TEST BANK for Principles of Marketing 18th Edition by Philip Kotler and Gary Armstrong. Complete Ch by ACADEMIAMILL

Test Bank (Download Only) for Principles of Marketing Revised by Michael Casey

Principles of Marketing Eighteenth Edition

Philip Kotler Gary Armstrong

Principles of Marketing, 18e (Kotler) 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 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 AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Easy 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

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 AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 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 AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. Difficulty: Moderate 6) Marketing is managing profitable customer relationships. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 1.1: Define marketing and outline the steps in the marketing process. 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 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

8) When backed by buying power, wants become ________. A) social needs B) demands C) physical needs D) self-esteem needs E) exchanges Answer: B 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 9) Needs include all of the following EXCEPT ________. A) food B) knowledge C) affection D) the newest iPhone E) belonging Answer: D 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 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 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: Moderate

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 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 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 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

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 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 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 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 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 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

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

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

20) The difference between human needs and wants is that needs are not created by marketers. Answer: TRUE 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 21) When backed by buying power, needs become wants. Answer: FALSE 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 22) Market offerings are limited to physical products. Answer: FALSE 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 23) An experience such as a vacation can be defined as a market offering. Answer: TRUE 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 24) When sellers focus on existing needs and lose sight of underlying customer wants, they suffer from marketing myopia. Answer: FALSE 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

25) A market is the set of actual and potential buyers of a product or service. Answer: TRUE 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 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 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 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; they are not created by marketers. Humans have a basic physical need for food, clothing, warmth, and safety; a basic social need for belonging and affection; and a basic individual need for knowledge and self-expression. Wants are needs shaped by culture, society, and individual personality. For example, an American needs food but wants a Big Mac and a soft drink. Wants become demands when they are backed by consumers' buying power. For example, an American with ten dollars needs food, wants a Big Mac and soft drink, and demands lunch at McDonald's. Marketers conduct extensive research to understand customers' wants and demands. They then attempt to fulfill customers' wants and demands through their market offerings. 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

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 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 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

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 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 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 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 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

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 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 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 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

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 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 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 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

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 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 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 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: Moderate 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

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 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. 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: Moderate 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 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

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 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 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: 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

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 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 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 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 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

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. 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: Moderate 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 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 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

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 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 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 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

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 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 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. 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: Moderate 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. 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: Moderate

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 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: 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 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 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

65) Market segmentation is the process of seeking fewer customers and reduced demand for profit maximization only. Answer: FALSE 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 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 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 67) An organization's department follows a customer-centered sense-and-respond philosophy. The department is most likely practicing the product concept. Answer: FALSE 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 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 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

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 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 72) The marketing mix refers to the set of marketing tools the firm uses to implement its marketing strategy. 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: Easy 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; such a strategy creates sales transactions but not long-term customer relationships. The company would most likely have a faulty assumption that customers who are persuaded to buy the product will like it or that they will buy the product again later even if they weren't really initially satisfied. Company X will not foster customer loyalty with this approach. 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

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; therefore, consumers rely on such firms to tell them what they need. Customer-driving marketing focuses on understanding customer needs even better than customers themselves do and creating products and services that meet both existing and latent needs, now and in the future. 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 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

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. Jeni's Splendid Ice Creams has a mission that stresses company profits, consumer wants, and societal interests. The company proactively seeks opportunities to act responsibly and efficiently. They ethically source all inputs from suppliers that have minimal impact on the environment and help build and shape local 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 77) In which of the following situations has a company most actively embraced customermanaged 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. 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

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. 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: Moderate 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 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 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

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 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 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 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

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 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 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 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 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

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 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 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 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 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

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 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: 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 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 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

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: 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 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 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: Moderate 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 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

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 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 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 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 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

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 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: Moderate 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 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

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. 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: Moderate 103) ________ occurs when satisfied customers initiate favorable interactions with others about a brand. A) Targeting new customers B) Customer intrusion C) Customer brand advocacy D) Customer-engagement marketing 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 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 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

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 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 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 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 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

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 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: Moderate 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 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: Moderate 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: 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

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 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 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

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

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 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 117) For most marketers, customer relationship management is exclusively a matter of customer data management. Answer: FALSE 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 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 39 Copyright © 2021 Pearson Education, Inc.

119) The meaning of value is perceived identically by all consumers. Answer: FALSE 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 120) Customer-managed relationships are marketing relationships that are controlled by customers; therefore, they are of no significance to marketers. Answer: FALSE 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 121) Large-scale marketing approaches that foster two-way customer relationships are made possible by new communication technologies. 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: Moderate 122) In consumer-generated marketing, marketers play a bigger role in shaping consumers' brand experiences and those of others. Answer: FALSE 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 123) To increase its "share of customer," a firm concentrates on retaining as many customers as possible over its lifetime. Answer: FALSE 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

124) A company can create customer delight by meeting customer expectations through offering good products that do what is promised. Answer: FALSE 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 125) Customer brand advocacy can occur with either satisfied or dissatisfied customers. Answer: FALSE 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 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

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"; they are both profitable and loyal. There is a strong fit between their needs and the company's offerings, so the company should make continuous relationship investments in an effort to go beyond satisfying and to delight these customers. A company should try to convert true friends into customer evangelists who tell others about their good experiences with the company. 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: Challenging 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

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: Integration of real-world business experiences 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 130) How can a marketer increase its "share of customer"? Answer: The marketer can offer greater variety to customers; in addition, the marketer can train employees to cross-sell and up-sell in order to market more products and services to existing customers. 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 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 brandbuilding 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 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 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: Application of knowledge 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

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 136) The technology that involves machines that think and learn like humans is known as A) big data B) analytics C) artificial intelligence D) the Internet of things E) digital thinking Answer: C AACSB: Application of knowledge 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) Amazon Echo's Alexa is an example of A) desktop computing B) data analytics C) the worldwide web D) artificial intelligence E) digital learning Answer: D AACSB: Application of knowledge 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

138) Government agencies design ________ to encourage energy conservation and discourage 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 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 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 dayto-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

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 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 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: Moderate 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 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: Moderate

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 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 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: Integration of real-world business experiences 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 146) The Internet of Things is a new product created by multiple companies working together. Answer: FALSE AACSB: Application of knowledge 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 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 AACSB: Application of knowledge 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

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 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 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: 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 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

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: 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

Principles of Marketing, 18e (Kotler) 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 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 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

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 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 AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 6) Mission statements should ________ and be defined in terms of ________. A) be technology oriented; meeting the self-actualization needs of customers B) be product oriented; satisfying the esteem needs of customers C) embody the company's short-term plans; current opportunities D) be market oriented; satisfying basic customer needs E) address sales and profits; the net return on investments Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate

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 AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. 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 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

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 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 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

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." D) A shoe manufacturer, whose business definition is: "We manufacture affordable and longlasting shoes for all." 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 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

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 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 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 AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 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

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 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 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 23) Mission statements should be market oriented. Answer: TRUE AACSB: Application of knowledge Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Easy 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 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

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 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; Reflective thinking Skill: Concept Objective: LO 2.1: Explain company-wide strategic planning and its four steps. Difficulty: Moderate 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 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

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 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 32) ________ involves evaluating the mix of products and businesses that make up the company. A) Portfolio analysis B) SBU identification C) A feasibility study D) Profit assessment E) An internal audit Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. 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 AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 9 Copyright © 2021 Pearson Education, Inc.

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 35) During portfolio analysis, a company ________ after identifying the key businesses that 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

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 38) According to the Boston Consulting Group approach, ________ provides a measure of 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 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

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 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 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

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 AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. 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 AACSB: Application of knowledge 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

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 AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 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 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 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 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

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 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 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

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 AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 56) Lark Inc., an American electronics company, is currently reviewing new geographical markets to sell its highly popular televisions. By 2025, 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 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

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 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 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; Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate

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 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 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

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

Refer to the scenario below to answer the following question(s). Fun-Spot Fun Park began as a small amusement park in 1985. With nothing more than a merrygo-round, a slide, pony rides, and an ice cream stand, Fun-Spot grew into a popular family 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

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 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 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

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 AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 71) The major activity in strategic planning is product innovation. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 72) On the BCG matrix, "question marks" are high-growth, high-share businesses or products. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Moderate 73) Market penetration involves offering modified or new products to current markets. Answer: FALSE AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 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

76) Company growth through diversification involves offering modified or new products to the company's current markets. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 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. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 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. AACSB: Application of knowledge Skill: Concept Objective: LO 2.2: Discuss how to design business portfolios and develop growth strategies. Difficulty: Easy 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 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

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 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 Consulting Group (BCG) approach, a company classifies all its SBUs according to the growthshare matrix. On the vertical axis, market growth rate provides a measure of market 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 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

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 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 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 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

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 88) Customer engagement and value are the key ingredients in the marketer's formula for success. Answer: TRUE 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 89) Each department in a company can be thought of as a link in the company's internal value chain. Answer: TRUE 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 90) Since companies want to work together to attract customers, marketers do not need to practice partner relationship management. Answer: FALSE 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

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 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. 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 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 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 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 them. Difficulty: Easy 28 Copyright © 2021 Pearson Education, Inc.

95) Which of the following is an element of the marketing mix? A) place B) education C) needs D) wants E) esteem 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 them. 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 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 them. 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 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 them. 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 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 them. 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 them. 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 them. 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 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 them. 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 them. Difficulty: Easy 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 them. Difficulty: Moderate

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 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 them. 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 them. 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 them. 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 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 them. Difficulty: Easy 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 them. Difficulty: Moderate 109) Arrow is "a different kind of company, manufacturing a different kind of a car"; 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 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 them. Difficulty: Moderate

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 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 them. Difficulty: Moderate 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 them. 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 them. 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 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 them. 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 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 them. 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 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 them. Difficulty: Easy

116) In the marketing mix, place includes ________. A) logistics B) discounts C) sales promotion D) advertising E) packaging 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 them. Difficulty: Easy 117) ________ refers to activities that communicate the merits of the product and persuade target customers to buy it. A) Position B) Promotion C) Pricing D) Segmentation E) Prospecting Answer: B 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 them. Difficulty: Moderate 118) To succeed in today's competitive marketplace, companies must be product-centered. 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 them. 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 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 them. Difficulty: Easy

120) A market segment consists of consumers who respond in different ways to a given set of marketing efforts. Answer: FALSE 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 them. Difficulty: Moderate 121) A product's position is the place it occupies relative to competitors' products in consumers' minds. Answer: TRUE 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 them. Difficulty: Easy 122) The marketing mix consists of people, property, planning, and position. Answer: FALSE 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 them. Difficulty: Moderate 123) Product refers to the goods-and-services combination that a company offers to its target market. Answer: TRUE 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 them. Difficulty: Easy 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 them. Difficulty: Easy

125) The four Cs concept adopts the buyer's view of the market. Answer: TRUE 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 them. Difficulty: Easy 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). 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 them. Difficulty: Easy 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. 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 them. Difficulty: Moderate 128) What does market targeting involve? Answer: Market targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter. 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 them. 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; 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 them. 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 them. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Fun-Spot Fun Park began as a small amusement park in 1985. With nothing more than a merrygo-round, a slide, pony rides, and an ice cream stand, Fun-Spot grew into a popular family 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." 131) Which of the following would be classified as an opportunity in a SWOT analysis of FunSpot? A) A rival amusement park announces plans to open three new rides next season. B) A new luxury hotel is being constructed in the area, with the aim of attracting more highspending families on vacation. 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

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 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 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 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

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 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 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: Moderate 137) Which of the following functions is NOT part of managing the marketing process? A) planning B) control C) budgeting D) implementation E) organization 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

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 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 139) Marketing ________ addresses the what and why of marketing activities, while marketing ________ addresses the who, where, when, and how. A) analysis; planning B) planning; implementation C) implementation; planning D) organization; implementation E) control; planning Answer: B 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

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 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: Moderate 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 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

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 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 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; Ethical understanding and reasoning 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 144) The most common form of marketing organization is the ________ organization. Under this organization, an operational specialist heads different marketing activities. A) geographic B) product management C) functional D) customer management E) 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

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 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 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 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

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 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. 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 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

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 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: Moderate 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 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 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 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

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 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 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 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 156) ________ involves looking at whether a company's key action plans are well-matched to its opportunities. A) Operating control B) Benchmarking C) Strategic control D) Regression analysis E) Portfolio analysis 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

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 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 158) A SWOT analysis allows a marketer to evaluate the company's overall strengths, weaknesses, opportunities and threats. Answer: TRUE 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 159) The four marketing management functions are analysis, planning, implementation, and control. Answer: TRUE 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 160) Benchmarking refers to the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives. Answer: FALSE 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: Moderate

161) Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Answer: TRUE 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 162) Return on marketing investment refers to the net return from a marketing investment divided by the costs of the marketing investment. Answer: TRUE 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: 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). 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 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

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 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

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 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

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. Increasingly, however, beyond standard performance measures, marketers are using customercentered measures of marketing impact, such as customer acquisition, customer retention, 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; 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: Moderate

Principles of Marketing, 18e (Kotler) Chapter 3 Analyzing the Marketing Environment 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 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 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 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 1 Copyright © 2021 Pearson Education, Inc.

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 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 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 6) Which is NOT part of the company environment that influences marketing decisions? A) accounting B) finance C) purchasing D) R&D E) retailers Answer: E 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

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 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 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 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

10) ________ help companies stock and move goods from their points of origin to their 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 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 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 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

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 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 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 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 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 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 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

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 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 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 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

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 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 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 24) ________ markets buy goods and services for further processing. A) Business B) Reseller C) Wholesale D) Consumer E) Retail 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

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

Refer to the scenario below to 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; 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 29) The microenvironment consists of larger societal forces that affect a company, such as demographic, economic, political, and cultural forces. Answer: FALSE 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 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 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 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 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

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 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 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 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 34) Local publics include consumer organizations, environmental groups, minority groups, and others. Answer: FALSE 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 35) The aim of the entire value delivery network is to serve target customers and create strong relationships with them. Answer: TRUE 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 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 12 Copyright © 2021 Pearson Education, Inc.

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 38) A business's suppliers are the most important actors in the company's microenvironment. Answer: FALSE 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 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 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 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 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 41) Publics are the most important component in the company's microenvironment. Answer: FALSE 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

42) Marketing management can control environmental forces. A reactive approach is, therefore, the most beneficial approach to the marketing environment. Answer: FALSE 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 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

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

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 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 16 Copyright © 2021 Pearson Education, Inc.

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 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 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

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 42 percent of the United States' spending power. 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 51) Which of the following is true of Gen Xers? A) They are considerably larger than the boomer generation. B) They are more skeptical than baby boomers. 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 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

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 54) Which of the following is true of the Millennials? A) They are the children of baby boomers and were born between 1981 and 1996. 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 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 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: 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) Echo Boomers Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging 57) Marketers target Generation Z because they ________. A) listen to their parents and follow their examples B) dislike technology C) spend an estimated minimum of $43 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 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 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: Moderate

59) Gen Alphas are kids born after 2012 and marketers view them as A) too young to be tech savvy. B) largely irrelevant at this time given their age. C) a generation that has no purchasing power. D) an important gateway to their parents. E) a group that exerts no influence over household purchases. 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: Moderate 60) 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 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 61) 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

62) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate 63) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. 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 small office/home office 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: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate 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 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

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

71) By 2060, ________ will be an estimated 15 percent of the U.S. population. A) African Americans B) Asians C) Hispanics D) Native Americans E) Native Hawaiians 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 72) Which of the following is a true statement about baby boomers? A) They are the first generation to have grown up with computers. B) They constitute the largest demographic group in the United States. C) They were born between 1965 and 1976. D) They are the most educated generation of Americans. E) They are the wealthiest generation in U.S. history. Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy 73) The approximately 80 million ________ make up the important kids, tweens, and teens markets. A) Millennials B) Generation Xers C) Generation Zers D) Latinos E) baby boomers Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy

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

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: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Challenging 78) Which generational group is characterized as the most educated and the least materialistic? A) baby boomer B) Generation X C) Millennial D) Generation Z E) Lost Generation 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 79) A retailer with a value proposition 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

80) Secure is a financial services and insurance company. The company's most profitable division is one that sells the Secure Future Plan. The Secure Future Plan targets customers who are entering retirement and want long-term savings so they can remain financially independent in the later years of their life. The marketing team at Secure has most likely targeted the plan to ________. A) Millennials B) baby boomers C) Generation Xers D) Generation Zers E) Lost Generation Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate

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) Gen Alpha 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 83) The demographic environment is of major interest to marketers because it involves people, and people make up markets. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate 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 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

86) Millennials comprise the most financially affluent group in America today. 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 87) The Gen Xers are increasingly displacing the lifestyles, culture, and values of the baby boomers. 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: Moderate 88) Millennials represent a larger demographic segment than the baby boomers or Gen Xers. 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: Moderate 89) Marketers must increasingly consider the special needs of traditional households because this segment of the population is growing more rapidly than nontraditional households. 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 90) The American workforce today is less white-collar than in the late twentieth century. 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

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. 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 92) Prior to the Great Recession of 2008/2009, American consumer spending was careful and restrained. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Easy 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; Written and oral communication Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. 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

95) Why do marketers find baby boomers attractive? Answer: Today's baby boomers account for about 22 percent of the U.S. population but control an estimated 42 percent of the nation's spending power. 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 96) How can marketers reach the Millennials effectively? Answer: Millennials 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; 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 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 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

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 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; 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

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; the three largest among them are the baby boomers, Generation X, and the Millennials. The baby boomer market of 72 million people is one of the most powerful forces shaping the marketing environment. Considerably smaller than the boomer generation that precedes them and the Millennials who follow, the Generation Xers are a sometimes overlooked consumer group. Although they seek success, they are less materialistic than the other groups; they prize experience, not acquisition. For many of the Gen Xers who are parents, family comes first–both children and their aging parents–and career second. From a marketing standpoint, the Gen Xers are a more skeptical bunch. They tend to research products before they consider a purchase, prefer quality to quantity, and tend to be less receptive to overt marketing pitches. They are more likely to be receptive to irreverent ad pitches that make fun of convention and tradition. The Millennials (or Generation Y) are the 75 million children of the baby boomers born between 1981 and 1996. One thing that all Millennials have in common is their comfort with digital technology. They don't just embrace technology; it's a way of life. Rather than having massmarketing messages pushed at them, the Millennials prefer to seek out information and engage in two-way brand conversations. Generation Zers make up important kids, tweens, and teens markets that spend an estimated $43 billion to $143 billion and influence almost $333 billion of their own and parents' spending. They are utterly fluent with technology and take it for granted. They are highly mobile, connected, and social. They blend the online and offline worlds seamlessly as they socialize and shop. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. 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 22 percent of the U.S. population but control an estimated 42 percent of the nation's spending power. 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; they are less materialistic than baby boomers, so marketers must use a different approach to appeal to them. Millennials are children of the baby boomers. One thing that all Millennials have in common is their comfort with digital technology. They don't just embrace technology; it's a way of life. The Millennials were the first generation to grow up in a world filled with computers, mobile phones, satellite TV, iPods and iPads, and online social networks. As a result, they engage with brands in an entirely new way, such as with mobile or social media. Rather than having mass-marketing messages pushed at them, the Millennials prefer to seek out information and engage in two-way brand conversations. Thus, reaching them effectively requires creative marketing approaches. Generation Zers are born between 1997 and 2012 and make up important tweens to young twenty-somethings that influence almost $500 billion of their own and parents' spending. They are utterly fluent with technology and take it for granted. They are highly mobile, connected, and social. They blend the online and offline worlds seamlessly as they socialize and shop. Marketers need to form more precise age-specific segments within each group. More important, defining people by their birth date may be less effective than segmenting them by their lifestyle, life stage, or the common values they seek in the products they buy. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 3.2: Explain how changes in the demographic and economic environments affect marketing decisions. Difficulty: Moderate 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

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 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 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

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: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Easy 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: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate 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: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate 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 112) Fargo Inc. is a carbonated beverage manufacturer that has many manufacturing plants around the world. It is planning to shift from using thermal power to wind power for its manufacturing plants in the Netherlands to decrease dependency on nonrenewable sources of energy. This scenario depicts Fargo's concern for its ________ environment. A) economic B) natural C) demographic D) political E) cultural Answer: B AACSB: Application of knowledge 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

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 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 117) The introduction of new technologies is equally beneficial to all industries. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate 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; the actions will also help in creating a more sustainable market. AACSB: Application of knowledge; Ethical understanding and reasoning Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. 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; Written and oral communication Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. 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: Written and oral communication Skill: Concept Objective: LO 3.3: Identify the major trends in the firm's natural and technological environments. Difficulty: Moderate 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

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

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

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 129) The boom in online, mobile, and social media has created a new set of social and ethical issues for companies. Their greatest concern involves ________. A) failure to provide value-priced products for online customers B) protecting the privacy of knowing and unknowing customers C) providing too many alternative products online which confuses customers D) rarely following the marketing orientation when devising promotional offers online E) failing to reach their target customers through online marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. 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: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

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 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 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

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 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 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

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; Diverse and multicultural work environments Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate 138) A society's ________ are expressed in how people view themselves and others, 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 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

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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy 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 142) P&G "Tide Loads of Hope" program provides mobile laundromats and loads of clean laundry to families in disaster-stricken areas. This is an example of ________ marketing. A) social B) environmental C) ethical D) cause-related E) charitable Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate

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 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 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 146) Secondary beliefs and values are less open to change than core beliefs and values. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy

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 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 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 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; believing that people should get married early in life is a secondary belief. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. 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 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 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; in the United States, these laws are enforced by the Federal Trade Commission (FTC) and the Antitrust Division of the Attorney General's office. An example of such a law is the Sherman Antitrust Act that prohibits monopolies and other activities that restrain trade. Laws to protect consumers are designed to prevent deceptive advertising, packaging, and pricing, among other harmful practices. Examples of this type of law include the Fair Packaging and Labeling Act and the Consumer Product Safety Act. Finally, regulations to protect the interests of society require companies to take responsibility for the social costs of their products and/or production practices. An example of this type of law is the National Environmental Policy Act. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. 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; Written and oral communication Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Moderate 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; it can be destroyed or spoiled by human activities. This renewed love of things natural has created a sizable market of consumers who seek out everything from natural, organic, and nutritional products to fuel-efficient cars and alternative medicine. The U.S. organic/natural food market now generates $45 billion in annual retail sales and will grow to an estimated $200 billion by 2019. AACSB: Written and oral communication Skill: Concept Objective: LO 3.4: Explain the key changes in the political and cultural environments. Difficulty: Easy 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

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 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

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 AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate 161) When a company hires lobbyists to influence legislation affecting its industry, it is taking a defensive stance toward the marketing environment. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Easy 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. AACSB: Analytical thinking Skill: Concept Objective: LO 3.5: Discuss how companies can react to the marketing environment. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 4 Managing Marketing Information to Gain Customer Insights 1) With the recent explosion of information technologies, ________. A) most marketing managers are overloaded with data and often overwhelmed by it B) most marketing managers are concerned solely about the duplication of content C) companies have ceased to feel the need for marketing information systems D) companies have ceased to maintain internal databases E) it has become more difficult and expensive to obtain primary data Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 2) The real value of marketing information lies in how it is used ________. A) in determining selling prices for products B) in analyzing budgets C) in creating advertising campaigns D) in the customer insights that it provides E) in introducing a new product to the marketplace Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 3) Brad works with a reputable retailer and leads a team that collects market information from a wide variety of sources ranging from marketing research studies to monitoring online conversations where consumers discuss Brad's firm or its products. Brad's team uses this information to arrive at a better understanding of consumers' behavior and their buying motives. This, in turn, allows Brad's firm to successfully generate more value for consumers. Brad leads the ________ team. A) product development B) strategy implementation C) human resource D) customer relationship management E) customer insights Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Moderate 1 Copyright © 2021 Pearson Education, Inc.

4) The term big data refers to the ________ generated by today's sophisticated information generation, collection, storage, and analysis technologies. A) large reports B) huge and complex data sets C) information requests D) social media contacts E) e-mail messages Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 5) Challenges of managing big data include ________. A) determining what information to request B) investing in appropriate technology C) hiring enough software engineers D) properly routing the information after gathering it E) accessing and sifting through so much data Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Moderate 6) A(n) ________ consists of people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate and validate actionable customer and market insights. A) enterprise planning system B) enterprise information system C) marketing information system D) corporate performance management system E) geographic information system Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy

7) An MIS is used to ________. A) generate product interest B) develop marketing plans C) identify demographic trends D) assess information needs E) test hypotheses about cause-and-effect relationships Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 8) An MIS user should most likely be able to ________. A) implement new technology B) increase order requests C) develop customer insights D) analyze employee turnover E) establish short-term objectives Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 9) The market researchers at HoneyCamp Foods gather daily sales data and sort it by product line and region. With the help of sophisticated tools and techniques, they develop the data needed by marketing managers to evaluate the market share of the company's different products and also to gain valuable market insights. This mix of people and procedures at HoneyCamp Foods that generate actionable marketing insights represents a(n) ________. A) enterprise planning system B) product mix C) strategic planning system D) marketing information system E) business portfolio Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Moderate

10) With the recent explosion of information technologies, companies are finding it difficult to generate marketing information in great quantities. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 11) The real value of marketing research lies in the customer insights that it provides. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 12) With current technology systems, marketers find it simple to access and sift through the data that is gathered. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy 13) A management information system assesses information needs, develops needed information, and helps decision makers use the information. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy

14) What do marketers gain from gathering and analyzing information about customers and the needs and motivations of those customers? Answer: To create value for customers and build meaningful relationships with them, marketers must first gain fresh, deep insights into what customers need and want. Such customer insights come from good marketing information. Companies use these customer insights to develop a competitive advantage. Customer insights groups collect customer and market information from a wide variety of sources, ranging from traditional marketing research studies to mingling with and observing consumers to monitoring social media conversations about the company and its products. They mine big data from sources far and wide. Then they use this information to develop important customer insights from which the company can create more value for its customers. AACSB: Reflective thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Moderate 15) What is the function of a marketing information system (MIS)? Answer: A marketing information system (MIS) consists of people and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers use the information to generate and validate actionable customer and market insights. The MIS begins and ends with information users–marketing managers, internal and external partners, and others who need marketing information. First, it interacts with these information users to assess information needs. Next, it interacts with the marketing environment to develop needed information through internal company databases, marketing intelligence activities, and marketing research. Finally, the MIS helps users to analyze and use the information to develop customer insights, make marketing decisions, and manage customer relationships. AACSB: Analytical thinking Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Moderate 16) Briefly explain the functions of a customer insights team. Answer: Customer insights groups collect customer and market information from a wide variety of sources, ranging from traditional marketing research studies to mingling with and observing consumers to monitoring consumer online conversations about the company and its products. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 4.1: Explain the importance of information in gaining insights about the marketplace and customers. Difficulty: Easy

17) A good marketing information system balances the information users ________ to have against what they ________ and what is ________ to offer. A) request; want; affordable B) demand; should request; time-efficient C) want; are unaware of; the newest technology D) would like; need; feasible E) don't need; can afford; available Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 18) Costs are involved in obtaining, ________, storing, and delivering information. A) analyzing B) interviewing C) conducting D) designing E) reporting Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 19) Kei, a senior marketing manager of a pizzeria in North Florida, is currently researching electronic collections of consumer information within the company network to arrive at crucial marketing decisions. In this instance, Kei is using ________. A) ethnographic research B) internal databases C) descriptive research D) data warehouses E) causal research Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate

20) Information in a company's database can come from many sources. An advantage of harnessing such information is to ________. A) eliminate employee turnover B) achieve a high degree of employee empowerment C) gain competitive advantage D) gain access to mass markets E) eliminate resource dependency Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 21) Which of the following is an advantage of using an internal database? A) Data always remains current in internal databases. B) Highly sophisticated equipment and techniques are not required for maintaining internal databases. C) Internal databases can be accessed more quickly and cheaply than other information sources. D) Internal databases require less maintenance efforts. E) Information obtained from internal databases is almost always sufficient for making marketing decisions. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 22) Which of the following is a disadvantage of using information from internal databases? A) Obtaining information from internal databases is both time-consuming as well as expensive. B) It is not possible to verify information obtained from internal databases. C) Using information from internal databases leads to biased research findings. D) Internal information may be incomplete or in the wrong form for making marketing decisions. E) Internal databases do not support highly sophisticated technologies that make it difficult to store large volumes of data. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate

23) Problems with internal databases include all of the following EXCEPT that ________. A) data ages quickly B) the data is in the wrong form for making marketing decisions C) managing and mining mountains of information requires sophisticated equipment D) keeping a database current requires major effort E) information can be accessed more cheaply Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 24) ________ is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment. A) Data warehousing B) Competitive marketing intelligence C) SWOT analysis D) Ethnographic research E) Customer relationship management Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 25) The marketing department of a reputable firm wants to improve strategic decision making, track the actions of other players in the market, and provide early warning of opportunities and threats. Which of the following would help the firm achieve its objectives? A) ethnographic research B) strategic planning C) data warehousing D) competitive marketing intelligence E) customer relationship management Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate

26) Which of the following statements is true regarding competitive marketing intelligence? A) The advantage of using competitive marketing intelligence is negligible. B) The goal of competitive marketing intelligence is to improve recruiting efforts. C) Competitive marketing intelligence relies upon costly internal databases. D) Competitive marketing intelligence relies upon publicly available information. E) Companies using competitive marketing intelligence routinely ignore consumers' online chatter. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 27) Which of the following is NOT a method of gathering good marketing intelligence? A) sending out teams of trained observers to mingle with customers B) interviewing competitors' employees to learn as much "inside information" as possible C) setting up digital centers that monitor brand-related online consumer and marketplace activity D) purchasing merchandise from competing sites to analyze and compare their assortment, speed, and service quality E) searching specific competitor names, events, or trends to see what comes up Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 28) Which of the following refers to a marketing intelligence technique? A) interviewing customers randomly B) increasing the annual budget for R&D C) investing heavily in primary research D) implementing product diversification E) benchmarking competitors' products Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate

29) Firms use competitive marketing intelligence to ________. A) create and sustain market monopolies B) counter the adverse effects of organizational anarchy C) perpetuate organizational learning D) gain early warnings of competitor moves and strategies E) strengthen weak ties with industry competitors Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Jason West, owner of A1 Cleaning, started his enterprise in 2001. Jason's primary focus had been on office cleaning for large corporations. But in recent months, Jason has seen a decline in demand for his office cleaning services. Surprisingly, the competitive environment appeared relatively stable with no new competitors. However, Jason knew that office cleaning was a highfrequency service that is usually performed daily; therefore, competitors must have been doing something to attract his customers. Building a competitive advantage seemed to be the only option to offset competition. But as Jason pondered over his dilemma, he realized that prior to building his competitive advantage he needed to better understand how customers assessed service quality and what they look for in a superior cleaning service. Jason developed a research plan. First, he gathered information about his competitors, primarily through pamphlets and Web sites, as well as through a few phone calls in order to find out exactly what the competitors offered in their cleaning packages. In addition, Jason obtained from the Chamber of Commerce an updated list of local corporations. He planned on sending written questionnaires to them. Though the list of corporations contained 141 local company names, Jason chose to survey 75 of them. To better understand customer service expectations between both small and large corporations, Jason divided his surveys into two categories. The survey questions were designed to extract specific data from respondents with regard to service quality expectations in correlation to service frequency and price. Jason awaited the results. Though his primary focus had been on large corporations, he was flexible and would aim his efforts differently if needed. 30) In this scenario, which of the following is representative of competitive marketing intelligence? A) formulating a research plan B) collecting data about competitors C) sending mail questionnaires to focus groups D) creating competitive advantage E) consolidating core competencies Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 31) The goal of competitive marketing intelligence is to evaluate and prevent high employee turnover. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 11 Copyright © 2021 Pearson Education, Inc.

32) External databases are electronic collections of consumer and market information obtained from data sources within a company's network. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 33) Internal databases usually can be accessed more quickly and cheaply than other information sources. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 34) Data ages quickly. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 35) Internal information is almost always sufficient for making marketing decisions. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 36) Competitive marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 37) Competitor intelligence can be collected from people inside the company, such as executives, engineers, purchasing agents, and the sales force, as well as customers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 12 Copyright © 2021 Pearson Education, Inc.

38) Marketers can obtain information from internal data and from competitive marketing intelligence. Compare and contrast the two sources of information. Answer: Internal databases refer to electronic collections of consumer and market information obtained from data sources within the company network. For example, the accounting department provides records of sales, costs, and cash flows; operations reports on productionrelated issues; sales and marketing provide data on resellers, competitors, buyer behavior, and the industry; and marketing provides information on customer transactions, demographics, and buying behavior. Internal data are cheaper sources that are easy to access. On the other hand, competitive marketing intelligence refers to the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace. The goal of competitive marketing intelligence is to improve strategic decision making by understanding the consumer environment, assessing and tracking competitors' actions, and providing early warnings of opportunities and threats. Marketing intelligence techniques range from observing consumers firsthand to quizzing the company's own employees, benchmarking competitors' products, researching the Internet, and monitoring Internet buzz. AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Moderate 39) What is the most important characteristic of a good MIS? Answer: A good MIS balances the information users would like to have against what they really need and what is feasible to offer. AACSB: Analytical thinking Skill: Concept Objective: LO 4.2: Define the marketing information system and discuss its parts. Difficulty: Easy 40) ________ is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization. A) Product marketing B) Strategic planning C) Marketing research D) Market segmentation E) Causal research Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

41) Which of the following is true with regard to marketing research? A) The marketing research process depends primarily on sophisticated internal databases. B) The marketing research process requires assessing macroeconomic forces. C) Marketing research gives marketers insights into customer motivations. D) Marketing research eliminates the need for a SWOT analysis. E) Marketing research is a simple two-step process. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 42) Which of the following is the first step in the marketing research process? A) developing a marketing information system B) defining the problem and objectives of the study C) developing the research plan D) implementing the research plan E) interpreting and reporting the findings Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 43) Which of the following is the final step of the marketing research process? A) developing the research plan B) implementing the research plan C) interpreting and reporting the findings D) selecting a research agency E) defining the research objectives Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

44) The objective of causal research is to ________. A) test hypotheses about cause-and-effect relationships B) gather preliminary information that will help suggest hypotheses C) describe things, such as the market potential for a product D) assign a cause to a seemingly random event E) predict the effect of a random event on unrelated entities Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 45) In ________ research, the objective is to gather preliminary information that will help define the problem and suggest hypotheses. A) exploratory B) statistical C) causal D) analytic E) descriptive Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 46) The goal of ________ research is to describe things, such as the market potential for a product or the demographics and attitudes of consumers who buy the product. A) exploratory B) statistical C) causal D) analytic E) descriptive Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

47) Akira Takano, a marketing manager, is about to test the hypothesis that the sale of a particular product will increase exponentially if there is a $5 drop in the selling price of the product. Akira is involved in ________ research. A) exploratory B) descriptive C) causal D) constructive E) ethnographic Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 48) Which of the following types of research would be best suited for understanding the attitudes of consumers who buy a particular brand of soft drink? A) internal research B) descriptive research C) causal research D) exploratory research E) demographic research Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 49) Beth Williams works for a marketing research company in Chicago. Her current research involves finding the market potential for a client's new line of sports apparel. Given her objective, which of the following types of research is the most suitable for Beth? A) causal research B) constructive research C) statistical research D) descriptive research E) exploratory research Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

50) The research plan ________. A) provides comprehensive marketing intelligence about competitors B) outlines sources of existing data and spells out the specific research approaches C) does not include sampling plans D) does not include contact methods E) precedes the definition of research objectives Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 51) The research plan should be presented in a written proposal. The proposal should include all of the following EXCEPT ________. A) the predicted results B) research objectives C) how the results will help management's decision making D) estimated research costs E) the information to be obtained Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 52) Secondary data consist of ________. A) information collected for the specific purpose at hand B) data that does not age C) information that already exists somewhere, having been collected for another purpose D) information collected from conducting personal, in-depth interviews E) data that is unreliable and unsuitable for the purpose of making marketing decisions Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

53) Primary data consist of ________. A) data that does not age B) data obtained from the public domain C) information collected for the specific purpose at hand D) information that already exists somewhere, having been collected for another purpose E) information that is the least expensive and the easiest to obtain Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 54) Information collected from Internet search engines is an example of ________ data. A) primary B) secondary C) binary D) low-level E) disposable Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 55) Commercial online databases are rich sources for obtaining ________. A) primary data B) secondary data C) customer insights D) low-level data E) binary data Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

56) Which of the following is a valid source of secondary data? A) personal letters and correspondence B) Internet search engines C) ethnographic research D) direct surveys E) interviews Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 57) Which of the following is true with regard to gathering secondary data? A) Gathering secondary data involves costly fees to government agencies. B) Commercial online databases contain primary rather than secondary data. C) Internet search engines can be useful sources of relevant secondary data. D) It is illegal for firms to purchase secondary data from outside suppliers. E) Secondary data eliminates the need for primary data in most cases. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 58) Which of the following is true about secondary data? A) It is always current and, unlike primary data, it does not have to be updated. B) Unlike primary data, it can be obtained by using direct surveys and questionnaires by the company. C) It cannot provide extra information a company is looking for. D) It can be obtained more quickly and at a lower cost than primary data. E) It requires more effort compared to gathering primary data. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

59) Which of the following is a disadvantage of using secondary data? A) Secondary data is generally not appropriate for consumer products. B) Collecting secondary data is time consuming. C) Few sources exist for secondary data. D) Gathering secondary data is costly. E) Relevant secondary data can be difficult to locate. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 60) Designing a plan for primary data collection requires decisions on all of the following EXCEPT ________. A) research instruments B) contact methods C) sampling plan D) research results E) research approaches Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 61) A company sent a trained observer to watch and interact with consumers in their natural environments in order to gain deeper insights on consumer needs. This is an example of ________. A) viral marketing B) survey research C) ethnographic research D) experimental research E) niche marketing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

62) ________ involves gathering primary data by closely examining relevant people, actions, and situations. A) Observational research B) Survey research C) Telephone interviewing D) Causal research E) Group interviewing Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 63) ________, a form of observational research, involves sending observers to watch and interact with consumers in their natural environments. A) Group interviewing B) Ethnographic research C) Survey research D) Experimental research E) Causal research Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 64) Which of the following is true with regard to mail questionnaires? A) The response rate of mail questionnaires is often very low. B) Mail questionnaires are highly flexible. C) The researcher has maximum control over the mail questionnaire sample. D) Mail questionnaires are unsuitable for collecting large amounts of information about respondents. E) Respondents always provide honest answers to personal questions on mail questionnaires. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

65) Which of the following is true of ethnographic research? A) It is a type of experimental research that involves evaluating group responses. B) It involves sending observers to watch and interact with consumers in their natural environments. C) It is a traditional quantitative research approach. D) Information used in this mode of research is mainly derived from secondary data sources. E) It is a form of survey research. Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 66) Observation is best suited for ________ research. A) exploratory B) constructive C) experimental D) descriptive E) survey Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 67) While looking for ideas on how to craft a user-friendly dishwasher, the designers of a dishwasher-manufacturing company spent 10 days observing people as they used their dishwashers in their homes. In this instance, the designers were conducting ________. A) survey research B) experimental research C) quantitative marketing research D) ethnographic research E) causal research Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

68) Some marketing decisions call for fast and agile marketing information and research known as ________. A) experimental research B) causal research C) ethnographic research D) just-in-time research E) exploratory research Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 69) Which of the following is true about survey research? A) It involves sending observers to watch and interact with consumers in their natural environments. B) It is best suited for gathering causal information. C) It involves selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses. D) The level of flexibility in survey research is lower than most other research methodologies. E) Survey research is the most widely used method for primary data collection. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 70) Juanita Petino, a nutritionist, decided to test the effects of two breakfast cereals, Kinglo and Loopy, on different consumer groups. For the purpose of her study, she divided 20 volunteers into two groups and asked the members of one group to have Kinglo cereal and the members of the other group to have Loopy cereal for breakfast. She decided to compare the responses of the volunteers after a week to gain deeper insights into consumer attitude. In this instance, Juanita is using ________. A) niche marketing B) experimental research C) product differentiation D) ethnographic research E) viral marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 23 Copyright © 2021 Pearson Education, Inc.

71) Which of the following is most likely an advantage of survey research? A) The flexibility of survey research is high; it can be used to obtain many different kinds of information in many different situations. B) Survey research allows researchers to observe respondents closely in their natural environments. C) The chances of getting dishonest feedback are almost negligible with survey research. D) The attitudes and motives of the customers can be easily determined through survey research. E) The data gathered in survey research is impartial and free from bias as the surveys are done in-person to evaluate consumer behavior. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 72) ________ refers to gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses. A) Experimental research B) Constructive research C) Observational research D) Survey research E) Descriptive research Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 73) Experimental research is best suited for gathering ________ information. A) exploratory B) causal C) random D) unstructured E) descriptive Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

74) Kinger Burgers came out with a new hamburger and, before including it on its main menu, released it in two different cities with two different prices. The marketers at Kinger Burgers then analyzed the different levels of purchase made at these two different places, planning to use the information to help them set a nationwide price for the new offering. This is an example of ________. A) ethnographic research B) descriptive research C) DIY research D) experimental research E) survey research Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 75) Maria Ramirez is conducting research to determine consumers' personal grooming habits. Because of the personal nature of many of the survey questions, Maria wants to select the contact method that is most likely to encourage respondents to answer honestly and that will allow her to easily collect large amounts of data. Which of the following is best suited to meet Maria's requirements? A) mail questionnaires B) telephone interviews C) individual interviews D) focus group interviews E) immersion group discussions Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 76) Which of the following contact methods is the most cost-effective? A) telephone interviews B) individual interviews C) in-depth interviews D) online surveys E) group interviews Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 25 Copyright © 2021 Pearson Education, Inc.

77) Loft Industries sells roof trusses to contractors and builders and is currently looking for honest feedback on its services. However, in the past, most of its efforts to procure feedback from customers did not yield any meaningful data. According to the marketing managers of Loft Industries, feedback was more polite than honest. Which of the following contact methods should Loft Industries most likely use to maximize its chances of receiving honest and impersonal feedback? A) online focus groups B) telephone interviews C) mail questionnaires D) group interviews E) personal interviews Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 78) Which of the following is an advantage of telephone interviews? A) They are more cost-effective than mail questionnaires. B) Interviewer bias is absent. C) The quantity of data collected is greater compared to personal interviewing. D) The speed with which data is collected is high. E) Response rates tend to be higher than those of mail questionnaires. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 79) Which form of marketing research involves talking with people in their homes or offices, on the street, or in shopping malls? A) individual interviewing B) focus group interviewing C) telephone interviewing D) mail questionnaires E) observational research Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

80) ________ consists of inviting 6 to 10 people to meet with a trained moderator to talk about a product, service, or organization. A) Telephone interviewing B) Individual interviewing C) A mail questionnaire D) An online survey E) Focus group interviewing Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 81) Redrunners Inc., a manufacturer of sports merchandise, is gathering customer opinions about the firm's new sports shoe line. A team of researchers in the company invited eight regular customers to talk about the new line of shoes, asking why they chose to buy the shoe and what they disliked most about its design. A moderator was present to monitor the discussion. Which of the following types of contact methods is Redrunners using? A) individual interviewing B) mail questionnaire C) group interviewing D) mass survey E) mall intercept Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 82) Happy Pets, a company manufacturing pet foods and accessories, created a membership club for its regular customers called "I Love My Pet." This group consists of animal lovers selected by the company to complete product-related polls, chat with product developers, and provide feedback about specific products. Which of the following best describes "I Love My Pet"? A) primary group B) immersion group C) mob D) dyad E) triad Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 27 Copyright © 2021 Pearson Education, Inc.

83) In a simple random sample, ________. A) every member of the population has a known and equal chance of selection B) the population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview C) the researcher selects the easiest population members from which to obtain information D) the population is divided into mutually exclusive groups and random samples are drawn from each group E) the researcher finds and interviews a prescribed number of people in each of several categories Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 84) Which of the following is most likely a disadvantage of focus group interviewing? A) Focus group interviewing does not connect secondary data with primary data. B) Focus group interviewing is less flexible compared to mail questionnaires. C) Consumers in focus groups are always open and honest about their real feelings, behaviors, and intentions in front of other people. D) Focus group interviewing involves small samples to keep time and costs down, which makes it hard to generalize from the results. E) The moderator in a focus group interview has poor control over the group of respondents. Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 85) To overcome problems in focus group interviewing, some companies employ small groups of consumers who interact directly and informally with product designers without a focus group moderator present. Such groups are known as ________. A) classes B) consumer guilds C) virtual communities D) immersion groups E) primary groups Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

86) Jaime Gonzalez owns a small publishing company in Utah and has a very restrictive budget for the market research he currently needs to conduct. He requires a large sample size for his research in order to arrive at insightful conclusions. Additionally, he wants to have excellent control over his sample. Keeping in mind his restrictive budget and other specifications, which of the following methods of contact would you advise Jaime to use? A) telephone interviews B) individual interviews C) online surveys D) mail questionnaires E) focus group interviews Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 87) Melissa Thomas leads the marketing research division at Tronics Inc., a manufacturing company based in Alabama. To improve future sales of the company's products, she has decided to collect customer opinions and feedback on the current products offered by her company. For this purpose, Melissa is looking for a highly flexible contact method that can be used to gather large amounts of data within the least possible time. In this instance, which of the following contact methods is most likely to hold the highest appeal for Melissa? A) online surveys B) in-depth interviews C) telephone interviews D) individual interviews E) mail questionnaires Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Challenging

88) Which of the following is true about Internet-based survey research? A) The effectiveness of Internet-based survey research is invariably affected by the interviewer's bias. B) Internet-based survey research is less flexible compared to mail questionnaires. C) Internet-based survey research is characterized by high speed and low costs. D) Typically, the quantity of data gathered in Internet-based survey research is low. E) The response rate of Internet-based survey research is lower than that of mail questionnaires. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 89) Which of the following is a disadvantage of online focus groups? A) Responses are not instantaneous. B) Controlling the online sample is difficult. C) Results take a long time to tabulate and analyze. D) Facility, technology, and travel costs are very high. E) Researchers are unable to view the sessions in real-time. Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 90) A(n) ________ is a segment of the population selected for marketing research to represent the population as a whole. A) focus group B) immersion group C) primary group D) sample E) secondary group Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

91) For her current research project, Margaret Rogers wants to select a sample in which every member has a known and equal chance of selection. In other words, Margaret is looking for a ________. A) simple random sample B) convenience sample C) stratified random sample D) judgment sample E) quota sample Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 92) Which of the following refers to a probability sample in which the population is divided into mutually exclusive groups (such as blocks), and the researcher draws a sample of the groups to interview? A) quota sample B) judgment sample C) cluster sample D) stratified random sample E) simple random sample Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 93) Which of the following refers to a nonprobability sample in which the researcher selects the easiest population members from which to obtain information? A) quota sample B) judgment sample C) convenience sample D) stratified random sample E) simple random sample Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

94) Which of the following refers to a nonprobability sample in which the researcher uses his or her evaluation techniques to select population members who are good prospects for accurate information? A) quota sample B) judgment sample C) convenience sample D) stratified random sample E) simple random sample Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 95) Which of the following refers to a nonprobability sample in which the researcher finds and interviews a prescribed number of people in each of several categories? A) quota sample B) judgment sample C) convenience sample D) stratified random sample E) simple random sample Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 96) In collecting primary data, marketing researchers have a choice of two main research instruments, ________. A) reference books and journals B) questionnaires and mechanical devices C) social networks and internal databases D) commercial online databases and search engines E) open-source directories and blogs Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

97) Which of the following is an example of an open-ended question? A) How is voting going to help the nation? B) Do you like driving on the highway? C) How many children do you have? D) Would you like to try a sample? E) Are your friends in town? Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 98) Which of the following questions is an example of a closed-end question? A) Why do you think some people are more comfortable taking risks than others? B) How can I improve my presentation skills? C) Why do you think a single vote makes a difference? D) Would you like to try our new ice cream flavor? E) What is the best way to prevent weeds in a garden? Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 99) While creating research questionnaires, researchers must particularly AVOID the use of ________. A) biased phrasing B) simple language C) closed-end questions D) logical question arrangement E) open-ended questions Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

100) ________ refers to the measurement of brain activity to learn how consumers feel and respond. A) Biometrics B) Demographics C) Sampling D) Neuromarketing E) Psychographics Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 101) After a research instrument is selected, the next step in the marketing research process is to ________. A) select a sampling method B) interpret the research findings C) implement the research plan D) evaluate alternatives E) select a research approach Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

Refer to the scenario below to answer the following question(s). Jason West, owner of A1 Cleaning, started his enterprise in 2001. Jason's primary focus had been on office cleaning for large corporations. But in recent months, Jason has seen a decline in demand for his office cleaning services. Surprisingly, the competitive environment appeared relatively stable with no new competitors. However, Jason knew that office cleaning was a highfrequency service that is usually performed daily; therefore, competitors must have been doing something to attract his customers. Building a competitive advantage seemed to be the only option to offset competition. But as Jason pondered over his dilemma, he realized that prior to building his competitive advantage he needed to better understand how customers assessed service quality and what they look for in a superior cleaning service. Jason developed a research plan. First, he gathered information about his competitors, primarily through pamphlets and Web sites, as well as through a few phone calls in order to find out exactly what the competitors offered in their cleaning packages. In addition, Jason obtained from the Chamber of Commerce an updated list of local corporations. He planned on sending written questionnaires to them. Though the list of corporations contained 141 local company names, Jason chose to survey 75 of them. To better understand customer service expectations between both small and large corporations, Jason divided his surveys into two categories. The survey questions were designed to extract specific data from respondents with regard to service quality expectations in correlation to service frequency and price. Jason awaited the results. Though his primary focus had been on large corporations, he was flexible and would aim his efforts differently if needed. 102) In this scenario, which of the following is an example of primary data? A) list of corporations obtained from the Chamber of Commerce B) information obtained from competitors' pamphlets C) data obtained from the surveys conducted in the 75 companies D) information obtained from the Internet about current market trends E) data obtained from competitors' Web sites Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

103) Of the 141 companies on the list, Jason chose to survey only 75 of them. He sent surveys to both small as well as large companies. If Jason selected survey recipients randomly from two mutually exclusive groups comprised of small and large companies respectively, he most likely used a ________. A) simple random sample B) judgment sample C) convenience sample D) stratified random sample E) quota sample Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 104) If Jason used mostly open-ended questions in the survey to encourage people to answer in their own words, he is performing ________ research. A) focus group B) qualitative C) experiential D) causal E) exploratory Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 105) Marketing researchers can conduct their own searches of secondary data sources by using mail questionnaires and interviewing individuals. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 106) Since secondary data provide a good starting point for research and often help define problems and research objectives, companies do not need to collect primary data. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 36 Copyright © 2021 Pearson Education, Inc.

107) A weakness of market research is that it cannot help marketers measure the effectiveness of pricing changes or promotion activities. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 108) Causal research involves sending observers to watch and interact with consumers in their natural environments. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 109) Experimental research is best suited for gathering descriptive information. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 110) Personal interviews can be used to collect large amounts of information at a low cost per respondent. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 111) The most obvious advantages that Internet-based survey research offers over mail and personal interviewing approaches are high speed and low costs. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

112) A sample is a segment of the population selected for marketing research to represent the population as a whole. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 113) Open-ended questions are especially useful in exploratory research. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 114) The first question in a questionnaire should be intentionally difficult and complicated in order to weed out uninterested respondents. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 115) Neuromarketing involves measuring brain activity to learn how consumers feel and respond. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

116) What are the steps of the marketing research process? How do companies conduct research? Answer: The marketing research process involves four steps: defining the problem and research objectives, developing the plan, implementing the research plan, and interpreting and reporting the findings. Some large companies have their own research departments that work with marketing managers on marketing research projects. In addition, these companies–like their smaller counterparts– frequently hire outside research specialists to consult with management on specific marketing problems and to conduct marketing research studies. Sometimes firms simply purchase data collected by outside firms to aid in their decision making. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 117) Briefly compare the different types of research approaches for gathering primary data. Answer: Research approaches for gathering primary data include observations, surveys, and experiments. Observational research involves gathering primary data by observing relevant people, actions, and situations. Observations can reveal information that people are unwilling or unable to provide in surveys or experiments. Survey research, the most widely used method for primary data collection, is the approach best suited for gathering descriptive information. A company that wants to know about people's knowledge, attitudes, preferences, or buying behavior can often find out by asking them directly. The major advantage of survey research is its flexibility; it can be used to obtain many different kinds of information in many different situations. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, in person, or online. Experimental research is best suited for gathering causal information. It involves selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses. Experimental research tries to explain cause-andeffect relationships. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

118) Identify three ways that companies can collect secondary data. Answer: Companies can buy secondary data from outside suppliers such as Nielsen and U.S. MONITOR service by Kantar Futures. Also, companies can use commercial online databases such as ProQuest for a fee. Companies can use Internet search engines to locate relevant secondary information sources. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 119) Describe the major contact methods used to collect information from respondents in market research. Answer: Information can be collected by mail, telephone, personal interview, or online. Mail questionnaires can be used to collect large amounts of information at a low cost per respondent. Respondents may give more honest answers to more questions by mail than to an unknown interviewer in person or on the phone. Also, no interviewer is involved to bias respondents' answers. Telephone interviewing is one of the best methods for gathering information quickly, and it provides greater flexibility than mail questionnaires. Interviewers can explain difficult questions and, depending on the answers they receive, skip some questions or probe on others. Response rates tend to be higher than with mail questionnaires, and interviewers can ask to speak to respondents with the desired characteristics or even by name. Personal interviewing takes two forms: individual interviewing and group interviewing. Individual interviewing involves talking with people in their homes or offices, on the street, or in shopping malls. Such interviewing is flexible. Group interviewing consists of inviting 6 to 10 people to meet with a trained moderator to talk about a product, service, or organization. Participants normally are paid a small sum for attending. A moderator encourages free and easy discussion, hoping that group interactions will bring out actual feelings and thoughts. Online research can take many forms. A company can use the Internet or mobile technology as a survey medium: It can include a questionnaire on its Web or social media sites or use e-mail or mobile devices to invite people to answer questions. It can create online panels that provide regular feedback or conduct live discussions or online focus groups. Researchers can also conduct online experiments. AACSB: Analytical thinking Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

120) Describe the three decisions involved in designing a sample. Answer: Designing the sample requires three decisions. First, who is to be studied (what sampling unit)? The answer to this question is not always obvious. Second, how many people should be included (what sample size)? Large samples give more reliable results than small samples. However, larger samples usually cost more, and it is not necessary to sample the entire target market or even a large portion to get reliable results. Finally, how should the people in the sample be chosen (what sampling procedure)? AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 121) Compare and contrast closed-ended questions and open-ended questions for gathering data. Answer: Closed-ended questions include all the possible answers, and subjects make choices among them. Examples include multiple-choice questions and scale questions. Open-ended questions allow respondents to answer in their own words. Open-ended questions are especially useful in exploratory research, when the researcher is trying to find out what people think but is not measuring how many people think in a certain way. Closed-ended questions, on the other hand, provide answers that are easier to interpret and tabulate. AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 122) Briefly explain why marketers need marketing research in addition to competitive marketing intelligence. Answer: In addition to marketing intelligence information about general consumer, competitor, and marketplace happenings, marketers often need formal studies that provide customer and market insights for specific marketing situations and decisions. Marketing research gives marketers insights into customer motivations, purchase behavior, and satisfaction. AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

123) What type of research would be the most useful to determine if a 20-percent decrease in price for a high-end sedan would result in an increase in purchases sufficient to offset the reduced price? Why? Answer: Causal research would be the most useful in this instance because the objective of causal research is to test hypotheses about cause-and-effect relationships. AACSB: Analytical thinking Skill: Application Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate 124) Why is it important for managers to define the problem and establish research objectives? Answer: The statement of the problem and research objectives guides the entire research process. The manager and the researcher should put the statement in writing to be certain that they agree on the purpose and expected results of the research. AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 125) How do primary data differ from secondary data? Answer: Primary data consist of information collected for the specific purpose at hand. Secondary data, on the other hand, consist of information that already exists somewhere, having been collected for another purpose. AACSB: Application of knowledge Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 126) List two benefits of using secondary data. Answer: Secondary data can usually be obtained more quickly and at a lower cost than primary data. Also, secondary sources can sometimes provide data an individual company cannot collect on its own–information that either is not directly available or would be too expensive to collect. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy

127) What is observational research and when is it used? Answer: Observational research involves gathering primary data by observing relevant people, actions, and situations. Researchers often observe consumer behavior to glean customer insights they can't obtain by simply asking customers questions. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 128) What are some of the limitations of observational research? Answer: Some things simply cannot be observed, such as attitudes, motives, or private behavior. Long-term or infrequent behavior is also difficult to observe. Finally, observations can be very difficult to interpret. Because of these limitations, researchers often use observation along with other data collection methods. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 129) What is experimental research and when is it used? Answer: Experimental research is best suited for gathering causal information. Experiments involve selecting matched groups of subjects, giving them different treatments, controlling unrelated factors, and checking for differences in group responses. Thus, experimental research tries to explain cause-and-effect relationships. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Easy 130) How can researchers and managers arrive at the best interpretation of research findings? Answer: Findings can be interpreted in different ways, and discussions between researchers and managers will help point to the best interpretations. Thus, managers and researchers must work together closely when interpreting research results, and both must share responsibility for the research process and resulting decisions. AACSB: Written and oral communication Skill: Concept Objective: LO 4.3: Outline the role of marketing research and the steps in the marketing research process. Difficulty: Moderate

131) The fourth step in gathering insights into the marketplace and customers is ________. A) assessing marketing information needs B) developing marketing information C) performing marketing research D) analyzing and using marketing information E) preparing reports for marketing management Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 132) Customer relationship management (CRM) helps ________. A) firms monitor and minimize employee turnover B) customers manage information about different sellers in the market C) firms manage customer touch points to maximize customer loyalty D) customers locate the best deals in the market E) firms create artificial demand in the market Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 133) Customer information is often buried deep in separate databases and records of different company departments. To overcome such problems, many companies are now turning to ________ to manage detailed information about individual customers. A) neuromarketing B) customer needs marketing C) customer relationship management D) ethnographic research E) netnography research Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy

134) Customer relationship management integrates everything that a company's sales, service, and ________ teams know about individual customers. A) management B) marketing C) manufacturing D) engineering E) accounting Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 135) Which of the following is true about customer relationship management (CRM)? A) Data mining has limited applicability in CRM activities. B) Sophisticated analytical tools are sparingly used in CRM activities. C) CRM reduces the number of customer touch points. D) CRM aims to maximize customer loyalty. E) CRM enables firms to compare various product and service categories. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Moderate 136) What is the purpose of marketing analytics? A) to obtain secondary data and integrate it with primary data B) to gather and integrate data in a central, accessible location C) to interpret the data obtained D) to prevent the theft of customer data E) to identify and discard outdated data Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy

137) In CRM, ________ techniques are used to sort through data and locate useful findings about customers. A) data warehousing B) marketing analytics C) niche marketing D) data conservancy E) mass marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 138) A successful CRM program is expected to help a company achieve all of the following EXCEPT ________. A) provide higher levels of customer service B) develop deeper customer relationships C) create offers tailored to meet specific customer requirements D) understand the competition better E) pinpoint high-value customers and cross-sell products Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Challenging 139) Ralph Goldsmith works for Zenith Inc., a leading cosmetic company based in Illinois. At Zenith, Ralph's primary responsibility revolves around digging deeply into customer data to gain valuable insights about customer needs, motives, and attitudes. This data is, in turn, used by Zenith to personalize its customers' shopping experiences. Ralph's position at Zenith requires him to focus primarily on ________. A) customer sales B) human resource management C) risk assessment D) financial analysis E) customer relationship management Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Moderate

140) Some marketing analytics employ ________ , technology by which machines think and learn in a way similar to the human mind. A) robots B) digital interfaces C) artificial intelligence D) big data machines E) search engines Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 141) Customer touch points include customer purchases, satisfaction surveys, credit and payment interactions, sales force contacts, and service and support calls. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 142) Customer relationship management helps manage detailed information about individual customers and maximize customer loyalty. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Easy 143) An obvious disadvantage of using customer relationship management is its ineffectiveness in pinpointing high-value customers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Moderate

144) How can a company manage information on specific customers more effectively? Answer: Many companies are now turning to customer relationship management (CRM) to manage detailed information about individual customers and carefully manage customer touch points to maximize customer loyalty. By using sophisticated software and analytical tools, information about customers can be integrated from all sources and analyzed in depth, and the results can be applied to build stronger customer relationships. CRM integrates everything that a company's sales, service, and marketing teams know about individual customers to provide a 360-degree view of the customer relationship. Moreover, CRM analysts use analysis tools, technologies, and processes to dig out meaningful patterns in big data to gain customer insights and gauge marketing performance. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Moderate 145) What is the most common CRM mistake? Answer: The most common CRM mistake is to view CRM as technology processes only. Companies can't improve customer relationships by simply installing some new software. Instead, marketers should start with the fundamentals of managing customer relationships and then employ high-tech data and analytics solutions. They should focus on the customer relationship, the central aspect of CRM. AACSB: Analytical thinking Skill: Concept Objective: LO 4.4: Explain how companies analyze and use marketing information. Difficulty: Moderate 146) Joe Kerry, owner of a small bakery, wants to obtain marketing insights to improve his business. Joe has a limited budget and would like to gather free secondary data. What is the best option for Joe? A) mail questionnaires B) focus group interviews C) Internet search engines D) personal interviews E) commercial online databases Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate

147) Which of the following is least likely to be a tool used by small businesses? A) observation of customers and potential customers B) online product and service review sites C) purchasing data from Nielsen or the U.S. MONITOR service D) informal surveys using small convenience samples E) competitor and customer web, mobile, and social media sites Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy 148) Often, international researchers must collect their own primary data because ________. A) reliable secondary data is both scarce and difficult to find B) information from commercial online databases is unreliable C) it is cheaper to obtain primary data than secondary data D) it is easier to obtain primary data than secondary data E) it is illegal in some countries to track customer data Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate 149) For international researchers, ________ is the most obvious obstacle. A) language B) technology C) infrastructure D) motivation E) political risk Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy

150) Which of the following is true with regard to problems faced by international researchers? A) Translation of questionnaires increases research costs and risks of error. B) Erratic purchasing patterns limit data reliability and validity. C) More often than not, cultural differences enrich research findings. D) Diverse markets always yield conflicting data. E) The primary data obtained by international researchers are almost always error prone. Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate 151) Which of the following is most likely true about international research? A) The availability of good secondary data makes international research rewarding. B) The costs of conducting international research are much higher than the benefits offered. C) Technology enables customer responses to be translated quickly and accurately. D) Costly international research is necessary if firms want to succeed in foreign markets. E) Interpretations of data are fairly consistent among different countries. Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate 152) Consumers who mistrust marketing research are more likely to ________. A) consider marketing research initiatives as genuine endeavors aimed at heightening customer satisfaction B) believe that marketers rarely use personal data to manipulate consumer behavior C) believe that the misuse of research findings is highly unlikely D) consider marketing research efforts, such as interviewing, intrusions on consumer privacy E) feel positive about being personally interviewed by marketers Answer: D AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate

153) While collecting sensitive customer data, market researchers should adhere to all of the following guidelines EXCEPT ________. A) asking only for the information needed B) using information responsibly to provide value C) providing respondents with the research firm's contact information D) sharing information without the customer's authorization E) explaining to respondents how the information will be used Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy 154) In a company, the job of a chief privacy officer is to ________. A) ensure timely product deliveries B) detect patent infringements and copyright violations C) safeguard the privacy of a firm's customers D) engage in niche marketing E) safeguard the privacy of senior executives Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy 155) Small businesses and not-for-profit organizations can collect a significant amount of information at very little cost by researching online. They can also use observation and informal surveys effectively. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy 156) For international researchers, language is a primary obstacle. Answer: TRUE AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy

157) Most major companies have now appointed a chief privacy officer (CPO), whose job is to safeguard the privacy of the companies in the international business environment. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Easy 158) Discuss how small businesses and not-for-profit organizations can obtain market insights economically. Answer: Small businesses and not-for-profit organizations can obtain good marketing insights through observation or informal surveys using small convenience samples. Also, many associations, local media, and government agencies provide special help to small organizations. Finally, small businesses can collect a considerable amount of information at very little cost online. They can scour competitor and customer Web sites and use Internet search engines to research specific companies and issues. In summary, secondary data collection, observation, surveys, and experiments can all be used effectively by small organizations with small budgets. However, although these informal research methods are less complex and less costly, they still must be conducted with care. Managers must think carefully about the objectives of the research, formulate questions in advance, recognize the biases introduced by smaller samples and less skilled researchers, and conduct the research systematically. AACSB: Written and oral communication Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate 159) Explain the common problems that international marketing researchers encounter. Answer: International researchers deal with less homogeneous markets. The markets often vary greatly in their levels of economic development, cultures and customers, and buying patterns. Good secondary data are difficult to find in many foreign markets. Because of the scarcity of good secondary data, international researchers often must collect their own primary data. In addition, choosing representative samples and finding methods of contacting participants can be a formidable task. Cultural and language differences can present obstacles in interpreting the data and drawing realistic conclusions. Consumers' attitudes in other countries may hinder the process of collection. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate

160) Why do some consumers resent marketing research? Answer: Although some consumers actually enjoy being interviewed and giving their opinions, others strongly resent or even mistrust marketing research. They don't like being interrupted by researchers. They worry that marketers are building huge databases full of personal information about customers. Or they fear that researchers might use sophisticated techniques to probe our deepest feelings, peek over our shoulders as we shop, or track us as we browse and interact on the Internet and then use this knowledge to manipulate our buying. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 4.5: Discuss the special issues some marketing researchers face, including public policy and ethics issues. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 5 Consumer Markets and Buyer Behavior 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy 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

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

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 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 9) The starting point of understanding how consumers respond to various marketing efforts is called the stimulus-response model of buyer behavior. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy 10) Consumers can easily explain what influences their purchases. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.1: Define the consumer market and construct a simple model of consumer buyer behavior. Difficulty: Easy

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

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 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 2060. 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 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

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 19) ________ involves enlisting established influencers or creating new influencers to spread the word about a firm's brands. A) Word-of-mouth influence B) Opinion leading C) Influencer marketing D) Social networking E) Using a reference group Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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

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 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 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

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 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

27) Family is one of the ________ factors that influence consumer behavior. A) regional B) social C) personal D) psychological E) business 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) Researchers have discovered that they can send hidden commands to affect the behavior of smart devices without the consumer knowing it. These commands are known as ________. A) digital stimuli B) subliminal messages C) learning stimuli D) selective perception E) stimulus response messages Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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

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 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 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence 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 35) Companies that use brand ambassadors are most likely involved in ________ marketing. A) ambush B) spam C) buzz D) viral E) database Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate 38) Independent bloggers are self-made influencers. Traits that make them relevant to marketers include ________. A) creative writing skills B) professional website C) good fit with the brand D) a few vocal followers E) technological skills Answer: C 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 40) ________ traditionally has been considered the main purchasing agent for the family in the 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

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 43) Consumer information provider Claritas uses a life-stage segmentation system that places U.S. households into one of 68 different life-stage groups. According to Claritas' 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: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 44) Life-stage changes usually result from ________. A) birthdays B) mentors C) friends D) life-changing events E) siblings Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

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

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 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 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

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

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

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 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 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 23 Copyright © 2021 Pearson Education, Inc.

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 AACSB: Analytical thinking 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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 mid2000s. 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

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 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 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

82) Social class is based on shared value systems and common life experiences and situations. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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 84) Online social networks represent an important avenue to create buzz for marketers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate 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 87) People's tastes in food, clothes, recreation, and even furniture remain unchanged as they age. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

88) Personality is a person's pattern of living as expressed in his or her psychographics. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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 91) Alternative evaluation is the process by which people select, organize, and interpret information to form a meaningful picture of the world. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 92) While an individual's beliefs are difficult to change, an individual's attitudes are easy to change. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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 29 Copyright © 2021 Pearson Education, Inc.

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 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. AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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 98) Define brand personality. Answer: A brand personality is the specific mix of human traits that may be attributed to a particular brand. AACSB: Analytical thinking Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy

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 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; Written and oral communication Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate 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; Written and oral communication Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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 communication; Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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 priceconscious than other segments; they are also strongly motivated by quality and selection. Asian American consumers are the most affluent U.S. demographic segment and are the second fastestgrowing population subculture, after Hispanic Americans. Asian American consumers are the most brand conscious of all the ethnic groups. They can be fiercely brand loyal. AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Easy 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; Written and oral communication Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate

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; Diverse and multicultural work environments Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. Difficulty: Moderate 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; Written and oral communication Skill: Concept Objective: LO 5.2: Name the four major factors that influence consumer buyer behavior. 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 bottomlevel, 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 selfactualization. AACSB: Written and oral communication 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 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 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 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

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 112) Which of the following consumer buying behaviors is related to conditions of lowconsumer 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 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 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

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 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 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 116) Carrie tends to purchase various brands of bath soap. She has never been loyal to a specific brand; 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 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

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 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 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 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: Moderate 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 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

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 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 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 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 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

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 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 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 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 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

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 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: Moderate 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 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 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 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

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 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 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 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 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

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 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 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 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 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

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 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 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 137) The ________ is the sum of the ongoing experiences consumers have with a brand that affect their buying behavior, engagement, and brand advocacy over time. A) customer engagement B) consumer delight C) market mapping D) customer journey E) customer behavior Answer: D 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

138) A person's customer journey ________. A) is unique to that person B) is mappable C) never changes D) is the same for all brands E) begins with customer advocacy Answer: A 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 139) Store salespeople and a consumer's friends rarely impact someone's final purchase decision. Answer: FALSE 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: Moderate 140) Dissonance-reducing buying behavior typically occurs when a buyer sees little difference among brands but is highly involved with the purchase. Answer: TRUE 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 141) 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 142) Habitual buying behavior involves consumers searching extensively for information about brands and evaluating brand characteristics. Answer: FALSE 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: Moderate 44 Copyright © 2021 Pearson Education, Inc.

143) Commercial sources of information typically legitimize and evaluate products for buyers. Answer: FALSE 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 144) 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 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 145) 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 146) Why should marketers set up systems that encourage customers to complain about products? Answer: Most customers never share their complaints with marketers; without this information, it is difficult for a company to identify how it can improve. 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: Easy

147) 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; Written and oral communication 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 148) 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; Written and oral communication 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

149) 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; sometimes they may make careful, logical calculations and other times they may rely on intuition and buy on impulse. Consumers then make the purchase decision, buying the product. The last component of the process is postpurchase behavior, which is determined by any difference between the consumer's expectations for the product and the perceived performance of the product. AACSB: Written and oral communication 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 150) 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 151) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

152) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 153) 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 154) 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

155) 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 156) 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 157) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy

158) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate 159) 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 160) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 161) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 162) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

163) Early adopters are opinion leaders in their communities. They adopt new ideas early but carefully. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 164) Early mainstream adopters accept new ideas after the average person. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 165) 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 166) 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 167) 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 168) 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 51 Copyright © 2021 Pearson Education, Inc.

169) What are the differences between innovators, early adopters, and early mainstream adopters? Answer: Innovators are more willing to take on risk; early adopters are opinion leaders in their communities and adopt new ideas early but carefully. Early mainstream adopters are deliberate; although they rarely are leaders, they adopt new ideas before the average person. AACSB: Analytical thinking Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Easy 170) 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 171) 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; the greater the perceived relative advantage, the sooner the product will be adopted. Compatibility is the degree to which the innovation fits the values and experiences of potential consumers; high compatibility leads to quick adoption. Complexity is the degree to which the innovation is difficult to understand or use; the greater the complexity, the slower the adoption rate. Divisibility is the degree to which the innovation may be tried on a limited basis; the higher the divisibility, the slower the rate of adoption. Finally, communicability is the degree to which the results of using the innovation can be observed or described to others; high communicability leads to a higher rate of adoption. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 5.4: Describe the adoption and diffusion process for new products. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 6 Business Markets and Business Buyer Behavior 1) The decision process by which business buyers determine which products and services their organizations need to purchase and then find, evaluate, and choose among alternative suppliers and brands is known as ________. A) situational analysis B) business buying process C) business diversification D) business process automation E) lateral expansion Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 2) Business buyer behavior refers to the ________. A) buying behavior of consumers who buy goods and services for personal consumption B) buying behavior of the organizations that buy goods and services for use in the production of other products and services that are sold, rented, or supplied to others C) buying behavior of consumers who rely on small retailers for the regular supply of provisions D) decision process by which business buyers determine which products and services their organizations need to purchase E) strong affinity of businesses for value-for-money deals Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 3) Which of the following is NOT part of the business market? A) Kruger Group sells interior security systems to resorts. B) A country club buys safety equipment for its swimming pool. C) Maria Theresa shops for her family's groceries at the local Whole Foods store. D) A firm buys laptops from Dell for company salespeople to use when traveling. E) Airmark sells a vinyl printing press to a manufacturer of plastic storage containers. Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate

4) Business markets are similar to consumer markets in that ________. A) the nature of the buying unit is the same for both B) the decision processes involved in both the markets are same C) both involve people who assume buying roles and make purchase decisions to satisfy needs D) both share the same market structure E) the types of decisions are fairly consistent in both the markets Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 5) Differences between business markets and consumer markets include all of the following EXCEPT ________. A) nature of the buying unit B) market structure and demand C) number of buyers D) people who make purchase decisions to satisfy needs E) types of decisions and the decision process Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 6) The business marketer normally deals with ________ than the consumer marketer does. A) far fewer but far larger buyers B) far more but far smaller buyers C) negligible customer complaints D) far less fluctuations in demands E) far more elastic demand Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate

7) The Pure Drug Company produces insulin, a product with a very stable demand. Even though the price changed several times in the past two years, the demand for Pure Drug's insulin remained relatively unaffected. In this instance, the demand for insulin is representative of ________ demand. A) latent B) negative C) inelastic D) derived E) composite Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 8) In business markets with inelastic demand ________. A) the total demand for products is not much affected by short-term price changes B) buyers are highly sensitive to price changes C) derived demand is absent D) a business purchase usually involves fewer decision participants E) a business purchase usually does not involve a professional purchasing effort Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 9) A university enrolled 200 graduate students in the Fall of 2015. However, the enrollment rate was only slightly affected following a 12-percent hike in tuition the following fall. This illustrates ________ demand. A) derived B) negative C) highly elastic D) composite E) inelastic Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate

10) Business demand that ultimately comes from the demand for consumer goods is known as ________ demand. A) derived B) negative C) primary D) consumer E) elastic Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 11) Green Bees, a popular American heavy-metal band, will perform in Berlin during Christmas. There is a high demand for concert tickets among fans worldwide who are looking forward to the much-awaited performance. In this instance, the high demand for tickets for the Green Bees concert is representative of ________ demand. A) primary B) negative C) derived D) elastic E) business Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 12) Demand for outboard motors depends on consumers purchasing fishing boats. This is an example of ________ demand. A) primary B) composite C) derived D) elastic E) negative Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate

13) Jeremy's, a handbag manufacturer in Lower Manhattan, procures a large stock of leather in anticipation of brisk sales of handbags during December. This is an example of a(n) ________ demand. A) composite B) derived C) primary D) latent E) inelastic Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 14) Which of the following is true about business purchases? A) Business purchases involve more professional purchasing effort than consumer purchases. B) Business purchases involve fewer participants in decision making compared to consumer purchases. C) Purchasing agents are absent in business purchases. D) Business purchases involve less technical and economic considerations compared to consumer purchases. E) Business purchases are usually quicker and more informal than are consumer purchases. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 15) A business purchase usually involves all of the following EXCEPT ________. A) more decision participants B) manufacturing representatives C) more professional purchasing effort D) trained purchasing agents E) high-level trained supply managers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy

16) Since business marketers have fewer buyers than consumer marketers, business buyers often face ________ than do consumer buyers. A) less complex buying decisions B) shorter buying processes C) informal buying processes D) more complex buying decisions E) fewer product details Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 17) ________ involves systematically developing networks of supplier-partners to ensure a dependable supply of products and materials for use in making products or reselling them to others. A) Supplier development B) Business buying C) Supplier quality assurance D) Relationship management E) Executive development Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 18) The owners of a manufacturing firm in Ohio have developed a core network of suppliers to ensure an uninterrupted supply of products. This is an example of ________. A) capability management B) a supply bottleneck C) asset management D) backsourcing E) supplier development Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy

Refer to the scenario below to answer the following question(s). Alpha Stampings Inc. produces 14 metal stampings for the automotive industry. Due to industry design changes and consumer demands, for the next financial year, six of those stampings will require a slight change: two will have an extra hole punched through the side, two will require an extra plating process, and two will require an additional weld operation. In the meantime, purchasing agent Richard Koehl has been asked to reduce the number of Alpha's steel suppliers in an effort to cut costs. After obtaining updated price quotations and steel samples from his current suppliers, Richard faced a dilemma. Until now, he had selected his suppliers based on quality and price, but the major consideration had been the type of steel required and the specialized production processes of his respective suppliers. Not all of Alpha's suppliers could produce the exact grades of steel needed; some suppliers were better at producing certain types of steel than others. Richard contacted several employees at Alpha who had worked with the various types of steel in the past. The quality control manager and line inspector, for example, could help to determine which suppliers had the capabilities of producing specific types of steel. The production control manager could provide input regarding which types of steel worked best in which presses. The warehouse foreman gave inputs regarding how long various types of steel could be held in inventory before rust spots began to form on their surfaces. Each person contributed the necessary information to help Richard in making his decision. 19) The demand for Alpha Stampings' products is ultimately based on the demand for new automobiles in the consumer market. This is an example of ________ demand. A) negative B) latent C) primary D) derived E) composite Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 20) In the business buying process, business buyers determine which products and services their organizations need to purchase. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy

21) The main differences between business and consumer markets are in market structure and demand, the nature of the buying unit, and the types of decisions and the decision process involved. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 22) Most businesses that manufacture products for the consumer market also sell directly to consumers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 23) The business marketer normally deals with far fewer but far larger buyers than the consumer marketer does. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 24) The demand for many business goods tends to change more slowly than the demand for consumer goods. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 25) Derived demand refers to the business demand that ultimately comes from the demand for consumer goods. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy

26) Business demand ultimately derives from the demand for consumer goods. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 27) In the business buying process, the buyer and seller are relatively less dependent on each other. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 28) Why is demand in the business market mostly inelastic? Answer: The total demand for many business products is not much affected by price changes, especially in the short run. A drop in the price of leather will not cause shoe manufacturers to buy much more leather unless it results in lower shoe prices that, in turn, increase consumer demand for shoes. AACSB: Application of knowledge Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 29) Explain the concept of derived demand. Answer: Derived demand refers to business demand that ultimately comes from–or derives from–the demand for consumer goods. AACSB: Written and oral communication Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Easy 30) Why is the business buying process more formalized than the consumer buying process? Answer: Large business purchases usually call for detailed product specifications, written purchase orders, careful supplier searches, and formal approval. Business purchases often involve large sums of money and complex technical and economic considerations. AACSB: Application of knowledge Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 9 Copyright © 2021 Pearson Education, Inc.

31) What is supplier development? Answer: Supplier development refers to systematic development of networks of supplierpartners to ensure an appropriate and dependable supply of products and materials for use in making products or reselling them to others. AACSB: Written and oral communication Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 32) Distinguish between business markets and consumer markets. Answer: As compared to consumer markets, business markets usually have fewer but larger buyers. Business demand is derived demand, which tends to be more inelastic and fluctuating than consumer demand. The business buying decision usually involves more, and more professional, buyers. Business buyers usually face more complex buying decisions, and the buying process tends to be more formalized. Finally, business buyers and sellers are often more dependent on each other. AACSB: Analytical thinking; Written and oral communication Skill: Concept Objective: LO 6.1: Define the business market and explain how business markets differ from consumer markets. Difficulty: Moderate 33) In which of the following would the buyer reorder a product without any modifications? A) reverse auction B) solution selling C) new task D) straight rebuy E) modified rebuy Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 34) Sigma Inc., a software firm based in California, reordered 50 printers from the designated provider without any modifications. This is an example of ________. A) derived demand B) inelastic demand C) a straight rebuy D) a new task E) a modified rebuy Answer: C AACSB: Application of knowledge; Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 10 Copyright © 2021 Pearson Education, Inc.

35) A marketer wanting to determine business buyer behavior is most likely to ask which of the following questions? A) Are buyers sensitive toward price changes in consumer markets? B) What are the major influences on buyers? C) Are niche markets more profitable than mass markets? D) How do interpersonal factors affect organizational performance? E) Is the role of gatekeepers relevant in the international business environment? Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 36) In a ________ situation, the "in" suppliers may become nervous and feel pressured to put their best foot forward to protect an account and the "out" suppliers may see the present situation as an opportunity to make a better offer and gain new business. A) straight rebuy B) new task C) reverse auction D) modified rebuy E) solutions selling Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 37) In a(n) ________ situation, the buyer wants to revise product specifications, prices, terms, or suppliers. A) reverse auction B) straight rebuy C) new task D) modified rebuy E) absolute auction Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

38) In a straight rebuy, ________. A) the "in" suppliers try to maintain product and service quality to keep the business B) the "in" suppliers feel pressured to protect an account C) the "out" suppliers view the situation as an opportunity to gain new business D) a company buys a product or a service for the first time E) buyers are keen on revising product specifications Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 39) Gina Parker owns an ad agency in Baton Rouge. She regularly purchases cleaning supplies for her custodial staff, using the same vendor and ordering relatively consistent amounts of the same products on each purchase. This is an example of ________. A) a modified rebuy situation B) a new task C) a straight rebuy situation D) reverse auction E) product differentiation Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 40) Which of the following is most likely true about a straight rebuy? A) Suppliers are not required to focus on quality of products or services delivered. B) A straight rebuy is far more complex than a new-task situation. C) A straight rebuy is handled on a routine basis by the purchase department. D) A straight rebuy occurs only when a buyer wants to pinpoint and procure the best deal in the market. E) A straight rebuy involves more opportunities for "out" buyers than do other types of purchasing situations. Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

41) Ralph works for a manufacturing company in Ohio. Recently, he called in a department manager to assist in the purchase of some heavy machinery. After consulting the department manager, Ralph is considering a change in product specifications and characteristics and expects suppliers to meet his requirements. Which of the following is evident here? A) modified rebuy B) new task C) straight rebuy D) product differentiation E) reverse auction Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 42) Sheffield Cargo serves both consumer and business markets, but most of its revenue comes from its business customers. Of late, the business customers of Sheffield Cargo have demanded a change in the packaging of heavy cargo along with a more sophisticated and user-friendly extranet framework. Sheffield Cargo is under pressure to offer better products and services or risk losing a huge portion of its customers. This is an example of ________. A) a new task B) a modified rebuy situation C) a straight rebuy situation D) trade exchange E) reverse auction Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 43) Peter Adams, an entrepreneur, decided to start a new technology venture. As he needed servers and computers for his company, he decided to order these from a local vendor who was offering attractive discounts. In this instance, Peter ________. A) faces a new task situation B) faces a modified rebuy situation C) is most likely to benefit the most from reverse auction D) faces the need for product differentiation E) plans to attract customers by offering products at below-market prices Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

44) ________ refers to a business buying situation in which the buyer purchases a product or service for the first time. A) Modified rebuy B) Straight rebuy C) New task D) Reverse auction E) Derived demand Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 45) A new task situation presents ________. A) low risk for the buyer B) the fewest decisions for the buyer C) the least information required D) the greatest opportunity and the greatest challenge to the marketer E) the smallest number of decision participants Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 46) ________ refers to buying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation. A) Systems selling B) Performance review C) Problem recognition D) Proposal solicitation E) General need specification Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

47) Solutions selling ________. A) is often a key business marketing strategy for winning and holding accounts B) refers to a business buying situation in which the buyer purchases a product or service for the first time C) refers to a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers D) is equivalent to cold calling E) refers to a business buying situation in which the buyer routinely reorders something without any modifications Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 48) Rudolf Technologies Inc. decided to enter the automobile service market. Consequently, the company decided to procure the tools and machines needed from a reputable supplier. Rudolf Technologies is facing ________. A) a new task situation B) a modified rebuy situation C) negative competition D) the need to outsource its primary service offering E) the pressure to diversify its market Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 49) The decision-making unit of a purchasing organization is called its ________. A) value chain B) buying center C) customer support system D) quality center E) innovation center Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

50) In routine buying situations, which of the following members of the buying center has formal or informal power to select or approve the final suppliers? A) users B) influencers C) gatekeepers D) deciders E) buyers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 51) The ________ refer(s) to all the individuals and units that play a role in the purchase decision-making process. A) users B) influencers C) buying center D) gatekeepers E) systems sellers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 52) A(n) ________ controls the flow of information to others in the buying center. A) user B) influencer C) buyer D) decider E) gatekeeper Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

53) ________ refer to members of the buying organization who help define specifications and provide information for evaluating alternatives. A) Gatekeepers B) Influencers C) Users D) Deciders E) Buyers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 54) ________ have formal authority to select the supplier and arrange the terms of purchase. A) Users B) Influencers C) Buyers D) Gatekeepers E) Deciders Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 55) ________ refer to people in an organization's buying center who affect the buying decision; they often help define specifications and provide information for evaluating alternatives. A) Users B) Influencers C) Buyers D) Gatekeepers E) Deciders Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

56) ________ may help shape product specifications, but their major role is to select vendors and to negotiate. A) Gatekeepers B) Deciders C) Buyers D) Influencers E) Users Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 57) Eric Mason, an employee of Huntington Steelworks, is responsible for defining product specifications and providing relevant information for evaluating alternatives in his organization's buying center. Eric, whose opinions affect the buying decisions of his organization to a great extent, is most likely a(n) ________. A) user B) influencer C) decider D) gatekeeper E) buyer Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 58) Dora has formal authority to select the suppliers and arrange terms of purchase for many of the items her firm uses. Her role in the buying center is that of a(n) ________. A) user B) influencer C) buyer D) decider E) gatekeeper Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

59) Paul, a purchasing agent for Kiel Inc., has the authority to prevent salespersons from seeing the decision makers in his organization. Which of the following best describes Paul's position? A) influencer B) decider C) gatekeeper D) buyer E) user Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 60) Who among the following does NOT participate in the purchase decision process of a buying organization? A) individuals who use the product or service B) individuals who influence the buying decision C) individuals who make the buying decision D) individuals who supply raw materials E) individuals who control the flow of information to others Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 61) Jason Perkins has the informal power to approve the final suppliers in his organization. In other words, Jason plays the role of a(n) ________ in his organization's buying center. A) gatekeeper B) decider C) buyer D) influencer E) user Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

62) A technician in a hospital told the chief dentist, Dr. Albrecht, that the hospital should purchase equipment that would sterilize the dentists' tools without using any water because water tends to affect the durability of the tools over time. Dr. Albrecht located some articles on chemical sterilizers and gathered more information on how they worked. After talking to salespeople, Dr. Albrecht finally placed his order for the machine. In this instance, Dr. Albrecht played the role of a(n) ________. A) monitor B) decider C) agent D) influencer E) gatekeeper Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Challenging 63) Marissa Hopkins, a hospital nurse, notices that the gurneys used in the hospital are not durable enough. She informed the hospital authorities about Grace Care Inc., a new company selling lightweight and durable gurneys. In this instance, Marissa played the role of a(n) ________. A) strategist B) buyer C) gatekeeper D) influencer E) decider Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 64) In new product buying, the users are often the ________. A) monitors B) influencers C) gatekeepers D) deciders E) primary advertisers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

65) Phoi Nguyen, a manufacturing mechanic, determines that the molds for manufacturing plastic jar lids are wearing out sooner than expected. Phoi contacts her manager to request that the parts be reordered. In this instance, Phoi played the role of a(n) ________. A) user B) buyer C) gatekeeper D) influencer E) decider Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 66) In routine buying, buyers are often the ________, or at least the approvers. A) monitors B) influencers C) gatekeepers D) deciders E) primary advertisers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 67) Which of the following is an environmental factor that influences business buyers? A) organizational procedures B) individual motives C) organizational objectives D) supply of key materials E) group dynamics Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

68) Business buyers are heavily influenced by factors in the current and expected economic environment, such as ________. A) level of primary demand B) organizational objectives C) group dynamics D) individual motives E) culture and customs Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 69) The major influences on the buying process at General Aeronautics Limited include supply conditions and technological changes, which would both be categorized as ________ factors. A) organizational B) individual C) systemic D) interpersonal E) environmental Answer: E AACSB: Application of knowledge Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 70) ________ can strongly influence business buyer reactions to the marketer's behavior and strategies, especially in the international marketing environment. A) Political developments B) Culture and customs C) Technological changes D) Competitive developments E) The cost of money Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

71) Which of the following is an organizational factor that influences business buyers? A) technology B) company procedures C) employee attitudes D) employee motives E) group dynamics Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 72) Which of the following factors influencing the business buying process do marketers typically find most difficult to assess? A) economic B) technological C) interpersonal D) organizational E) environmental Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 73) Factors such as a firm's objectives, procedures, and systems are examples of ________ influences on the business buyer behavior. A) political B) interpersonal C) technological D) organizational E) cultural Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

74) If a buying center is most influenced by authority in the business buying process, it can be safely concluded that ________ factors have a major influence on its buying behavior. A) technological B) systemic C) interpersonal D) strategic E) economic Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 75) Individual factors that are major influences on business buyer behavior include all of these EXCEPT ________. A) ethnic background B) age C) job position D) personality E) buying style Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

Refer to the scenario below to answer the following question(s). Alpha Stampings Inc. produces 14 metal stampings for the automotive industry. Due to industry design changes and consumer demands, for the next financial year, six of those stampings will require a slight change: two will have an extra hole punched through the side, two will require an extra plating process, and two will require an additional weld operation. In the meantime, purchasing agent Richard Koehl has been asked to reduce the number of Alpha's steel suppliers in an effort to cut costs. After obtaining updated price quotations and steel samples from his current suppliers, Richard faced a dilemma. Until now, he had selected his suppliers based on quality and price, but the major consideration had been the type of steel required and the specialized production processes of his respective suppliers. Not all of Alpha's suppliers could produce the exact grades of steel needed; some suppliers were better at producing certain types of steel than others. Richard contacted several employees at Alpha who had worked with the various types of steel in the past. The quality control manager and line inspector, for example, could help to determine which suppliers had the capabilities of producing specific types of steel. The production control manager could provide input regarding which types of steel worked best in which presses. The warehouse foreman gave inputs regarding how long various types of steel could be held in inventory before rust spots began to form on their surfaces. Each person contributed the necessary information to help Richard in making his decision. 76) In this scenario, which of the following had the greatest influence on the business buying behavior at Alpha Stampings? A) individual preferences B) organizational structure C) interpersonal influences D) technological changes E) cultures and customs Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

77) The management's directive to reduce the number of steel suppliers refers to the influence of ________ factors affecting the business buying behavior of Alpha. A) political B) organizational C) interpersonal D) individual E) cultural Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 78) In a straight rebuy, the buyer wants to alter product specifications, prices, terms, or suppliers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 79) A company buying a product or service for the first time faces a new task situation. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 80) The buying center is a fixed and formally identified unit within the buying organization. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 81) Within the organization, buying activity consists of two major parts: the buying center and the buying decision process. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

82) Influencers often help define specifications and also provide information for evaluating alternatives. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 83) Gatekeepers have formal or informal power to select or approve the final suppliers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 84) Rachel Stein works for the LeBray Beverage Company. She helps define product specifications and also provides information for evaluating alternatives. Rachel plays the role of gatekeeper. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 85) Business buyers are subject primarily to economic influences when they make their buying decisions. Emotional or personal factors rarely are involved. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 86) What happens in a modified rebuy? Answer: In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The "in" suppliers may become nervous and feel pressured to put their best foot forward to protect an account. "Out" suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

87) How do influencers contribute to the purchase decision process? Answer: Influencers often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 88) What is the primary function of gatekeepers in an organization? Answer: Gatekeepers control the flow of information to others. For example, purchasing agents often have authority to prevent salespersons from seeing users or deciders. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 89) How do interpersonal factors influence the business buying process? Answer: The buying center usually includes many participants who influence each other, so interpersonal factors also influence the business buying process. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 90) What functions do buyers serve in a buying center? Answer: Buyers have formal authority to select the supplier and arrange terms of purchase. Buyers may help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex purchases, buyers might include high-level officers participating in the negotiations. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy 91) Why is it difficult to assess interpersonal factors that influence the business buying process? Answer: Interpersonal factors such as who is liked, who controls rewards and punishments, and who has special relationships with other important participants are often very subtle and not obvious to the external observer. Therefore, a business marketer is likely to find it difficult to assess interpersonal factors in the business buying process. AACSB: Written and oral communication Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

92) Describe the major types of buying situations. Answer: There are three major types of buying situations. In a straight rebuy, the buyer reorders something without any modifications. It is usually handled on a routine basis by the purchasing department. To keep the business, "in" suppliers try to maintain product and service quality. "Out" suppliers try to find new ways to add value or exploit dissatisfaction so that the buyer will consider them. In a modified rebuy, the buyer wants to modify product specifications, prices, terms, or suppliers. The "in" suppliers may become nervous and feel pressured to put their best foot forward to protect an account. "Out" suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business. A company buying a product or service for the first time faces a new task situation. In such cases, the greater the cost or risk, the larger the number of decision participants and the greater the company's efforts to collect information. The new task situation is the marketer's greatest opportunity and challenge. The marketer not only tries to reach as many key buying influences as possible but also provides help and information. The buyer makes the fewest decisions in the straight rebuy and the most in the new task decision. AACSB: Written and oral communication Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 93) Explain the advantages of systems selling. Answer: Many business buyers prefer to buy a complete solution to a problem from a single seller rather than buying separate products and services from several suppliers and putting them together. The sale often goes to the firm that provides the most complete system for meeting the customer's needs and solving its problems. Such systems selling (or solutions selling) is often a key business marketing strategy for winning and holding accounts. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Easy

94) Define a buying center and the major roles played by members of an organization in the purchase decision process. Answer: The decision-making unit of a buying organization is called its buying center. It consists of all the individuals and units that play a role in the business purchase decision-making process. This group includes the actual users of the product or service, those who make the buying decision, those who influence the buying decision, those who do the actual buying, and those who control buying information. The buying center includes all members of the organization who play any of five roles in the purchase decision process: 1. Users are members of the organization who will use the product or service. In many cases, users initiate the buying proposal and help define product specifications. 2. Influencers often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers. 3. Buyers have formal authority to select the supplier and arrange terms of purchase. Buyers may help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex purchases, buyers might include high-level officers participating in the negotiations. 4. Deciders have formal or informal power to select or approve the final suppliers. In routine buying, the buyers are often the deciders, or at least the approvers. 5. Gatekeepers control the flow of information to others. For example, purchasing agents often have authority to prevent salespersons from seeing users or deciders. Other gatekeepers include technical personnel and even personal secretaries. AACSB: Written and oral communication Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 95) "The buying center concept presents a major marketing challenge." What does a business marketer need to learn in order to deal with the challenge effectively? Answer: The buying center is not a fixed and formally identified unit within the buying organization. It is a set of buying roles assumed by different people for different purchases. Within the organization, the size and makeup of the buying center will vary for different products and for different buying situations. The buying center concept presents a major marketing challenge. The business marketer must learn who participates in the decision, each participant's relative influence, and what evaluation criteria each decision participant uses. AACSB: Application of knowledge Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate

96) Discuss the major influences on business buyers. Answer: Business buyers are heavily influenced by factors in the current and expected economic environment, such as the level of primary demand, the economic outlook, and the cost of money. Another environmental factor is the supply of key materials. Many companies now are more willing to buy and hold larger inventories of scarce materials to ensure adequate supply. Business buyers also are affected by technological, political, and competitive developments in the environment. Finally, culture and customs can strongly influence business buyer reactions to the marketer's behavior and strategies, especially in the international marketing environment. Organizational factors are also important. Each buying organization has its own objectives, strategies, structure, systems, and procedures, and the business marketer must understand these factors well. The buying center usually includes many participants who influence each other, so interpersonal factors also influence the business buying process. However, it is often difficult to assess such interpersonal factors and group dynamics. AACSB: Written and oral communication Skill: Concept Objective: LO 6.2: Identify the major factors that influence business buyer behavior. Difficulty: Moderate 97) Buyers who face a ________ usually go through all stages of the buying process. A) straight rebuy B) modified rebuy C) new task buying situation D) routine buying situation E) need for limited problem solving Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 98) In the beginning of the buying process, Timothy Perry, a product development manager, noticed that the raw materials that were being procured from his company's regular supplier were of poor quality. Consequently, he decided to change the existing supplier as a remedial measure. The stage of the buying process in which Timothy identified the quality breach represents the ________ stage. A) problem recognition B) general needs description C) product specification D) supplier search E) performance review Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

99) ________ occurs when someone in the company identifies a need that can be met by acquiring a specific product or service. A) Solutions selling B) Proposal solicitation C) Problem recognition D) Performance review E) Real-time marketing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 100) Which of the following is an example of an internal stimulus that would most likely lead to problem recognition? A) A buyer gets a new idea from an advertisement. B) A buyer gets a new idea at a trade show. C) A buyer is unhappy with a current supplier's product quality. D) A buyer receives a call from a salesperson offering better service. E) A buyer learns about a new product at an industry convention. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 101) The first step of the business buying process is ________. A) general needs description B) product specification C) order-routine specification D) problem recognition E) performance review Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy

102) Ross Stuart is a purchasing manager in a Texas-based manufacturing company. He sources most of the raw materials needed by his company from Kramer Corp. However, Ross is unhappy with Kramer's prices. Additionally, he thinks that the quality of the raw materials supplied by Kramer is substandard. Which of the following stages in the business buying process is Ross' company currently in? A) general needs description B) problem recognition C) product specification D) order-routine specification E) performance review Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 103) Sam Doharty, a purchasing manager in Willard Groups of Companies, is currently working with engineers and consultants to define the items to be purchased. Additionally, Sam and his team are ranking the importance of reliability, durability, and price desired in the items. In other words, they are preparing a(n) ________. A) decision tree B) supplier list C) product proposal D) order-routine specification E) general need description Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 104) In the ________ stage of the buying process, the alert business marketer can help the buyers define their needs and provide information about the value of different product characteristics. A) problem recognition B) general needs description C) supplier search D) supplier selection E) order-routine specification Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy

105) ________ refers to the stage of the business buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item. A) Performance review B) General needs description C) Product development D) Proposal solicitation E) Product specification Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 106) During which of the following stages of the business buying process is a buyer most likely to conduct a value analysis by carefully studying components to determine if they can be redesigned, standardized, or made less expensively? A) proposal solicitation B) general need description C) order-routine specification D) performance review E) product specification Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 107) A manager in a garment manufacturing company decided to replace the plastic shopping bags currently used in his company with bags made of recyclable material. Consequently, he asked the operations officer to gather relevant information and send a list of alternatives to him. In the business buying process, the manager is preparing a(n) ________. A) problem statement B) general needs description C) supplier list D) proposal solicitation E) order-routine specification Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

108) ________ is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. A) Proposal solicitation B) General needs description C) Order-routine specification D) Cost-benefit analysis E) Product value analysis Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 109) By showing buyers a better way to make an object, outside sellers can ________. A) turn straight rebuy situations into modified rebuy situations B) reduce delivery times and save money C) provide incentives for larger orders D) turn straight rebuy situations into new task situations E) discourage straight rebuys Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 110) Johann Herr's company has standardized the size of its paper bags so that each bag can be used in five to seven different store departments. In the business buying process, this approach to cost reduction most likely took place in the ________ stage. A) problem recognition B) general needs description C) product specification D) supplier search E) proposal solicitation Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

111) Sail Metalworks Inc. is currently looking for the best vendors of metal sheets. In other words, Sail Metalworks is ________. A) preparing a general needs description B) deciding on product specification C) conducting a supplier search D) preparing an order-routing specification E) reviewing suppliers' performance Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 112) Members of the buying center at Kid's World, a store for children's clothing, are drawing up a list of desired supplier attributes and their relative importance. Next, they intend to compare several suppliers' proposals to these attributes. In which step of the business buying process is the buying center at Kid's World involved? A) general needs description B) proposal solicitation C) supplier selection D) order-routine specification E) performance review Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 113) Which of the following most likely occurs in the supplier selection stage of the business buying decision process? A) The buyer calls for detailed written proposals or formal presentations from each potential supplier. B) The buyer compiles a small list of qualified suppliers by reviewing trade directories, doing computer searches, or contacting other companies for recommendations. C) The buying team decides on the best product characteristics and specifies them accordingly. D) The buyer prepares a general need description and identifies the quantity of the needed item. E) The buying center draws up a list of the desired supplier attributes and their relative importance. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

114) If a task is new, complex and costly, on which stage of the buying process will the buyer spend a greater amount of time? A) preparing a general needs description B) deciding on product specification C) conducting a supplier search D) preparing an order-routing specification E) reviewing suppliers' performance Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 115) A company will likely identify qualified suppliers by doing all of the following EXCEPT ________. A) online searches B) reviewing trade directories C) phoning other companies for recommendations D) placing classified advertisements E) being contacted by salespeople of qualified firms Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 116) In which stage of the business buying process does the buyer contact suppliers for bids? A) general needs description B) product specification C) supplier search D) proposal solicitation E) order-routing specification Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

117) Attributes that a buying center may look for in a supplier include all of the following EXCEPT ________. A) product quality B) off-shore manufacturing C) service quality D) on-time delivery E) competitive prices Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 118) Many buyers prefer multiple sources of supplies ________. A) to avoid being totally dependent on one supplier B) to keep companies interested in doing business with them C) to ensure that suppliers do not become complacent D) to encourage their salespeople to develop broader networks of contacts E) to prepare in case of a work stoppage Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate 119) The stage of the business buying process in which the chosen supplier(s) is given the final order is the ________ stage. A) performance review B) proposal solicitation C) order-routine specification D) vendor-managed inventory E) product specification Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy

120) A ________ creates a long-term relationship in which the supplier promises to resupply the buyer as needed at agreed prices for a set time period. A) blanket contract B) request for proposal C) supplier proposal D) change order E) noncompete clause Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 121) In which stage of the business buying process does a buyer ask users to rate their satisfaction with the supplied materials? A) problem recognition B) performance review C) supplier search D) supplier selection E) order-routine specification Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 122) Luke Price, a manager in an automobile factory, wanted his subordinates to rate their satisfaction about the new pistons that arrived last month. He asked them to rate the product based on strength and ease of handling. Which of the following is evident here? A) order-routine specifications B) supplier selection C) performance review D) general needs description E) proposal solicitation Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy

123) Under ________, buyers share sales and inventory information directly with key suppliers who monitor and replenish the buyer's stock automatically as needed. A) supplier selection B) proposal solicitation C) general need specification D) vendor-managed inventory E) procurement Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy Refer to the scenario below to answer the following question(s). Alpha Stampings Inc. produces 14 metal stampings for the automotive industry. Due to industry design changes and consumer demands, for the next financial year, six of those stampings will require a slight change: two will have an extra hole punched through the side, two will require an extra plating process, and two will require an additional weld operation. In the meantime, purchasing agent Richard Koehl has been asked to reduce the number of Alpha's steel suppliers in an effort to cut costs. After obtaining updated price quotations and steel samples from his current suppliers, Richard faced a dilemma. Until now, he had selected his suppliers based on quality and price, but the major consideration had been the type of steel required and the specialized production processes of his respective suppliers. Not all of Alpha's suppliers could produce the exact grades of steel needed; some suppliers were better at producing certain types of steel than others. Richard contacted several employees at Alpha who had worked with the various types of steel in the past. The quality control manager and line inspector, for example, could help to determine which suppliers had the capabilities of producing specific types of steel. The production control manager could provide input regarding which types of steel worked best in which presses. The warehouse foreman gave inputs regarding how long various types of steel could be held in inventory before rust spots began to form on their surfaces. Each person contributed the necessary information to help Richard in making his decision. 124) In this instance, Richard plays the role of a(n) ________. A) decider B) gatekeeper C) influencer D) proposal solicitor E) product designer Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 40 Copyright © 2021 Pearson Education, Inc.

125) Product value analysis is an approach to enhancing productivity. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 126) In the general needs description of the buying process, the buyer describes the characteristics and quantity of the needed item. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 127) In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 128) The newer the buying task, and the more complex and costly the item, the lesser the amount of time the buyer will spend searching for suppliers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 129) In the supplier selection stage, the buyer reviews supplier performance. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 130) During proposal solicitation, the buying center often will draw up a list of desired supplier attributes and their relative importance. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 41 Copyright © 2021 Pearson Education, Inc.

131) The order-routine specification includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected delivery time, return policies, and warranties. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 132) In the performance review stage, the seller or the buyer may modify, continue, or cancel the business arrangement. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 133) All business buying decisions follow all steps of the business buying process. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 134) How does the buying process typically begin? Answer: The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. AACSB: Application of knowledge Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 135) What is product value analysis? Answer: Product value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. AACSB: Application of knowledge Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Moderate

136) What does the proposal solicitation stage of the business buying process involve? Answer: In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will refer the buyer to their Web sites or promotional materials or send a salesperson to call on the prospect. AACSB: Written and oral communication Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy 137) Describe the advantage of selecting multiple sources of supplies. Answer: Many buyers prefer multiple sources of supplies to avoid being totally dependent on one supplier and to allow comparisons of prices and performance of several suppliers over time. AACSB: Written and oral communication Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Easy

138) Briefly describe the eight steps in the business buying process. Answer: The eight steps in the business buying process are: problem recognition, general needs description, product specification, supplier search, proposal solicitation, supplier selection, orderroutine specification, and performance review. 1. Problem recognition: The buying process begins when someone in the company recognizes a problem or need that can be met by acquiring a specific product or service. Problem recognition can result from internal or external stimuli. 2. General needs description: Having recognized a need, the buyer next prepares a general need description that describes the characteristics and quantity of the needed item. For standard items, this process presents few problems. For complex items, however, the buyer may need to work with others–engineers, users, and consultants–to define the item. 3. Product specifications: The buying organization next develops the item's technical product specifications, often with the help of a value analysis engineering team. Product value analysis is an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production. 4. Supplier search: The buyer now conducts a supplier search to find the best vendors. The buyer can compile a small list of qualified suppliers by reviewing trade directories, doing computer searches, or contacting other companies for recommendations. 5. Proposal solicitation: In the proposal solicitation stage of the business buying process, the buyer invites qualified suppliers to submit proposals. In response, some suppliers will refer the buyer to their Web sites or promotional materials or send a salesperson to call on the prospect. However, when the item is complex or expensive, the buyer will usually require detailed written proposals or formal presentations from each potential supplier. 6. Supplier selection: During supplier selection, the buying center often will draw up a list of the desired supplier attributes and their relative importance. Such attributes include product and service quality, reputation, on-time delivery, ethical corporate behavior, honest communication, and competitive prices. 7. Order-routine specification: The buyer now prepares an order-routine specification. It includes the final order with the chosen supplier or suppliers and lists items such as technical specifications, quantity needed, expected delivery time, return policies, and warranties. 8. Performance review: In this stage, the buyer reviews supplier performance. The buyer may contact users and ask them to rate their satisfaction. The performance review may lead the buyer to continue, modify, or drop the arrangement. The seller's job is to monitor the same factors used by the buyer to make sure that the seller is giving the expected satisfaction. AACSB: Written and oral communication Skill: Concept Objective: LO 6.3: List and define the steps in the business buying decision process. Difficulty: Challenging

139) ________ refers to purchasing through electronic connections between buyers and sellers– usually online. A) E-procurement B) General need specification C) Strategic sourcing D) Proposal solicitation E) Value chain management Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 140) SkyWalk Aeronautics Limited received orders for 25 cargo air carriers from Zephyr Cargo Limited through its Web site in 2016. This is an example of ________. A) order-routine specification B) supplier selection C) e-procurement D) proposal solicitation E) customer relations management Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate 141) Pace Hardware uses Learningnow.com to improve sales force effectiveness and facilitate sharing of expertise. It allows Pace retailers to connect with each other for seeking managerial and marketing advice. It also allows Pace retailers to ask their suppliers about product usage, deliveries, and warranties, and send new-product information directly to the retailers. In this instance, Pace Hardware is facilitating communication through ________. A) extranet links B) podcasts C) search engines D) trading exchanges E) reverse auctions Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate

142) Which of the following is true with regard to e-procurement? A) E-procurement has significantly declined in recent years. B) Typically, business marketers do not favor e-procurement as it offers them little benefit. C) E-procurement has been widely practiced since the 1950s. D) E-procurement adds to existing inefficiencies in the supply chain. E) E-procurement hastens order processing and delivery. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 143) In ________, companies put their purchasing requests online and invite suppliers to bid for the business. A) product specification B) supplier search C) reverse auctions D) procurement E) problem recognition Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate 144) In ________, companies work together to facilitate the trading process. A) reverse auctions B) trading exchanges C) procurement D) supplier selection E) order-routine specification Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate

145) Which of the following is LEAST likely a characteristic of business-to-business eprocurement? A) greater access to new suppliers B) lower purchasing costs C) quick order processing and delivery D) an increase in the derived demand E) less paperwork Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate 146) Which of the following can help a company create direct procurement accounts with suppliers, through which company buyers can purchase equipment, materials, and supplies directly? A) backsourcing B) extranet C) company blog D) reverse auction E) trade exchange Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 147) Which of the following is true about business-to-business e-procurement? A) E-procurement increases transaction costs for suppliers. B) Because of an overwhelming demand, e-procurements usually have a huge time gap between order and response. C) Many buyers now use the power of the Internet to pit suppliers against one another and search out better deals, products, and turnaround times on a purchase-by-purchase basis. D) E-procurement doesn't enhance customer-supplier relationships. E) Due to extensive paperwork, the relatively important strategic issues, such as finding better supply sources and working with suppliers to reduce costs and develop new products, are sidelined. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate

148) Digital and social media's role in business-to-business marketing enhances all of the following EXCEPT ________. A) targeting individuals that affect buying decisions within the target businesses B) facilitating anytime and anywhere connections between people at the selling and buying organizations C) giving sellers more control of and access to important information D) meeting in person with customers at trade shows or conferences E) giving buyers more control of and access to important information Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Challenging 149) The benefits of e-procurement include access to new suppliers, lower purchasing costs, and more time-efficient order processing and delivery. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 150) E-procurement has caused the time between order and delivery to increase significantly. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 151) Companies can allow their suppliers access to online sites on which the company posts its buying needs, requests bids, negotiates terms, and places orders, thus minimizing research steps and costs. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy

152) Digital and social media are useful primarily for consumer products and services companies. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Easy 153) What is e-procurement? Briefly describe its major advantages. Answer: E-procurement refers to purchasing through electronic connections between buyers and sellers–usually online. E-procurement gives buyers access to new suppliers, lowers purchasing costs, and hastens order processing and delivery. In turn, business marketers can connect with customers online to share marketing information, sell products and services, provide customer support services, and maintain ongoing customer relationships. E-procurement frees purchasing people from a lot of drudgery and paperwork. In turn, it frees them to focus on more strategic issues, such as finding better supply sources and working with suppliers to reduce costs and develop new products. AACSB: Analytical thinking Skill: Concept Objective: LO 6.4: Discuss how online, mobile, and social media have changed business-tobusiness marketing. Difficulty: Moderate 154) The ________ market consists of schools, hospitals, nursing homes, prisons, and the like that provide goods and services to people in their care. A) government B) consumer C) wholesale D) for-profit E) institutional Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate

155) Sage Hospitals, a nonprofit organization, provides healthcare to the people in the Midwest. Management at Sage is involved in the ________ market. A) government B) consumer C) wholesale D) institutional E) resell Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy 156) All of the following organizations are likely part of the institutional market EXCEPT ________. A) LaGrange Community Hospital B) Worthampshire Prison C) Lancaster Real Estate Company D) Water Street Nursing Home E) Millersville Community College Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy 157) In several major cities in the United States, the ________ operates business service centers with staffs to provide a complete education on the way government agencies buy, the steps that suppliers should follow, and the procurement opportunities available. A) Defense Logistics Agency B) Federal Business Agency C) Small Business Administration D) General Services Administration E) U.S. Commerce Department Answer: D AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy

158) All of the following are difficulties associated with selling to government buyers EXCEPT ________. A) excessive paperwork B) bureaucracy C) strict regulations D) high advertising costs E) decision-making delays Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate 159) Government buyers are affected by all of the following factors EXCEPT ________ factors. A) environmental B) cultural C) organizational D) interpersonal E) individual Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate 160) Which of the following plays the most important role in government buying? A) price B) product differentiation C) advertising D) personal selling E) customer relationship management Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate

161) Total government spending is determined by ________. A) legal treatises B) marketing efforts C) elected officials D) court rulings E) technology needs Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate 162) Some companies sell primarily to government buyers as prime contractors or subcontractors. This allows these companies to ________, participate in the product specification phase, gather competitive intelligence, prepare bids carefully, and produce stronger communication to describe and enhance their companies' reputations. A) lobby elected officials to fund projects B) anticipate government needs and projects C) develop relationships with government procurers D) identify cost-cutting measures E) invest in new technologies Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate 163) The ________ Web site provides a single point of entry through which commercial vendors and government buyers can post, search, monitor, and retrieve opportunities solicited by the entire federal contracting community. A) U.S. Small Business Administration B) Center for Regulatory Effectiveness C) Federal Business Opportunities D) Federal Civil Defense Authority E) U.S. Commerce Department Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy

164) The institutional market is characterized by high budgets, while its buying objective is profit. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy 165) The government market consists of schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in their care. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy 166) Government organizations typically require suppliers to submit bids, and normally they award the contract to the lowest bidder. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy 167) What are the noneconomic criteria that influence government buying? Answer: Government buyers are asked to favor depressed business firms and areas; small business firms; minority-owned firms; and business firms that avoid race, gender, and age discrimination. AACSB: Written and oral communication Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Easy

168) What are the major characteristics of institutional markets? Answer: The institutional market is made up of schools, hospitals, prisons, and other institutions that provide goods and services to people in their care. These markets can be huge. Many institutional markets are characterized by low budgets and captive patrons. For many institutions, the buying objective will not strictly be profit maximization or cost minimization; instead, the institution is likely to search for vendors that meet or exceed a certain minimum standard besides offering low prices. AACSB: Application of knowledge Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate 169) What are the major characteristics of government markets? Answer: The government market offers large opportunities for many companies, both big and small. In most countries, government organizations are major buyers of goods and services. Government organizations typically require suppliers to submit bids, and normally they award the contract to the lowest bidder. In some cases, a governmental unit will make allowances for the supplier's superior quality or reputation for completing contracts on time. Governments will also buy on a negotiated contract basis, primarily in the case of complex projects involving major research and development (R&D) costs and risks, and in cases where there is little competition. Government organizations tend to favor domestic suppliers over foreign suppliers. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 6.5: Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) 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 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 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 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 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 Answer: C 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

4) ________ involves actually distinguishing the firm's market offering to create superior customer value. A) Mass customization B) Differentiation C) Market segmentation D) Diversifying E) Targeting Answer: B 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 5) When marketers at Fair & Leigh Inc. selected the Gen Z, 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; Diverse and multicultural work environments Skill: Application Objective: LO 7.1: Define the major steps in designing a customer value-driven marketing strategy: market segmentation, targeting, differentiation, and positioning. Difficulty: Moderate 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

7) Mass marketing involves identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each. Answer: FALSE 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 8) The customer-driven marketing strategy involves four steps: market segmentation, market targeting, positioning, and differentiation. Answer: TRUE 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 9) With technology advances making it simple to contact many customers at once, companies have moved toward mass marketing over target marketing. Answer: FALSE 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 10) What is differentiation? Answer: Differentiation refers to differentiating the market offering to create superior customer value. AACSB: Application of knowledge 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

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; Written and oral communication 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: Moderate 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. 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 AACSB: Analytical thinking 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 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 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

17) ________ segmentation divides buyers into different segments based on social class, lifestyle, or personality characteristics. A) Benefit B) Occasion C) Geographic D) Demographic E) Psychographic Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 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 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

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 21) ________ segmentation has long been used in clothing, cosmetics, toiletries, and magazines. A) Behavioral B) Gender C) Benefit D) Occasion E) Geographic Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 22) Gilron Holidays runs a premium membership club that caters to customers whose annual salary exceeds $100,000. 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

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

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

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 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 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

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

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

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 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 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

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

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 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 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

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 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 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

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 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 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

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 55) Business information services such as Personicx Lifestage 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

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

59) ________ segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. A) Complex B) Measurable C) Competitive D) Differentiable E) Homogeneous Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

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

63) Location-based targeting to consumers in local communities or neighborhoods using digital or social media is called ________. A) micro-segmentation B) community marketing C) marketing networking D) digitization E) hyperlocal social marketing 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 64) Dunkin' has partnered with traffic navigation app Waze to allow drivers to find the nearest Dunkin' outlet. This practice is an example of________. A) hyperlocal social marketing B) artificial intelligence C) community-based marketing D) psychographic segmentation E) demographic 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: Easy 65) 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 66) 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 22 Copyright © 2021 Pearson Education, Inc.

67) Gender segmentation has long been used in clothing, cosmetics, toiletries, and magazines. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 68) Psychographic segmentation divides buyers into different segments based on lifestyle or personality characteristics. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 69) Demographic segmentation divides buyers into segments based on their knowledge, attitudes, uses, or responses concerning a product. 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 70) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 71) When segmenting by user status, markets are segmented into light, medium, and heavy product users. 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

72) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 73) Marketers usually limit their segmentation analysis to only one major variable. 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 74) Intermarket segmentation refers to forming segments of consumers who have different needs and buying behaviors in a given geographical region. 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 75) 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

76) 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 77) 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; Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Easy 78) 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 79) 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

80) 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 81) 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 82) 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

83) 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 84) 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 85) 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; Analytical thinking Skill: Concept Objective: LO 7.2: List and discuss the major bases for segmenting consumer and business markets. Difficulty: Moderate

86) 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 87) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 88) 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

89) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 90) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate 91) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

92) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 93) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 94) 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

95) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 96) 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 97) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

98) 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) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate 100) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

101) 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 102) 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 103) 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

104) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate 105) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 106) 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

107) 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 108) 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 109) 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

110) 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 111) 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 112) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate

113) ________ marketing is more suited for products that vary in design. A) Mass B) Local C) Direct D) Differentiated E) Individual 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: Easy 114) 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 115) 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

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." 116) 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

117) 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 118) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 119) A company will always choose the largest and fastest-growing segments as the most attractive for it to enter. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 120) The relative power of buyers affects segment attractiveness. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

121) A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 122) Using an undifferentiated marketing strategy, a firm might decide to target several market segments and designs separate offers for each. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 123) Using a segmented marketing strategy, a firm might decide to ignore market segment differences and target the whole market with one offer. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 124) When using a niche marketing strategy, a firm goes after a large share of one or a few smaller segments. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 125) Niche marketing involves tailoring brands and promotions to the needs and wants of local customer groups–cities, neighborhoods, and even specific stores. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy

126) Individual marketing is also known as one-to-one marketing, mass customization, and markets-of-one marketing. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 127) When competitors use differentiated marketing to focus on the customer's needs, a firm should use undifferentiated marketing to compete with them. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Easy 128) 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 129) 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 130) 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 41 Copyright © 2021 Pearson Education, Inc.

131) 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 132) List some important factors that companies need to consider when choosing a markettargeting 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 133) 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 masspromoting 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

134) 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 135) 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; Written and oral communication Skill: Concept Objective: LO 7.3: Explain how companies identify attractive market segments and choose a market-targeting strategy. Difficulty: Moderate 136) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

137) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 138) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 139) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

140) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 141) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 142) 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

143) 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 144) 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 145) ________ 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 AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

146) 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 147) ________ 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 148) While there may be many differences between brands, not all are meaningful or relevant to consumers. Which of the following is NOT a criterion for establishing the value of a difference to promote? A) superior; the difference is superior to other ways that customers might obtain the same benefit B) affordable; buyers can afford to pay the difference C) profitable; the company can introduce the difference profitably D) important; the difference delivers a highly valued benefit to target buyers E) visually appealing; 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

149) 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 150) 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 151) 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

152) 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 153) "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 154) 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

155) Apex describes its clothing line as, "Elegance and attitude, now as one. For the daily officegoer, 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 156) 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) 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

158) 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 159) 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 160) 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

161) 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 162) 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 163) A product position is the way a product is defined by consumers on important attributes. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 164) To the extent that a company can differentiate and position itself as providing superior customer value, it gains competitive advantage. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy

165) Firms that practice product differentiation gain competitive advantage through the way they design their channel's coverage, expertise, and performance. 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 166) Less-for-much-less positioning involves meeting consumers' lower performance or quality requirements at a much lower price. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 7.4: Discuss how companies differentiate and position their products for maximum competitive advantage. Difficulty: Easy 167) Companies find it as easy to come up with a good positioning strategy as to execute it. 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 168) 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 169) 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

170) 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 171) 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

Principles of Marketing, 18e (Kotler) 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 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 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

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 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 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

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 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

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 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 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

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 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 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

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

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

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 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 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

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 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 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

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 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 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

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 AACSB: Analytical thinking 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 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

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 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 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

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 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 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

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 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

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

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 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 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 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

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 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 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; no services accompany these products. AACSB: Application of knowledge Skill: Concept Objective: LO 8.1: Define product and describe the major classifications of products and services. 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 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

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 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 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

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 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 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 58) Product attributes include all of the following EXCEPT ________. A) style B) design C) price D) features E) quality 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

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 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 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 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 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

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 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? 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 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

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 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 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 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? 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: Moderate

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 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 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 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 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 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: Moderate

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 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 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 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 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

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 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 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 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

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 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 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 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 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

80) Proton Corp. is an automobile manufacturer known for producing efficient, durable, and lowpriced 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 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 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 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 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

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 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 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 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 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 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

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 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: Moderate

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

89) Style is a larger concept than design. Design simply describes the appearance of a product. 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 90) Branding decisions include determining a product price. 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: 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 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 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 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

95) A company cannot stretch its product line downward. 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: Easy 96) Product mix width refers to the total number of items a company carries within its product lines. 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: Easy 97) Companies stretch downward to add prestige to their current products. 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: 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 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; 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

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 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 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; 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 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; 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

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 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; 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 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 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

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 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 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 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

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 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 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 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 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

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 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 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 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

116) Through ________, a service firm orients and motivates its customer-contact employees 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 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 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 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 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

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 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 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 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

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. 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 124) In a service business, the customer and the front-line service employee interact to co-create the service. 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 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 126) Service companies can differentiate their service delivery by having more able and reliable customer-contact people. 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

127) Product quality is harder to define and judge than service quality. 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: 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 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 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; Written and oral communication 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

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; Written and oral communication 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 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 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

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

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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 8.4: Discuss branding strategy - the decisions companies make in building and managing their brands. Difficulty: Easy 139) Brand ________ refers to how highly consumers regard and respect the brand. A) esteem B) conformance C) differentiation D) relevance E) knowledge 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

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 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 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

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 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 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

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 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: 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 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

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

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

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 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 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

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 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 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 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 51 Copyright © 2021 Pearson Education, Inc.

163) Co-branding occurs when retailers and wholesalers create their own store brands. 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 164) Line extension refers to extending an existing brand name to new product categories. 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 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 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

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 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 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

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

Principles of Marketing, 18e (Kotler) 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 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 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

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 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 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

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 8) A firm can obtain new products through acquisition or new product development efforts. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy 9) Acquisition involves the purchase of a whole company, a patent, or a license to produce someone else's product. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy 10) Adapting marketing strategies is not a challenge faced in the product life cycle. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Easy

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; the product may have been incorrectly positioned in the market, priced too high, or advertised poorly; a high-level executive might have pushed a favorite idea despite poor marketing research findings; the costs of product development were higher than expected; or competitors fought back harder than expected. To create successful new products, a company must understand its customers, markets, and competitors and deliver superior value to customers. AACSB: Analytical thinking; Written and oral communication Skill: Concept Objective: LO 9.1: Explain how companies find and develop new product ideas. Difficulty: Moderate 12) New product development starts with ________. A) concept development B) idea screening C) idea generation D) concept testing E) test marketing 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 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 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

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 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 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 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

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 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 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 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 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 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

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. 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: Moderate 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 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 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

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 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 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 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

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 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 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 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 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 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

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 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 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 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

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 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 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 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 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

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 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 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 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 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 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 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 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 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. 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

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 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: Moderate 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 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 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 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

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 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 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 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

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 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: Moderate 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: 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 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

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 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 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 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 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 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

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 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: 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 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 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. 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

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

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 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: 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 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

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 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 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 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 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

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 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 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 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: Moderate 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 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

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 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: Moderate 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. 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: Moderate 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 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

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 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 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 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: Moderate 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

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 multiplecity 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

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 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 76) New product development begins with a systematic search for new product ideas through idea generation. Answer: TRUE 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 77) Companies seldom solicit ideas from customers during the idea generation stage of product development. 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: Easy 78) A product idea is an idea for a possible product that a company can offer the market. Answer: TRUE 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

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 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. 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 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. 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 83) The business analysis stage represents the first large jump in financial investment in the new product development process. 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 27 Copyright © 2021 Pearson Education, Inc.

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 85) Marketers often involve actual customers in product testing. Answer: TRUE 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 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 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 87) A company launching a new product into the market must first decide where to launch the product. 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: Easy 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

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 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 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 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 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; the promotional campaign also affects product image. 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 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

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 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 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 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

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 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; 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 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; other departments are less likely to interfere. AACSB: Application of knowledge; 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

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 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 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

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; their answers reveal to the marketer whether the concept needs to be altered in any way. 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 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 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

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 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 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: Moderate 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. 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: Moderate

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 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 111) ________ is the product life cycle period when sales growth slows because the product 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 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

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 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 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: Moderate 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 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

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 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: Moderate 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 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 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 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: Moderate

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 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 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 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 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 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

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 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 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 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

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 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 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 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 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 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

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 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 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 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 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

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 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 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

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 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

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 multiplecity 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 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 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: Moderate 44 Copyright © 2021 Pearson Education, Inc.

137) Most successful products are immediately accepted, and quickly move to the growth stage of the PLC. Answer: FALSE 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: Moderate 138) Profits drop during the growth stage of the PLC because per customer promotion costs are high. Answer: FALSE 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: Moderate 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 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: 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 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: Moderate 141) Sales of products decline because of technological advances, shifts in consumer tastes, and increased competition. Answer: TRUE 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

142) Harvesting the product involves reducing various costs such as maintenance, R&D, and advertising to increase profits. Answer: TRUE 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: Moderate 143) The distribution strategy during the decline stage of PLC involves building more intensive distribution networks. Answer: FALSE 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: Moderate 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 145) Why are ad expenditures high for products in the introduction stage of the PLC? Answer: Consumers have very little awareness about such products; promotional spending can enhance customer awareness. 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: Easy 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; therefore, ad expenses remain high in an effort to offset competitive threats. 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: Easy

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; 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 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 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

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 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 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

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 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 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 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

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 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; though manufacturers are only found to be at fault in a small percentage of cases, awards can run into the tens or even hundreds of millions of dollars. This litigation phenomenon has resulted in huge increases in product liability insurance premiums, causing big problems in some industries. 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 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

Principles of Marketing, 18e (Kotler) 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 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: 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 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: Easy 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

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 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 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 7) List some important characteristics of price. Answer: Price is the only element in the marketing mix that produces revenue; all other elements represent costs. Price is also one of the most flexible marketing mix elements. Unlike product features and channel commitments, prices can be changed quickly. AACSB: Application of knowledge; 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 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 2 Copyright © 2021 Pearson Education, Inc.

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; all other elements represent costs. Price is also one of the most flexible marketing mix elements. Unlike product features and channel commitments, prices can be changed quickly. At the same time, pricing is the number one problem facing many marketing executives, and many companies do not handle pricing well. Some managers view pricing as a big headache, preferring instead to focus on other marketing mix elements. However, smart managers treat pricing as a key strategic tool for creating and capturing customer value. Prices have a direct impact on a firm's bottom line. A small percentage improvement in price can generate a large percentage increase in profitability. More important, as part of a company's overall value proposition, price plays a key role in creating customer value and building customer relationships. AACSB: Analytical thinking; 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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 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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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 C) atmosphere and décor of the restaurant D) travel distance for customers E) percentage of bar patrons versus dining patrons Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 6 Copyright © 2021 Pearson Education, Inc.

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: Define price, 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 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: Define price, 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 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 Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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

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 inflight 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: Define price, 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 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: Define price, 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 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: Define price, 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 9 Copyright © 2021 Pearson Education, Inc.

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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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. Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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

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 AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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) 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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

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 AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 42) In 2011, the fixed costs of a company were $500,000, and its variable costs equaled $150,000. In 2010, the company made an annual profit of $200,000. It has been predicted that, despite a steady growth, the company's variable costs will likely equal $300,000 by 2013. The total costs of the company in 2011 were ________. A) $350,000 B) $450,000 C) $650,000 D) $800,000 E) $950,000 Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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

43) The total production costs at Kellner Machine Works are $87,000 out of which $45,000 represent fixed costs. Which of the following is representative of the variable costs incurred by the company? A) $35,000 B) $42,000 C) $45,000 D) $87,000 E) $132,000 Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 44) The fixed cost in manufacturing a single LED monitor is $40 and the variable cost is $12. If the company expects to manufacture 5,000 monitors, the total costs would be ________. A) $60,000 B) $200,000 C) $260,000 D) $420,000 E) $500,000 Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

46) A cell phone manufacturing firm produced 1,000 cell phones a day but believed that it could reasonably step up production to 2,000 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 2,000 cell phones per day would be twice that of the unit cost of producing 1,000 units per day. B) A production plant with the capacity of producing 5,000 cell phones a day would be most efficient. C) The unit cost of producing 2,000 cell phones per day would be lower than the unit cost of producing 1,000 units per day. D) A 2,000-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: Define price, 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 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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

48) A manufacturing plant is designed to produce 2000 flat-screen TVs per day. But demand is higher than that. If the company tries to increase its production to 2500 TVs per day, the average costs will ________ because ________. A) decrease; the plant becomes more efficient B) stay the same; the plant becomes more efficient C) decrease; the plant becomes inefficient D) increase; the plant becomes more efficient E) increase; the plant becomes inefficient Answer: E AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 10.2: Define price, 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 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: Define price, 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 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 17 Copyright © 2021 Pearson Education, Inc.

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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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: Define price, 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 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: Define price, 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 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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

57) The simplest pricing method is ________ pricing. A) value-based B) fixed cost C) cost-plus D) target return E) competition-based Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

60) Herbie Inc., a firm manufacturing sandwich makers, has fixed costs of $250,000, variable costs of $20 per unit of output, and expected unit sales of 50,000 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: Define price, 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 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: Define price, 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 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. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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 Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

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. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 70) A company faces fixed costs of $100,000 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) 20,000 B) 25,000 C) 30,000 D) 35,000 E) 40,000 Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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 Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Define price, 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

72) Mansfield Pharmaceuticals markets Zipro, an antibiotic. The firm has fixed costs of $1,000,000 and variable costs of $2 per bottle of 50 tablets priced at $10 per bottle. What is the break-even volume? A) 25,000 B) 55,000 C) 100,000 D) 115,000 E) 125,000 Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 $100,000, a variable cost of $10 per unit of output, and break-even volume of 50,000 units. What should the manufacturer's unit cost be in order to break even? A) $10 B) $12 C) $14 D) $16 E) $20 Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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: Define price, 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 25 Copyright © 2021 Pearson Education, Inc.

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 Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Define price, 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 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 Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

Refer to the scenario below to 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 firsttime 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: Define price, 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

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 Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 79) Customer perceptions of the product's value set the floor for prices. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 80) Product costs set the ceiling for prices. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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

82) Value-based pricing uses the sellers' perception of value as the key to pricing. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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 84) Good-value pricing usually is used by premium brands, and rarely by less-expensive brands. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Define price, 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 85) Cost-based pricing is often product driven. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 86) Department stores that practice everyday low pricing typically provide frequent sale days, early-bird savings, and bonus earnings for store credit-card holders. Answer: FALSE AACSB: Application of knowledge Skill: Concept Objective: LO 10.2: Define price, 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 29 Copyright © 2021 Pearson Education, Inc.

87) Overhead costs are costs that do not vary with production or sales level. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 88) Variable costs change directly with the level of production. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 89) Cost-based pricing involves setting prices based on consumer perception of value. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 90) A company will be at an advantage even if it costs more than its competitors to make and sell a similar product. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 91) Average cost tends to increase with accumulated production experience. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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

92) A downward-sloping experience curve is indicative of a company's rapidly increasing production costs. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 93) The simplest pricing method is cost-plus pricing, which involves adding a standard markup to the cost of the product. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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 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: Define price, 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

96) A break-even chart shows the total cost and total revenue expected at various sales volume levels. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 97) Break-even volume is the number of unit sales required for total revenue to cover total cost. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 10.2: Define price, 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 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: Define price, 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 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: Define price, 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

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: Define price, 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) 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: Define price, 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 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: Define price, 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) 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: Define price, 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

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: Define price, 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 $400,000. 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 50,000 units at $24 each. AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 106) A marketer's fixed costs are $400,000, 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 $1,200,000. AACSB: Analytical thinking Skill: Application Objective: LO 10.2: Define price, 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 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: Define price, 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

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; Written and oral communication Skill: Concept Objective: LO 10.2: Define price, 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 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; Written and oral communication Skill: Concept Objective: LO 10.2: Define price, 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 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

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 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 113) Developing an effective integrated marketing mix program involves coordinating price decisions with product design, promotion, and ________ decisions. A) distribution B) production C) assembly D) warranty E) competition 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: Moderate

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 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

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 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: Moderate 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 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 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

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 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 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 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 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 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

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 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 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 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 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 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

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. 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 126) In Viña del Mar, Chile, a large number of shops specialize in selling the same quality of seafood products along the beach frequented by tourists. No individual shop dares charge more than the going price without fearing loss of business to other shops. This exemplifies ________. 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 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 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

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. 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 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 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 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 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

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 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 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

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. 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 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 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: Moderate 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

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 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 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: 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

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 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 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 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 142) When companies set prices, the government and social concerns are ________ factors affecting pricing decisions. A) external B) internal C) economic D) cultural E) organizational 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

Refer to the scenario below to 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 firsttime 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. 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 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 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: Moderate

145) Internal factors affecting pricing include the company's overall marketing strategy, objectives, and marketing mix. 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 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 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 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

150) If demand changes greatly with price, the demand is inelastic. 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 151) The more elastic the demand, the more it pays for the seller to raise the 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: Moderate 152) If demand is elastic rather than inelastic, sellers will consider lowering their 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 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. 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 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

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 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 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; Written and oral communication Skill: Synthesis Objective: LO 10.3: Identify and define the other important external and internal factors affecting a firm's pricing decisions. Difficulty: Challenging

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 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; 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

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; 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 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; 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 shortterm sales, market share, and profit goals may need to be tempered by broader societal considerations. AACSB: Application of knowledge; 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

Principles of Marketing, 18e (Kotler) 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 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 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

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 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 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

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 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

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 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

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 Refer to the scenario below to 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 15) Pricing strategies tend to change and evolve as the average product passes through its life cycle. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Easy 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 5 Copyright © 2021 Pearson Education, Inc.

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 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; Written and oral communication Skill: Synthesis Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Challenging 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

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; such pricing may be common when competition for products is high. AACSB: Application of knowledge Skill: Application Objective: LO 11.1: Describe the major strategies for pricing new products. Difficulty: Moderate 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 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 25) Which of the following companies is most likely to use 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 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

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 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 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

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 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 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 32) Which of the following companies is most likely to use 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

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 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 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

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 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 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

39) Which of the following companies is most likely to use 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 Refer to the scenario below to 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 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

42) In product line pricing, price steps should account for differences in customer perceptions of the value of different features. 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 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 44) Print-Fast Printers prices its printer cartridges at a premium, since customers must buy PrintFast cartridges to work with their Print-Fast printer. Print-Fast uses optional-product pricing. Answer: FALSE AACSB: Application of knowledge; 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: 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 customersegmented 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 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 14 Copyright © 2021 Pearson Education, Inc.

47) Some industries commonly use two-part pricing, breaking the price down into a fixed fee and a fixed usage rate. Answer: FALSE 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 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 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 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; Written and oral communication 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 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; Written and oral communication 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

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; Written and oral communication 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 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 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 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

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 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 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 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

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 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: 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 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 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

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 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 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 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

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 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 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 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

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 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: 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 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 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

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 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 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: Moderate 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

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 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 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 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 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 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: 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 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 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 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

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 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 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 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

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 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 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 26 Copyright © 2021 Pearson Education, Inc.

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 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: Easy 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 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

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 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 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

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 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 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

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 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 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 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 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

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 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: Moderate 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 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: 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

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 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 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: 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 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

104) Digital technologies make it possible for firms to reverse the fixed-price trend and instead use ________. A) psychological pricing B) zone pricing C) freight-absorption pricing D) dynamic pricing E) geographic pricing 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 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 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 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

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 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 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: 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. 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 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

112) In segmented pricing, the difference in prices is based on differences in costs. 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 113) For segmented pricing to be an effective strategy, prices should reflect real differences in customers' perceived value. 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 114) Sellers cannot influence or use consumers' reference prices when setting their product prices. 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: Moderate 115) Customers located close to a firm are less likely to benefit from FOB-origin pricing than customers located farther away. 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 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 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

117) Dynamic pricing is least prevalent online. 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 118) Marketing a product internationally rarely requires a product to be priced differently depending on the country. 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 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; Written and oral communication Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging 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; Written and oral communication Skill: Synthesis Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging

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; Application of knowledge; Written and oral communication Skill: Concept Objective: LO 11.3: Discuss how companies adjust their prices to take into account different types of customers and situations. Difficulty: Challenging 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 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 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; 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: Challenging

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

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 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 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; Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate 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 39 Copyright © 2021 Pearson Education, Inc.

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 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 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 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 138) Excess capacity leads to companies initiating an increase in price. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. 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 AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Easy

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 AACSB: Analytical thinking Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Moderate 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; Written and oral communication Skill: Concept Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Challenging 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; Written and oral communication Skill: Application Objective: LO 11.4: Discuss the key issues related to initiating and responding to price changes. Difficulty: Challenging 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

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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy

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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Challenging 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate

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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Challenging 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: Discuss the major public policy concerns and key pieces of legislation 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: Discuss the major public policy concerns and key pieces of legislation 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy

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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate

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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Easy 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Challenging 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; price fixing undermines the core element of price competition in our free-market economy. On the other hand, predatory pricing takes price competition too far. Predatory pricing occurs when a company sells a product below cost with the intention of punishing a competitor or by putting a competitor out of business. AACSB: Ethical understanding and reasoning Skill: Synthesis Objective: LO 11.5: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Challenging 166) Why is predatory pricing considered illegal? Answer: Predatory pricing works against the principles of a free-enterprise system; predatory pricing allows marketers to sell below cost with the intention of punishing competitors. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate

167) Why is identifying predatory pricing difficult? Answer: Selling below cost to unload excess inventory is not considered predatory; selling below cost to drive out competitors is illegal. Thus, a given action may or may not be predatory depending on intent, and intent can be very difficult to determine or prove. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 11.5: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Challenging 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: Discuss the major public policy concerns and key pieces of legislation that affect pricing decisions. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) 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 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 1 Copyright © 2021 Pearson Education, Inc.

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 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 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

7) A ________ is made up of the company, suppliers, distributors, and customers who partner 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 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 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

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 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 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

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 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 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 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-toorder 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 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

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 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

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 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

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 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 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 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 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 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 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

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 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

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-productionconsumption 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; Written and oral communication Skill: Concept Objective: LO 12.1: Explain why companies use marketing channels and discuss the functions these channels perform. Difficulty: Moderate 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 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

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 40) Which of the following does NOT apply to channel systems? A) Some channel systems consist of only informal interactions among loosely organized firms. B) Channel systems do not stand still; 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 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

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 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

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 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 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

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 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 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 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

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 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 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 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 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

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 55) The ________ organization is the most common type of contractual relationship. A) franchise B) horizontal C) conventional D) multi-national E) entrepreneurial 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: Easy 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

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 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 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

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 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 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

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 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 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 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

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 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 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

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 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 71) A marketing channel works most effectively when each channel member performs the tasks it does best. 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 72) Horizontal conflicts are conflicts between different levels of the same channel. 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 23 Copyright © 2021 Pearson Education, Inc.

73) Vertical conflict occurs among firms at the same level of the channel. 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 74) A conventional distribution channel consists of one or more independent producers, wholesalers, and retailers; 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 75) A non-corporate VMS integrates successive stages of production and distribution under single ownership. 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 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 77) Disintermediation occurs when radically new types of channel intermediaries displace traditional ones. 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

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; an example would be conflict created between a manufacturer and its dealers when it decides to open an online e-commerce Web site for the same product. 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 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 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

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 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; by working together, companies can combine their financial, production, or marketing resources to accomplish more than any one company could 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 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 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; Written and oral communication Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. 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; Written and oral communication Skill: Concept Objective: LO 12.2: Discuss how channel members interact and how they organize to perform the work of the channel. Difficulty: Moderate 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: 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate

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 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 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

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 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 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

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 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 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

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 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 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

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 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 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. 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

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 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 106) Multichannel marketing occurs when a single firm sets up two or more marketing channels to reach one or more customer segments. Answer: TRUE AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. 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 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. 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; examples include chewing gum, soft drinks, and toothpaste. Student examples will vary. AACSB: Application of knowledge Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Easy 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

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 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; Written and oral communication Skill: Concept Objective: LO 12.3: Identify the major channel alternatives open to a company. Difficulty: Moderate 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.4: Explain how companies select, motivate, and evaluate channel members. Difficulty: Easy

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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.4: Explain how companies select, motivate, and evaluate channel members. 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 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

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 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 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 122) Marketing channel management calls for selecting, managing, and motivating individual channel members and evaluating their performance over time. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.4: Explain how companies select, motivate, and evaluate channel members. Difficulty: Easy

123) As a part of intensive distribution, dealers are expected to refrain from selling the products of the producers' competitors. Answer: FALSE AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.4: Explain how companies select, motivate, and evaluate channel members. 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 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 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; Written and oral communication Skill: Concept Objective: LO 12.4: Explain how companies select, motivate, and evaluate channel members. Difficulty: Moderate 38 Copyright © 2021 Pearson Education, Inc.

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 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 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

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 132) ________ logistics starts with the marketplace and works backward to the factory or even 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 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

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 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 136) ________ management refers to the management of upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers. A) Cross B) Price C) Supply chain D) Product cycle E) Customer 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

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 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 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

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 141) ________ or smart tag technology helps companies locate a product's exact position within its supply chain. A) RFID B) PRM C) VMS D) BCODE E) 3PL 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 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

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

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 147) In multimodal 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 148) In multimodal 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

149) Which of the following is the most effective way for a company to ship bulky, nonperishable products if its key requirement is low price? 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 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 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: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy

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 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. 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

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 Refer to the scenario below to 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 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 48 Copyright © 2021 Pearson Education, Inc.

157) Kimberly's Crown, Inc. decides to alter its distribution strategy so that its jewelry is accessible to the public only through one distributor. Which employee is most likely to make this decision? A) chief executive officer B) chief financial officer C) physical distribution planner D) production manager E) marketing manager 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 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy 160) Reverse logistics refers to the moving of products and materials from suppliers to the factory. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy 49 Copyright © 2021 Pearson Education, Inc.

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 AACSB: Analytical thinking 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 AACSB: Analytical thinking 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 AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy 164) Multimodal transportation refers to the combination of two or more modes of transportation. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Easy 165) Electronic data interchange is the digital exchange of data between organizations, which primarily is transmitted via the Internet. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. 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 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 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; Written and oral communication Skill: Concept Objective: LO 12.5: Discuss the nature and importance of marketing logistics and integrated supply chain management. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 13 Retailing and Wholesaling 1) ________ includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. A) Franchising B) Retailing C) Brokering D) Wholesaling E) Disintermediation Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 2) Many institutions, including retailers, wholesalers, and ________ do retailing. A) schools B) government agencies C) factory farmers D) manufacturers E) defense contractors Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 3) Retailers connect brands with consumers in the ________ phases of the buying process. A) need identification B) evaluation of alternatives C) final D) information gathering E) post-purchase Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

4) ________ involves using in-store promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decisions. A) Differentiation B) Shopper marketing C) Social media marketing D) Retailer marketing E) Segmentation Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 5) ________ creates a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping. A) Shopper marketing B) Point-of-purchase marketing C) Social media marketing D) Virtual marketing E) Omni-channel retailing Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 6) Retailers are classified on characteristics including the amount of service they offer, the breadth and depth of their product lines, how they are organized, and ________. A) the relative prices they charge B) the number of locations they have C) the strength of their Internet presence D) their sustainability and environmental policies E) the stability of their financial situation Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

7) At Neiman Marcus, a first-class department store, customers shop for high-end products and they are assisted in every phase of the shopping process. Neiman Marcus is a ________. A) full-service retailer B) limited-service retailer C) self-service retailer D) specialty store E) superstore Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 8) ________ is a type of service offered by those retailers who serve customers that are willing to perform their own "locate-compare-select" process in order to save money. A) Limited-service B) Self-service C) Full-service D) Specialty-service E) Wholesaling Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 9) ________ are retailers that offer sales assistance because they carry more shopping goods about which customers might need information. A) Self-service retailers B) Full-service retailers C) Off-price retailers D) Limited-service retailers E) Specialty-service retailers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

10) Which type of retailer usually carries more specialty goods at high prices and is more likely to provide customers with assistance in every phase of the shopping process? A) self-service retailer B) limited-service retailer C) full-service retailer D) independent retailer E) off-price retailer Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 11) At JCPenney, a mid-level department store, customers shop for moderately priced products and they are assisted in some phases of the shopping process. JCPenney is a ________. A) full-service retailer B) limited-service retailer C) self-service retailer D) specialty store E) superstore Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 12) Which type of retailer is most likely to require its employees to focus most on assisting customers as they shop? A) self-service retailer B) full-service retailer C) off-price retailer D) limited-service retailer E) convenience retailer Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

13) Today, ________ are flourishing due to the increased use of market segmentation and market targeting. A) chain stores B) specialty stores C) superstores D) discount stores E) off-price stores Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 14) Specialty stores carry ________ with ________ within them. A) only convenience products; shallow assortments B) narrow product lines; deep assortments C) narrow product lines; shallow assortments D) wide product lines; shallow assortments E) wide product lines; deep assortments Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 15) Which type of store carries a wide variety of product lines and has been squeezed in recent years between more focused and flexible specialty stores on the one hand and more efficient, lower-priced discounters on the other? A) warehouse clubs B) department store C) factory outlet D) merchant wholesaler E) category specialist Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

16) ________ are facing slow sales growth because of slower population growth, increased competition, and the rapid growth of out-of-home eating. A) Warehouse clubs B) Off-price retailers C) Discount stores D) Supermarkets E) Factory outlets Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 17) Which of the following is the most frequently visited type of retail store? A) convenience store B) department store C) supermarket D) superstore E) off-price retailer Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 18) A ________ is a small store, located near a residential area that is open long hours seven days a week and carries a limited line of high-turnover goods. A) convenience store B) chain store C) department store D) supermarket E) specialty store Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

19) Which type of store is much larger than regular supermarkets and offers a large assortment of routinely purchased food products, nonfood items, and services? A) off-price retailer B) specialty store C) factory outlet D) superstore E) convenience store Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 20) Which type of store carries a deep assortment of a particular product line, has knowledgeable staff, and can be viewed as a giant specialty store? A) category killer B) convenience store C) factory outlet D) warehouse club E) off-price retailer Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 21) Home Depot and PetSmart are examples of ________. A) factory outlets B) warehouse clubs C) superstores D) off-price retailers E) category killers Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

22) Which of the following would be considered a service retailer? A) factory outlets B) supermarkets C) jewelry stores D) restaurants E) gas stations Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 23) ________ retailers in the United States are growing faster than product retailers. A) Discount B) Merchant C) Service D) Specialty E) Off-price Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 24) ________ sell standard merchandise at lower prices by accepting lower margins and selling higher volume. A) Merchant wholesalers B) Discount stores C) Full-service retailers D) Limited-service retailers E) Factory outlets Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

25) The early ________ cut expenses by offering few services and operating in warehouse-like facilities in low-rent, heavily traveled districts. A) department stores B) hypermarkets C) discount stores D) supermarkets E) full-service retailers Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 26) As discount stores traded up, ________ have filled the ultra low-price, high-volume gap by buying at less-than-regular wholesale prices and charging consumers less than retail. A) off-price retailers B) specialty stores C) convenience stores D) chain stores E) supercenters Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 27) Which of the following is NOT a type of off-price retailer? A) independent B) factory outlet C) warehouse club D) category killer E) wholesale club Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

28) ________ are manufacturer-owned and operated stores that offer prices as low as 50 percent below retail on a wide range of mostly surplus, discounted, or irregular items. A) Category killers B) Factory outlets C) Specialty stores D) Superstores E) Power centers Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 29) Which of the following is an off-price retailer that operates in a huge, warehouse-like facility and offers few frills? A) warehouse club B) service retailer C) convenience store D) hypermarket E) superstore Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 30) ________ are two or more outlets that are commonly owned and controlled. A) Corporate chains B) Convenience stores C) Off-price retailers D) Independent off-price retailers E) Power centers Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

31) As a result of the great success of corporate chains, many independent stores choose to band together in either a voluntary chain or a ________. A) factory outlet B) retailer cooperative C) wholesale club D) warehouse club E) convenience cooperative Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 32) A ________ is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. A) voluntary chain B) retailer cooperative C) franchise D) wholesale club E) warehouse club Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 33) McDonald's, Subway, and Jiffy Lube are all examples of ________. A) voluntary chains B) retailer cooperatives C) franchises D) category killers E) power centers Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

34) Which of the following kind of organization best represents a contractual association based on some unique product or service, a method of doing business, or a trade name or goodwill? A) corporate chain B) franchise C) voluntary chain D) retailer cooperative E) warehouse club Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Challenging 35) Sears, Target, and Kroger are examples of ________. A) voluntary chains B) retailer cooperatives C) corporate chains D) franchise organizations E) warehouse clubs Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 36) Independent Grocers Alliance, Do-It Best, and Western Auto are examples of ________. A) franchise organizations B) warehouse clubs C) voluntary chains D) category killers E) wholesale clubs Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

37) GameStop sells only video games and systems, offering a narrow product line with a deep assortment within that line. GameStop is a(n) ________. A) department store B) convenience store C) category killer D) specialty store E) off-price retailer Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 38) Stop-N-Go , 7-Eleven, and Circle K are examples of ________. A) department stores B) convenience stores C) category killers D) specialty stores E) supermarkets Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 39) Which of the following terms best describes a large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products? A) convenience store B) supermarket C) specialty store D) warehouse club E) factory outlet Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

40) Overstock.com, a Web seller that buys furniture, clothing, electronics, and more from a variety of producers at less-than-regular wholesale prices and then charges customers less than retail, is a(n) ________. A) specialty store B) off-price retailer C) factory outlet D) wholesale club E) category killer Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who were intrigued by the lifestyle of Shipshewana's largest population–the Amish. Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same variety. Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles as customers had requested such items. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. The Millers also hired four more people to help customers throughout the purchasing process and to provide the required product-related information to the customers. "Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods." 41) Indiana Wood can be best classified as a(n) ________. A) full-service retailer B) industrial distributor C) self-service retailer D) warehouse club E) limited-service retailer Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

42) Retailers can also be classified by the length and breadth of their product assortments. In terms of product line, what kind of retailer is Indiana Wood? A) supermarket B) specialty store C) category killer D) department store E) convenience store Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 43) Wholesaling includes all the activities involved in selling products or services directly to final consumers for their personal, nonbusiness use. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 44) Shopper marketing involves focusing the entire marketing process–from product and brand development to logistics, promotion, and merchandisings–toward turning shoppers into buyers at the point of sale. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 45) Department stores carry narrow product lines with deep assortments within those lines. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

46) Self-service retailers serve customers who are willing to perform their own locate-compareselect process to save time or money. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 47) Full-service stores usually carry more specialty goods for which customers need or want assistance or advice. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 48) In recent years, convenience stores have redesigned their stores to closely focus on serving their primary target market made up of young, blue-collar men. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 49) Superstores are much larger than regular supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 50) Supermarkets sell a limited selection of goods at deep discounts to consumers who pay membership fees. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

51) Supermarkets are located near residential areas and are open long hours, seven days a week. They carry a limited line of high-turnover goods. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 52) Category killers are giant specialty stores that carry a very deep assortment of a particular line. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 53) Off-price retailers pay regular wholesale prices for their merchandise but maintain low prices by accepting lower margins and selling higher volume. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 54) A discount store buys at less-than-regular wholesale prices and charges consumers less than retail. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 55) Independent off-price retailers either are independently owned and run or are divisions of larger retail corporations. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

56) Corporate chains are two or more outlets that are commonly owned and controlled. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 57) A voluntary chain is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 58) In a retailer cooperative, independent retailers band together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 59) Franchises constitute only a small portion of all retail sales in the United States. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 60) Retail stores can be classified in terms of several characteristics. Name four of them. Answer: Retail stores can be classified based on the amount of service they offer, the breadth and depth of their product lines, the relative prices they charge, and how they are organized. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

61) Compare and contrast specialty stores and convenience stores. Answer: Specialty stores carry narrow product lines with deep assortments within those lines. Convenience stores are small stores that carry a limited line of high-turnover convenience goods. The majority of their revenues come from sales of gasoline, cigarettes, and beverages. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 62) Describe the differences between discount stores and off-price retailers. Answer: A discount store buys at regular wholesale prices but sells standard merchandise at lower prices by accepting lower margins and selling higher volume. Off-price retailers buy at less-than-regular wholesale prices and charge consumers less than retail. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 63) What types of products do specialty stores carry? Give an example of a specialty store. Answer: Student answers will vary. Specialty stores carry narrow product lines with deep assortments within those lines. Today, specialty stores are flourishing. The increasing use of market segmentation, market targeting, and product specialization has resulted in a greater need for stores that focus on specific products and segments. Some examples of specialty stores are Tiffany, Sunglass Hut, and REI. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 64) How have department stores responded to increased competition by specialty stores and lower-priced discounters? Answer: Many department stores have added promotional pricing to meet the threat; in addition, they have stepped up the use of store brands and single-brand "designer shops" to compete with specialty stores. Department stores are also trying mail order, telephone, and Web selling. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

65) What is a category killer? Provide an example and a description of a category killer. Answer: Student answers will vary. A category killer is a giant specialty store that carries a very deep assortment of a particular line. They feature stores the size of airplane hangars that carry a very deep assortment of a particular line. Category killers are found in a wide range of categories, including electronics, home-improvement products, books, baby gear, toys, linens and towels, party goods, sporting goods, and even pet supplies. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 66) How can discount stores sell merchandise at lower prices? Answer: Discount stores sell merchandise at lower prices by accepting lower margins and selling higher volumes. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 67) What are the different types of off-price retailers? Answer: The three main types of off-price retailers are independents, factory outlets, and warehouse clubs. Independent off-price retailers either are independently owned and run or are divisions of larger retail corporations. A factory outlet is an off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods. A warehouse club is an off-price retailer that sells a limited selection of brand-name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 68) How does a retailer cooperative function? Answer: A retailer cooperative is a group of retailers that come together to set up a jointly owned, central wholesale operation, and conduct joint merchandising and promotion efforts. Through a retailer cooperative, independents can match the buying and promotion economies of corporate chains. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy

69) Describe the levels of service that retailers can offer. Provide an example of each type of retailer. Answer: Student answers will vary. Amount of service can include self-service to serve customers who are willing to perform their own locate-compare-select process to save time and money. It is the basis of all discount operations and typically used by retailers selling convenience goods. Examples include supermarkets, Target, and Kohl's. It can also include limited-service retailers that provide more sales assistance because they carry more shopping goods about which customers need information. Examples include Sears and JCPenney. The third type is full-retailers that assist customers in every phase of the shopping process. These stores usually carry more specialty goods for which customers need or want assistance or advice. Examples include Nordstrom or Neiman Marcus. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Easy 70) Identify and describe the different types of retailers, based on their product lines. Provide an example of each type of retailer. Answer: Student answers will vary. -Specialty stores are stores with narrow product lines and deep assortments within those lines. Examples include REI, Sephora and Williams-Sonoma. -Department stores carry a wide variety of product lines, each operated as a separate department. Examples include Macy's and Neiman Marcus. -Supermarkets are large, low-cost, self-service stores that carry a wide variety of grocery and household products. Examples include Safeway and Kroger. -Convenience stores are small stores, open long hours, that carry a limited line of high-turnover convenience goods. Examples include 7-Eleven, Stop-N-Go, and Circle K. -Superstores are much larger than supermarkets and offer a large assortment of routinely purchased food products, nonfood items, and services. Examples include Walmart and Target. -Category killers are giant specialty stores that carry a very deep assortment of a specific product line. Examples include Best Buy, Home Depot, and PetSmart. -Service retailers are retailers whose product line is actually a service; examples include hotels, airlines, banks, colleges, and many others. Specific examples include Holiday Inn, Southwest Airlines, and SuperCuts. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

71) Describe the different types of off-price retailers. Provide examples of each type. Answer: Student answers will vary. -A discount store is a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume. Examples include Walmart, Costco, Dollar General and Target. -An off-price retailer is a retailer that buys at less-than-regular wholesale prices and sells at less than retail. Off-price retailers can be found in all areas, from food, clothing, and electronics to no-frills banking and discount brokerages. -An independent off-price retailer is an off-price retailer that is independently owned and operated or a division of a larger retail corporation. Examples include TJ Maxx and Marshalls. -A factory outlet is an off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods. Examples include J. Crew, Gap, Coach and Mikasa. -A warehouse club is an off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees. Examples include Costco, Sam's Club, and BJ's. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

72) Although many retail stores are independently owned, others band together under some form of corporate or contractual organization. Describe the four kinds of corporate or contractual organizations. Answer: -Corporate chains are two or more outlets that are commonly owned and controlled. Their size allows them to buy in large quantities at lower prices and gain promotional economies. They can hire specialists to deal with areas such as pricing, promotion, merchandising, inventory control, and sales forecasting. Examples include Macy's, Target, and CVS. -The voluntary chain is a wholesaler-sponsored group of independent retailers that engages in group buying and common merchandising. Examples include the Independent Grocers Alliance, Western Auto, and Do-It Best hardware stores. -The other type of contractual association is the retailer cooperative, a group of independent retailers that band together to set up a jointly owned, central wholesale operation and conduct joint merchandising and promotion efforts. Examples are Associated Grocers and Ace Hardware. These organizations give independents the buying and promotion economies they need to meet the prices of corporate chains. -Another form of contractual retail organization is a franchise. The main difference between franchise organizations and other contractual systems (voluntary chains and retail cooperatives) is that franchise systems are normally based on some unique product or service; a method of doing business; or the trade name, goodwill, or patent that the franchisor has developed. Franchising has been prominent in fast-food restaurants, motels, health and fitness centers, auto sales and service dealerships, and real estate agencies. Examples include McDonald's, Subway, and Jiffy Lube. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate 73) Describe the differences between chain stores and franchises. Answer: Chain stores consist of two or more outlets that are commonly owned and controlled. Chain stores have the advantage of buying in larger quantities at lower prices and sharing resources to hire specialists to help with decisions in pricing, promotion, merchandising, inventory, and sales forecasting. Franchises are not commonly owned and controlled; instead, a franchise is a contractual association between a manufacturer, wholesaler, or service organization and an independent businessperson. The system is normally based on some unique product or service; a method of doing business; or a trade name, goodwill, or patent that the franchisor has developed. AACSB: Application of knowledge Skill: Concept Objective: LO 13.1: Explain the role of retailers in the distribution channel and describe the major types of retailers. Difficulty: Moderate

74) Store retailers must master ________, integrating store and online channels into a single shopper experience. A) showrooming B) single-channel retailing C) omni-channel retailing D) webrooming E) dual-channel retailing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Moderate 75) ________ creates a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping. A) Shopper marketing B) Omni-channel retailing C) Test marketing D) Online marketing E) Consolidation marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 76) Foot Locker has mastered online and mobile efforts that link seamlessly with store operations, offering options such as "buy online, ship from store" and "buy online, reserve in store" for pickup. This is an example of ________. A) digital retailing B) omni-channel retailing C) web-based retailing D) in-store ordering with a mobile device E) social media Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy

77) Which of the following plays the most important role in omni-channel retailing? A) Social media B) Advertising C) Discounts D) Daily alerts E) In-store promotions Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 78) Omni-channel retailers are those who ________. A) expand their businesses internationally B) conduct all business activities online C) sell products through third-party retailers D) use mobile apps to sell their products E) successfully merge the virtual and physical worlds Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 79) Walmart, Target, Macy's, and other major retailers offer handy ________ that pull customers to both their websites and stores. A) mobile apps B) in-store shopping experiences C) channels D) platforms E) product information Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy

80) Omni-channel retailing includes all of the following except ________. A) cross-shopping on mobile devices B) integrating available shopping channels C) boosting online selling options D) omitting digital selling options E) increasing in-store shopping channels Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 81) Beyond direct online sales, retailer online sites, mobile apps, and social media influence a large amount of in-store buying. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 82) It's estimated that U.S. retail sales are either transacted directly or influenced by online research. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 83) Many online merchants–including Amazon–have experienced so much online growth that they are now moving into showrooms or their own stores. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 84) The boundaries between in-store and online retailing are rapidly blurring. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 27 Copyright © 2021 Pearson Education, Inc.

85) What have retailers learned about how customers make purchase decisions? Answer: Retailers have learned that shoppers with smartphones are doing far more than just checking online prices. More often, they are filling in the information gap. "The consumer has never been more informed, and that information comes from their phone," says a senior marketer at outdoor-gear retailer REI. "We love when someone enters the store holding their phone saying, 'I want this tent. I want this bike. Help me find this.' " This type of activity shows how digital and store retailing can come together to make a sale. AACSB: Analytical thinking Skill: Application Objective: LO 13.2: Discuss how retailers are using omni-channel retailing to meet the crossshopping behavior of today's digitally connected consumers. Difficulty: Easy 86) In recent years, service differentiation among retailers has ________. A) increased at a steady rate B) decreased C) stayed the same D) increased exponentially E) tripled Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 87) Changes to service differentiation include all of the following EXCEPT ________. A) smarter customers B) decreased services at department stores C) more price-sensitive consumers D) customers' willingness to pay more for identical brands E) increased services from discounters Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

88) Daizy's is a shop that carries only plus-size clothing. According to this information, Daizy's differentiates itself from its competitors based on ________. A) service mix B) pricing C) product assortment D) store atmosphere E) distribution strategy Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 89) ________ were the main form of retail clusters until the 1950s. A) Strip malls B) Discount stores C) Independent off-price retailers D) Central business districts E) Regional shopping malls Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 90) A large retailer of home improvement and construction products offers "how-to" classes for do-it-yourselfers, featuring instructions on how to complete home improvement projects using products sold at its stores. This is an example of how the retailer has differentiated itself through its ________. A) product assortment B) services mix C) segmentation D) atmosphere E) pricing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

91) Until retailers ________ their markets, they cannot make consistent decisions about product assortment, services, pricing, or advertising. A) create B) communicate with C) divide up D) define and profile E) design products for Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 92) A ________ contains from 50 to 100 stores, is like a covered mini-downtown, and attracts customers from a wide area. A) community shopping center B) neighborhood shopping center C) central business district D) regional shopping center E) strip mall Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 93) Upon determining who will want the product, retailers must determine in more detail how to ________ in those markets. A) differentiate and position themselves B) market themselves C) entice customers to them D) offer the correct products E) properly price the product offerings Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

94) A ________ contains between 15 and 50 retail stores, including a department or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank. A) community shopping center B) neighborhood shopping center C) strip mall D) regional shopping center E) power center Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 95) In addition to segmenting and targeting the correct market, which of the following is NOT an area in which marketers must make decisions? A) product assortment B) services mix C) store's atmosphere D) using experiential retailing E) manufacturing schedules Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 96) A ________ generally contains between 5 and 15 stores. It is close and convenient for consumers, usually contains a supermarket, perhaps a discount store, and several service stores such as a dry cleaner, a drugstore, and a hardware store. A) regional shopping center B) community shopping center C) neighborhood shopping center D) warehouse club E) factory outlet Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy

97) An ideal price policy scenario for retailers would be to achieve ________ while earning ________. A) low volume; high markups B) low volume; low markups C) high volume; high markups D) high volume; low markups E) high volume; zero markups Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 98) In-store demonstrations, displays, sales, and loyalty programs are examples of ________. A) direct marketing B) sales promotion C) public relations D) personal selling E) affinity marketing Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 99) Neighborhood shopping centers are also known as ________. A) power centers B) lifestyle centers C) warehouse clubs D) strip malls E) regional shopping centers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy

100) Press conferences, speeches, store openings, special events, newsletters, and store magazines are examples of ________ activities used by retailers to promote themselves. A) public relations B) sales promotions C) personal selling D) affinity marketing E) social marketing Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 101) Digital promotions have grown in usage and include e-mail, social media, Web sites, and ________. A) demonstrations B) displays C) store flyers D) newsletters E) online ads and video Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 102) Which of the following is most likely gained by stores that cluster together? A) decreased competition B) increased customer pulling power C) compliance with franchise agreements D) creation of retailer cooperatives E) standardization of the service mix Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Challenging

103) A ________ is a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit. A) warehouse club B) franchise C) shopping center D) supermarket E) hypermarket Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 104) Most shopping centers are ________. A) strip malls B) regional shopping malls C) community shopping centers D) lifestyle centers E) power centers Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 105) ________ are huge unenclosed shopping centers consisting of a long strip of retail stores, including at least one large, freestanding anchor store like Walmart. Each store has its own entrance with parking directly in front for shoppers who wish to visit only one store. A) Shopping malls B) Power centers C) Superstores D) Chain stores E) Regional shopping centers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy

106) A small, open-air mall with upscale stores, convenient locations, and nonretail activities, such as a playground, skating rink, hotel, dining establishments, and a movie theater, is an example of a ________. A) regional shopping center B) lifestyle center C) community shopping center D) franchise E) power center Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 107) Springfield, a convenience store, has recently begun to redesign and restock its stores to offer a more upscale environment with products such as house wines and fresh foods. This information indicates that Springfield has most likely changed its ________. A) positioning B) price strategy C) service level D) corporate identity E) organizational structure Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 108) Cabela's stores are as much natural history museums for outdoor enthusiasts as they are retail outlets. This information indicates that Cabela's is practicing ________. A) wholesaling B) nonstore retailing C) shopper marketing D) experiential retailing E) showrooming Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

109) Big and Tall Men's Shop carries men's clothing in larger sizes; this allows the store to ________ other stores. A) align itself with B) differentiate itself from C) cluster with D) affect the store atmosphere of E) converge with Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 110) The lighting in Jake's Steak Restaurant is dim. The chairs are covered in leather and each table is covered with a white linen cloth. The colors are limited to earth tones with an occasional splash of red. Patrons cannot hear any kitchen noises, only a pleasant melody that seems familiar but unrecognizable. The smells are extraordinarily varied. This is a description of the restaurant's ________. A) promotions B) target C) atmosphere D) services mix E) product assortment Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Challenging 111) Which of the following best describes a similarity between Costco and Walmart? A) Both are warehouse clubs. B) Both target the same affluent market. C) Both are specialty stores. D) Both use everyday low pricing. E) Both are examples of merchant wholesalers. Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

112) Macy's department stores carry a wide range of product lines, including clothing, jewelry, kitchenware, and home furnishings. Macy's typically charges a relatively high markup, but also holds frequent sales and price promotions, in particular offering discounts to customers who use a Macy's credit card. Macy's uses ________. A) self-service retailing B) experiential retailing C) high-low pricing D) everyday low pricing E) retail convergence Answer: C AACSB: Application of knowledge Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 113) Which of the following is most likely true about shoppers who prefer to shop at "lifestyle centers"? A) They use coupons. B) They prefer upscale stores. C) They prefer indoor shopping locations. D) They rarely dine out in expensive restaurants. E) They are motivated by deals on last year's merchandise. Answer: B AACSB: Reflective thinking Skill: Critical Thinking Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who were intrigued by the lifestyle of Shipshewana's largest population–the Amish. Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same variety. Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles as customers had requested such items. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. The Millers also hired four more people to help customers throughout the purchasing process and to provide the required product-related information to the customers. "Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods." 114) The authentic Amish décor of Indiana Wood's contributes to the store's ________. A) product assortment B) services mix C) atmosphere D) segmentation E) retail convergence Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 115) Retailers first must position themselves in a market and then decide how they will define the target customers in these markets. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

116) Retailers must work to ensure customers identify with their products. Differentiation and positioning are vital to communicating this message. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 117) The colors, layout, and music in a store or a product package are only minor aspects of the shopping experience and marketers spend little time making decisions about them. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 118) A neighborhood shopping center has from 50 to more than 100 stores. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 119) A strip mall contains between 5 and 15 retail stores. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 120) Explain how Whole Foods is able to compete against Walmart. Answer: Walmart owns the low-price position, so other grocery chains such as Whole Foods must position themselves differently. Rather than try to compete directly with Walmart, Whole Foods is positioned away from Walmart. It targets a smaller group of upscale customers and offers them organic, gourmet foods in a cheerful, aesthetically pleasing environment. AACSB: Application of knowledge Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Challenging

121) What attracts shoppers to a power center? Answer: Power centers are unenclosed shopping centers that consist of a long strip of retail stores, each store with its own entrance with parking directly in front for shoppers who wish to visit only one store. A power center offers convenience and variety for shoppers. AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 122) Explain what is meant by the term "overmalled." Answer: Between 1970 and 2015, U.S. malls grew at twice the rate of the population. In the past few years, online shopping pulled even more customers away from malls and reduced the need to shop in the traditional brick and mortar format. As a result, vacancy rates in shopping malls have soared and many weaker and smaller regional malls are suffering financially. AACSB: Application of knowledge Skill: Application Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Challenging 123) What elements comprise a store's atmosphere? Answer: A store's atmosphere includes the sights, sounds, and smells that customers typically associate with the store. AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Easy 124) How do the practices of high-low pricing and everyday low pricing differ? Answer: With high-low pricing, a retailer charges higher prices on an everyday basis but also has frequent sales and other price promotions; with everyday low pricing, a retailer for the most part avoids sales and instead delivers constant, everyday low prices. AACSB: Application of knowledge Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate

125) How have shopping centers changed in the past few decades? Answer: Central business districts were the main form of retail cluster until the 1950s. Every large city and town had a central business district with department stores, specialty stores, banks, and movie theaters. When people began moving to the suburbs, however, these central business districts, with their traffic, parking, and crime problems, began to lose business. In recent years, many cities have joined with merchants to revive downtown shopping areas, generally with only mixed success. Currently, shopping centers are described as a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit. They are not generally located in the central business districts. AACSB: Written and oral communication Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 126) The three types of shopping centers are regional shopping centers, community shopping centers, and neighborhood shopping centers/strip malls. Describe how they are different from each other. Answer: Regional shopping centers are the largest shopping centers and they contain anywhere from 40 to more than 200 stores. They attract customers from a wide area. Smaller than regional shopping centers, community shopping centers contain between 15 and 40 stores. They normally contain a branch of a department store or variety store, a supermarket, specialty stores, professional offices, and sometimes a bank. Smaller still are neighborhood shopping centers/strip malls, which generally contain five to 15 stores. They are close and convenient for consumers, usually containing a supermarket, a discount store, and several service stores. AACSB: Written and oral communication Skill: Concept Objective: LO 13.3: Describe the major retailer marketing decisions. Difficulty: Moderate 127) Many retailers are now experimenting with limited-time shops that allow them to promote their brands to seasonal shoppers and create buzz in busy areas. Which of the following terms best represents such shops? A) power centers B) strip malls C) pop-up stores D) category killers E) lifestyle centers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy

128) Target recently opened temporary shops to celebrate limited-run collections by Jason Wu in Toronto and Missoni in New York. These temporary shops are examples of ________. A) lifestyle centers B) pop-up stores C) warehouse clubs D) strip malls E) category killers Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 129) The online and mobile equivalent of a pop-up store is ________. A) door buster deals B) Black Friday specials C) high-low pricing D) flash sales sites E) everyday low pricing Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 130) When different types of retailers sell the same products at the same prices to the same customers, thanks in part to the price transparency of the Internet, the retail forms appear to be ________. A) converging B) differentiating C) repositioning D) adapting E) declining Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate

131) With their size and buying power, ________ can offer better merchandise selections, good service, and strong price savings to consumers. A) convenience stores B) franchises C) megaretailers D) power centers E) lifestyle centers Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 132) ________ is known as the merging of consumers, products, prices, and retailers. A) Retail conglomeration B) Consumer convergence C) Price merging D) Retail convergence E) Retail clustering Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 133) Which term refers to looking at merchandise at a traditional store and then purchasing the merchandise online? A) pop-up shopping B) wheel-of-retailing C) off-price retailing D) showrooming E) wholesaling Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy

134) Retail online sites, mobile apps, and social media influence ________. A) overall retail sales B) in-store buying C) the number of likes and subscribers companies earn D) customers and their followers E) the number of products a company manufactures Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 135) Touchscreen kiosks, handheld shopping assistants, interactive dressing-room mirrors and virtual sales associates are all examples of how retailers use technology to ________. A) maintain inventory costs B) send information between stores C) meet consumers' expectations D) produce more accurate forecasts E) interact with suppliers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 136) Today's retailers increasingly adopt environmentally sustainable practices. Which of the following is NOT one of these practices? A) working with channel partners to reduce their environmental impact B) cutting back on recycling programs C) greening up their stores and operations D) launching programs to help customers be more responsible E) promoting more environmentally responsible products Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). In the 1970s, Shipshewana was only a small town with a hardware store, a grain mill, a shoe store, a small restaurant, and a grocery store. Over the next two decades, the small town transformed into an international tourist attraction, attracting thousands of tourists who were intrigued by the lifestyle of Shipshewana's largest population–the Amish. Ben and Mary Miller, having grown up within the Amish faith, decided to capitalize on their town's popularity and their woodworking skills. Their shop, Indiana Wood, began with a small display of handmade hickory rocking chairs, Ben Miller's specialty. But within a few months, the display at Indiana Wood included picnic tables, flower boxes, and small handmade novelty items. No other shop offers the same variety. Mary Miller decorated the shop's display room with authentic Amish décor and eventually hired three Amish friends to sew and embroider napkins and other textiles as customers had requested such items. In addition, two women from the Amish community sought permission from the Millers to display home-baked pastries and jellies on Tuesdays and Wednesdays, when Shipshewana attracts swarms of visitors to its flea market on the south edge of town. The Millers also hired four more people to help customers throughout the purchasing process and to provide the required product-related information to the customers. "Shipshewana is full of specialty shops," Mary Miller stated. "People don't come here to buy things made in China or Taiwan. They want real, Amish-made goods." 137) Which of the following would be the most logical way for Indiana Wood to expand? A) establishing an online presence B) pursuing retail convergence C) implementing RFID inventory tracking D) establishing a community-gathering environment in the store E) joining a producers' cooperative Answer: A AACSB: Analytical thinking Skill: Critical Thinking Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 138) Power centers tend to be smaller than lifestyle centers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate

139) The life cycle of new retail forms is getting longer. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 140) Retail convergence means lower competition for retailers and lower difficulty in differentiating the product assortments of different types of retailers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 141) Megaretailers have shifted the balance of power between retailers and producers, giving retailers more power. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Easy 142) Many shoppers now check out merchandise in-store and then buy it online. This process is called webrooming. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 143) While the process of showrooming can hurt in-store sales of merchandise, retailers can make it a positive by enhancing the in-store shopping experience. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 144) Green retailing yields both top- and bottom-line benefits. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate

145) What are pop-up stores? Provide an example to illustrate your answer. Answer: Many retailers are now experimenting with limited-time pop-up stores that let them promote their brands to seasonal shoppers and create buzz in busy areas. During the last holiday season, for instance, Toys"R"Us set up approximately 150 temporary pop-up toy boutiques, many located in malls that formerly housed recently bankrupt KB Toys stores. AACSB: Application of knowledge Skill: Concept Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 146) What constitutes retail convergence? Answer: Retail convergence is the coming together of shoppers, goods, and prices. Customers of all income levels are shopping at the same stores, often for the same goods. Distinctions such as discount store, specialty store, and department store are losing significance. AACSB: Analytical thinking Skill: Application Objective: LO 13.4: Discuss the major trends and developments in retailing. Difficulty: Moderate 147) ________ includes all activities involved in selling goods and services to those buying for resale or business use. A) Wholesaling B) Retailing C) Franchising D) Discounting E) Showrooming Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 148) ________ buy mostly from producers and sell to retailers and industrial consumers. A) Warehouse clubs B) Factory outlets C) Wholesalers D) Discount stores E) Megaretailers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

149) Which of the following wholesaler's channel functions is demonstrated when a wholesaler's sales force helps a manufacturer to reach many small customers at a low cost? A) bulk-breaking B) selling and promoting C) buying and assortment building D) risk bearing E) rack jobbing Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 150) Which of the following is NOT one of a wholesaler's channel functions? A) financing B) risk bearing C) transportation D) off-price retailing E) bulk breaking Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 151) Which of the following wholesaler's channel functions is demonstrated when a wholesaler holds inventories and thereby reduces inventory holding costs and risks of suppliers and customers? A) financing B) transporting C) buying and assortment building D) warehousing E) bulk breaking Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate

152) Which of the following wholesaler's channel functions is demonstrated when a buyer receives quicker delivery because wholesalers are located closer than producers? A) financing B) transportation C) buying and assortment building D) warehousing E) risk bearing Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 153) Which of the following wholesaler's channel functions is exemplified by buying in carload lots and then dividing these lots into small quantities? A) warehousing B) transportation C) risk bearing D) bulk breaking E) selling and promoting Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 154) ________ are the largest group of wholesalers. They include two broad types: full-service wholesalers and limited-service wholesalers. A) Brokers B) Manufacturer sellers C) Manufacturers' agents D) Merchant wholesalers E) Selling agents Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

155) What is the most common type of agent wholesaler? A) wholesale merchant B) industrial distributor C) limited-service wholesaler D) manufacturers' representative E) truck jobber Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 156) ________ and ________ do not take title to goods, and they perform only a few channel functions. A) Full-service wholesalers; limited-service wholesalers B) Brokers; agents C) Industrial distributors; cash-and-carry wholesalers D) Cash-and-carry wholesalers; industrial distributors E) Rack jobbers; off-price retailers Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 157) A(n) ________ brings buyers and sellers together and assists in negotiations. A) agent B) broker C) retailer D) wholesaler E) industrial distributor Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

158) A(n) ________ does not take title to goods and represents buyers or sellers on a more permanent basis than a broker. A) full-service wholesaler B) industrial distributor C) agent D) retailer E) cash-and-carry wholesaler Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 159) Which type of wholesaler sells to manufacturers rather than to retailers? A) industrial distributor B) full-service wholesaler C) cash-and-carry wholesaler D) wholesale merchant E) limited-service wholesaler Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 160) ________ are a type of limited-service wholesaler who carries a limited line of semiperishable merchandise (such as milk, bread, and snack foods), which is sold for cash as deliveries are made to supermarkets, small groceries, or hotels. A) Industrial distributors B) Wholesale merchants C) Full-service wholesalers D) Truck jobbers E) Purchasing agents Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

161) ________ are a type of limited-service wholesaler who does not carry inventory or handle a product. They typically operate in bulk industries, such as coal, lumber, and heavy equipment. A) Wholesale merchants B) Industrial distributors C) Cash-and-carry wholesalers D) Rack jobbers E) Drop shippers Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 162) ________ are agents who take physical possession of products and negotiate sales. They deal mostly with agricultural marketing. A) Industrial distributors B) Cash-and-carry wholesalers C) Purchasing officers D) Rack jobbers E) Commission merchants Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 163) ________ are wholesalers who serve grocery and drug retailers, mostly in nonfood items. They price the goods, keep them fresh, set up point-of-purchase displays, and keep inventory records. A) Purchasing agents B) Rack jobbers C) Drop shippers D) Cash-and-carry wholesalers E) Manufacturers' agents Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

164) Today's large, progressive wholesalers have successfully reacted to rising costs by ________. A) relocating to low-rent, low-tax areas B) investing in information technology systems C) investing less money in expensive machinery D) reducing their markup rates E) reducing promotional activities Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 165) Carey David's wholesale company helps retailers train salesclerks, improve store layouts and displays, and set up inventory control systems. According to this information, which of the following wholesaler's channel functions does Carey David provide? A) buying and assortment building B) selling and promotion services C) risk bearing services D) marketing information E) management services and advice Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 166) You own a small independent retail store in your neighborhood. You want to offer fresh seafood, milk, and bread in your store. In this case, which of the following types of wholesalers will serve you the best? A) truck jobber B) independent distributor C) drop shipper D) mail-order wholesaler E) manufacturers' agent Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Challenging

167) You own a neighborhood grocery store and would like to have non-food items delivered, priced, displayed and inventoried by a wholesaler. You do not want to purchase title to the goods. Which type of wholesaler best fits your needs? A) cash-and-carry wholesaler B) rack jobber C) drop shipper D) mail-order wholesaler E) agents and brokers Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Challenging 168) Tony Pool Chemical Co. purchased 144 buckets of chlorine tablets over the Internet from Chemical Inc. Then Chemical Inc. placed the order with the manufacturer, and the manufacturer then transported the tablets directly to the Tony Pool store. In this case, Chemical Inc. is an example of a ________. A) drop shipper B) truck jobber C) rack jobber D) full-service wholesaler E) cash-and-carry wholesaler Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Challenging 169) ________ perform a role similar to that of brokers or agents but are part of the buyer's organization. A) Truck jobbers B) Merchant wholesalers C) Purchasing officers D) Rack jobbers E) Cash-and-carry wholesalers Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate

170) Wholesalers must ________ to maintain their profits. A) raise their prices to their retail customers B) find efficient ways to deliver value to their customers C) reduce the number of customers they work with D) increase the number of services they offer E) improve the relationships with the suppliers Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 171) Like retailers, wholesalers must decide on product and service assortments, prices, promotion, and place. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 172) Wholesalers realize that they increase value to their customers by watching for better ways to meet the needs of their suppliers and target customers. This involves reducing the services they provide to retailers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 173) In an automated warehouse, orders are fed directly from the retailer's information system to the wholesaler's, and the items are picked up by mechanical devices and taken to a shipping platform where they are assembled. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy

174) Why would a producer use wholesalers rather than sell directly to retailers or consumers? Answer: Wholesalers add value by performing one or more of the following channel functions: selling and promotion, buying and assortment building, bulk breaking, warehousing, transportation, financing, risk bearing, providing market information, and giving management services and advice. Wholesalers can perform many channel functions more efficiently and effectively than a producer can, allowing the producer to focus its energies on creating its product. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 175) How do merchant wholesalers and agents/brokers differ? Answer: Merchant wholesalers "take title to" (or own) what they sell; agents/brokers merely serve as liaisons, bringing buyers and sellers together. AACSB: Application of knowledge Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Easy 176) How can wholesalers improve their use of promotions? Answer: Many wholesalers do not view promotion as a team effort to sell, build, and service major accounts; to address this issue, wholesalers should adopt some of the promotion techniques used by retailers, such as developing an overall promotion strategy and making greater use of supplier promotion materials and programs. AACSB: Written and oral communication Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate

177) Explain the marketing decisions faced by wholesalers. Answer: Wholesalers are faced with the marketing decisions of segmentation and targeting, differentiation and promotion, and the marketing mix. Progressive wholesalers are adapting their services to the needs of target customers and are seeking cost-reducing methods of doing business. Faced with slow growth in their domestic markets and developments such as the North American Free Trade Association, many large wholesalers are also now going global. Wholesalers must decide on product and service assortments, prices, promotion, and place. Wholesalers add customer value though the products and services they offer. Price is also an important wholesaler decision. Wholesalers usually mark up the cost of goods by a standard percentage. As their retail and industrial customers face sales and margin declines, these customers turn to wholesalers, looking for lower prices. Wholesalers may, in turn, cut their margins on some lines to keep important customers. They may also ask suppliers for special price breaks in cases when they can turn them into an increase in the supplier's sales. Although promotion can be critical to wholesaler success, most wholesalers are not promotion minded. They use largely scattered and unplanned trade advertising, sales promotion, personal selling, and public relations. They need to develop an overall promotion strategy and make greater use of supplier promotion materials and programs. Digital and social media are playing an increasingly important role. Finally, distribution (location) is important. Wholesalers must choose their locations, facilities, and Web locations carefully. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate 178) Explain how wholesalers have been able to use technology to cut costs. Answer: Many wholesalers have invested in automated warehouses and information technology systems. Delivery time can be cut as orders are fed from the retailer's information system directly into the wholesaler's. Automated warehouses increase efficiencies and drive down costs, as mechanical devices can automatically pick up items and take them to a shipping platform to be assembled. Wholesalers can also use technology for accounting, billing, inventory control, and forecasting. These computerized, automated, and Web-based systems help wholesalers contain the costs of ordering, shipping, and inventory holding. AACSB: Analytical thinking Skill: Concept Objective: LO 13.5: Explain the major types of wholesalers and their marketing decisions. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) 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 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 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 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 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

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 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 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

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

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 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 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; Written and oral communication Skill: Concept Objective: LO 14.1: Define the five promotion mix tools for communicating customer value. Difficulty: Moderate 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: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate 5 Copyright © 2021 Pearson Education, Inc.

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

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: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate 22) Companies are doing less ________ and more ________ as a result of the explosive developments in communication technologies to better target smaller customer segments. A) personal selling; digital activities B) public relations activities; digital activities C) digital activities; mass marketing D) mass marketing; digital marketing E) viral marketing; 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 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

24) Of the various digital marketing categories, ________ account(s) for most of the spending in this category. A) blogs B) e-mail C) social media D) mobile E) brand sites Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. 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: Analytical thinking 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: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. 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 28) Which of the following is an effect of the advancement of technology on marketing? A) Fragmented markets have assimilated into a few mass markets. B) Marketers go through more intermediaries to connect with consumers. C) Consumers rely less on marketer-supplied information than in the past. D) Marketers have increasingly moved toward mass-marketing techniques. E) Marketers tend to supply less information to consumers than in the past. 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 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

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 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 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

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 34) Direct marketing includes catalogs, direct-response TV, kiosks, the Internet, and mobile 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: 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 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: Analytical thinking Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. Difficulty: Moderate

37) Mass marketers can expect consumers to distinguish between commercial message sources to maintain a clear image of a company and its brands. 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: Moderate 38) The integrated marketing concept ties together all of the company's messages and images. 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 39) Integrated marketing communications calls for recognizing all communications channels where the customer may encounter the company and its brands. 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: Moderate 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 41) A marketing communications director has overall responsibility for the company's communications efforts. 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

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 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 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

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; Written and oral communication Skill: Concept Objective: LO 14.2: Discuss the changing communications landscape and the need for integrated marketing communications. 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 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

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 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 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

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 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; Written and oral communication Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate 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

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 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 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

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 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 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; Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. 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 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 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

63) In the communication process, the more the sender's field of experience ________ that of the receiver, the more ________ the message is likely to be. A) varies from; distinguishable B) overlaps with; effective C) connects with; ineffective D) coincides with; creative E) departs from; 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 64) Research shows that the advertiser is often better off asking questions and allowing ________. A) a two-sided argument to be presented. B) this process to overcome any negative associations. C) the buyer to reach their own conclusions D) this practice to enhance the advertiser's credibility E) the weaker format to influence buyers 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 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

66) Marketing communicators must be good at ________ messages that take into account how the target audience ________ them. A) delivering; encodes B) sending; encodes C) encoding; decodes D) retrieving; perceives E) decoding; 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 67) Marketing communicators must know what ________ and what ________. A) products they wish to sell; audiences they want to target B) distribution channel(s) they wish to use; timing they need C) advertising media they will use; message they will send D) audiences they wish to reach; responses they want E) message they will send; 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 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

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

72) Which of these steps is NOT one of the five As of the customer journey? A) awareness B) authority C) appeal D) act E) advocacy 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 73) Which of these steps of the customer journey involves the customer wanting to know more about the product? A) awareness B) appeal C) act D) ask E) advocacy Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy 74) In which of these steps of the customer journey do customers admit liking the product? A) awareness B) appeal C) act D) ask E) advocacy 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

75) When customers begin telling others about a product they are in the ________ step of the customer journey. A) act B) awareness C) appeal D) ask E) advocacy Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy 76) When a customer first realizes a product exists they are in the ________ step of the customer journey. A) ask B) act C) appeal D) awareness E) advocacy Answer: D AACSB: Analytical thinking 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) Word-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

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 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 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; Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. 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 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 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

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 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 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

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 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 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

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 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 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; Written and oral communication Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Challenging

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 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 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

Refer to the scenario below to 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-ofmouth." 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; Written and oral communication Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate 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; Written and oral communication Skill: Application Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate 31 Copyright © 2021 Pearson Education, Inc.

98) The communications process should start with mass media advertising in order to reach a large number of consumers. 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: Moderate 99) The four major communication functions are encoding, decoding, response, and noise. 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 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. 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 102) Atmospheres are designed environments that create or reinforce the buyer's leanings toward buying a product. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Easy

103) Good marketing communications can speed the demise of a poor product. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. 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 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 106) All personal communication channels are controlled directly by the company. 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: Moderate 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

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 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 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 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

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; moral appeals are directed to the consumer's sense of what is "right" and "proper." 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 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 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; 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; Written and oral communication Skill: Concept Objective: LO 14.3: Outline the communication process and the steps in developing effective marketing communications. Difficulty: Moderate

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 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 118) Describe the five As of the customer journey. Answer: The five As of the customer journey are awareness (I know about the product), appeal (I like the product), ask (I want to know more about the product and be more engaged with the brand), act (I'm buying and relating to the product), and advocacy (I'm telling others about the product). 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

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 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 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 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: Moderate 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 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: Moderate

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 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 123) Sam, the owner of a small company, learned that a competitor was planning to spend $150,000 on promotion in the next financial year. As soon as he learned this, Sam called his finance manager and said, "I want to spend $150,000 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 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 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: Moderate

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 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 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 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 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 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: Moderate

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 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. 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: Moderate 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. 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: Moderate

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 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 133) ________ consists of strong short-term incentives that invite and reward quick responses from customers. A) Public relations B) Personal selling C) Advertising D) Sales promotion E) Direct marketing 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

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 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 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

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 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 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

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 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 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 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 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: 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 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 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

Refer to the scenario below to 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-ofmouth." 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 Answer: E 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: Moderate 147) The affordable method of setting advertising budgets takes into consideration the effects of promotion on sales. Answer: FALSE 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: Moderate

148) The affordable method of setting advertising budgets more frequently results in overspending, rather than in underspending. Answer: FALSE 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: Moderate 149) The percentage-of-sales method wrongly views sales as the cause of promotion rather than as the result. Answer: TRUE 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: Moderate 150) The percentage-of-sales budget is based on the availability of funds rather than on opportunities. Answer: TRUE 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 151) The affordable method involves setting promotion budgets to match competitors' outlays. Answer: FALSE 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: 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

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 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: Challenging 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 155) Integrating the promotion mix starts with suppliers. Answer: FALSE 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 156) Because personal selling involves developing relationships, it is acceptable for salespeople to stretch claims they make about a product's advantages. 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

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 shortlived, however, and often are not as effective as advertising or personal selling in building longrun 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 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 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

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; 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 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; 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 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; 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) 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; 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 164) Discuss the affordable method of setting the total budget for advertising. Answer: Some companies use the affordable method: They set the promotion budget at the level they think the company can afford. Small businesses often use this method, reasoning that the company cannot spend more on advertising than it has. They start with total revenues, deduct operating expenses and capital outlays, and then devote some portion of the remaining funds to advertising. Unfortunately, this method of setting budgets completely ignores the effects of promotion on sales. It tends to place promotion last among spending priorities, even in situations in which advertising is critical to the firm's success. It leads to an uncertain annual promotion budget, which makes long-range market planning difficult. Although the affordable method can result in overspending on advertising, it more often results in underspending. AACSB: Application of knowledge; 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

165) What is personal selling? What are the advantages and disadvantages of a firm using personal selling to promote a product or service? Answer: Personal selling is the most effective tool at certain stages of the buying process, particularly in building up buyers' preferences, convictions, and actions. It involves personal interaction between two or more people, so each person can observe the other's needs and characteristics and make quick adjustments. Personal selling also allows all kinds of customer relationships to spring up, ranging from matter-of-fact selling relationships to personal friendships. An effective salesperson keeps the customer's interests at heart to build a long-term relationship by solving a customer's problems. Finally, with personal selling, the buyer usually feels a greater need to listen and respond, even if the response is a polite "No thank-you." These unique qualities come at a cost, however. A sales force requires a longer-term commitment than does advertising–although advertising can be turned up or down, the size of a sales force is harder to change. Personal selling is also the company's most expensive promotion tool, costing companies on average $600 or more per sales call, depending on the industry. AACSB: Application of knowledge; 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 166) Discuss the advantages and disadvantages of advertising. Answer: Advertising can reach masses of geographically dispersed buyers at a low cost per exposure, and it enables the seller to repeat a message many times. Beyond its reach, large-scale advertising says something positive about the seller's size, popularity, and success. Because of advertising's public nature, consumers tend to view advertised products as more legitimate. Advertising is also very expressive; it allows the company to dramatize its products through the artful use of visuals, print, sound, and color. Advertising also has some shortcomings. Although it reaches many people quickly, advertising is impersonal and lacks the direct persuasiveness of company salespeople. For the most part, advertising can carry on only a one-way communication with an audience, and the audience does not feel that it has to pay attention or respond. In addition, advertising can be very costly. AACSB: Application of knowledge; 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

Principles of Marketing, 18e (Kotler) Chapter 15 Advertising and Public Relations 1) Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor is called ________. A) sales promotion B) direct marketing C) advertising D) personal selling E) public relations Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Easy 2) Advertising is used mostly by ________. A) governments B) business firms C) social agencies D) independent professionals E) not-for-profit organizations Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Easy 3) Marketing management must make important decisions when developing an advertising program. Which of the following is NOT one of those decisions? A) evaluating advertising effectiveness B) developing advertising strategy C) setting advertising objectives D) designing products and distribution E) setting the advertising budget Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Easy

4) Competitive parity and task methods are considered when making decisions about ________. A) sales objectives B) budget C) message structure D) media selection E) message effectiveness Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Easy 5) Advertising is the least used of the major promotion tools, although it has great potential for building consumer awareness and reference. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Moderate 6) Advertising is a good way to engage, inform, and persuade, regardless of the objective of the message. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Moderate 7) Marketing management must make four important decisions when developing an advertising program. Briefly describe these four decisions. Answer: Marketing management should first set advertising objectives, which can be classified by primary purpose: to inform, persuade, or remind. Next, the advertising budget needs to be determined, which will often depend on the product's stage in the product life cycle. The third step is to develop an advertising strategy, which involves message decisions and media decisions. The last step is to evaluate the effectiveness of the advertising campaign. AACSB: Analytical thinking; Written and oral communication Skill: Concept Objective: LO 15.1: Define the role of advertising in the promotion mix. Difficulty: Moderate

8) The decisions about impact and engagement of an advertisement fall into the category of ________ decisions. A) sales objectives B) budget C) message D) media E) advertising evaluations Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 9) An advertising objective is classified by its primary purpose, which is to inform, persuade, or ________. A) reciprocate B) compete C) remind D) explain E) suggest Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 10) Advertising objectives should be based on the marketing mix, positioning, and ________. A) differentiation B) past decisions about the target market C) costs of different media choices D) ability to create special events E) novelty of the product advertised Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

11) Advertising is a good way to ________, inform, and persuade. A) educate B) create C) define D) engage E) harvest Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 12) Which of the following is most likely an objective of informative advertising? A) build brand preference B) change customer perceptions of brand value C) encourage customers to switch brands D) suggest new uses for a product E) keep the brand in customer minds during off-seasons Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 13) When P&G developed the Mr. Clean Magic Eraser, the company needed to explain how the product cleans grime from walls without removing paint. What type of campaign was most likely used by P&G for the Mr. Clean Magic Eraser? A) informative advertising B) persuasive advertising C) reminder advertising D) developmental advertising E) comparative advertising Answer: A AACSB: Reflective thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging

14) When the advertising objective is to build primary demand for a new product category, ________ advertising will most likely be used. A) persuasive B) informative C) comparative D) patronage E) institutional Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 15) Which of the following is an objective of persuasive advertising? A) communicate customer value B) correct false impressions C) describe available services and support D) keep the brand in a customer's mind during off-seasons E) engage customers and create brand community Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 16) ________ becomes more important as competition increases. With this type of advertising, a company's objective is to build selective demand. A) Institutional advertising B) Informative advertising C) Reminder advertising D) Not-for-profit advertising E) Persuasive advertising Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

17) Persuasive advertising becomes ________ advertising when a company directly or indirectly compares its brand with one or more other brands. A) informative B) reminder C) attack D) covert E) institutional Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 18) Comparative advertising is also known as ________ advertising. A) attack B) institutional C) covert D) reminder E) informative Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 19) When Verizon Wireless began offering the iPhone, it used its "Can you hear me now?" slogan to attack AT&T's rumored spotty service. This example best illustrates ________. A) informative advertising B) reminder advertising C) comparative advertising D) covert advertising E) institutional advertising Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

20) Encouraging customers to switch brands is most likely the objective of ________ advertising. A) informative B) reminder C) covert D) persuasive E) institutional Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 21) Which of the following types of advertising will most likely result in an advertising war? A) covert advertising B) institutional advertising C) informative advertising D) comparative advertising E) reminder advertising Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 22) Describing available services and support is most likely a goal of ________ advertising. A) reminder B) competitive C) covert D) attack E) informative Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

23) Keeping the brand in a customer's mind during off-seasons is most likely a goal of ________ advertising. A) reminder B) attack C) informative D) covert E) competitive Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 24) Which of the following is one of the primary goals of reminder advertising? A) maintain customer relationships B) build brand preference C) correct false impressions D) inform the market of a price change E) restore company image Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 25) A product in the maturity stage will most likely require ________ advertising. A) informative B) comparative C) persuasive D) reminder E) covert Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

26) Advertising has numerous goals. Which of the following is NOT one of those goals? A) to help move consumers through the buying process B) to work with lobbyists and legislators in developing industry regulations C) to move people to immediate action D) to build or strengthen long-term customer relationships E) to engage customers and change the way they think or feel about the brand Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 27) After determining its advertising objectives, a company's next step in developing an advertising program is to ________. A) set an advertising budget B) determine the media vehicle C) use cash rebate offers D) evaluate the advertising campaign E) develop a message strategy Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 28) Which of the following most likely requires the smallest advertising budget? A) products in competitive markets B) undifferentiated brands C) new products D) low-share brands E) mature brands Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

29) Expensive Coca-Cola television ads are primarily designed to ________. A) deliver promotional materials via QR codes B) move buyers to immediate action C) attack the firm's primary competitors D) build and maintain the Coca-Cola brand relationship E) inform new consumers about Coca-Cola Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 30) Which of the following brands most likely requires heavy advertising in order to be set apart from similar products? A) undifferentiated brands B) specialty brands C) international brands D) mature brands E) high-share brands Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 31) Brands in a market with many competitors and high advertising clutter must ________. A) have very high prices compared to competitors B) be advertised only through print and social media C) be advertised more heavily to be noticed in the marketplace D) never be advertised using informative advertising E) be advertised only during the mature stage of the product life cycle Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

32) Which of the following would be the most likely result of slashing ad spending for a product? A) increased popularity B) reduced long-term market share C) improved brand image D) increased short-term sales E) increased long-term market share Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 33) When the product differs greatly from those of competitors, ________. A) advertising can make customers aware of the product B) firms should advertise similarly to competitors, to remind consumers of the product C) advertising can point out the differences to consumers D) firms should advertise little as the uniqueness will not require education of consumers E) advertising can reaffirm a consumer's decision to purchase Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 34) Which of the following is a major element of developing an advertising strategy? A) selecting advertising media B) using sophisticated statistical models C) setting advertising objectives D) evaluating advertising campaigns E) setting the advertising budget Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

35) Which of the following statements is true regarding the vital importance of the mediaplanning function? A) With changing technologies, media costs are declining. B) Brand content is usually created in-house by the company. C) Which media to use is sometimes more critical than the creative elements of the messaging. D) Market targeting has declined in importance in the planning stages. E) Because so many consumers use the same mobile and social media applications, messaging can be less focused. Answer: C AACSB: Application of knowledge; Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 36) Producing a single 30-second television commercial costs an average of ________. A) $350,000 B) $123,000 C) $1.2 million D) $434,000 E) $55,000 Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 37) The aim of ________ is to make an advertisement so useful or entertaining that people want to watch it. A) branded entertainment B) advertainment C) viral marketing D) buzz marketing E) word-of-mouth advertising Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

38) In addition to advertainment, advertisers are creating content that ________. A) provides much more information than ads did in the past B) they expect to go viral C) helps the advertiser save money D) looks less like ads and more like short films or shows E) confuses viewers about whether they are ads Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 39) Product placement in television programs and movies is an example of ________. A) branded entertainment B) advertainment C) direct marketing D) buzz marketing E) sales promotion Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 40) Pepsi being prominently featured on episodes of Empire is an example of ________. A) advertainment B) buzz marketing C) personal selling D) sales promotion E) product placement Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

41) Which term refers to the general idea that will be communicated to consumers through an advertisement? A) advertising appeal B) message strategy C) consumer-generated message D) creative concept E) message execution Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 42) The first step in creating effective advertising messages is ________. A) selecting specific media vehicles B) planning a message strategy C) determining return on advertising investment D) choosing media timing E) executing the message Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 43) Developing an effective message strategy begins with identifying ________ that can be used as advertising appeals. A) consumer trends B) competitors' weaknesses C) competitors' strengths D) customer benefits E) consumer emotions Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

44) ________ tend to be straightforward outlines of benefits and positioning points that the advertiser wants to stress. A) Promotion mix plans B) Message strategy statements C) Creative concept strategies D) Advertainment statements E) Branded entertainment plans Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 45) After creating a message strategy statement, the advertiser must develop a compelling ________ that will bring the message strategy to life in a distinctive and memorable way. A) creative concept B) customer strategy C) customer benefit D) execution style E) media vehicle Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 46) Which of the following are the three characteristics that an advertising appeal should have? A) engaging, informative, and stylish B) trendy, compelling, and appealing C) meaningful, believable, and distinctive D) unique, emotional, and entertaining E) humorous, memorable, and interesting Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

47) In its advertisements, Timex promotes its affordable and sturdy watches. Fossil emphasizes style and fashion in its advertisements, and Rolex stresses luxury and status. These are all examples of ________ appeals. A) rational B) reminder C) believable D) entertainment E) distinctive Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 48) The advertiser must find the best approach, style, words, format, and ________ for executing the message. A) media B) cost C) visuals D) tone E) endorser Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 49) Which message execution style depicts average people using a product in an everyday setting? A) lifestyle B) scientific evidence C) slice of life D) personality symbol E) testimonial evidence Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

50) An ad for a new convection oven shows a busy professional woman using the convection oven to cook dinner for her family. Which of the following message execution styles is illustrated in this example? A) testimonial evidence B) slice of life C) fantasy D) scientific evidence E) mood or image Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 51) An ad for Athleta active wear shows a woman in a complex yoga pose and states: "If your body is your temple, build it one piece at a time." This ad uses the ________ execution style. A) slice of life B) lifestyle C) fantasy D) scientific evidence E) personality symbol Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 52) Which of the following message execution styles focuses on the company's skill and knowledge in making the product? A) endorsement B) scientific evidence C) slice of life D) technical expertise E) testimonial evidence Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

53) A pharmaceutical ad features a world-renowned heart surgeon describing the benefits of a medication. Which of the following message execution styles is illustrated in this example? A) mood or image B) fantasy C) personality symbol D) musical E) testimonial evidence Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 54) An IKEA ad shows consumers creating fanciful room designs with IKEA furniture, such as "a bedroom for a queen made by Bree and her sister, designed by IKEA." Which of the following message execution styles is illustrated in this example? A) mood or image B) musical C) fantasy D) lifestyle E) personality symbol Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 55) Apple used an album by the band U2 to promote the Apple Watch announcement. Which of the following message execution styles is illustrated in this example? A) personality symbol B) musical C) fantasy D) lifestyle E) slice of life Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

56) The advertisements that use the Aflac duck or the GEICO gecko are using the message execution style of ________. A) lifestyle B) technical expertise C) testimonial evidence D) slice of life E) personality symbols Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 57) Progressive Insurance uses Flo to represent its product. Which of the following message execution styles was used by Progressive Insurance? A) mood or image B) fantasy C) personality symbol D) technical expertise E) musical Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 58) Which message execution style involves presenting survey data indicating that a brand is better than other brands? A) scientific evidence B) testimonial evidence C) endorsement D) technical expertise E) slice of life Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

59) Which of the following message execution styles features a highly believable or likable source endorsing the product? A) musical B) mood or image C) testimonial evidence D) lifestyle E) slice of life Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 60) Maybelline used Gigi Hadid, a model, to endorse a new range of cosmetics. This message execution style is referred to as ________. A) lifestyle B) testimonial evidence C) image D) technical expertise E) personality symbol Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 61) The McDonald's fast-food restaurant chain uses Ronald McDonald, a clown, as its primary character. Which message execution style is used by McDonald's? A) technical expertise B) lifestyle C) personality symbol D) image E) slice of life Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

62) An illustration, a headline, and a copy are the three ________ elements of an advertisement. A) tone B) mood C) format D) reach E) frequency Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 63) What is the first element that a reader most likely notices in a print ad? A) copy B) illustration C) headline D) slogan E) tone Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 64) The main block of text in a print ad is referred to as the ________. A) copy B) testimonial evidence C) headline D) slogan E) message strategy statement Answer: A AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

65) Which of the following is illustrated by an amateur 30-second video, developed by a consumer, telling the story of the online crafts marketplace, Etsy.com? A) personal selling B) consumer-generated messages C) consumer ethnocentrism D) sales promotion E) consumerism Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 66) Television, as a medium of advertisement, is characterized by ________. A) high audience selectivity B) low absolute costs C) poor mass-marketing coverage D) fleeting exposure E) high cost per exposure Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 67) What is an advantage of consumer-generated content? A) It will be less expensive. B) It cannot be controlled by the company. C) It can provide new creative ideas. D) It can entice customers to become brand evangelists. E) It can use social media sites more effectively than the company can. Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

68) Which of the following is a major step in selecting advertising media? A) determining reach, frequency, and impact B) selecting message execution style C) developing a compelling creative concept D) deciding on format elements E) planning a message strategy Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 69) ________ is a measure of the percentage of people in a target market who are exposed to an ad campaign during a given period of time. A) Frequency B) Qualitative value C) Impact D) Premium E) Reach Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 70) Which of the following is an advantage of using newspapers as an advertising medium? A) long life B) good reproduction quality C) large pass-along audience D) broad acceptability E) no ad competition within the same medium Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

71) You receive a report that 68 percent of your target market has been exposed to your ad campaign during a given period of time. Which of the following aspects of media selection is represented by this information? A) frequency B) reach C) impact D) engagement E) qualitative value Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 72) Which of the following statements about magazines as an advertising medium is true? A) Magazines have long ad purchase lead times. B) Magazines cannot offer high geographic selectivity. C) Magazines lack credibility. D) Magazines provide better local coverage than newspapers. E) Magazines have poor reproduction of images. Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 73) The number of times an average person in the target market is exposed to a message is known as the ________ of the message. A) quantitative value B) reach C) frequency D) exposure rate E) turnover rate Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

74) Which of the following is a disadvantage of using direct mail as an advertising medium? A) low audience selectivity B) no flexibility C) severe ad competition D) relatively high cost per exposure E) lack of personalization Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 75) Which term refers to the qualitative value of message exposure through a given medium? A) reach B) turnover rate C) efficiency D) media impact E) frequency Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 76) Which of the following is a media measure? A) consumer price index B) GDP per capita C) wholesale price index D) click-through rate E) human development index Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

77) Which of the following statements is most likely true about radio as an advertising medium? A) Radio advertising is typically quite expensive. B) Radio ensures good attention from the target audience. C) Radio offers very low audience selectivity. D) Radio prohibits the use of segmentation strategies. E) Radio advertising is characterized by good local acceptance. Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 78) Which of the following is a digital medium that is used by advertisers to reach consumers directly? A) smartphone B) direct mail C) newspapers D) billboards E) television Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 79) Which of the following statements about outdoor media is true? A) It has no creative limitations. B) It is characterized by higher costs per exposure. C) It has good positional selectivity. D) It has very limited flexibility. E) It has high audience selectivity. Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

80) You want to advertise your new product. You want good mass marketing coverage and low cost per exposure. You also want to combine sight, sound, and motion and make the advertisement appealing to the senses. You should choose ________ as your advertising media. A) newspaper B) radio C) magazines D) television E) direct mail Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 81) Snappy Cameras is launching a new advertising campaign to demonstrate the high quality of its digital cameras. Which media option would give the audience the most control over exposure to the ads and interactive capabilities? A) the Internet B) newspaper C) TV D) radio E) billboard Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 82) Rather than measuring click-through rates, companies now want to track ________ as a more accurate measure of the engagement of the consumers in the message. A) ratings B) consumer expressions C) listenership D) consumer impressions E) readership Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

83) While traditional mass media still make up a significant portion of today's media mixes, companies have added digital, mobile, and social media that cost less, target more effectively, and ________. A) are quicker to create B) involve more departments in the company C) must be chosen carefully, since there are so many options D) engage consumers more fully E) are challenging to schedule Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 84) Finding ads on shopping carts, ATMs, transit buses, and even municipal garbage cans is known as ________. A) paid media B) earned media C) shared media D) media multitasking E) alternative media Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 85) A Spanish-language channel runs its ads only in Hispanic neighborhoods. This is an example of ________. A) broadcasting B) buzz marketing C) narrow programming D) media multitasking E) personal selling Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

86) The term media multitaskers refers to ________. A) competing brands which use the same media vehicle B) people who absorb more than one medium at a time C) media planners who also head the creative department D) media planners who use more than one advertising medium E) ad agencies whose clients are competitors of each other Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 87) Modern Family and The Wall Street Journal are both examples of ________–specific media within each general media type. A) alternative media B) major media C) media vehicles D) media multitaskers E) micromedia Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 88) When selecting a media vehicle, the media planner looks both at the total cost of using a medium and at the ________. A) cost per thousand persons reached B) cost of premium offers C) cost of the magazine it is using D) profit margin E) continuity cost Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

89) When a media planner determines whether an advertisement for diapers should be placed in Parents magazine or Sports Illustrated magazine, the planner is evaluating the media vehicle's ________. A) profit margin B) flexibility C) rate of depreciation D) audience quality E) cost per exposure Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 90) Audience quality, audience engagement, and editorial quality are most likely to be considered when a media planner ________. A) decides on media timing B) selects an execution style C) selects a media vehicle D) evaluates return on investment E) measures the communication effects of an advertisement Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 91) In the context of media timing, ________ means making decisions on scheduling ads either following the seasonal pattern, opposing the seasonal pattern, or being the same all year. A) routing B) continuity C) sequencing D) narrowcasting E) seasonal advertising Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

92) To measure the ________ effects of an ad after it has aired, the advertiser can evaluate how the ad affected consumer recall, product awareness, attitude changes, and preference. A) sales B) profit C) communication D) continuity E) associativity Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 93) Which of the following characterizes standardized global advertising? A) higher advertising costs B) no global advertising coordination C) higher appeal to varying demographics D) a more consistent worldwide image E) lower reach Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Most clients of Second Avenue have learned about the store through word-of-mouth communication. This small retailer of quality secondhand children's clothing thrives on the sale of a vast inventory of children's clothing placed on consignment. "Because small children grow so quickly," Second Avenue's owner commented, "they often outgrow many of their clothes before they've hardly been worn!" Second Avenue provides a way for people to sell their children's clothing, earn a few dollars, and buy the next larger size. "We're extremely picky about the condition of the clothing we stock," the owner stated, "but we sell most items at a 60-percent discount." 94) Which of the following media options would be the LEAST costly for Second Avenue's promotional efforts? A) periodic advertising in a local newspaper that follows a regular monthly schedule B) daily advertisements on a cable television station C) daily commercials during the local evening news D) a billboard placed on the nearest interstate highway E) a billboard placed in a supercenter Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 95) Second Avenue has just developed a 30-second television ad that features three different shoppers enthusiastically shopping in the store and appreciating its products. This ad uses the ________ execution style. A) slice of life B) technical expertise C) personality symbol D) fantasy E) image Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging

96) A specific communication task to be accomplished with a specific target audience during a specific period of time is called an advertising objective. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 97) Informative ads are used primarily in the growth stage of the product life cycle. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 98) The most important objective of reminder advertising is telling the market about a new product. Answer: FALSE Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 99) Persuasive advertising aims to build broad demand. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 100) While cuts in advertising may appear to do little short-term harm to sales, reducing ad spending may cause long-term damage to a brand's image and market share. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

101) The aim of advertainment is to make ads so entertaining or useful that people want to watch them. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 102) The most common form of advertainment is product placement. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 103) A brief glimpse of the latest LG phone on the television series Modern Family is an example of an advertainment. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 104) Branded entertainment involves making the brand an inseparable part of some other form of entertainment. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 105) Professional athletes such as Peyton Manning and Maria Sharapova are featured in advertisements for Gatorade. According to this information, Gatorade is utilizing branded entertainment. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

106) The purpose of advertising is to get consumers to think about or react to the product or company in a certain way. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 107) The message execution style of personality symbol involves identifying and presenting ordinary people saying how much they like a product. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 108) Although television advertising has high absolute costs, its cost per exposure is relatively low. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 109) In an endorsement style of execution, the endorsers can be characters that represent the product. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 110) The direct mail medium has very low cost per exposure. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

111) Reach is a measure of how many times the average person in the target market is exposed to the message. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 112) While advertisers can accurately measure the communications effects of their ads, measuring sales and profit effects are more difficult. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 113) The communication effects of advertisements and ad campaigns are more difficult to measure than the sales and profit effects. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 114) Agencies bring an outside point of view to solving a company's problems, along with lots of experience from working with different clients and situations. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 115) Recently, the increased use of online social networks and video sharing has reduced the need for advertising standardization with global brands. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

116) Standardization of advertising leads to lower advertising costs, greater global advertising coordination, and a more consistent worldwide image. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 117) Advertising media costs and availability differ vastly from country to country. Answer: TRUE Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 118) What is an advertising objective? What are the three primary types of advertising objectives? Answer: An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Advertising objectives can be classified by primary purpose–whether the aim is to inform, persuade, or remind. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 119) Describe the main objectives of informative advertising. Answer: The main objectives of informative advertising are: -Communicating customer value -Building a brand and company image -Telling the market about a new product -Explaining how a product works -Suggesting new uses for a product -Informing the market of a price change -Describing available services and support -Correcting false impressions AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy

120) Describe the three characteristics that advertising appeals should have? Answer: Advertising appeals should be meaningful, believable, and distinctive. Meaningful appeals point out benefits that make the product more desirable or interesting to consumers. Believable appeals lead consumers to believe that the product or service will deliver the promised benefits. Finally, distinctive appeals should tell how the product is better than the competing brands. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 121) When would a marketer most likely use a comparative ad? Answer: Comparative ads are a type of persuasive ad in which a company directly or indirectly compares its brand with one or more other brands. This type of ad is used as competition increases within a category. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 122) Describe the main objectives of reminder advertising. Answer: The main objectives of reminder advertising are: -Maintaining customer relationships -Reminding consumers that the product may be needed in the near future -Reminding consumers where to buy the product -Keeping the brand in a customer's mind during off-seasons AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 123) How has clutter in television and other advertising media created an increasingly hostile advertising environment? Answer: The majority of Americans believe there are too many television commercials, and they are faced with almost 20 minutes of commercials for each hour of prime-time television; viewers are increasingly using technologies to skip past commercials. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

124) Discuss the concepts of advertainment and branded entertainment. Answer: This merging of advertising and entertainment takes one of two forms: advertainment or branded entertainment. The aim of advertainment is to make ads themselves so entertaining, or so useful, that people want to watch them. Branded entertainment (or brand integrations) involves making the brand an inseparable part of some other form of entertainment. The most common form of branded entertainment is product placements–embedding brands as props within other programming. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 125) Give an example of a slice-of-life message execution style. Answer: Student answers will vary. Slice-of-life examples show one or more typical people using a product in a normal setting. A McDonald's ad featuring a family eating burgers and fries on a family outing is a slice-of-life message execution. AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 126) How does a personality symbol impact a brand? Answer: A personality symbol is a character that represents the product and with whom the consumer can relate; the personality symbol helps a consumer connect with the product. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 127) Give an example of testimonial evidence and explain the importance of the source. Answer: Students answers will vary. Testimonial evidence features a highly believable or likable source endorsing the product. Under Armour uses Dwayne "The Rock" Johnson and Pepsi used Steve Carrell and Cardi B in a Super Bowl ad. AACSB: Analytical thinking Skill: Application Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

128) Why is reach an important measure for a marketer? Answer: Reach is a measurement of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 129) Explain why an ad might need to be modified from one country to the next. Answer: Differences in culture, demographics, and economic conditions will impact how effective or acceptable an advertisement will be in other countries. In addition, changes in the use of language and imagery may be required to be appropriate to the foreign culture. Also, countries have varying laws regulating advertising. AACSB: Application of knowledge; Diverse and multicultural work environments Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 130) Describe any three message execution styles. Answer: Students' answers may include any three of the following. There are nine message execution styles. They are: -Slice of life: shows one or more typical people using the product in a normal setting. -Lifestyle: shows how a product fits in with a particular lifestyle. -Fantasy: creates a fantasy around the product or its use. -Mood or image: builds a mood or image around the product or service. -Musical: shows people or cartoon characters singing about the product. -Personality symbol: creates a character to represent the product. -Technical expertise: depicts the company's expertise in making the product or delivering the service. -Scientific evidence: presents survey or scientific evidence that the brand is better than other brands. -Testimonial evidence/endorsement: features a highly believable or likable source endorsing the product. AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

131) How are companies taking advantage of interactive technologies to tap consumers for message ideas and actual ads? What are the benefits and disadvantages of consumer-generated advertising? Answer: Companies can now search existing video sites such as YouTube, set up their own Web sites, create accounts on social networks such as Facebook, and sponsor ad-creation contests. Several companies, such as Coca-Cola, MasterCard, and Frito-Lay, have used consumer-generated ads in national promotions. Consumer-generated advertising offers companies a way to gather new perspectives on their products and develop insights into how their products are used and seen by actual consumers. Also, consumer-generated advertising is very inexpensive. On the other hand, companies do not control consumer-generated material, which can lead to conflicting, or even negative, messages about a brand. AACSB: Application of knowledge; Information technology Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 132) Describe the four major steps in media selection. Answer: First, the advertiser needs to decide on reach, frequency, and impact. Reach is a measure of the percentage of people who are exposed to the advertisement; frequency is the measure of how many times the average person is exposed to the message; impact is how people feel about the advertisement. Next, media planners need to choose among major media types: television, newspapers, magazines, direct mail, radio, outdoor, and Internet. They may also select newer digital media such as cell phones. After the media type is selected, the specific media vehicles must be identified. The last decision is media timing, which involves determining how to schedule the advertising over the course of a year. AACSB: Written and oral communication Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

133) List any four major media types and identify some of the strengths and weaknesses of each of them. Answer: Students' answers may include any four of the following. -Television: Advantages are good mass marketing coverage, low cost per exposure, and appeals to the senses; weaknesses are high total costs and high clutter. -Newspapers: Strengths are timeliness, good local market coverage, and high believability; weaknesses are short life and poor reproduction quality. -Direct mail: Strengths are flexibility and capacity for personalization; weaknesses are relatively high cost per exposure and "junk mail" image. -Magazines: Strengths are high audience selectivity, credibility, and good pass-along readership; weaknesses are high costs and long lead times. -Radio: Strengths are good local acceptance and low cost; weaknesses are low attention and fleeting exposure to messages. -Outdoor: Strengths are flexibility, low cost, and low message competition; weaknesses are low audience selectivity and creative limitations. -Internet: Strengths include high selectivity, low cost, and interactive capabilities; weaknesses are audience control of exposure and potentially low impact. AACSB: Analytical thinking Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate 134) Advertisers should regularly evaluate two types of advertising results: the communication effects and the sales and profit effects. How are these two results measured? Answer: Measuring the communication effects of an ad or ad campaign tells whether the ads and media are communicating the ad message well. Individual ads can be tested before or after they are run. Before an ad is placed, the advertiser can show it to consumers, ask how they like it, and measure message recall or attitude changes resulting from it. After an ad is run, the advertiser can measure how the ad affected consumer recall or product awareness, knowledge, and preference. Pre- and post-evaluations of communication effects can be made for entire advertising campaigns as well. Sales and profit effects of advertising are often much harder to measure. Sales and profits are affected by many factors other than advertising–such as product features, price, and availability. One way to measure the sales and profit effects of advertising is to compare past sales and profits with past advertising expenditures. Another way is through experiments. For example, to test the effects of different advertising spending levels, a company could vary the amount it spends on advertising in different market areas and measure the differences in the resulting sales and profit levels. More complex experiments could be designed to include other variables, such as differences in the ads or media used. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Moderate

135) Explain how seasonality impacts media timing. Answer: An advertiser must decide how to schedule the advertising over the course of a year. Suppose sales of a product peak in December and drop in March (for winter outdoor gear, for instance). The firm can vary its advertising to follow the seasonal pattern, oppose the seasonal pattern, or be the same all year. Most firms do some seasonal advertising. For example, Mars currently runs M&M's special ads for almost every holiday and "season," from Easter, Fourth of July, and Halloween to the Super Bowl season and the Oscar season. The Picture People, the national chain of portrait studios, advertises more heavily before major holidays, such as Christmas, Easter, Valentine's Day, and Halloween. Some marketers do only seasonal advertising: for instance, P&G advertises its Vicks NyQuil only during the cold and flu season. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Challenging 136) Discuss the advantages of using the services of an advertising agency. Answer: Today's agencies employ specialists who can often perform advertising tasks better than the company's own staff can. Agencies also bring an outside point of view to solving the company's problems, along with lots of experience from working with different clients and situations. So, today, even companies with strong advertising departments of their own use advertising agencies. Most large advertising agencies have the staff and resources to handle all phases of an advertising campaign for their clients, from creating a marketing plan to developing ad campaigns and preparing, placing, and evaluating ads and other brand content. AACSB: Application of knowledge Skill: Concept Objective: LO 15.2: Describe the major advertising decisions involved in developing an advertising plan. Difficulty: Easy 137) Which of the following promotion tools involves building up a positive corporate image and handling unfavorable stories and events? A) sales promotion B) personal selling C) direct marketing D) public relations E) advertising Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy

138) Kathy Champe, a public relations specialist for a regional chain of pharmacies, regularly contacts members of the local and statewide media with information about community events and charity fundraisers sponsored by her company. This is an example of the ________ function of public relations. A) press relations B) product publicity C) investor relations D) lobbying E) development Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate 139) One of the functions performed by a PR department is ________, which involves building and maintaining relations with legislators and government officials to influence legislation and regulation. A) direct marketing B) press relations management C) investor relations management D) lobbying E) public affairs management Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy 140) One of the functions performed by a PR department is ________, which involves working with donors or members of nonprofit organizations to gain financial or volunteer support. A) direct marketing B) press relations management C) investor relations management D) development E) lobbying Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy

141) The National Pork Board developed "Pork. The Other White Meat" campaign. The campaign provided nutritional information and pork recipes in an attempt to encourage people to view pork as a tasty alternative to poultry and fish. Which of the following functions was the goal of this public relations campaign? A) influencing government regulations on pork B) gaining financial support for pork producers C) creating newsworthy information about pork D) maintaining relationships with pork producers E) rebuilding consumer interest in pork Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Challenging 142) Which of the following public relations functions involves maintaining relationships with shareholders and those in the financial community? A) direct marketing B) press relations management C) investor relations management D) development E) lobbying Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy 143) Which of the following statements is most likely true of public relations? A) It requires participating companies to pay for media space or time. B) It can have the same impact on public awareness as advertising at much lower costs. C) It is always handled by a third-party agency hired by the firm. D) It forms a huge portion of the overall marketing budget of most large firms. E) It plays an insignificant role in brand building with the increasing popularity of advertising. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate

144) How can public relations have a strong impact at a much lower cost than advertising? A) The firm can pay for content to be spread. B) Interested consumers can create the content on their own and spread it. C) Interesting brand stories, events, videos, or other content can be shared by sources out of the company's control, but to its benefit. D) Advertising agencies can minimize the impact of competitors' news. E) Advertising costs have changed dramatically due to changing technologies. Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate 145) Which of the following is NOT one of the publics to which a public relations department must answer? A) stockholders B) legislators C) the press D) employees E) suppliers Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate 146) Which of the following best explains why public relations is often overlooked as a tool for supporting product marketing objectives? A) Public relations departments are typically large divisions within corporations. B) The time and costs associated with public relations prohibit its extensive use. C) Public relations specialists lack the skills necessary to work with marketing experts. D) Many public relations professionals see their jobs as communicating, not brand building. E) The public relations department handles stockholders and legislators but not employees. Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Most clients of Second Avenue have learned about the store through word-of-mouth communication. This small retailer of quality secondhand children's clothing thrives on the sale of a vast inventory of children's clothing placed on consignment. "Because small children grow so quickly," Second Avenue's owner commented, "they often outgrow many of their clothes before they've hardly been worn!" Second Avenue provides a way for people to sell their children's clothing, earn a few dollars, and buy the next larger size. "We're extremely picky about the condition of the clothing we stock," the owner stated, "but we sell most items at a 60-percent discount." 147) The owner of Second Avenue wants to establish a community clothing drive to collect clothes for a local children's shelter. The owner is planning to set up collection barrels outside Second Avenue. In this case, which of the following public relations tools is being used by the owner? A) press relations B) product publicity C) lobbying D) development E) public affairs Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Challenging 148) Companies use PR to build good relations with consumers, investors, the media, and their communities. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy 149) PR can have a strong impact on public awareness at a much higher cost than advertising can. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy

150) When using public relations, the company pays for space and time in the media. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy 151) Changing technologies, especially with digital content, is significantly increasing the role of public relations in a firm's integrated marketing communications program. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Easy 152) Describe the significance of public relations as a mass-promotion tool. Answer: Public relations is used to promote products, people, places, ideas, activities, organizations, and even nations. Companies use PR to build good relations with consumers, investors, the media, and their communities. Trade associations have used PR to rebuild interest in commodities, such as eggs, apples, potatoes, milk, and even onions. AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate 153) Explain why a public relations campaign can be a more cost-effective option for corporations than an advertising campaign. Answer: Public relations can have a strong impact on public awareness at a much lower cost than advertising can. The company does not pay for the space or time in the media. Rather, it pays for a staff to develop and circulate information and to manage events. If the company develops an interesting story or event, it could be picked up by several different media, having the same effect as advertising that would cost millions of dollars. And it would have more credibility than advertising. AACSB: Application of knowledge Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate

154) Describe public relations and any three of its main functions. Answer: Student answers may include this description and any three function descriptions. Public relations departments build 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, and events. Some of its functions are: -Product publicity: publicizing specific products -Public affairs: building and maintaining national or local community relations -Lobbying: building and maintaining relations with legislators and government officials to influence legislation and regulation -Press relations: creating and placing newsworthy information in the new media to attract attention to a person, product, or service associated with the company -Investor relations: maintaining relationships with shareholders -Development: working with donors or members of nonprofit organizations to gain financial or volunteer support AACSB: Written and oral communication Skill: Concept Objective: LO 15.3: Define the role of public relations in the promotion mix. Difficulty: Moderate 155) Which of the following is NOT a major public relations tool? A) trade shows and conferences B) stationery, logos, and uniforms C) public service activities D) videos E) annual reports and brochures Answer: A AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy 156) Which of the following is a major tool used by PR professionals? A) standardized global advertising B) market penetration C) news D) bait-and-switch strategy E) product packaging Answer: C AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy

157) News conferences, press tours, and grand openings are examples of ________, a type of tool commonly used by public relations professionals. A) public service activities B) special events C) social networking D) development E) investor relations Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy 158) Which of the following would most likely be included in the written materials prepared by PR professionals to reach and influence target markets? A) employee code of conduct B) annual reports C) memorandum of association D) advertisement jingles E) white papers Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy 159) Which of the following is an example of audiovisual material used by PR professionals? A) blogs B) logos C) vision statements D) brochures E) online videos Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Moderate

160) Logos, uniforms, brochures, and company trucks are all examples of ________ materials that can be used to help a company create a visual image which the public can immediately recognize. A) direct marketing B) social marketing C) public service D) corporate identity E) buzz marketing Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy 161) In an attempt to set the company apart from its competitors, Central Parcel Service (CPS) has its employees wear brown uniforms and drive brown trucks. What type of public relations tool is being used by CPS? A) buzz marketing B) corporate logos C) corporate identity materials D) product publicity E) public service materials Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Moderate 162) Steps involved in determining when and how to use product public relations include ________, choosing the PR message and media, implementing the PR plan, and evaluating the results, plus integrating with the full marketing communications effort. A) defining the budget B) hiring the media creators C) collecting feedback D) setting PR objectives E) determining the messenger Answer: D AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy

163) Corporate identity materials help create a corporate identity that the public immediately recognizes. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Moderate 164) A company's Web site can be an important public relations vehicle. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy 165) While a company can choose to participate in public service activities, doing so has no impact on public goodwill toward the company. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Easy

166) Public relations specialists use several tools. Identify three of these tools and describe how they can help a company communicate with the public. Answer: Students' answers may include any three of the following. PR professionals find or create favorable news about the company and its products or people. Sometimes news stories occur naturally, and sometimes the PR person can suggest events or activities that would create news. Speeches can also create product and company publicity. Increasingly, company executives must field questions from the media or give talks at trade associations or sales meetings, and these events can either build or hurt the company's image. Another common PR tool is special events, ranging from news conferences, press tours, grand openings, and fireworks displays to laser shows, hot air balloon releases, multimedia presentations, or educational programs designed to reach and interest target publics. Public relations people also prepare written materials to reach and influence their target markets. These materials include annual reports, brochures, articles, and company newsletters and magazines. Audiovisual materials, such as slide-and-sound programs, DVDs, and online videos are being used increasingly as communication tools. Corporate identity materials can also help create a corporate identity that the public immediately recognizes. Logos, stationery, brochures, signs, business forms, business cards, buildings, uniforms, and company cars and trucks–all become marketing tools when they are attractive, distinctive, and memorable. Companies can improve public goodwill by contributing money and time to public service activities. AACSB: Application of knowledge Skill: Concept Objective: LO 15.4: Explain how companies use PR to communicate with their publics. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 16 Personal Selling and Sales Promotion 1) Which of the following is true with regard to personal selling? A) Personal selling entails personal presentations by a firm's sales force for the purpose of making sales and building customer relationships. B) Personal selling involves making personal requests to potential buyers to enter into short-term business relationships with firms. C) Personal selling distances the buyer from the seller and does not focus on building enduring relationships. D) An outside sales force is not involved in personal selling. E) Personal selling is a relatively new profession. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy 2) A(n) ________ is an individual who represents a company to customers by prospecting, communicating, selling, servicing, information gathering, and/or relationship building. A) auditor B) trainer C) salesperson D) manager E) human resource personnel Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy 3) Which of the following is true about the sales force of a company? A) Salespeople represent customers to the company and manage the buyer-seller relationship. B) Salespeople represent workers' interests to upper management. C) The primary responsibility of a sales force is to formulate operational strategies. D) The sales force is responsible for product development and product strategy. E) The sales force oversees the auditing process and recovers money from defaulting customers. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate

4) Which of the following is NOT a position that a salesperson covers? A) order taker B) creative seller C) order getter D) relationship builder E) shipping arranger Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate 5) Which of the following is true about the sales force of a company? A) Salespeople rely on engineers and manufacturers to learn about customer needs. B) The sales force plays a minor role in customer-company relationships. C) Salespeople rarely visit in person with customers. D) Salespeople represent customers to the company, championing customers' interests. E) Salespeople do not have the authority to act on customers' objections. Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate 6) Which of the following would most likely improve coordination between marketing and sales? A) Salespeople should directly participate in the development of new products. B) Salespeople should participate in marketing planning sessions by sharing firsthand customer knowledge. C) The sales force should strategize promotional strategies and be the primary decision makers about marketing. D) Marketing managers should field test new promotion strategies before the sales team. E) The marketing and sales departments should conduct annual job rotations. Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate

7) Which of the following is NOT likely to improve coordination between marketing and sales? A) appointing a high-level marketing executive to oversee both marketing and sales B) arranging joint meetings and spelling out communications channels C) creating rewards systems that put marketing and sales in competition with each other D) including brand managers in sales calls E) adding marketing-sales liaisons to coordinate programs and efforts Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate 8) At Price & Wallace Inc., a pharmaceuticals company, members of the sales force and marketing department tend to have disagreements when things go wrong with a customer. The marketers blame the salespeople for poorly executing their strategies, while the salespeople blame the marketers for being out of touch with customers. Which of the following steps should upper management at Price & Wallace take to help bring the sales and marketing functions closer together? A) establish a customer sales force structure and make sure that sales quotas are easily achievable B) establish a complex sales force structure C) emphasize traditional methods of selling D) adopt a sales force automation system and implement team selling E) appoint a high-level marketing executive to oversee both marketing and sales Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate 9) All companies must have salespeople. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy

10) Personal selling involves interpersonal interactions between salespeople and individual customers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy 11) Salespeople do not represent customers to the company. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy 12) What is personal selling? Answer: Personal presentations by the firm's sales force for the purpose of making sales and building customer relationships is known as personal selling. AACSB: Written and oral communication Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Easy 13) Describe the nature of personal selling and the role of the sales force. Answer: Today, most salespeople are well-educated and well-trained professionals who work to build and maintain long-term customer relationships by listening to their customers, assessing customer needs, and organizing the company's efforts to solve customer problems. The best salespeople are the ones who work closely with customers for mutual gain. Personal selling is the interpersonal arm of the promotion mix. The sales force acts as a critical link between a company and its customers. Salespeople represent the company to the customer and the customer to the company to produce customer satisfaction and company profit. AACSB: Written and oral communication Skill: Concept Objective: LO 16.1: Discuss the role of a company's salespeople in engaging customers, creating customer value, and building customer relationships Difficulty: Moderate

14) ________ is defined as analyzing, planning, implementing, and controlling sales force activities. A) Benchmarking B) Sales force management C) Business intelligence D) Sales force automation E) Sampling Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 15) Sales force management includes all of the following EXCEPT ________ salespeople. A) recruiting B) evaluating C) paying D) supervising E) training Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 16) Which of the following questions is NOT asked when designing a sales force strategy and structure? A) Should salespeople sell in the field, by phone, or using online and social media? B) Should salespeople work alone or in teams with other company employees? C) How big should the sales force be? D) Should salespeople follow strict steps in the sales process? E) How should salespeople and their tasks be structured? Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

17) In the ________, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that region. A) territorial sales force structure B) digital marketing system C) product sales force structure D) geographical operations system E) customer sales force structure Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 18) Which of the following is true about the territorial sales force structure? A) The territorial sales force structure does not define each salesperson's job clearly. B) Salespeople specialize in selling only a small portion of the company's products. C) In a territorial sales force structure, separate sales forces are set up for different industries. D) Travel expenses are relatively small as each salesperson travels within a limited geographic area. E) In a territorial sales force structure, separate sales forces are often established to handle a single, large account in every territory. Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 19) Ultra Tech Inc., a company manufacturing gardening tools, has decided to switch to a territorial sales force structure. Which of the following benefits is the company most likely to gain as a result of this decision? A) The cost of training new recruits would be eliminated. B) An increased focus on short-term customer relationships would boost local sales of specialized products. C) Each salesperson would be assigned to sell a single product in which he/she specializes. D) The capacity for mass production of a wide range of products would significantly increase. E) As each salesperson travels within a limited geographic area, travel expenses would decline. Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging

20) If a company ________, it should adopt a product sales force structure, in which the sales force specializes along product lines. A) specializes in a single product B) manufactures a small number of simple products C) maintains that product specialization is counterproductive D) has numerous and complex products E) lacks salespeople with superior technical know-how Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 21) Which of the following is true about the product sales force structure? A) A product sales force structure is most appropriate for a company that manufactures a small number of simple products. B) In a product sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. C) In a product sales force structure, salespersons specialize in only a particular product line as the company produces numerous and complex products. D) In a product sales force structure, a single salesperson can become an expert in all product categories. E) In a product sales force structure, specialization is highly discouraged. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 22) In the ________, separate sales forces are set up for different industries. A) territorial sales force structure B) digital marketing system C) customer sales force structure D) geographical operations system E) product sales force structure Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

23) Which of the following is true about the customer sales force structure? A) The customer sales force structure is a combination of territorial sales force structure and product sales force structure. B) Each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. C) Salespersons specialize in only a particular product line as the company produces numerous and complex products. D) Companies using customer sales force structure tend to ignore the importance of long-term relationship building with customers. E) Separate sales forces are set up for different industries, serving current customers versus finding new ones. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 24) Johnson Business Solutions maintains one sales force for its copy machines and a separate sales force for its computer systems. Johnson Business Solutions utilizes a ________. A) product sales force structure B) customer sales force structure C) territorial sales force structure D) digital marketing system E) geographical operations system Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 25) In what situation is a complex sales force structure used? A) when a company sells a narrow variety of products to few types of customers over a broad geographic area B) when a company sells a wide variety of products to many types of customers over a broad geographic area C) when a company sells a wide variety of products to many types of customers over a small geographic area D) when a company sells a wide variety of products to few types of customers over a small geographic area E) when a company sells a narrow variety of products to many types of customers over a small geographic area Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 8 Copyright © 2021 Pearson Education, Inc.

26) Morrill Motors splits the United States of America into 10 sales regions. Within each of those regions, the company has separate sales personnel selling the company's full line of products. Morrill Motors uses a ________ sales force structure. A) territorial B) complex C) customer D) product E) market Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 27) Which of the following helps companies in setting sales force size? A) workload approach B) pull strategy C) push strategy D) top-down approach E) bottom-up approach Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 28) The workload approach takes into account all of the following EXCEPT ________. A) customer account status B) amount of effort required to maintain the account C) customer account size D) number of times each class of account is to be contacted E) success rate at closing orders with account Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

29) Sigma Inc. has 2,000 Type-A accounts, each requiring 35 calls per year, and 1,000 Type-B accounts, each requiring 15 calls per year. What is the sales force's workload? A) 15,000 calls B) 35,000 calls C) 70,000 calls D) 85,000 calls E) 95,000 calls Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 30) Stahl Inc. has 1,000 A-level accounts, each requiring 30 calls per year, and 3,000 B-level accounts, each requiring 10 calls per year. If each salesperson at Stahl Inc. can make 1,500 sales calls per year, how many salespeople would be needed to meet the total workload? A) 25 B) 35 C) 40 D) 45 E) 60 Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 31) Kevin is a salesperson working for a company that manufactures gardening tools. He is involved in door-to-door sales and travels every day to call on customers. In his company, Kevin is most likely a part of the ________. A) top management B) inside sales force C) product designing team D) customer support team E) outside sales force Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

32) Robin works in a manufacturing company in Ohio. She sells products and handles customer requests via the company's online live chat feature. In her company, Robin is most likely a part of the ________. A) outside sales force B) inside sales force C) product designing team D) operations management team E) executive management Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 33) Which of the following is true with regard to the inside sales force of a company? A) The inside sales force is invariably more attentive to customer needs than the outside sales force. B) Unlike the outside sales force, the inside sales force does not require training. C) Inside sales representatives engage in face-to-face interaction with customers. D) The inside sales force is far more knowledgeable about customer habits than are outside salespeople. E) Inside salespeople provide support for the outside sales force, freeing them to spend more time selling to major accounts and finding new prospects. Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 34) Kelly works as a sales representative at Ginner Machine Works. She uses the phone and the Internet to identify prospects and make sales. Kelly calls customers and explains the products offered by Ginner and the advantages of using them. If requested, she also mails the customer product information brochures. Which of the following is most likely Kelly involved in? A) outside selling B) technical sales support C) telemarketing and online selling D) research and administrative backup E) field sales Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

35) Which of the following best explains the growth of telephone and online selling? A) the use of the Do Not Call Registry B) the ability to make up to 8 times as many more customer contacts per day than an outside salesperson C) the similarity in cost between the inside and outside sales forces D) the difficulty and expense of reaching some customers E) the preference of customers for face-to-face contact Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 36) Travis Computing Systems earns most of its revenue from sales and in-person computer services. The sales force at Travis recently began telemarketing and online selling. How would telemarketing and online selling most likely benefit Travis? A) The need for an outside sales force would be completely eliminated through telemarketing. B) Travis sales reps would be able to engage in more frequent face-to-face interaction with large, high-value customers. C) Travis sales reps would be able to service hard-to-reach customers more effectively. D) The overhead costs of Travis would significantly decrease. E) The current liabilities of Travis would decrease. Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 37) Amanda Perkins is a senior sales manager in Arlington Steelworks. As the customer base of her company has grown larger and more demanding over the last few years, Amanda insists on ________, or using groups of people from various departments such as sales, technical support, engineering, and even upper management to service complex accounts. A) cross selling B) e-procurement C) team selling D) observational research E) vendor screening Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

38) Which of the following best explains why companies are adopting the team selling approach to service large, complex accounts? A) Products have become too complicated for one salesperson to handle a large company's needs. B) Customers prefer dealing with many salespeople rather than one sales representative. C) Job rotation, an integral part of team selling, keeps workers motivated and boosts their morale. D) Team selling facilitates the evaluation of individual contributions. E) With team selling, companies are not required to train the outside sales force any longer. Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 39) A(n) ________ is a written representation of a salesperson's completed activities. A) bill of sale B) call report C) tender D) sales quotation E) contract of sale Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 40) All of the following are disadvantages of team selling EXCEPT ________. A) selling teams can be confusing and overwhelming for customers B) salespeople who are used to having customers all to themselves may have trouble learning to work with and trust others on a team C) team selling reduces the overall efficiency of the selling process D) individual contributions and compensations can be difficult to assess in team selling E) team selling discourages individual contributors because the team receives credit for good performance Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

41) Hannah Adams is a senior sales manager in Elmo Corp., a rapidly growing company manufacturing personal computers and printers. In order to handle sales effectively, Hannah insists on using the services of different groups of people from different departments within the company such as the sales, marketing, technical support, and finance departments. In this instance, Hannah makes use of ________. A) team selling B) competitive marketing intelligence C) hybrid selling D) occasion segmentation E) sales force automation systems Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 42) All of the following are problems associated with the poor selection of salespeople EXCEPT ________. A) lower sales B) costly turnover C) less productivity D) fewer training expenses E) disruptive customer relationships Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 43) Eric Brown is a human resource manager in a company selling and manufacturing personal computers. Who among the following is Eric most likely to hire as a salesperson if his objective is to minimize training costs post recruitment? A) Samantha, a fresh college graduate B) Richard, a product developer from a competing firm C) Nancy, an experienced engineer with no prior experience in personal selling D) Melissa, a proven salesperson from a competing firm E) Henry, a young salesperson with a few months' experience in a large MNC Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging

44) Which of the following abilities would LEAST likely be measured when recruiting and testing applicants for a sales position? A) sales aptitude B) work style C) accounting skills D) motivation E) relationship skills Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 45) The purpose of a training program for salespeople is to teach them about all of the following EXCEPT ________. A) customers' buying habits B) customers' buying motives C) competitor strategies D) industry history E) company goals Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 46) Which of the following is a primary reason that companies use online training tools to conduct sales training programs? A) Customer needs and habits can be unambiguously conveyed through online training programs. B) Sales training programs that do not use online training are mostly ineffective. C) Online training eliminates employee attrition. D) Online training is the best way to simulate real-life sales calls. E) Online training cuts travel and training costs. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

47) A hybrid sales rep ________. A) works exclusively from remote locations B) is a modern cross between a field sales rep and an inside rep C) rarely engages in face-to-face interactions with customers D) performs sales audits E) sets the sales objectives of companies Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 48) All of the following are basic types of compensation plans for salespeople EXCEPT ________. A) straight commission B) straight salary C) salary plus commission D) salary plus company shares E) salary plus bonus Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 49) More and more companies are moving away from high-commission plans because ________. A) outside salespeople tend to undermine the efforts of the inside sales team B) high-commission plans require salespeople to work overtime C) salespeople tend to become pushy which affects customer relationships D) salespeople are prone to taking multiple sales jobs to maximize their income E) salespeople end up spending too much time traveling to meet customers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

50) Which of the following is most likely a true statement about sales compensation in economically tough circumstances? A) Cutting sales force compensation is usually a last resort for firms that want to maintain positive customer relationships. B) Morale is boosted by distributing commissions equally among low and high sales performers. C) Online selling is discontinued to improve customer relations. D) Compensation for the inside sales force is reduced to increase commissions for the outside sales force. E) Low performers are retained and top performers are dismissed to reduce commission payments. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 51) A(n) ________ shows how much time is spent selling, traveling, waiting, taking breaks, and doing administrative chores by the salesperson. A) customer relationship management tool B) corporate social networking site C) time-and-duty analysis tool D) outsourcing relationship management tool E) product lifecycle management analysis Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 52) Which of the following is the best way for a company to increase selling time? A) implementing high-commission plans B) reducing the number of customers C) sharing less information with customers D) simplifying administrative duties E) implementing mass customization Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

53) Which of the following involves computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere? A) SWOT analysis B) BCG matrix C) digital marketing system D) sales force automation system E) field service management system Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 54) Which of the following is an advantage of using a sales force automation system? A) lowers sales team training costs B) records major competitor's sales C) eliminates the need for an inside sales force D) eliminates employee attrition E) improves customer service Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 55) ________ refers to the standard that establishes the amount each salesperson should sell and how sales should be divided among the company's products. A) Conditional sale B) A bill of sale C) A sales quota D) Prospecting E) Satisficing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

56) Which of the following refers to a positive incentive intended to increase the sales force effort? A) sales contests B) prospecting C) telecommuting D) sales collateral E) annual sales plan Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 57) Mary Conti, a sales manager at National Computer Training, wants to evaluate the performance of her sales force in the New England territory. Which of the following would Mary most likely use? A) SWOT analysis B) breakeven analysis C) sales forecast D) expense reports E) call plan Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 58) At the beginning of each year, the management of Dee Decor states the exact amount a salesperson should sell. This specific sales target is also known as a ________. A) sales lead B) prospect C) bill of sale D) channel length E) sales quota Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

Refer to the scenario below to answer the following question(s). Reliable Tools Company is a manufacturer of hubs and axles for the trailer and heavy truck industry. Although Reliable Tools only has 15 customers, the company is the sole supplier of hub and axle components to those customers. Monthly sales at Reliable Tools are approximately $1 million. "You might say we have all our eggs in one basket," says owner Arthur Deetz. It is critical that a competent sales force be maintained in order to nurture those few but large accounts. Ninety-five percent of Reliable Tools' customers are located in Michigan, Ohio, and Indiana, which means that travel time to all customers is relatively short. However, given the nature of the industry, time spent with each customer is crucial. 59) How would a customer sales force structure benefit Reliable Tools? A) It would eliminate the need for the company's salespeople to travel to meet customers. B) It would enable the company's salespeople to build close relationships with customers. C) It would help the company's salespeople become experts in the products they sell. D) It would enable the company's management to cut training costs substantially. E) It would make telemarketing irrelevant. Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 60) For sales managers to understand how the members of the Reliable Tools sales force spend their time, the salespeople must submit a(n) ________. A) expense report B) time-and-duty analysis C) mobile conferencing schedule D) sales forecast E) incentive plan Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging

61) Several compensation plans are available to reward and motivate Reliable Tool's salespeople. Since generating new leads and new business can be a goal for the sales force, which compensation plan approach is MOST likely to motivate and direct the salespeople in that direction? A) straight commission B) salary plus bonus C) straight salary D) salary plus commission E) salary, commission, and bonus Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 62) Purposes of social selling, the use of online, mobile, and social media, are to do all of the following EXCEPT ________. A) augment sales performance B) eliminate person-to-person selling C) build stronger customer relationships D) engage customers E) provide customers more control over the selling process Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 63) Disadvantages of social selling include ________. A) its impact on efficiency B) its ability to provide information C) its expense and the difficulty of presenting some things via the Internet D) the ability to spot opportunities E) its impact on productivity Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Challenging 64) Sales force management refers to hiring and training the sales force. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 21 Copyright © 2021 Pearson Education, Inc.

65) In the territorial sales force structure, each salesperson is responsible for selling a single, exclusive product across different geographical regions. Answer: FALSE AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 66) In a territorial sales force structure, as each salesperson travels within a limited geographic area, travel expenses are relatively small. Answer: TRUE AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 67) If a company has numerous and complex products, it can adopt a product sales force structure in which the sales force specializes along product lines. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 68) In a product sales force structure, no single salesperson can become an expert in all of the product categories, so product specialization is required. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 69) In the customer sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 70) In a complex sales force structure, salespeople can be specialized by customer and territory; product and territory; product and customer; or territory, product, and customer. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 22 Copyright © 2021 Pearson Education, Inc.

71) The workload approach is used to determine the type of sales force structure required by a company. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 72) The inside sales force consists of salespeople who conduct business from their offices via telephone, the Internet, or visits from buyers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 73) Sales assistants confirm appointments, follow up on deliveries, and answer customers' questions when outside salespeople cannot be reached. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 74) Telemarketing has ceased to be an important tool for most B-to-B marketers owing to the federal government's Do Not Call Registry. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 75) Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts is known as complex selling. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

76) Training online instead of on-site can cut travel and other training costs, and it takes up less of a salesperson's selling time. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 77) Companies are increasingly adopting high-commission plans to make sure that salespersons are motivated to build long-term relationships with customers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 78) The goal of supervision is to encourage salespeople to "work hard" and energetically toward sales force goals. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 79) Salespeople are only evaluated on the number of sales they close within a certain time frame. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 80) Social selling emphasizes personal contact between the company and its customers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 81) What is the role of a salesperson in a territorial sales force structure? Answer: In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 24 Copyright © 2021 Pearson Education, Inc.

82) Under what conditions is a company most likely to use a product sales force structure? Answer: If a company has numerous and complex products, it can adopt a product sales force structure, in which the sales force specializes along product lines. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 83) Why and how do companies use workload approach? Answer: Many companies use some form of workload approach to set sales force size. Using this approach, a company first groups accounts into different classes according to size, account status, or other factors related to the amount of effort required to maintain the account. It then determines the number of salespeople needed to call on each class of accounts the desired number of times. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 84) Distinguish between an outside sales force and an inside sales force. Answer: Outside sales force (or field sales force) consists of salespeople who travel to call on customers in the field. On the other hand, inside sales force consists of salespeople who conduct business from their offices via telephone, the Internet, or visits from prospective buyers. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 85) What is the goal of training salespeople? Answer: Training programs have several goals. First, salespeople need to know about customers and how to build relationships with them. Therefore, the training program must teach them about different types of customers and their needs, buying motives, and buying habits. It must also teach them how to sell effectively and train them in the basics of the selling process. Salespeople also need to know and identify with the company, its products, and its competitors. Therefore, an effective training program teaches them about the company's objectives, organization, products, and the strategies of major competitors. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy

86) What does a call plan show? Answer: The weekly, monthly, or annual call plan shows which customers and prospects to call on and which activities to carry out. AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 87) Why have firms adopted sales force automation systems? Answer: Many firms have adopted sales force automation systems to help their salespeople better manage their time, improve customer service, lower sales costs, and increase sales performance. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Easy 88) Why is a firm's organizational climate an important part of building a successful sales staff? Answer: Organizational climate describes the feeling that salespeople have about their opportunities, value, and rewards for a good performance. Some companies treat salespeople as if they are not very important, so performance suffers accordingly. Other companies treat their salespeople as valued contributors and allow virtually unlimited opportunity for income and promotion. Not surprisingly, these companies enjoy higher sales force performance and less turnover. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 89) Discuss the differences between the three major sales force structures. What are the potential benefits of each structure? Answer: In the territorial sales force structure, each salesperson is assigned to an exclusive geographic area and sells the company's full line of products or services to all customers in that territory. This organization clearly defines each person's job, fixes accountability, and increases the person's desire to build local business relationships that improve selling effectiveness. The product sales force structure allows the sales force to sell along product lines; the seller becomes very knowledgeable about products. The customer sales force structure organizes its sales force along customer or industry lines. This can help a company build closer relationships with important customers. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

90) Why are more companies using team selling? What are its pros and cons? Answer: Team selling is useful for servicing large, complex accounts. Sales teams can uncover problems, solutions, and sales opportunities that no individual salesperson could. In many cases, the move to team selling mirrors similar changes in customers' buying organizations. Many large customer companies have implemented team-based purchasing, requiring marketers to employ equivalent team-based selling. When dealing with large, complex accounts, one salesperson can't be an expert in everything the customer needs. Instead, selling is done by strategic account teams, quarterbacked by senior account managers or customer business managers. Team selling does have some pitfalls, however. For example, salespeople are by nature competitive and have often been trained and rewarded for outstanding individual performance. Salespeople who are used to having customers all to themselves may have trouble learning to work with and trust others on a team. In addition, selling teams can confuse or overwhelm customers who are used to working with only one salesperson. Finally, difficulties in evaluating individual contributions to the team selling effort can create some sticky compensation issues. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 91) How do successful companies recruit and train their salespeople? What does an effective training program teach salespeople? Answer: When recruiting, a company should analyze the sales job itself and the characteristics of its most successful salespeople to identify the traits needed by a successful salesperson in their industry. Then it must recruit the right salespeople. The human resources department looks for applicants by getting names from current salespeople, using employment agencies, searching the Internet, placing classified ads, and working through college placement services. Another source is to attract top salespeople from other companies. Proven salespeople need less training and can be productive immediately. New salespeople may spend anywhere from a few weeks or months to a year or more in training. After the initial training ends, most companies provide continuing sales training via seminars, sales meetings, and Internet e-learning throughout the salesperson's career. Many companies are now using imaginative and sophisticated e-learning techniques to make sales training more efficient. Salespeople also need to know and identify with the company, its products, and its competitors. Therefore, an effective training program teaches them about the company's objectives, organization, products, and the strategies of major competitors. AACSB: Application of knowledge Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

92) Describe some of the methods used to supervise salespeople and help them work more efficiently. Answer: Through supervision, or helping salespeople "work smart," companies can help salespeople do the right things in the right way. This includes helping salespeople identify target customers and manage their time. A weekly, monthly, or annual call plan is used in many companies to show salespeople which customers and potential customers to call on within a given time period and which activities to carry out. Companies often use time-and-duty-analysis. In addition to time spent selling, the salesperson spends time traveling, waiting, taking breaks, and doing administrative chores. Companies are always looking for ways to save time– simplifying administrative duties, developing better sales call and routing plans, supplying more and better customer information, and using phone, e-mail, or Internet conferencing instead of traveling. Many firms have adopted sales force automation systems: computerized, digitized sales force operations that let salespeople work more effectively anytime, anywhere. Companies now routinely equip their salespeople with technologies such as laptops or tablets, smartphones, wireless connections, videoconferencing technologies, and customer-contact and relationship management software. Armed with these technologies, salespeople can more effectively and efficiently profile customers and prospects, analyze and forecast sales, schedule sales calls, make presentations, prepare sales and expense reports, and manage account relationships. The result is better time management, improved customer service, lower sales costs, and higher sales performance. In all, technology has reshaped the ways in which salespeople carry out their duties and engage customers. AACSB: Written and oral communication Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

93) Explain the methods of evaluating the performance of a sales force. Why is the evaluation of a company's sales force considered necessary? Answer: Management gets information about its salespeople in several ways. The most important source is sales reports, including weekly or monthly work plans and longer-term territory marketing plans. Salespeople also write up their completed activities on call reports and turn in expense reports for which they are partly or wholly reimbursed. The company can also monitor the sales and profit performance data in the salesperson's territory. Additional information comes from personal observation, customer surveys, and talks with other salespeople. Using various sales force reports and other information, sales management evaluates the members of the sales force. It evaluates salespeople on their ability to "plan their work and work their plan." Formal evaluation forces management to develop and communicate clear standards for judging performance. It also provides salespeople with constructive feedback and motivates them to perform well. On a broader level, management should evaluate the performance of the sales force as a whole. Is the sales force accomplishing its customer relationship, sales, and profit objectives? Is it working well with other areas of the marketing and company organization? Are sales force costs in line with outcomes? As with other marketing activities, the company wants to measure its return on sales investment. AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate

94) Describe social selling and what changes it is bringing to the selling process. Answer: The fastest-growing sales trend is the explosion in social selling–the use of online, mobile, and social media to engage customers, build stronger customer relationships, and augment sales performance. New digital sales force technologies are creating exciting new avenues for connecting with and engaging customers in the digital and social media age. Used properly, online and social media technologies will make salespeople more productive and effective. The new digital technologies are providing salespeople with powerful tools for identifying and learning about prospects, engaging customers, creating customer value, closing sales, and nurturing customer relationships. Social selling technologies can produce big organizational benefits for sales forces. They help conserve salespeople's valuable time, save travel dollars, and give salespeople new vehicles for selling and servicing accounts. Social selling hasn't really changed the fundamentals of selling. Sales forces have always taken the primary responsibility for reaching out to and engaging customers and managing customer relationships. Now, more of that is being done digitally. However, online and social media are dramatically changing the customer buying process. As a result, they are also changing the selling process. In today's digital world, many customers no longer rely as much as they once did on information and assistance provided by salespeople. Instead, they carry out more of the buying process on their own–especially the early stages. In response to this new digital buying environment, sellers are reorienting their selling processes around the new customer buying process. They are "going where customers are"–social media, forums, online communities, blogs–in order to engage customers earlier. They are engaging customers not just where and when they are buying, but also where and when they are learning about and evaluating what they will buy. Salespeople now routinely use digital tools that monitor customer social media exchanges to spot trends, identify prospects, and learn what customers would like to buy, how they feel about a vendor, and what it would take to make a sale. Today's sales forces are also ramping up their own use of social media to engage customers throughout the buying process. AACSB: Analytical thinking Skill: Concept Objective: LO 16.2: Identify and explain the six major sales force management steps. Difficulty: Moderate 95) Which of the following is the last step in the selling process? A) qualifying B) handling objections C) demonstration D) follow-up E) approach Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

96) Which of the following is the first step in the personal selling process? A) handling objections B) follow-up C) presentation and demonstration D) preapproach E) prospecting and qualifying Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 97) In the ________ stage of the selling process, a company first identifies qualified potential customers. A) preapproach B) follow-up C) prospecting D) presentation E) approach Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 98) Prospects can be qualified by looking at all of the following characteristics EXCEPT ________. A) occupational mobility B) financial ability C) volume of business D) location E) possibilities for growth Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

99) During the prospecting stage, a salesperson needs to identify the good leads and screen out the poor ones through a process known as ________. A) closing B) satisficing C) presenting D) qualifying E) approaching Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 100) Salespeople can draw prospective leads by referrals from all of the following EXCEPT ________. A) current customers B) suppliers C) dealers D) directories E) competitive salespeople Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 101) Before calling on a prospect, the salesperson should learn as much as possible about the organization and its buyers. This step is known as ________. A) preapproach B) closing C) approach D) presentation E) prospecting Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

102) ________ refers to a practice in which salespeople drop in unannounced on various offices. A) Hybrid selling B) Niche marketing C) Cold calling D) Value selling E) Direct marketing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 103) Which of the following will NOT be a call objective in a preapproach plan? A) qualify the prospect B) find the initial lead C) gather information D) determine the best approach and timing E) make an immediate sale Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 104) In which of the following steps of the selling process is a salesperson most likely to meet the customer for the first time? A) prospecting B) preapproach C) follow-up D) approach E) closing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

105) Which of the following is especially crucial in the approach stage of the selling process? A) ensuring the customer understands the company's history B) telling the customer about the company's products C) listening to the customer D) presenting the solution that the customer needs E) overcoming the customer's objections Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 106) During the ________ step of the selling process, the salesperson tells the value story to the buyer, showing how the company's product or service solves the customer's problems. A) prospecting B) preapproach C) presentation D) closing E) follow-up Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 107) ________ refers to the sales step in which a salesperson asks the customer for an order. A) Prospecting B) Demonstration C) Approach D) Closing E) Handling objections Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

108) All of the following are traits that buyers dislike in salespeople EXCEPT ________. A) disorganization B) tardiness C) empathy D) being overly talkative E) deceit Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 109) Which of the following refers to a closing technique used by salespeople? A) asking customers for referrals B) developing solutions to customers' problems C) seeking out hidden objections D) reviewing points of agreement E) taking objections as opportunities to provide more information Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 110) Which of the following steps in the selling process is most focused on ensuring customer satisfaction and repeat business? A) preapproach B) demonstration C) handling objections D) qualifying prospects E) follow-up Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

111) Which of the following is true with regard to value selling? A) Value selling refers to earning business from customers by cutting down prices of value products. B) Value selling refers to delivering superior customer value and capturing a fair return on that value. C) Value selling refers to the mass production of inferior-quality goods for sale. D) Value selling dilutes customer loyalty in the long run. E) Value selling tarnishes the brand image of a product in the long run. Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 112) A salesperson of a manufacturing company has qualified a number of leads. Which of the following is most likely the next step in the selling process? A) calling on all the prospects one by one B) closing the deal with the most promising prospect C) learning as much as possible about the qualified prospects D) handling all objections raised by the prospects E) narrating the "value story" to the buyer Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 113) Melissa Price is a member of the sales force at Urban Fashions, a Houston-based manufacturer of women's apparel. Melissa is preparing for a first meeting with a wholesaler who is a potential customer. She is learning as much as she can about her prospect and his organization. Melissa is in the ________ step of the personal selling process. A) prospecting B) qualifying C) preapproach D) follow-up E) demonstration Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

114) Which of the following is true with regard to prospecting? A) Salespersons meet and greet the buyer. B) Salespersons learn as much as possible about the organization. C) Salespersons identify qualified potential customers. D) Salespersons tell the "value story" to the buyer, showing how the company's offer solves the customer's problems. E) Salespersons ask for the order, review points of agreement, and offer to write up the order. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 115) Richard, a salesperson, works for Wellington Steelworks. After researching a qualified lead, Richard is preparing opening lines for meeting the customer for the first time. Which step of the selling process is he about to enter? A) follow-up B) handling objections C) approach D) presentation E) preapproach Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 116) Capitalizing on the customer's complaints about the previous detergents she has used, Sheila, a salesperson, explains to the customer why her company's detergent Swish is better and how it can be a one-stop solution for everyday washing. In which of the following steps of the selling process is Sheila? A) follow-up B) handling objections C) preapproach D) presentation E) prospecting Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate

117) After successfully overcoming a potential customer's objection to buying the vacuum cleaner he was selling, Terrence, a salesperson, asked the customer for an order. Terrence is in the ________ stage of the selling process. A) follow-up B) approach C) preapproach D) closing E) prospecting Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 118) Right after closing, Joshua, a senior sales manager at Halcyon Technologies, called up the customer to ensure that she was satisfied with Halcyon's products. By calling the customer, Joshua also wanted to ensure repeat business. In this instance, Joshua is in the ________ stage of the selling process. A) follow-up B) handling objections C) preapproach D) closing E) prospecting Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 119) The first step in the selling process is preapproach–learning about an organization and its buyers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

120) During the prospecting step of the selling process, the salesperson meets the customer for the first time. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 121) During the presentation step of the selling process, the salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 122) In the follow-up stage of the selling process, the salesperson asks the customer for an order. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 123) Buyers prefer to work with salespeople who are good listeners. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 124) How do salespeople qualify prospects? Answer: Prospects can be qualified by looking at their financial ability, volume of business, special needs, location, and possibilities for growth. AACSB: Written and oral communication Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy

125) Why should a salesperson set call objectives? Answer: The salesperson should set call objectives, which may be to qualify the prospect, gather information, or make an immediate sale. This prepares the salesperson for the approach stage of the selling process. AACSB: Written and oral communication Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 126) Briefly describe the presentation stage of the selling process. Answer: During the presentation step of the selling process, the salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems. AACSB: Written and oral communication Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Easy 127) What are the different steps in the selling process? Briefly describe each step. Answer: The selling process consists of seven steps: prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objections, closing, and follow-up. 1. The first step in the selling process is prospecting, in which a salesperson or company identifies qualified potential customers. 2. Before calling on a prospect, the salesperson should learn as much as possible about the organization (what it needs, who is involved in the buying) and its buyers (their characteristics and buying styles). This step is known as preapproach. 3. The sales step in which a salesperson meets the customer for the first time is known as approach. During the approach step, the salesperson should know how to meet and greet the buyer and get the relationship off to a good start. 4. During the presentation step of the selling process, the salesperson tells the "value story" to the buyer, showing how the company's offer solves the customer's problems. 5. The sales step in which a salesperson seeks out, clarifies, and overcomes any customer objections to buying is known as handling objections. 6. After handling the prospect's objections, the salesperson next tries to close the sale. This step is known as closing, in which a salesperson asks the customer for an order. 7. The last step in the selling process–follow-up–is necessary if the salesperson wants to ensure customer satisfaction and repeat business. In this step, a salesperson follows up after the sale to ensure customer satisfaction and repeat business. AACSB: Written and oral communication Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate

128) What is the follow-up step of the selling process? Why is it important? Answer: The follow-up step is important if the salesperson wants to ensure customer satisfaction and repeat business. Right after closing, the salesperson should complete any details on delivery time, purchase terms, and other matters. The salesperson then should schedule a follow-up call after the buyer receives the initial order to make sure proper installation, instruction, and servicing occur. This visit would reveal any problems, assure the buyer of the salesperson's interest, and reduce any buyer concerns that might have arisen since the sale. AACSB: Application of knowledge Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 129) How are the personal selling process and customer relationship management interrelated? What are the primary requirements of value selling? Answer: The selling process should be understood in the context of building and maintaining profitable customer relationships, as companies are interested in more than simply securing a one-time sale. Successful sales organizations recognize that winning and keeping accounts requires more than making good products and directing the sales force to close lots of sales. If the company wishes only to close sales and capture short-term business, it can do this by simply slashing its prices to meet or beat those of competitors. Instead, most companies want their salespeople to practice value selling–demonstrating and delivering superior customer value and capturing a return on that value that is fair for both the customer and the company. Unfortunately, in the heat of closing sales–especially in a tight economy–salespeople often take the easy way out by cutting prices rather than selling value. Sales management's challenge is to transform salespeople from customer advocates for price cuts into company advocates for value. Value selling requires listening to customers, understanding their needs, and carefully coordinating the whole company's efforts to create lasting relationships based on customer value. AACSB: Application of knowledge Skill: Concept Objective: LO 16.3: Discuss the personal selling process, distinguishing between transactionoriented marketing and relationship marketing. Difficulty: Moderate 130) ________ consists of short-term incentives to encourage the purchase of a product or service. A) Value selling B) Conditional sale C) Advertising D) Sales promotion E) Benchmarking Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 41 Copyright © 2021 Pearson Education, Inc.

131) Which of the following factors has most likely contributed to the rapid growth of sales promotion, particularly in consumer markets? A) declining interest in quality B) declining advertising efficiency C) rising hostility toward large firms D) increasing popularity of e-procurement E) increasing number of international firms Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 132) Sales promotions are targeted toward members of the sales force, business customers, retailers, wholesalers, and ________. A) final buyers B) employees C) manufacturers D) suppliers E) upstream companies Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 133) ________ weakens a given promotion's ability to trigger an immediate purchase. A) A customer-oriented promotion mix B) Promotion clutter C) Puffery D) Local marketing E) Niche marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

134) Which of the following is the most effective–but most expensive–way to introduce a new product or create new excitement for an existing one? A) coupons B) sampling C) cash refunds D) cents-off deals E) satisficing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 135) ________ are offers of a trial amount of a product. A) Samples B) Coupons C) Premiums D) Rebates E) Price packs Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 136) ________ are like coupons except that the price reduction occurs after the purchase rather than at the retail outlet. A) Rebates B) Promotional products C) Premiums D) Samples E) Price packs Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

137) Which consumer promotion tool requires the consumer to provide a proof of purchase to the manufacturer? A) price packs B) coupons C) samples D) rebates E) displays Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 138) In ________, the producer marks the reduced prices directly on the label or package. These offer consumers savings off the regular price of a product and are very effective in stimulating short-term sales. A) promotional products B) coupons C) cents-off deals D) samples E) rebates Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 139) ________ are goods offered either free or at low cost as an incentive to buy a product, ranging from toys included with kids' products to phone cards and DVDs. A) Coupons B) Premiums C) Price packs D) Rebates E) Cents-off deals Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

140) ________ are useful articles imprinted with an advertiser's name, logo, or message that are given as gifts to consumers. A) Rebates B) Cents-off deals C) Premiums D) Promotional products E) Sweepstakes Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 141) ________ include displays and demonstrations that take place at the point of sale. A) Rebates B) Price packs C) Premiums D) POP promotions E) Samples Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 142) A ________ calls for consumers to submit an entry to be judged by a panel that will select the best entries. A) contest B) sweepstake C) sample D) premium E) rebate Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

143) Creating a brand-marketing event or serving as a sole or participating sponsor of events created by others is known as ________. A) point-of-purchase promotions B) sweepstakes C) team selling D) event marketing E) personal selling Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 144) ________ refer to sales promotion tools used to persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers. A) Point-of-purchase promotions B) Frequency marketing programs C) Trade promotions D) Events E) Coupons and inserts Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 145) A manufacturer that offers cash or gifts to dealers for encouraging the purchase of its products is using ________. A) coupons B) push money C) promotional products D) premiums E) bonuses Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate

146) Which of the following is used to generate business leads, stimulate purchases, reward customers, and motivate salespeople? A) business plan B) SWOT analysis C) POP promotion D) benchmarking E) business promotion Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 147) Trade shows most likely help companies to ________. A) maximize productivity B) find new sales leads C) trim overhead costs D) reduce the inside sales force E) shorten the selling process Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 148) Which of the following questions would help a marketer evaluate the return on a sales promotion investment? A) Was the sales force successful in filtering out the good prospects from the poor ones? B) Did customers enjoy the events associated with the promotion? C) Did customers receive high-quality promotional products? D) Did the promotion attract new customers or more purchasing from current customers? E) Were channel intermediaries effectively positioned to ensure a seamless supply of products? Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

149) Which of the following is an example of trade promotion? A) manufacturers offering regular value-for-money deals to attract thrifty and value-conscious customers B) salespeople engaging in door-to-door selling activities C) manufacturers offering free merchandise to resellers who feature a certain flavor or size D) advertisers claiming that a certain product is the best in the market E) marketers selling specialty products to a small segment of customers with unique preferences Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 150) Bose offers $50 cash back to customers who purchase a new speaker and send in a proof of purchase. This is an example of a ________. A) rebate B) POP promotion C) price pack D) premium E) sample Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 151) Monty Boyd, an account manager, travels frequently on West Coast Airlines. Monty earns points for every mile he flies, and he will soon have enough points to receive a free airline ticket. West Coast Airlines is attempting to build a strong customer relationship with Monty through a ________. A) trade promotion B) promotional product C) rebate offer D) point-of-purchase promotion E) frequency marketing program Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate

152) Renee's, a company selling winter clothing in Chicago, ran a preseason promotion on some of its fur jackets, offering cash refunds if the snowfall in the customer's market area turned out to be below average. This exemplifies ________. A) puffery B) satisficing C) prospecting D) a price pack E) a rebate Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 153) A five-foot high cardboard display of Terry the polar bear, mascot of Terry's protein shake, next to the shelf containing Terry's products in a supermarket is an example of a(n) ________. A) sample B) point-of-purchase promotion C) business promotion D) advertising specialty E) rebate Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 154) Kirk Wilkins renewed his cell phone contract with Zip Wireless Services and purchased a new cell phone through the Zip Web site. If Kirk mails Zip Wireless Services his transaction receipt, he would be eligible to receive $50 as cash refund. Which of the following types of sales promotion is evident here? A) point-of-purchase promotion B) advertising specialty C) premium D) price pack E) rebate Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate

155) Happy Pet is a large pet food company that has convinced the retailers and the wholesalers of the New England area to resell its products. Happy Pet promises to reimburse the advertising costs to its retailers and wholesalers for advertising its products. This is an example of a(n) ________. A) trade promotion B) point-of-purchase promotion C) sweepstake D) price pack E) advertising specialty Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 156) Orion is planning to give away free mouse pads imprinted with the company logo and name to anyone who enters their store on the day they launch their new laser mouse. What kind of sales promotion is Orion planning? A) promotional products B) rebate C) price packs D) sweepstakes E) premiums Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate 157) Waldo Stores will reward an all-expense-paid trip to Hawaii to anyone who correctly guesses the date on which Waldo Stores was first established in the Boston area. Which type of sales promotion is evident here? A) contest B) sample C) premium D) trade promotion E) point-of-purchase promotion Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate

158) Blue Fizz Inc. sponsors every race that takes place at the Sears Racing Track in Orange County, California. The high-octane racing at Sears is perfect for Blue Fizz to sell its energy drinks and to establish the desired brand image of the company. Which type of promotion is evident here? A) event marketing B) mass marketing C) point-of-purchase promotion D) solution selling E) advertising specialties Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate Refer to the scenario below to answer the following question(s). Reliable Tools Company is a manufacturer of hubs and axles for the trailer and heavy truck industry. Although Reliable Tools only has 15 customers, the company is the sole supplier of hub and axle components to those customers. Monthly sales at Reliable Tools are approximately $1 million. "You might say we have all our eggs in one basket," says owner Arthur Deetz. It is critical that a competent sales force be maintained in order to nurture those few but large accounts. Ninety-five percent of Reliable Tools' customers are located in Michigan, Ohio, and Indiana, which means that travel time to all customers is relatively short. However, given the nature of the industry, time spent with each customer is crucial. 159) Which of the following promotions would be most appropriate for Reliable Tools to use in its attempt to promote its products and generate new business leads? A) rebates and price packs B) premiums C) specialty advertising D) samples E) conventions and trade shows Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 160) Sales promotion consists of long-term incentives to encourage the purchase of a product or service. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 51 Copyright © 2021 Pearson Education, Inc.

161) Advertising specialties include displays and demonstrations that take place at the point of sale. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 162) Creating a brand-marketing event or serving as a sole or participating sponsor of events created by others is known as event marketing. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 163) Trade promotions are targeted at final buyers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 164) Business promotions are used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy 165) How can sales promotion be accomplished through samples? Answer: Sampling can be a powerful promotional tool. Some samples are free; for others, the company charges a small amount to offset its cost. The sample might be sent by mail, handed out in a store or at a kiosk, attached to another product, or featured in an ad or an e-mail. Samples are sometimes combined into sample packs, which can then be used to promote other products and services. AACSB: Application of knowledge Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Easy

166) Briefly explain the major sales promotion tools. Answer: Consumer promotions include a wide range of tools–from samples, coupons, refunds, premiums, and point-of-purchase displays to contests, sweepstakes, and event sponsorships. Marketers also promote their brands through event marketing. They can create their own brandmarketing events or serve as sole or participating sponsors of events created by others. Trade promotions can persuade resellers to carry a brand, give it shelf space, promote it in advertising, and push it to consumers. Manufacturers often have to offer price-offs, allowances, buy-back guarantees, or free goods to retailers and wholesalers to get products on the shelf and, once there, to keep them on it. Business promotions are used to generate business leads, stimulate purchases, reward customers, and motivate salespeople. Business promotions include many of the same tools used for consumer or trade promotions. AACSB: Written and oral communication Skill: Concept Objective: LO 16.4: Explain how sales promotion campaigns are developed and implemented. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 17 Direct, Online, Social Media, and Mobile Marketing 1) Amazon.com and GEICO approach customers via Web sites or mobile apps. This is an example of ________ marketing. A) mass B) niche C) individual D) multi-level E) direct Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 2) All of the following are benefits of online direct marketing for buyers EXCEPT ________. A) access to numerous products B) access to product reviews C) live product demonstrations D) convenience E) privacy Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 3) Advantages of direct and digital marketing for sellers include all of the following EXCEPT ________. A) low cost B) efficiency C) speed D) need for sales training E) flexibility Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy

4) Which of the following statements is true of direct marketing? A) Direct marketing is also referred to as referral marketing. B) Salespersons are compensated for other salespeople they recruit. C) Direct marketing offers sellers a low-cost alternative for reaching their markets. D) Direct marketing involves two or more intermediaries. E) In direct marketing, consumers earn a commission every time they buy a product. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Moderate 5) With direct marketing, companies can interact with customers in all of the following ways EXCEPT ________. A) in person B) learning more about customers' needs C) personalizing products and services D) answering questions from customers E) by phone or online Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 6) Which of the following is true about digital marketing? A) Digital marketing is also referred to as multi-level marketing. B) Salespersons are compensated for other salespeople they recruit. C) Digital marketing allows sellers to create immediate, timely, and personal offers. D) Digital marketing involves two or more intermediaries. E) In digital marketing, outside and inside sales forces coordinate to provide value products to customers. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Moderate

7) All of the following are benefits of direct marketing for sellers EXCEPT ________. A) access to small groups or individuals B) program flexibility C) mass reach and immediate returns D) low cost E) easy to personalize products Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 8) Direct and digital marketing involve targeting broad segments of customers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 9) Most companies use direct marketing as a supplementary channel or medium. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 10) Direct marketing seldom occurs on a one-to-one, interactive basis. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 11) Direct marketing through catalogs and direct mailers is still the primary method used by marketing professionals. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy

12) For customers, the benefits of direct marketing are being able to shop online anytime and anywhere. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 13) Direct marketing is an expensive way of reaching target markets. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 14) How does direct marketing give buyers access to more comparative information about companies, products, and competitors? Answer: Catalogs and Web sites, both forms of direct marketing, can provide extensive product information and helpful product reviews. Customers can easily research companies, products, and competitors by comparing information in catalogs or on various Web sites. AACSB: Application of knowledge Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy 15) How does digital marketing provide flexibility for sellers? Answer: Digital marketing allows the marketer to make ongoing adjustments to its prices and programs or make immediate, timely, and personal announcements and offers. Online catalogs, if used, can be adjusted daily or even hourly if needed. AACSB: Application of knowledge Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Easy

16) Explain the major benefits of direct marketing for customers and for sellers. Answer: For customers, direct marketing is convenient, easy to use, and private. It gives buyers ready access to a wealth of products and information, at home or work and around the globe. It is immediate and interactive. For sellers, direct marketing is powerful for building customer relationships. Marketers can target small groups or individual consumers, tailor offers to individual needs, and promote these offers through personalized communications. It provides great timing and offers a low-cost, efficient alternative for reaching markets. AACSB: Application of knowledge Skill: Concept Objective: LO 17.1: Define direct and digital marketing and discuss their rapid growth and benefits to customers and companies. Difficulty: Moderate 17) Which of the following is the fastest growing form of direct marketing? A) ambush marketing B) digital marketing C) direct-mail marketing D) kiosk marketing E) telemarketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.2: Identify and discuss the major forms of direct and digital marketing. Difficulty: Easy

Refer to the scenario below to answer the following question(s). The Treble Clef sells music books, musical instruments, and novelty gifts of a musical nature. In recent years, owner Gary Zahn has served as the local representative of several musical instrument manufacturers, providing a contact person for three local schools. He sends a sample of a manufacturer's products to schools that request a demonstration or presentation. "If we don't have it, we can definitely get it for you," Gary tells all Treble Clef visitors and customers. Most walk-ins are particularly interested in a specific piece of sheet music from a particular era or just browsing among the hundreds of music knick-knacks in the store. Gary spends most of his time making presentations to beginners at the local schools and making biweekly visits to the schools to deliver instruments, make minor repairs, or pick up instruments to ship to the manufacturer for more complicated repairs. After establishing a loyal customer base, Gary was convinced that a Treble Clef Web site could benefit a variety of customers. He began with a simple Web site that provided information about the store and the types of gifts and services available. The site received so much response that Gary added a question-and-answer option. Questions poured in, ranging from "Where can I get sheet music for 'Hello, Dolly'?" to "Do you carry clarinet reeds?" to "My saxophone needs two new pads. When will you be at Elmhurst School to repair it?" The Web site is now able to accept credit card orders, and gifts can even be wrapped and shipped for no extra charge. "This Web site idea was fantastic!" Gary admitted. "It allows us to be so responsive. And our novelties sales have doubled!" 18) Which kind of Web site does Treble Clef use? A) branded community Web site B) corporate Web site C) investor relations Web site D) marketing Web site E) online Web site Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 17.2: Identify and discuss the major forms of direct and digital marketing. Difficulty: Challenging 19) Digital and traditional direct marketing forms must be blended into an integrated marketing communications program for best results. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.2: Identify and discuss the major forms of direct and digital marketing. Difficulty: Easy

20) Identify the traditional direct marketing tools and differentiate them from the digital direct marketing tools. What is their importance? Answer: Traditional direct marketing tools include face-to-face selling, direct-mail marketing, catalog marketing, telemarketing, direct-response television marketing, and kiosk marketing. In recent years, however, digital direct marketing tools have burst onto the marketing scene, including online marketing (Web sites, online ads and promotions, e-mail, online videos, and blogs), social media marketing, and mobile marketing. It's important to remember that all of these tools–both the new digital and the more traditional forms–must be blended into a fully integrated marketing communications program. AACSB: Application of knowledge Skill: Concept Objective: LO 17.2: Identify and discuss the major forms of direct and digital marketing. Difficulty: Easy 21) Online companies include all of the following EXCEPT ________. A) content sites B) online social media C) search engines and portals D) transaction sites E) brick-and-mortar Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 22) Companies such as Amazon.com and Expedia.com that sell products and services directly to final buyers exclusively over the Internet are known as ________. A) transaction sites B) content sites C) search engines and portals D) e-tailers E) online social media Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

23) Which term best describes sites such as the New York Times on the web and ESPN.com? A) search engine B) content site C) online social network D) transaction site E) e-tailer Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 24) ________ companies use both offline and online marketing channels. A) Start-up B) Click-only C) Omni-channel retailing D) Brick-and-mortar E) Brick-only Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 25) Online marketing includes marketing via the Internet using company websites, e-mail marketing, blogs, and ________. A) direct mail brochures B) live demonstrations C) samples D) online video E) focus groups Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

26) ________ are designed to engage consumers in interactions that will move them closer to a direct purchase or other marketing outcome. A) Online magazines B) Marketing websites C) Search engines D) Digital catalogs E) Podcasts Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 27) Gant Hardware is a huge chain of hardware stores. GantHardware.com helps customers conduct product research and also lets them order directly online or redirects them to the nearest Gant retail store. Which of the following best describes GantHardware.com? A) marketing website B) digital catalog C) social network D) podcast E) blog Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 28) A(n) ________ is designed to present brand content that engages consumers and creates customer-brand community. A) podcast B) brand community website C) search engine D) digital catalog E) online magazine Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

29) Oscarz Aviation's website, GoOscarzAv.com, informs customers about a wide variety of services offered by the firm. It also has a guestbook where customers can provide feedback on their experiences with Oscarz Aviation. They can also view videos Oscarz Aviation posts, as well as read and respond to blogs and ask questions. GoOscarzAv.com is an example of a(n) ________. A) online social network B) blog C) kiosk D) brand community website E) digital catalog Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 30) Spartan Sportsgear is a company that sells sports equipment for adventure sports. It recently launched ExtremeSpartan.com to showcase products and provide testimonials of famous adventure sports athletes who use Spartan's products. It also includes videos and blogs. Which of the following best describes ExtremeSpartan.com? A) brand community website B) digital catalog C) social network D) podcast E) blog Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

31) Runner Sprintz, a particular brand of shoes, has its own Web site, myrunnersprintz.com that welcomes consumers to "the Runner Sprintz Century," invites readers to post their Runner Sprintz stories, and offers a wide variety of shoes for direct purchase. The site even allows customers to individually design their own shoes and share them among their circles on the website. Which of the following best describes myrunnersprintz.com? A) Web directory B) blog C) corporate website D) digital catalog E) brand community website Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 32) Which of the following is NOT a specific goal of brand community websites? A) present brand content that engages consumers B) build closer customer relationships C) generate engagement with and between the brand and its customers D) increase online sales E) allows visitors to interact with likeminded people to explore and communicate experiences with the brand Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 33) Companies must attract visitors to their websites. Which of the following is a method companies use to entice visitors not just to visit but also to return to a site? A) using flashy graphics, bright colors and vivid pictures B) aggressively promoting the site in broadcast advertising and through ads and links on other sites C) offering prizes for visiting the site D) providing rewards for visitors connecting their friends to the site E) requiring registration on the first visit to the site Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

34) Effective websites contain interactive tools that help find and evaluate content of interest, links to other related sites, useful information, changing promotional offers, and ________. A) celebrity endorsers B) respected columnists C) advertising for unrelated products D) enticements for customers to include their friends and contacts E) entertaining features that lend excitement Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 35) Online ads that incorporate animation, video, sound, and interactivity are called ________. A) search-related ads B) rich media ads C) content-based ads D) digital catalogs E) parody ads Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 36) In ________, text-based ads and links appear alongside search engine results on sites such as Google, Yahoo!, and Bing. A) content sponsorships B) digital billboards C) digital catalogs D) contextual advertisements E) RSS feeds Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

37) While comparing hotel rates on Google's search engine, Brenda came across text-based ads and links alongside the search results. This form of advertising is known as ________. A) contextual advertising B) rich media ads C) content sponsorship D) catalog advertising E) social media advertising Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 38) Which of the following is true about e-mail marketing messages? A) E-mail marketing messages involve sending an offer, announcement, reminder, or sample to a person living at a particular address. B) E-mail marketing messages involve connecting directly with carefully targeted consumers, exclusively on a one-to-one, interactive basis. C) E-mail marketing messages are effective in reaching the desired target market and result in low costs. D) E-mail marketing messages cost more per thousand people reached than mass media such as television or magazines. E) E-mail marketing messages create a stronger emotional connection with the customers compared to traditional direct mail. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 39) A ________ is an unsolicited, unwanted commercial e-mail message that clogs up emailboxes. A) catalog B) spam C) podcast D) tweet E) blog Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

40) Which of the following best describes permission-based e-mail marketing? A) sending unsolicited, unwanted commercial e-mail messages B) sending requests to users to join online social networking communities C) sending e-mail pitches only to customers who "opt-in" D) offering free promotional materials to new customers E) gathering demographic details for customer databases Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 41) After selecting a sweater on the Land's End Web site, Kelly was asked to fill in details for the customer database. Kelly was given a form that required her to fill in her name, date of birth, and e-mail address. Kelly then checked a box that was next to the following statement: "Yes, I would like to receive weekly promotional information from Land's End online." Which of the following practices is evident from this scenario? A) e-mail hosting service B) e-mail spoofing C) catalog marketing D) contextual advertising E) permission-based e-mail marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 42) Randy keeps getting unwanted and annoying e-mails from several marketing firms unknown to him. The number of these e-mails is alarmingly high in his inbox. Which of the following best describes these e-mails? A) malware B) adware C) Trojan D) firewall E) spam Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

43) ________ involves creating a video, e-mail, mobile message, advertisement, or other marketing event that is so infectious that customers will seek it out or pass it along to their friends. A) Telemarketing B) Omni-channel marketing C) Integrated marketing D) Viral marketing E) Kiosk marketing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 44) Uptown-Clean Crew is a company that provides house-cleaning services in major urban and suburban areas. Marketers at Uptown-Clean Crew developed a short, humorous video promoting the company's services and posted it online. Soon the video was a rage as customers who saw the video found it hilarious and they passed it on to their friends and colleagues calling it the "Uptown comedy." Which form of marketing is illustrated from this scenario? A) telemarketing B) viral marketing C) integrated marketing D) omni-channel marketing E) kiosk marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 45) What is a disadvantage of a viral success? A) Many people will see the marketing message. B) The cost per exposure is relatively low. C) Word-of-mouth is strong. D) Publicity is always good. E) Marketers have little control over where the message ends up. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

46) Clenzo is a company that provides house cleaning services in major urban and suburban areas. Marketers at Clenzo developed a short, humorous video promoting the company's services and hope that customers who see the video will be so entertained that they will pass the video on to their friends and colleagues. The marketers at Clenzo are using techniques to facilitate ________. A) direct-mail marketing B) viral marketing C) catalog marketing D) contextual advertising E) display advertising Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 47) Which of the following statements is true of viral marketing? A) Marketers have significant control over where their viral messages end up. B) Viral marketing gives consumers online places to congregate, socialize, and exchange views. C) Because customers find and pass along the message, viral marketing can be very inexpensive. D) In viral marketing, links appear alongside search engine results on sites such as Google and Bing. E) Viral marketing messages are blocked by most search engines, security software, and social networking sites. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 48) Which of the following is most likely a disadvantage of viral marketing? A) Viral marketing usually takes time to make an impact. B) Viral marketing is very inexpensive. C) Marketers have little control over who receives the viral message. D) Viral marketing messages are offensive to the audiences who are not a part of the targeted market. E) Viral marketing messages are blocked by most search engines. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

49) Which of the following is most likely an advantage of viral marketing? A) Viral marketing reinforces consumers' attitudes about a brand. B) Most messages are likely to "go viral." C) Consumers want to be a part of viral marketing. D) Viral marketing can easily be successfully accomplished. E) Viral marketing produces engagement and positive exposure for a brand. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 50) Which of the following is a reason a consumer would follow a company's blog? A) The blog offers fresh insights or new ideas about the company or products. B) The blog provides the consumer with familiar information. C) The blog allows consumers to communicate with each other. D) A well-followed blog gives the company influence in the marketplace. E) Consumers know that companies want them to follow the blog postings. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 51) Coca-Cola Unbottled is an online forum where Coke fans and company insiders can "look at what's beyond the bottle," sharing posts on everything from new products and sustainability initiatives to fun and inspiring fan stories. This is an example of a ________. A) blog B) catalog C) search engine D) spam post E) viral message Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

52) ________ are online journals where people post their thoughts, usually on a narrowly defined topic. A) Social networks B) Blogs C) Forums D) Search engines E) Web directories Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 53) Which of the following is a benefit of using blogs as marketing tools for companies? A) Blogs provide companies with a platform to help portray wider merchandise. B) Blogs are online selling platforms for people located in hard-to-reach places. C) Blogs help reach a wider audience compared to other online direct marketing tools. D) Demographic information about customers can be easily discovered. E) Blogs can offer a fresh, original, personal, and cheap way to enter into consumer conversations. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 54) Which of the following is a disadvantage of using blogs as a marketing tool? A) The blogosphere is cluttered and difficult to control. B) Advertising on a blog is typically expensive and time consuming. C) Using blogs as a marketing tool offers minimum reach to a target audience. D) Blogs, when used as a marketing tool, have a low rank in Web directories and search engines. E) Blogs do not provide the kind of personalized approach that today's marketers are looking for. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

55) While blogs are a fundamentally a consumer-controlled medium, marketers can ________. A) directly contact customers through them B) use insights from them to improve their marketing programs C) offer special promotions to new customers D) retrieve research data from clicks in them E) provide content Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 56) What is a significant issue for social media and for companies using it as a marketing tool? A) measuring viewership B) creating content C) identifying target markets D) monetizing the tool E) recognizing effective social media sites Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 57) A marketing website interacts with consumers to move them closer to a direct purchase or other marketing outcome. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 58) Branded community websites are designed to present brand content that engages consumers and builds closer customer relationships rather than to sell the company's products directly. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

59) Marketers drive traffic to the company websites solely through using other online and digital marketing tools. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 60) Online-only companies are more successful than omni-channel marketing companies. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 61) Search advertisers buy search terms from the search site and pay whenever the search terms come up in the results of a consumer's search. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 62) Consumers welcome e-mail marketing messages; opportunities to control the messages they receive are frequently ignored. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 63) E-mail can be the ultimate direct marketing tool, as it lets marketers send highly targeted, tightly personalized, relationship-building messages. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy

64) Spam is unsolicited, unwanted commercial e-mail messages that clog up users' e-mailboxes. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 65) Viral marketing allows marketers to send tailored messages to targeted customers who have chosen to receive them. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 66) Blogs can be used to appeal to specific special-interest groups, about almost any topic. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 67) Provide two reasons why companies are shifting more of their marketing dollars to online advertising. Answer: As consumers spend more and more time online, companies are shifting more of their marketing dollars to online advertising to build brand sales or attract visitors to their Internet, mobile, and social media sites. The main forms of online advertising are display ads and searchrelated ads. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 68) Describe the largest form of online advertising. Answer: The largest form of online advertising is search-related ads, or contextual advertising. Text- and image-based ads and links appear atop or alongside search engine results on sites such as Google, Yahoo!, and Bing. A search advertiser buys search terms from the search site and pays only if consumers click through to its site. AACSB: Analytical thinking Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 21 Copyright © 2021 Pearson Education, Inc.

69) Explain the goal of viral marketing. Answer: Viral marketing is the digital version of word-of-mouth marketing. Viral marketing involves creating videos, ads, or other marketing content that are so infectious that customers will want to pass them along to their friends. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 70) Explain how a company benefits from monitoring the blogosphere. Answer: They can offer a fresh, original, personal, and cheap way to enter into consumer online and social media conversations. Beyond their own brand blogs, many marketers use third-party blogs to help get their messages out. Marketers can use insights from consumer online conversations to improve their marketing programs. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Easy 71) Identify the major advantage of the following forms of digital and social media marketing: websites, viral marketing, e-mail, blogs, social media, and mobile ads and apps. Answer: Websites are designed to engage the customers. Marketing websites want to move them closer to a direct purchase or other marketing outcomes. Branded community websites want to provide content that builds closer customer relationships and generates engagement with and between the brand and its customers. Viral marketing can be very inexpensive when customers find and pass along the message or promotion. E-mail lets marketers send highly targeted, tightly personalized, relationship-building messages. Blogs can offer a fresh, original, personal and cheap way to enter into consumer online and social media conversations. Social media first and foremost are targeted and personal. Mobile ads and apps are used to increase convenience for customers, whether in making a purchase or accessing information. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Challenging

72) Compare and contrast the purpose and content of a branded community website to that of a marketing website. Answer: Branded community websites are designed to present brand content that engages consumers and builds closer customer relationships, rather than to sell the company's products directly. Such sites typically offer a rich variety of brand information, videos, blogs, activities, and other features that build closer customer relationships and generate engagement with and between the brand and its customers. In contrast, marketing websites are designed to engage consumers in an interaction that will move them closer to a direct purchase. A marketing website allows customers to view, research, and purchase specific items. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 73) What are the characteristics of a successful website? Answer: To attract visitors, companies aggressively promote their websites in offline print and broadcast advertising and through ads and links on other sites. The key is to create enough engaging and valued content to get consumers to come to the site, stick around, and come back again. At the very least, a website should be easy to use and visually appealing. Ultimately, however, websites must also be USEFUL. When it comes to online browsing and shopping, most people prefer substance over style and function over flash. Thus, effective websites contain deep and useful information, interactive tools that help find and evaluate content of interest, links to other related sites, changing promotional offers, and entertaining features that lend relevant excitement. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate 74) What are the strengths and weaknesses of email marketing? Answer: Email is still the king as people send out 406 million emails every day. Thanks to low costs, email marketing brings one of the highest marketing returns on investment. It lets marketers send highly targeted, personalized, relationship-building messages that are colorful, inviting, and interactive. However, spam has produced consumer irritation and frustration given its ubiquity. Marketers want to add value for consumers but not be intrusive and annoying. AACSB: Application of knowledge Skill: Concept Objective: LO 17.3: Explain how companies have responded to the digital age with various online marketing strategies. Difficulty: Moderate

75) Which kind of social media networks are smaller communities likely to join or create? A) blog B) niche C) Internet D) video E) commercial Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate 76) You can't buy anything at Sony's PlayStation Forums site. Instead it serves as a social hub for PlayStation PS4 game enthusiasts. A place where PS4 fans can follow game trends, share content, and interact with other fans–all in real time. This site is an example of a(n) ________. A) podcast B) blog C) online community D) content sponsorship program E) kiosk Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate 77) Which of the following is NOT a reason that companies use social media? A) cost effectiveness B) engagement and social sharing capabilities C) ease of creating content D) immediacy and timeliness E) interactiveness Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate

78) Which of the following is a challenge of marketing through online social networks? A) Results are hard to measure. B) Users seldom have control over the online social networks. C) Most existing networks are already controlled by major corporations and therefore do not favor competitors. D) It is difficult to get the approval of the online advisory board to post an ad in a social network. E) Marketing via online social networks is expensive and time-consuming. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate 79) Social media are all of the following EXCEPT ________. A) expensive B) interactive C) personal D) targeted E) timely Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 80) An integrated social marketing campaign likely could include all of the following EXCEPT ________. A) Facebook pages B) Twitter postings C) Instagram photos D) television ads E) YouTube videos Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy

81) ________ marketing features marketing messages and promotions delivered to on-the-go consumers through their handheld devices. A) Kiosk B) Ambush C) Direct-mail D) Mobile E) Catalog Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 82) Mobile marketing is used to enrich the brand experience, stimulate immediate buying, or ________. A) decrease advertising costs B) help friends contact friends C) make shopping easier D) create new customer relationships E) find new suppliers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate 83) Joanna uses her smartphone to accomplish many tasks every day. She is also an avid shopper. Which online marketing tool will benefit Joanna the most to help her shop? A) e-mail messages from sites to which she subscribes B) banking app for her bank C) instant deals and digital coupons D) YouTube video E) Facebook friends Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate

84) Kirk's Comic Store has its own mobile app that users can download for free. The app lets users know about special events, discounts, and merchandise currently available in the store. Which of the following forms of marketing is exemplified from this scenario? A) social media marketing B) kiosk marketing C) direct-response television marketing D) mobile marketing E) direct-mail marketing Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 85) James is looking for a new suit for a job interview. He is shopping at Smith & Jones, a wellregarded menswear store. While he looks at various styles and uses his smartphone to scan codes, the menswear shopping app provides him with suggestions for shirts, ties, and shoes that would complete the ensemble he needs to make a strong, positive impact at his interview. The ability of the app to provide this information serves to ________. A) enrich the shopping experience B) annoy James C) complicate the shopping experience D) use James' data plan E) interrupt the shopping experience Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 86) Social media marketing can be inexpensive for companies to use. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy

87) Social media sites primarily exist for broad topics, making it difficult for marketers to appeal to smaller communities and niche markets. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 88) While many consumers welcome the convenience that mobile marketing ads offer, marketers still must be smart about how they engage people on mobile devices. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 89) Describe how marketers can engage in social media. Answer: Marketers can engage in social media in two ways: They can use existing social media or they can set up their own. Using existing social media seems easiest, but many companies have also created their own online brand communities. AACSB: Analytical thinking Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy 90) Explain integrated social media marketing. Answer: Companies that use social media successfully are integrating a broad range of diverse media to create brand-related social sharing, engagement, and customer community. They design full-scale social media efforts that blend with and support other elements of a brand's marketing strategy and tactics. AACSB: Application of knowledge Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Easy

91) Describe two ways that marketers can participate in online social networks. What are the challenges and advantages of these approaches? Answer: Marketers can engage in social media in two ways: They can use existing social media or they can set up their own. Using existing social media seems the easiest. Thus, many brands now use a host of social media sites. Although large social media networks are most familiar, countless niche social media have also emerged. Niche online social networks cater to the needs of smaller communities of likeminded people, making them ideal vehicles for marketers who want to target special interest groups. Beyond these independent social media, many companies have created their own online brand communities. Using social media presents both advantages and challenges. On the plus side, social media are targeted and personal, interactive, immediate and timely. Social media can be very cost effective. Perhaps the biggest advantage of social media is their engagement and social sharing capabilities. Social media are especially well suited to creating customer engagement and community–for getting customers involved with the brand and with each other. Social media marketing also present challenges. First, many companies are still experimenting with how to use them effectively, and results are hard to measure. Second, such social networks are largely user controlled. The company's goal in using social media is to make the brand a part of consumers' conversations and their lives. However, marketers must become a valued part of the online experience by developing a steady flow of engaging content. AACSB: Application of knowledge Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Moderate 92) Explain the strengths of mobile marketing from the marketer's point of view. Answer: Companies can use mobile marketing to stimulate immediate buying, make shopping easier, enrich the brand experience, or all of these. It lets marketers provide consumers with information, incentives, and choices at the moment they are expressing an interest or when they are in a position to make a buying choice. The rich-media ads can create substantial engagement and impact. They can enrich the brand experience by providing information or even entertainment. They can target "anytime, anywhere, and everywhere." AACSB: Application of knowledge Skill: Concept Objective: LO 17.4: Discuss how companies use social media and mobile marketing to engage consumers and create brand community. Difficulty: Challenging

93) ________ involves sending an offer, announcement, reminder, or other item to a person at a particular address. A) Kiosk marketing B) Online marketing C) Ambush marketing D) Direct-mail marketing E) Telemarketing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 94) All of the following are forms of traditional direct marketing EXCEPT ________. A) face-to-face selling B) point-of-purchase promotion C) telemarketing D) direct-mail marketing E) kiosk marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 95) Which of the following types of marketing involves sending out letters, brochures, samples, and DVDs to consumers' addresses? A) direct-response marketing B) direct-mail marketing C) direct digital marketing D) kiosk marketing E) online marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

96) Why does direct-mail marketing most likely remain a popular promotional tool for marketers? A) It does not disturb consumers enrolled in the Do Not Call Registry. B) It provides something tangible for people to keep. C) It builds long-term customer relationships. D) It involves very low marketing costs. E) It reaches the consumer very quickly. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 97) SparkClean is a company that specializes in producing cleaning products for automobiles. In order to promote its products, SparkClean sends a complimentary sample of its products to auto enthusiasts. Which form of marketing is SparkClean involved in? A) online marketing B) viral marketing C) telemarketing D) kiosk marketing E) direct-mail marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 98) Fiona Lambrech is the marketing director of a newly established detergent company. In order to introduce her product effectively into the market, Fiona sends samples of the detergent to a select group of individuals. Which of the following forms of marketing was most likely used by Fiona? A) direct-mail marketing B) catalog marketing C) telephone marketing D) kiosk marketing E) direct-response television marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate

99) While shopping at KelfanDesigns.com, Shelly came across a checkbox beside which a statement said, "I want to receive promotional offers from KelfanDesigns.com." Which of the following types of marketing is illustrated in this example? A) telemarketing B) viral marketing C) direct response television marketing D) contextual advertising E) permission-based e-mail marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 100) Which of the following is an advantage of using digital catalogs? A) lists the phone numbers of interested prospects B) coordinates with direct-response television ads C) points customers to the nearest kiosk D) eliminates printing and mailing costs E) creates emotional contact with customers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 101) What is the primary advantage of printed catalogs? A) filtering out interested prospects B) offering immediate rebates and coupons C) building emotional connections with customers D) offering unlimited space for merchandise details E) reaching consumers in a quick and inexpensive manner Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate

102) Digital catalogs offer all of the following benefits EXCEPT ________. A) presenting an almost unlimited amount of merchandise B) offering a broad assortment of presentation formats, including search and video C) adding and removing products as needed D) adjusting prices instantly to meet demand E) touching the product Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 103) Why are historically online shops such as Amazon adding catalogs to their marketing methods? A) to meet the increased demand in print catalogs B) to reduce the costs involved in online marketing C) to connect with customers in hard-to-reach places D) to drive online sales and services E) to reduce the need for telemarketers Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 104) Which of the following is a major form of direct-response television marketing? A) telemarketing B) interactive TV C) social media D) digital catalog E) podcast Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

105) In building a connection to customers through catalogs, marketers want to ________. A) offer a new brand experience B) create an emotional connection C) create word-of-mouth advertising D) develop a viral following E) perform marketing research Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 106) Sales executives at Keiron Air Conditioners use phone directories to call customers and convince them to buy their air conditioners. Which form of direct marketing is used here? A) telemarketing B) direct-mail marketing C) catalog marketing D) direct-response television marketing E) kiosk marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 107) Which of the following is an advantage of a well-designed and targeted telemarketing plan? A) exemption from the National Do Not Call Registry B) ability to portray wider merchandise C) purchasing convenience for customers D) interactive infomercials via phone E) coordination with nearby kiosks Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate

108) Geller Insurance calls qualified prospects to sell insurance. Which of the following forms of marketing is evident from this example? A) catalog marketing B) kiosk marketing C) direct-response television marketing D) telemarketing E) direct-mail marketing Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 109) Marketers publicize inbound toll-free numbers to consumers in television and print ads, direct mail, and catalogs. The benefit to sellers is that it presents an opportunity for consumers to order products and for the seller to build the relationship. A benefit to consumers is ________. A) increased convenience B) increased telemarketing calls C) decreased telemarketing calls D) 24/7 availability of support E) a discounted price on the product Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 110) By using ________ to contact potential customers, marketers sell directly to consumers. A) undercover marketing B) outbound telephone marketing C) affinity marketing D) multi-level marketing E) ambush marketing Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging

111) How has do-not-call legislation helped direct marketers? A) Marketers are compensated by the Federal Trade Commission for lost sales caused by the laws. B) Direct marketers have outsourced their activities to firms that are exempt from such laws. C) Direct marketers have developed kiosks as an alternative to telemarketing. D) Telemarketers are allowed to call customers for a small fee. E) Telemarketers have developed opt-in calling systems that target consumers who have chosen to be contacted and therefore are less invasive. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 112) Neal Murphy sells his company's unique products on television programs. He hosts a 30minute show in which he demonstrates and explains the advantages of the product. At the end of the show, a toll-free number is displayed on the screen that can be used by viewers to place their orders for the product. Which of the following forms of advertising is evident here? A) direct-response television advertising B) telemarketing C) interactive television marketing D) podcast marketing E) kiosk marketing Answer: A AACSB: Application of knowledge Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 113) Which of the following terms refers to a 30-minute television advertising program that markets a single product? A) social media B) digital catalog C) telemarketing D) blog E) infomercial Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

114) Which of the following is an example of inbound telemarketing? A) Sterrns Media advertises its services by sending letters to potential customers and prompting them to contact the firm through a toll-free number. B) Sterrns Media purchases customer information and later cold calls these customers to generate potential leads. C) Sterrns Media spends a lot of time and effort to train its sales force to call businesses and inform them about its B2B products. D) Sterrns Media utilizes interactive cable systems to enable customers to obtain product information by using their TV remotes. E) Sterrns Media airs advertising programs called infomercials to attract viewers and get them to order products from its website. Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 115) ________ are everywhere these days, from self-service hotel and airline check-in devices to in-store ordering devices that let you order merchandise not carried in the store. A) Infomercials B) Viral videos C) Kiosks D) Podcasts E) Catalogs Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 116) Even large companies use infomercials for all the following reasons EXCEPT to ________. A) recruit members B) refer customers to retailers C) attract buyers to online, mobile, and social media sites D) introduce new advertising campaigns E) sell their products Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

117) What is the most likely reason that direct-response television marketing has increased in recent years? A) uses of social media B) shifts in demographics C) increases in global demand D) changes in FTC legislation E) advances in technology Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 118) Which of the following direct marketing forms includes infomercials? A) direct-response television marketing B) outbound telephone marketing C) print-catalog marketing D) direct-mail marketing E) face-to-face marketing Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 119) Which term refers to an in-store machine that allows a customer to order merchandise not carried in the store? A) kiosk B) automated teller machine C) virtual catalog D) interactive TV E) direct-response device Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

120) Green Gardens is a click-and-mortar company that sells gardening and landscaping goods and equipment. When customers are unable to find a product they need on the shelves of their local Green Gardens store, customers order the product online with the help of the in-store ordering machine. Which of the following best describes the ordering machine? A) kiosk B) digital catalog C) podcast D) tablet E) online networks Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 121) Marbles Inc. has placed vending machines in most of its retail stores in Florida. Consumers can order a pack of marbles by just selecting their requirements on the touch screen. Which term best describes such machines? A) POP B) kiosk C) virtual catalog D) interactive television E) automated teller machine Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 122) Music Mogul has arrangements with several stores and retail chains to place their DVDs and digital music machines in prime spots such as near billing counters and at store entrances. Consumers can buy DVDs by depositing payment or they can buy music online via the touchscreen interface on the machine. Which form of marketing is illustrated in this scenario? A) direct-response television advertising B) telemarketing C) interactive television D) podcast marketing E) kiosk marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 39 Copyright © 2021 Pearson Education, Inc.

123) Charlie Putnam received an e-mail promoting a new financial services institution that offers surprisingly low mortgage rates. The e-mail simply asked customers to provide their address, date of birth, social security number, and current mortgage information in order to receive a free loan quote. Suspicious of the offer, Charlie researched the company and discovered that the email was a fraud. This is an example of ________. A) cyberbullying B) phishing C) adware D) spamdexing E) viral marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 124) Which of the following is generally regarded as the toughest issue of public policy and ethics confronting the direct marketing industry? A) customization of search results B) unwanted email spam C) invasion of consumer privacy D) increasing costs of browsing E) restrictions on digital offers and discounts Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 125) Josh received an e-mail stating that he had won a lottery of $500,000 from Lottors Corporation. The e-mail asked Josh to send his bank account details and social security number to transfer cash directly to his account. Josh did not remember buying any lottery tickets, and so was apprehensive about providing his bank details without verification. Which of the following is illustrated from this scenario? A) adware B) viral marketing C) telemarketing D) cyberbullying E) phishing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 40 Copyright © 2021 Pearson Education, Inc.

126) Which of the following is a type of identity theft that uses deceptive e-mails and fraudulent Web sites to fool consumers into revealing their personal data? A) bait-and-switch B) cyber spying C) viral marketing D) phishing E) spam Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 127) All of the following are Internet marketing concerns EXCEPT ________. A) financial scams B) access by vulnerable or unauthorized groups C) phishing D) identity theft E) secure online and digital Web sites Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 128) What action do consumers continue to perform even though a majority are concerned with identify theft? A) shopping online B) searching for product information C) reading reviews from friends on Facebook D) sending and responding to e-mail messages E) watching videos Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

129) Consumers' names and additional information likely become part of ________ whenever they enter a sweepstakes, apply for a credit card, visit a Web site, or send a tweet. A) other consumers' contact lists B) telemarketers' lists C) their computer's cookie history D) a company's database E) the FTC's surveys regarding online privacy Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 130) To decrease direct marketing abuses, government agencies are investigating do-not-call lists, do-not-mail lists, do-not-track-online lists, and ________. A) claimed fraudulent credit card charges B) can-spam legislation C) possibly deceptive television advertising D) offerings of illegal products E) bait-and-switch offers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 131) To enable customers to opt out of seeing particular ads, marketers use a(n) ________. This is added to behaviorally targeted online ads to tell consumers why they are seeing a particular ad. A) advertising option icon B) opt-in question C) X to close the ad D) survey E) questionnaire Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

132) Which of the following acts requires that Web site operators obtain parental consent before collecting personal information about children under the age of 13? A) Safe Children's Act of 2001 B) Children's Online Privacy Protection Act C) Children's Online Protection Act D) Adam Walsh Child Protection and Safety Act E) Children's Act for Responsible Employment Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 133) TRUSTe, a nonprofit self-regulatory organization, works with other companies to audit online privacy and security measures. It lends its TRUSTe privacy seal to all the following communication channels that meet its privacy and security standards EXCEPT ________. A) mobile apps B) e-mail marketing C) telemarketing D) Web sites E) social media Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

Refer to the scenario below to answer the following question(s). The Treble Clef sells music books, musical instruments, and novelty gifts of a musical nature. In recent years, owner Gary Zahn has served as the local representative of several musical instrument manufacturers, providing a contact person for three local schools. He sends a sample of a manufacturer's products to schools that request a demonstration or presentation. "If we don't have it, we can definitely get it for you," Gary tells all Treble Clef visitors and customers. Most walk-ins are particularly interested in a specific piece of sheet music from a particular era or just browsing among the hundreds of music knick-knacks in the store. Gary spends most of his time making presentations to beginners at the local schools and making biweekly visits to the schools to deliver instruments, make minor repairs, or pick up instruments to ship to the manufacturer for more complicated repairs. After establishing a loyal customer base, Gary was convinced that a Treble Clef Web site could benefit a variety of customers. He began with a simple Web site that provided information about the store and the types of gifts and services available. The site received so much response that Gary added a question-and-answer option. Questions poured in, ranging from "Where can I get sheet music for 'Hello, Dolly'?" to "Do you carry clarinet reeds?" to "My saxophone needs two new pads. When will you be at Elmhurst School to repair it?" The Web site is now able to accept credit card orders, and gifts can even be wrapped and shipped for no extra charge. "This Web site idea was fantastic!" Gary admitted. "It allows us to be so responsive. And our novelties sales have doubled!" 134) Gary sends samples of sheet music to schools for demonstration or presentation. Which of the following types of marketing is being illustrated from this statement? A) kiosk marketing B) viral marketing C) direct-mail marketing D) telemarketing E) direct-response television marketing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging

135) In addition to sending samples of sheet music to schools, Gary sends school music directors messages with links to sample digital clips of the compositions. What kind of marketing is this? A) email marketing B) viral marketing C) kiosk marketing D) mobile marketing E) catalog marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 136) Gary wants to expand the reach of his business. An effective approach to reaching the most likely potential customers would be ________ marketing. The message will include a link to Treble Clef's Web site. A) email B) viral C) kiosk D) mobile E) catalog Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Challenging 137) Digital catalogs eliminate printing and mailing costs. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 138) Telemarketing is especially effective for business-to-business marketers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

139) With outbound telephone marketing, the company provides a toll-free phone number to receive orders from television ads, print ads, direct mail, and catalogs. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 140) The ad industry uses an advertising option icon that allows consumers to opt out of seeing a particular ad. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 141) You receive a text message on your phone from Upscale Furnishings about an upcoming sale on custom furniture. Upscale Furnishings is developing a direct customer relationship with you through kiosk marketing. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 142) Kiosk marketing connects users around the world to each other and to an amazingly large information repository. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 143) Kiosk marketing features marketing messages and promotions delivered to on-the-go consumers through their mobile devices. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

144) One common form of Internet fraud is phishing, a type of identity theft that uses deceptive emails and fraudulent online sites to fool users into divulging personal data. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 145) Because of strict consumer privacy regulations, invasion of privacy is no longer a concern for the direct marketing industry. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 146) The Children's Online Privacy Protection Act requires online operators targeting children to post privacy policies on their sites and notify parents about any information they are gathering and obtain parental consent before collecting information from children under age 13. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 147) Why are people that are reached by direct mail better prospects for a company than those reached by mass media such as television or magazines? Answer: Unlike mass media, direct mail allows for high target-market selectivity, so only consumers who are likely to become customers can be contacted; in addition, direct mail can be personalized for each individual, which helps to build customer relationships. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

148) Why are printed catalogs still thriving in the face of the growing popularity of Web-based catalogs? Answer: Printed catalogs are more effective at creating an emotional connection with customers and continue to be one of the best ways to drive online sales. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 149) Explain how the creation of the National Do Not Call Registry may have helped telemarketers more than it hurt them. Answer: Rather than making unwanted calls, many of these marketers are developing "opt-in" calling systems, in which they provide useful information and offers to customers who have invited the company to contact them by phone or e-mail. The opt-in model provides better returns for marketers than the formerly invasive one. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 150) Why is the use of direct-response television growing in popularity? Answer: Direct-response television (DRTV) marketing takes one of two major forms: directresponse television advertising and interactive TV (iTV) advertising. Using direct-response television advertising, direct marketers air television spots, often 60 or 120 seconds in length, which persuasively describe a product and give customers a toll-free number or a Web site for ordering. It also includes full 30-minute or longer advertising programs, called infomercials, for a single product. Successful direct-response advertising campaigns can ring up big sales. Interactive TV (iTV) lets viewers interact with television programming and advertising. Thanks to technologies such as interactive cable systems, Internet-ready smart TVs, and smartphones and tablets, consumers can now use their TV remotes, phones, or other devices to obtain more information or make purchases directly from TV ads. Interactive ads and infomercials are appearing not just on TV, but also on mobile, online, and social media platforms, adding even more TV-like interactive direct marketing venues. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

151) Provide an example of how a marketer uses kiosk marketing. Answer: Students' answers will vary. Many airlines and hotels use kiosks as self-service checkin devices; many retail stores offer in-store ordering kiosks. AACSB: Analytical thinking Skill: Application Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 152) How can firms that use new direct marketing technologies avoid backlash from consumers who view such marketing as an invasion of privacy? Answer: Marketers should always target their direct marketing offers carefully and bring real value to customers through direct marketing. Firms can opt for database marketing so that consumers receive offers that closely match their interests. Using sophisticated computer technologies, direct marketers can mine these databases to "microtarget" their selling efforts. Most marketers have become highly skilled at collecting and analyzing detailed consumer information. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy 153) How has the direct marketing industry taken steps to address privacy and security concerns? Answer: Some companies use a nonprofit self-regulatory organization that audits a company's security and privacy measures and then approves Web sites, mobile apps, e-mail marketing and other online and social media channels that meet its privacy and security standards. The Direct Marketing Association launched a Privacy Promise that asks member companies to agree to notify customers when any personal information is rented, sold, or exchanged with others. They must also honor customer requests to opt-out of receiving further solicitations or having their contact information transferred to other marketers. Finally, they must abide by the DMA's Preference Service by removing the names of consumers who do not wish to receive mail, phone, or e-mail offers. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Easy

154) Identify the major advantage of the following traditional forms of direct marketing: telephone, direct mail, catalog, direct-response television, and kiosk. Answer: Telephone marketing provides purchasing convenience and increased product and service information. Direct-mail marketing permits selectivity and personalization. Paper catalogs create emotional connections with customers that digital sales spaces can't, and through online catalogs, marketers can use real-time merchandising, adding or removing products based on their availability. Direct-response television marketing allows live demonstrations without salespeople having to visit buyers' homes or businesses. Kiosk marketing places information and ordering machines in convenient places, such as airports, stores, and malls. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate 155) How has the implementation of the National Do Not Call Registry changed telephone marketing? Answer: The National Do Not Call Registry was created by legislation, passed in 2003; it bans most business telemarketing calls to registered phone numbers. However, people can still receive calls from nonprofit groups, politicians, and companies with which they have recently done business. Millions of customers have joined the do-not-call list, and businesses that break the laws can be fined heavily. The use of unsolicited outbound telemarketing has greatly decreased due to the law, but inbound consumer telemarketing and outbound business-to-business telemarketing remain strong and growing. Many telemarketers are shifting their call-center activity from making unsolicited cold calls on often resentful customers to managing existing customer relationships. They are developing "opt-in" calling systems, in which they provide useful information and offers to customers who have invited the company to contact them by phone or e-mail. AACSB: Analytical thinking Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate

156) Internet marketing practices have raised a number of ethical and legal questions. Why is invasion of privacy perhaps the number one online marketing concern? Answer: Web site activities provide extensive personal information. This may leave consumers open to information abuse if companies make unauthorized use of the information in marketing their products or exchanging databases with other companies. Critics worry that through database marketing, marketers know too much about consumers' lives and may not use that information responsibly, taking unfair advantage of consumers. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 17.5: Identify and discuss the traditional direct marketing forms and overview public policy and ethical issues presented by direct marketing. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 18 Creating Competitive Advantage 1) A competitor analysis requires the assessment of all of the following EXCEPT the competitors' ________. A) objectives B) organizational hierarchy C) strategies D) strengths and weaknesses E) reaction patterns Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging 2) Strategies that strongly position a company against competitors and that give the company the best possible strategic advantage are ________ strategies. A) competitor analysis B) customer relationship C) competitive marketing D) competitive relationship E) customer identification Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 3) Gaining ________ requires delivering more value and satisfaction to target consumers than competitors do. A) competitive advantage B) first-mover advantage C) economies of scale D) comparative advantage E) differentiation Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

4) The first step in initiating competitive marketing strategies is to ________. A) balance customer and competitor orientations B) design broad competitive marketing strategies C) assess long-term organizational objectives D) conduct competitor analysis E) conduct transaction analysis Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 5) ________ involves first identifying and assessing competitors and then selecting which competitors to attack or avoid. A) Competitor analysis B) Self-competition C) Blue ocean strategy D) Quantitative analysis E) Perfect competition Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 6) To plan effective marketing strategies, a company needs to find out all it can about its competitors. It must constantly compare its marketing strategies, products, prices, channels, and promotions with those of close competitors. This is an example of ________. A) blue ocean strategy B) competitor analysis C) organizational evaluation D) perfect competition E) quantitative analysis Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

7) The goal of performing a competitor analysis is to ________. A) learn more about the competitors' sales structures B) find flaws in the competitors' manufacturing processes C) copy the best features that the competitors offer D) find areas of potential competitive advantage and disadvantage E) develop products in markets that the competitors are not in Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 8) Companies can identify their competitors from both ________ points of view. A) industry and market B) product and customer C) customer and location D) location and product E) product and strategy Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 9) Companies can identify competitors from a(n) ________ point of view by defining competitors as companies that are trying to satisfy the same customer need or build relationships with the same customer group. A) customer B) blue ocean C) market D) myopic E) industry Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

10) Companies can identify competitors from one of two points of view: ________. A) manufacturing or selling B) engineering or producing C) consumer or business D) industry or market E) unique or similar Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 11) If a company identifies its competitors from an industry point of view, it must understand ________ if it hopes to be an effective player in that industry. A) the trends in the industry B) the primary customers C) the impact of technological changes D) the potential customers E) the competitive patterns Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 12) A company is guilty of ________ if the company forgets latent competitors and only focuses on current competitors. A) perfect competition B) self-competition C) Cournot competition D) competitor backlinking E) competitor myopia Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

13) Kodak's film business didn't lose out to direct competitor Fujifilm; it lost out to Sony, Canon, and other digital camera makers, along with a host of digital image developers and online image sharing services. This is an example of ________. A) a blue ocean strategy B) competitor backlinking C) self-competition D) competitor myopia E) marketing myopia Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 14) Fosters and Mason House, two major coffee brands, competed neck and neck based on their product attributes and price promotions. They were soon blindsided by the arrival of Starcoffeez, which focused more on the coffee experience rather than the coffee. This resulted in major losses for the two companies. This is an example of ________. A) self-competition B) competitor myopia C) competitor backlinking D) marketing myopia E) perfect competition Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 15) From a(n) ________ point of view, Pepsi might see its competition as Coca-Cola, Dr Pepper, 7UP, and the makers of other soft drink brands. From a(n) ________ point of view, however, the customer really wants "thirst quenching." A) market; industry B) market; consumer C) industry; competitive D) industry; market E) company's; consumer's Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

16) Nintendo, producer of the Wii video game console, might define its competitors as other makers of physically interactive video games. But from a(n) ________ point of view, it would include all firms making physically interactive recreational products. A) industry B) market C) segment D) niche E) interdependent Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 17) From a market point of view, Universal Pictures film studio might see its competition as ________. A) Paramount Pictures B) Warner Bros. Pictures C) Walt Disney Pictures D) 20th Century Fox E) Broadway Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 18) From an industry point of view, Universal Pictures film studio might see its competition as ________. A) West End theatre B) Columbia Pictures C) Tomorrowland D) Summerfest E) HarperCollins Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

19) What is the LEAST relevant question to ask when assessing a firm's main competitor? A) What are the competitor's objectives? B) What is the competitor's strategy? C) What are the competitor's strengths? D) What are the competitor's locations? E) What are the competitor's weaknesses? Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 20) Each competitor has a mix of objectives. The company wants to know the relative importance that a competitor places on all of the following EXCEPT ________. A) company history B) current profitability C) market share growth D) cash flow E) technological leadership Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 21) A company's objectives indicate its satisfaction with its current situation and ________. A) its strength with its current management B) in what areas it intends to develop further C) how strong it is financially D) how it might react to different competitive actions E) its areas of concern, if any Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

22) A company that pursues ________ will react much more strongly to a competitor's cost reducing manufacturing breakthrough than to the same competitor's advertising increase. A) product differentiation B) low-cost leadership C) customer intimacy D) a middle-of-the-roaders strategy E) product leadership Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 23) In the context of identifying competitors' strategies, the more that one firm's strategy resembles another firm's strategy, the more likely the two firms are to ________. A) merge B) compete C) globalize D) form a partnership E) become market leaders Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 24) Companies need to know each competitor's product quality, features, and mix; customer services; pricing policy; distribution coverage; sales force strategy; and advertising and sales promotion programs. These are all the dimensions that identify ________ groups within the industry. A) target B) focus C) control D) strategic E) experimental Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

25) An analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors' offers is known as ________. A) customer lifetime value B) customer value analysis C) quantitative analysis D) brand value proposition E) benchmarking Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 26) In the audio equipment industry, Philips and Sony belong to the same ________. A) target group B) strategic group C) experimental group D) control group E) focus group Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 27) Country Kitchen and Perkins are both a chain of family restaurants featuring diner-like menus with reasonably priced items. These companies are in the same ________. A) focus group B) control group C) strategic group D) target group E) experimental group Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

28) Companies use secondary data, personal experience, and word of mouth to ________. A) identify competitors' target customers and strategies B) identify competitors' target locations and market share C) learn about their competitors' strengths and weaknesses D) select competitors to attack or avoid E) estimate competitors' sales projections Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 29) ________ is the process of comparing the company's products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance. A) Segmenting B) Positioning C) Sales promotion D) Benchmarking E) Publicity Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 30) Cinnabon's realization that it doesn't just sell cinnamon rolls but instead sells "irresistible indulgence" is an example of a firm taking a(n) ________. A) narrow view B) market view C) industry view D) firm view E) competitor view Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

31) Benchmarking has become a powerful tool for increasing a company's ________. A) product mix B) mass appeal C) employee training services D) distribution channels E) competitiveness Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 32) In the major home appliance industry, Whirlpool, Maytag, and LG all follow similar strategies in the same market. These firms would be considered a(n) ________. A) appliance group B) niche group C) strategic group D) market group E) target group Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 33) Marketers need an in-depth understanding of ________ if they want to anticipate how that competitor will act. A) the industry B) a competitor's mentality C) a competitor's strengths and weaknesses D) a competitor's business model E) the market Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging

34) What term is applied to the practice of a firm comparing its products and processes to the leading competitors in the same industry? A) Assessing B) Competing C) Estimating D) Industrial espionage E) Benchmarking Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 35) A firm should compete with ________ competitors in order to sharpen its abilities. Succeeding against these competitors often provides greater returns. A) strong B) international C) weak D) distant E) smaller Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 36) In conducting ________, the company first identifies the major attributes that customers value and the importance customers place on these attributes. Next, it assesses its performance against competitors on those valued attributes. A) a customer value analysis B) benchmarking C) entrepreneurial marketing D) intrepreneurial marketing E) a customer lifetime value estimate Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

37) A market research firm conducts a survey of soft-drink consumers to assess Pepsi's and Coke's strengths and weaknesses in attributes valued by both company's target customers. The market research firm is using a ________. A) customer lifetime value estimation B) global marketing strategy C) competitive marketing strategy D) customer value analysis E) blue ocean strategy Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 38) If a company's offer delivers greater value by exceeding the competitor's offer on important attributes, the company can charge a higher price and ________, or it can charge the same price and ________. A) earn lower profits; gain higher profits B) earn higher profits; lose profits C) earn higher profits; gain more market share D) lose profits; gain more market share E) lose profits; gain higher profits Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging 39) What is most likely a strategic benefit of the existence of competitors? A) Competitors seldom lead to product differentiation. B) Competitors help legitimize new technologies. C) Competitors exclusively serve more-attractive segments. D) Competitors fracture the target market. E) Competitors decrease the total demand. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

40) An industry often contains "good" and "bad" competitors. Good competitors ________. A) break the rules of fair competition B) ensure minimum competition between firms C) play by the rules of the industry D) typically dominate the market E) share their marketing strategies with other firms Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 41) Most competitors in the airline industry see Spirit Airlines as a ________ because it competes strictly on rock-bottom prices which makes it difficult for its competitors to match prices and still make a profit. A) good competitor B) marginal competitor C) weak competitor D) bad competitor E) distant competitor Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 42) Rather than competing head to head with established competitors, many companies seek out unoccupied positions in uncontested market spaces. They try to create products and services for which there are no direct competitors. This is called a ________. A) horizontal integration approach B) commercialization process C) guerrilla marketing technique D) blue ocean strategy E) lean dynamics approach Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

43) An example of a company exhibiting a blue ocean strategy is ________. A) Amazon's online shopping convenience B) a Starbucks opening in the same vicinity of an independent coffee house C) Nike's brand image of the "swoosh" D) Whirlpool's full line of medium-priced, energy-saving appliances E) the first digital tablet iPad released by Apple Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 44) Tomorrow's leading companies will succeed by seeking out unoccupied positions in uncontested market spaces. Such strategic moves, termed ________, create powerful leaps in value for both the firm and its buyers, creating new demand for new products. A) customer lifetime value B) customer equity C) value innovation D) market segmentation E) customer intimacy Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 45) Which of the following is the first step taken in the competitive intelligence system? A) collect published data and information from the field B) check, interpret, and organize gathered information C) identify the vital types of competitive information needed D) respond to inquiries from managers about competitors E) create a new brand image and marketing concept for the firm Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

46) The competitive intelligence system continuously collects information from the field through ________. A) government publications B) online monitoring C) speeches D) online databases E) market surveys Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 47) The competitive intelligence system does all of the following EXCEPT ________. A) sends relevant information to decision makers and responds to inquiries from managers B) takes action against the competitors once the data has been analyzed C) collects information from the field and published data D) checks the information for validity, interprets it, and organizes it E) identifies vital types of competitive information needed and the best sources Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging

Refer to the scenario below to answer the following question(s). Essential-Beauty is a rapidly growing firm that manufactures women's makeup, perfumes, and nail-care products. The company has established itself as a high-end cosmetic product brand available at most national drug stores. In the past, almost all of the advertising for EssentialBeauty has been in women's fashion magazines. The firm is now launching a new line of skin care products, ranging from facial cleansers to body lotion. These products are designed to be marketed to a broader audience, so the marketing team is exploring the effectiveness of different promotional mixes. 48) Essential-Beauty considers one of its most important competitors to be Look-Lovely, another marketer of high-end makeup and skin care products sold in drug stores. Based on this, it is most accurate to say that Look-Lovely and Essential-Beauty are both ________. A) niche marketers B) in the same strategic group C) distant competitors D) overall cost leaders E) market followers Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging 49) Essential-Beauty e-mailed a survey to a group of its most frequent, loyal customers. The survey asked what makeup and skin care characteristics were most important to them. The company's marketing staff then ranked the performance of Essential-Beauty products in each of these categories. Essentials was conducting a(n) ________. A) customer lifetime value survey B) entrepreneurial marketing strategy C) intrepreneurial marketing strategy D) customer value proposition E) customer value analysis Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging

50) Customers see competitive advantages as customer advantages. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 51) To plan effective marketing strategies, the company must ignore its competitors. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 52) A competitive analysis involves first identifying and assessing competitors and then selecting which competitors to attack or avoid. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 53) At the narrowest level, a company can define its competitors as other companies offering similar products and services to the same customers at similar prices. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 54) A group of firms in an industry following the same or a similar strategy in a given target market is known as a strategic group. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

55) Companies in competition within a strategic group do not compete with other strategic groups. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 56) When benchmarking you typically compare your firm to the leading firms in the industry. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 57) Benchmarking involves comparing the firm's products and processes to those of the competitors to identify best practices to improve quality and performance. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 58) Continuous innovation is a weak response by a company trying to protect its market share. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 59) Most companies prefer to compete against strong competitors. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

60) Competitive exchanges such as comparison advertisements can provide useful information to consumers and advantages from brands. However, they also might reflect negatively on the entire industry. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 61) In some markets, competitors live in relative harmony. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 62) Competitors may serve less-attractive segments or lead to more product differentiation. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 63) The existence of competitors in a market may cause a decrease in total demand. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 64) The goal of a "blue ocean strategy" is to make competition irrelevant. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

65) The competitive intelligence system of a company supplies key information to relevant decision makers about the company's competitors. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 66) A good competitor plays by its own rules at the expense of the industry as a whole. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 67) Discuss the steps in analyzing competitors. Answer: Creating competitive advantage begins with competitor analysis. First, the company's competitors must be identified. The next step is assessing competitors' objectives, strategies, strengths, weaknesses, and reaction patterns. Based on this information, the company can select which competitors to attack or avoid. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 68) Discuss the different levels at which competitors can be identified. Answer: At the narrowest level, a company can define its competitors as other companies offering similar products and services to the same customers at similar prices. However, the company might also define competitors as all firms making the same product or class of products. Even more broadly, competitors might include all companies making products that supply the same service. Finally, and still more broadly, competitors might include all companies that compete for the same consumer dollars. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy

69) Explain how the United States Postal Service has "competitor myopia." Answer: The U.S. Postal Service loses billions of dollars every year, but direct competitors such as FedEx and UPS aren't the problem. Instead, indirect competition from the Internet has hurt the U.S. Postal Service's revenue, as more people e-mail and make online transactions rather than mail transactions. AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging 70) Give examples of competitor objectives and discuss the importance of knowing a competitor's mix of objectives. Answer: Each competitor has a mix of objectives. The company wants to know the relative importance that a competitor places on current profitability, market share growth, cash flow, technological leadership, service leadership, and other goals. Knowing a competitor's mix of objectives reveals whether the competitor is satisfied with its current situation and how it might react to different competitive actions. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 71) Describe a strategic group. Name a few companies that belong to the same strategic group, and discuss why they are in the same group. Answer: A strategic group is a group of firms in an industry following the same or a similar strategy in a given target market. General Electric and Whirlpool belong to the same strategic group because each produces a full line of medium-price appliances supported by good service. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 72) How can companies learn about their competitors' strengths and weaknesses? Answer: Companies normally learn about their competitors' strengths and weaknesses through secondary data, personal experience, and word of mouth. They can also conduct primary marketing research with customers, suppliers, and dealers, or they can benchmark themselves against other firms. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

73) What is the purpose of benchmarking? Answer: A company uses benchmarking to identify best practices and find ways to improve its own product quality and performance. AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Easy 74) Discuss why a company really needs and benefits from competitors. Answer: The existence of competitors results in several strategic benefits. Competitors may share the costs of market and product development and help to legitimize new technologies. They may serve less-attractive segments or lead to more product differentiation. Finally, competitors may help increase total demand. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 75) Discuss the need to understand competitors as well as customers through competitor analysis. Answer: In order to prepare an effective marketing strategy, a company must consider its competitors as well as its customers. Building profitable customer relationships requires satisfying target consumer needs better than competitors do. A company must continually analyze competitors and develop competitive marketing strategies that position it effectively against competitors and give it the strongest possible competitive advantage. Competitor analysis first involves identifying the company's major competitors, using both an industry-based and a market-based analysis. The company then gathers information on competitors' objectives, strategies, strengths and weaknesses, and reaction patterns. With this information in hand, it can select competitors to attack or avoid. Competitive intelligence must be collected, interpreted, and distributed continuously. Company marketing managers should be able to obtain full and reliable information about any competitor affecting their decisions. AACSB: Application of knowledge Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

76) Although competition is most intense within a strategic group, explain why there is also rivalry among groups. Give examples. Answer: First, some of the strategic groups may appeal to overlapping customer segments. For example, no matter what their strategy, all major appliance manufacturers will go after the apartment and homebuilders segment. Second, the customers may not see much difference in the offers of different groups; they may see the little difference in quality between GE and Whirlpool. Finally, members of one strategic group might expand into new strategy segments. Thus, General Electric's Monogram and Profile lines of appliances compete in the premiumquality, premium-price line with Viking and Sub-Zero. AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate 77) Marketing managers need a deep understanding of a given competitor's mentality if they want to anticipate how the competitor will act or react. Discuss the different ways competitors act or react. Why do they do so? Use examples to support your thoughts. Answer: Student answers will vary. Each competitor reacts differently. Some do not react quickly or strongly to a competitor's move. They may feel their customers are loyal; they may be slow in noticing the move; they may lack the funds to react. Some competitors react only to certain types of moves and not to others. Other competitors react swiftly and strongly to any action. For example, Procter & Gamble does not let a new detergent come easily into the market. Many firms avoid direct competition with P&G and look for easier prey, knowing that P&G will react fiercely if challenged. In some industries, competitors live in relative harmony; in others, they fight constantly. Knowing how major competitors react gives the company clues on how best to attack competitors or how best to defend the company's current positions. AACSB: Analytical thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

78) An industry often contains "good" competitors and "bad" competitors. Define each term and discuss scenarios with both "good" and "bad" competitors. How might "good" competitors choose to react to "bad" competition? Answer: Student answers will vary. Good competitors play by the rules of the industry. Bad competitors, in contrast, break the rules. They try to buy share rather than earn it, take large risks, and play by their own rules. For example, Yahoo! Music Unlimited sees Napster, Rhapsody, AOL Music, Amazon.com, and most other digital music download services as good competitors. They share a common platform, so that music bought from any of these competitors can be played on almost any playback device. However, it sees Apple's iTunes Music Store as a bad competitor, one that plays by its own rules at the expense of the industry as a whole. With the iPod, Apple created a closed system with mass appeal. A company might be smart to support good competitors, aiming its attacks at bad competitors. AACSB: Reflective thinking Skill: Application Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Challenging 79) Discuss the functions and goals of a competitive intelligence system. Answer: The competitive intelligence system first identifies the vital types of competitive information needed and the best sources of this information. Then, the system continuously collects information from the field (sales force, channels, suppliers, market research firms, trade associations, Web sites) and from published data (government publications, speeches, articles). Next, the system checks the information for validity and reliability, interprets it, and organizes it in an appropriate way. Finally, it sends key information to relevant decision makers and responds to inquiries from managers about competitors. With this system, company managers will receive timely intelligence information about competitors in the form of phone calls, e-mails, bulletins, newsletters, and reports. In addition, managers can connect with the system when they need an interpretation of a competitor's sudden move, when they want to know a competitor's weaknesses and strengths, or when they need to know how a competitor will respond to a planned company move. AACSB: Analytical thinking Skill: Concept Objective: LO 18.1: Discuss the need to understand competitors as well as customers through competitor analysis. Difficulty: Moderate

80) Which of the following statements is true of the approaches to marketing strategy? A) Intrepreneurial marketing applies to companies that sometimes lose their marketing creativity and passion that they had at the start. B) As small companies achieve success, they inevitably move away from more-formulated marketing. C) Within a company, a single strategy exclusively applies to all different businesses and products. D) Formulated marketing seldom involves developing formal marketing strategies and adhering to them closely. E) Formulated marketing encourages more marketing initiative and "intrepreneurship" at the local level. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 81) Companies that operate large marketing departments, conduct expensive marketing research, spell out elaborate competitive strategies, and spend huge sums on advertising are using ________ marketing strategies. A) informal B) formulated C) entrepreneurial D) intrepreneurial E) blue ocean Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 82) What are the stages that the approaches to marketing strategy and practice usually pass through? A) ambush marketing, multi-level marketing, and guerrilla marketing B) guerrilla marketing, ambush marketing, and affinity marketing C) multi-level marketing, undercover marketing, and evangelism marketing D) entrepreneurial marketing, formulated marketing, and intrapreneurial marketing E) undercover marketing, affinity marketing, and ambush marketing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 26 Copyright © 2021 Pearson Education, Inc.

83) Most companies are started by individuals who live by their wits. They visualize an opportunity, take risks, and knock on every door to gain attention. Which of the following stages in marketing strategy is being illustrated here? A) exponential marketing B) formulated marketing C) entrepreneurial marketing D) affinity marketing E) ambush marketing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 84) When Gary Hirshberg started the Stonyfield Farm yogurt company, he stated that his company could do better with less advertising, less marketing research, and more guerrilla marketing. He came up with innovative marketing ideas to promote his products such as having sales personnel dress up as large yogurt cartons to distribute free yogurt samples. Which of the following marketing strategies was being implemented by Hirshberg? A) formulated marketing B) entrepreneurial marketing C) ambush marketing D) undercover marketing E) intrapreneurial marketing Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging 85) As small companies achieve success, they inevitably move toward more ________ marketing. They adopt more-developed marketing tools and adhere to them closely. A) ambush B) formulated C) entrepreneurial D) intrepreneurial E) multi-level Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

86) Companies that have been in existence for some time often lose the marketing creativity and passion that they had at the start. They often need to refresh their marketing strategies and try new approaches, known as ________. A) multi-level marketing B) formulated marketing C) ambush marketing D) intrapreneurial marketing E) affinity marketing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 87) Many approaches to developing effective competitive marketing strategies exist. There may be ________ between the formulated side of marketing and the creative side, as creativity and passion help build and maintain success. A) collaboration B) strong disagreements C) managerial conflicts D) productive meetings E) constant tension Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 88) According to Michael Porter, what are three effective competitive positioning strategies? A) middle-of-the-roaders, focus, and overall cost leadership B) focus, differentiation, and middle-of-the-roaders C) overall cost leadership, differentiation, and middle-of-the-roaders D) overall cost leadership, differentiation, and focus E) differentiation, market segmentation, and focus Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

89) Dell produces and delivers PCs of competitive quality at lower costs. The company constantly aims to achieve low production and distribution costs to win a large market share. Dell utilizes a(n) ________ strategy very effectively. A) overall cost leadership B) differentiation C) focus D) blue ocean E) market segmentation Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 90) Porsche is a German automobile manufacturer that competes against BMW and Audi, but only in the sports car and SUV segments of the automobile market. Porsche utilizes a(n) ________ strategy. A) overall cost leadership B) focus C) middle-of-the-roaders D) market segmentation E) blue ocean Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 91) Bosch is a German firm that manufactures home appliances such as dishwashers, ovens, and ranges. It competes with companies such as GE Elite and LG. Bosch is perceived as the class of the industry. Bosch pursues a(n) ________ strategy. A) focus B) blue ocean C) overall cost leadership D) differentiation E) middle-of-the-road Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

92) Companies that pursue a clear strategy will likely perform well. Firms that do not pursue a clear strategy are called ________. A) jack-of-all-trades B) middle-of-the-roaders C) niches D) red oceans E) laggards Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 93) Sears and Holiday Inn encountered difficult times because they did not stand out as the lowest in cost, highest in perceived value, or best in service of their primary target market segment. Both companies are ________. A) niches B) jack-of-all-trades C) middle-of the roaders D) red oceans E) laggards Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 94) Which of the following are value discipline strategies? A) operational excellence, overall cost leadership, and differentiation B) customer intimacy, operational excellence, and focus C) employee relations, product leadership, and overall cost leadership D) product leadership, customer intimacy, and focus E) operational excellence, customer intimacy, and product leadership Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

95) When a company provides superior value by leading its industry in price and convenience, it has obtained ________. A) product leadership B) focus C) operational excellence D) customer intimacy E) differentiation Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 96) Walmart, Costco, and Southwest Airlines serve customers who want reliable, good-quality products or services that are also reasonable and easily available. These companies are all known for pursuing a value discipline known as ________. A) operational excellence B) customer intimacy C) product differentiation D) product leadership E) focus Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 97) When companies serve customers who are willing to pay a premium to get precisely what they want and the company responds quickly to satisfy these customers' needs, the company has achieved ________. A) customer intimacy B) product differentiation C) operational excellence D) product leadership E) focus Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

98) American Express will do almost anything to build long-term customer loyalty and to capture customer lifetime value. Which of the following competitive marketing strategies is being pursued by American Express? A) consumer capitalism B) customer equity C) product differentiation D) product leadership E) customer intimacy Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 99) If a company's aim is to make its own and competing products obsolete and serve customers who want state-of-the-art products and services, it is using a value discipline called ________. A) overall cost leadership B) product activation C) product binning D) product leadership E) customer intimacy Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 100) Samsung and Apple actively generate new ideas, relentlessly pursue new solutions, and quickly work to get new products to market. They serve customers who want state-of-the-art products and services, regardless of the costs in terms of price or inconvenience. Which of the following value disciplines is illustrated from this example? A) operational excellence B) customer intimacy C) product leadership D) product activation E) product binning Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

101) Some companies successfully pursue more than one of the three value disciplines at the same time. For example, FedEx excels at operational excellence as well as customer intimacy. However, more companies focus on excelling at a single value discipline while ________ the other two. A) choosing a second one to also focus on B) meeting industry standards on C) ignoring D) achieving minimal goals on E) developing plans to improve on Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging 102) Which of the following is a competitive position or role that firms play in the target market? A) surrogate consumer B) market analyst C) market maven D) market nicher E) laggard Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 103) Most of the market is in the hands of the ________, the firm with the largest market share. A) market challenger B) market follower C) market leader D) market nicher E) market maven Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

104) ________ are those runner-up firms that are working to increase their market share in an industry. A) Market leaders B) Market challengers C) Market followers D) Market mavens E) Market nichers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 105) Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company B is the market ________. A) leader B) challenger C) follower D) nicher E) maven Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 106) A runner-up firm that wants to hold its share in an industry without rocking the boat is a ________. A) market follower B) market maven C) market challenger D) market nicher E) market leader Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

107) Firms that serve small segments not being pursued by other firms are called ________. A) market followers B) market mavens C) market challengers D) market nichers E) market leaders Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 108) Fifty percent of the market is in the hands of Company A, 30 percent is in the hands of Company B, 15 percent is in the hands of Company C, and the remaining 5 percent is in the hands of Company D. Based on these hypothetical numbers, Company D is the market ________. A) leader B) challenger C) follower D) nicher E) maven Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 109) If a company is a market leader in one category, and a market challenger or market nicher in other categories, it will follow ________ strategies for each category. A) different B) the same C) unique D) multiple E) complex Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

110) Which of the following is a market leader strategy? A) expanding market share B) multiple niching C) full frontal attack D) following at a distance E) following closely Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 111) Which of the following are market challenger strategies? A) expand total market and protect market share B) expand market share and follow closely C) full frontal attack and indirect attack D) follow closely and follow at a distance E) multiple niching and quality service Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 112) To remain number one, leading firms can take any of three actions. First, they can find ways to expand total demand. Second, they can protect their current market share through good defensive and offensive actions. Third, they can ________. A) focus exclusively on divestment B) evaluate current employees and reduce costs through downsizing C) run smaller companies out of business, causing them to sell out to larger firms D) try to expand their market share further, even if market size remains constant E) shut down current company locations and reopen in highly populated areas Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

113) A company can protect its market share through all of the following EXCEPT ________. A) continuous innovation B) attacking its competitors directly C) preventing or fixing weaknesses D) fulfilling its value promise to customers E) pricing its products to be consistent with the customers' perceived value Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 114) The market leader normally gains the most when ________. A) its total market diminishes B) it achieves expanded market share C) its personal communication channels expand D) the niche marketing efforts by other firms expand E) the major global competitors enter the market Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging 115) Marketers can expand markets by discovering and promoting ________. A) subliminal points of interest B) the deficiencies of competitors C) subtle advantages of the product D) new uses of the product E) green technologies Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

116) Market leaders can expand the market by ________ and more usage of the product. A) identifying competitors B) initiating monopolistic practices C) developing new users D) ensuring users adhere to higher standards E) initiating new rules for product users Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 117) Lovelies is the leading workout and fitness center for women. The regional chain of gyms has traditionally catered to women age 40 and older who are interested in strength and cardiovascular training. Lovelies has recently begun promotions to bring younger women into its gyms. This is an example of how the market leader ________. A) competes with mature products B) changes its product line C) develops new rules D) develops new users E) increases competition Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 118) Which of the following is the best response a company can make to competitive threats? A) continuous innovation B) surrender to the competitor C) exit from the market D) divestment E) globalization Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

119) Profitability increases as a business gains share relative to competitors in its ________. A) higher market B) direct market C) secondary market D) served market E) valued market Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 120) ________ can adopt one of two competitive strategies: they can challenge the leader or they can play along with competitors and not rock the boat. A) Runner-up firms B) Market nichers C) Global investors D) Localized marketers E) Market developers Answer: A Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 121) Although it might seem that the market leader has the most going for it, challengers often have what some strategists call a(n) ________. The challenger observes what has made the leader successful and improves upon it. A) "marketing myopia" B) "second mover advantage" C) "absolute advantage" D) "blue ocean strategy" E) "red ocean strategy" Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

122) A market challenger that matches the competitor's product, advertising, price, and distribution efforts is most likely ________. A) creating multiple niches B) pursuing an indirect attack C) launching a full frontal attack D) exiting from the current market E) implementing a blue ocean strategy Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 123) Rather than challenging head on, a challenger can make a(n) ________ attack on the competitor's weaknesses or on gaps in the competitor's market coverage. A) bypass B) frontal C) indirect D) guerrilla E) preemptive Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 124) Which of the following conditions would enable higher market share to produce higher profits? A) when unit costs drop as market share increases B) when unit costs increase as market share increases C) when production volume drops as market share increases D) when production volume remains unaltered as market share increases E) when the company fails to break even Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging

125) Cozy Country Market entered the candle business with a unique product: a line of candles made from soy that produces less smoke and lasts up to twice as long as other candles. The firm sold this unique product exclusively to a few niches. The candles were priced at twice the cost charged for normal candles. The product was also sold online and in unconventional outlets not dominated by market leaders. In this case, Cozy Country Market was using a(n) ________ against the market leaders. A) preemptive attack B) guerrilla attack C) counter offensive attack D) indirect attack E) frontal attack Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging 126) Which of the following statements is most likely true of market follower strategies? A) Market followers have the resources to expand the market by developing new users, new uses, and more usage of its products. B) Market followers must expand internationally first to ensure distribution effectiveness, cost savings, and quality control. C) Market followers should conduct indirect attacks on competitors' weaknesses to gain market share quickly and inexpensively. D) Market followers benefit from pursuing subsegments of target markets due to their limited resources. E) Market followers must keep manufacturing costs and prices low or product quality and services high. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging

127) Almost every industry includes firms that specialize in serving target subsegments called market ________. A) niches B) mavens C) baskets D) indicators E) mixes Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 128) Market niching is profitable because the company ________. A) copies or improves on the leader's products and programs, usually with much less investment B) bears the cost of developing new products and markets, expanding distribution, and educating the market C) knows the needs of the target customer segment better than other firms that casually attempt to sell to the same segment D) either keeps its manufacturing costs and prices low or its product quality and services high E) can achieve economies of scale much faster by selling the same product to the global market Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 129) Whereas the mass marketer achieves ________, the nicher achieves ________. A) low margins; low volume B) low volume; high margins C) high volume; high margins D) high volume; low margins E) high margins; high volume Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

130) Computer mouse and interface device maker AdvTechPRO is only a fraction the size of software giant Terminal Time Software Inc. AdvTechPRO manufactures every variation of computer mouse imaginable (for left-handed people, wireless mice, shaped like actual mice, LED mice, etc.). Through skillful ________, the firm dominates the PC mouse market, with Terminal Time Software as its runner up. A) centralization techniques B) niching C) brand imaging D) vertical integration E) benchmarking Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging 131) Which of the following is most critical for successful niching? A) catering to global markets B) buzz marketing C) follow-up D) specialization E) mass appeal of one idea Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 132) A market nicher can most likely specialize along all of the following lines EXCEPT ________. A) specific end users B) unique products C) customized services D) quality-price E) mass marketing Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

133) The market subsegment that a company exclusively caters to may dry up, or it might grow to the point that it attracts larger competitors. This is why such companies practice ________. A) multiple niching B) mass marketing C) overall cost leadership D) low-price strategies E) dumping Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy Refer to the scenario below to answer the following question(s). Essential-Beauty is a rapidly growing firm that manufactures women's makeup, perfumes, and nail-care products. The company has established itself as a high-end cosmetic product brand available at most national drug stores. In the past, almost all of the advertising for EssentialBeauty has been in women's fashion magazines. The firm is now launching a new line of skin care products, ranging from facial cleansers to body lotion. These products are designed to be marketed to a broader audience, so the marketing team is exploring the effectiveness of different promotional mixes. 134) Before deciding to launch the new line of products, Essential-Beauty conducted extensive market research to make sure the products were optimally positioned. A complete marketing plan including mobile advertising, magazine advertising, event sponsorship, and sales promotions was established long before the products themselves were ready for market. In this case, EssentialBeauty was using ________. A) cost leadership B) entrepreneurial marketing C) intrepreneurial marketing D) formulated marketing E) operational excellence Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Challenging

135) Companies with multiple products or businesses typically choose one marketing strategy for all their different businesses or products. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 136) Formulated marketing focuses on the entrepreneurial aspects of marketing. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 137) Entrepreneurial marketing exclusively involves developing formal marketing strategies and adhering to them closely. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 138) Many large and mature companies get stuck in formulated marketing. They pore over the latest Nielsen numbers, scan market research reports, and try to fine-tune their competitive strategies and programs. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 139) Gary Hirshberg started the Stonyfield Farm yogurt company. His marketing strategy: building a casual bond with customers using guerilla marketing. This is an example of formulated marketing. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

140) According to the overall cost leadership competitive strategy, the company works hard to achieve the lowest production and distribution costs. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 141) Firms competing in a given target market, at any point in time, are similar in their objectives and resources. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 142) Market challengers can grow by further increasing their market shares. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 143) Michael Porter suggested four basic competitive positioning strategies that companies can follow, three winning strategies and one losing one. Name and describe these four different strategies. Answer: Overall cost leadership is when the company works hard to achieve the lowest production and distribution costs. Differentiation is when the company concentrates on creating a highly differentiated product line and marketing program so that it comes across as the class leader in the industry. Focus is when the company puts its efforts on serving a few market segments well rather than going after the whole market. Middle-of-the-roaders are firms that do not pursue a clear strategy. These firms do the worst. AACSB: Written and oral communication Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

144) Name the three value disciplines. Answer: Research indicates that companies can pursue leadership positions by delivering superior value to their customers. There are three possible value disciplines that marketers can follow: operational excellence, customer intimacy, or product leadership. AACSB: Written and oral communication Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 145) Explain how a market follower can gain advantage from a market leader. Answer: The market leader often bears the huge expenses of developing new products and markets, expanding distribution, and educating the market. By contrast, the market follower can learn from the leader's experience. It can copy or improve on the leader's products and programs, usually with much less investment. AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy 146) Why is niching profitable? Answer: The main reason a market nicher can succeed is that it ends up knowing the target customer group so well that it meets the group's needs better than other firms that casually sell to that niche. As a result, the nicher can charge a substantial markup over costs because of the added value. Whereas the mass marketer achieves high volume, the nicher achieves high margins. AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Easy

147) Discuss customer intimacy. Why is it important? Provide an example of a company that successfully abides by this value discipline. Answer: Student answers will vary. A company provides superior value by precisely segmenting its markets and tailoring its products or services to match exactly the needs of targeted customers. It specializes in satisfying unique customer needs through a close relationship with and intimate knowledge of the customer. It builds detailed customer databases for segmenting and targeting, and empowers its marketing people to respond quickly to customer needs. Customer-intimate companies serve customers who are willing to pay a premium to get precisely what they want. They will do almost anything to build long-term customer loyalty and to capture customer lifetime value. Examples include Nordstrom, Lexus, American Express, British Airways, and Ritz-Carlton hotels. AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 148) Compare and contrast the four competitive positions that are often used to describe market structures. Answer: Determining which competitive marketing strategy makes the most sense depends on the company's industry and on whether it is a market leader, challenger, follower, or nicher. A market leader has to mount strategies to expand the total market, protect market share, and expand market share. A market challenger is a firm that tries aggressively to expand its market share by attacking the leader, other runner-up companies, or smaller firms in the industry. The challenger can select from a variety of direct or indirect attack strategies. A market follower is a runner-up company that chooses not to rock the boat, usually from fear that it stands to lose more than it might gain. But the follower is not without a strategy and seeks to use its particular skills to gain market growth. A market nicher is a smaller firm that is unlikely to attract the attention of larger firms; it often becomes a specialist in some end use, customer size, specific customer, geographic areas, or service. AACSB: Analytical thinking Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate

149) Discuss two ways a market challenger can best attack the chosen competitor and achieve its strategic objectives. Explain when a challenger should use these attacks and provide examples of companies that have used these methods. Answer: Student answers will vary. The market challenger may launch a full frontal attack, matching the competitor's product, advertising, price, and distribution efforts. It attacks the competitor's strengths rather than its weaknesses. The outcome depends on who has the greater strength and endurance. If the market challenger has fewer resources than the competitor, however, a frontal attack makes little sense. Thus, many new market entrants avoid frontal attacks, knowing that the market leaders can head them off with ad blitzes, price wars, and other retaliations. Rather than challenging head-on, the challenger can make an indirect attack on the competitor's weaknesses or on gaps in the competitor's market coverage. It can carve out toeholds using tactics that the established leaders have trouble responding to or choose to ignore. Red Bull is a successful example of an indirect attack. PepsiCo challenges Coca-Cola by launching a full frontal attack. AACSB: Application of knowledge Skill: Concept Objective: LO 18.2: Explain the fundamentals of competitive marketing strategies based on creating value for customers. Difficulty: Moderate 150) A company can become so ________ centered that it loses its even more important focus on maintaining profitable ________ relationships. A) customer; competitor B) competitor; customer C) market; customer D) market; competitor E) competitor; product Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate 151) Which of the following is a positive aspect of a competitor-centered company? A) It carries out its own customer relationship strategy. B) It bases its own moves on competitors' moves. C) It searches out competitors' weaknesses. D) It concentrates its resources on delivering superior value to target customers. E) It ends up seeking innovative ways to create more value for customers. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate 49 Copyright © 2021 Pearson Education, Inc.

152) Which of the following is a negative aspect of a competitor-centered company? A) It may end up simply matching industry practices. B) It fails to identify competitors' weaknesses. C) It becomes stable and unreactive. D) It fails to notice weaknesses in its own position. E) It fails to develop a fighter orientation. Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate 153) A company that focuses on customer developments in designing its marketing strategies and on delivering superior value to its target customers is a ________ company. A) market-centered B) cost-centered C) competitor-centered D) customer-centered E) product-centered Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy 154) A company that is in a good position to identify new opportunities is a ________ company. A) market-centered B) cost-centered C) competitor-centered D) product-centered E) customer-centered Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy

155) Which of the following does NOT apply to a customer-centered company? A) watching customer needs evolve B) deciding what customer groups are the most important to serve C) matching or extending industry practices D) focusing the resources on delivering superior value to target customers E) setting long-range strategies that make sense Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate 156) When companies watch both their buyers and their competitors, they are called ________ companies. A) product-centered B) market-centered C) customer-centered D) competitor-centered E) cost-centered Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy 157) Which is NOT one of the four orientations a company may have? A) customer B) product C) competitor D) market E) cost Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy

158) A product-oriented company focuses on ________. A) the competitors' products B) the customers' needs C) its own products D) the selling process E) the competitors and the customers Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy 159) Greener-grass Inc. is a lawn care company providing landscaping and lawn maintenance services to customers in and around Kansas City. The marketing team at Greener-grass carefully tracks the moves of competing companies, watching for shifting strategies and new promotions. The marketing team is also in constant touch with customers, using surveys and other feedback methods to find out what kind of services customers value the most. Greener-grass is most accurately described as having a ________ orientation. A) market B) product C) customer D) competitor E) leadership Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Challenging 160) An advantage of a competitor-centered company is that it ends up simply matching or extending industry practices rather than seeking innovative new ways to create more value for customers. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate

161) A market-centered company most likely has a stronger competitor and customer focus than a customer-centered company. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate 162) What is the primary focus of a competitor-centered company? Answer: A competitor-centered company spends most of its time tracking competitors' moves and market shares and tries to find strategies to counter them. AACSB: Written and oral communication Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy 163) What is the primary focus of a customer-centered company? Answer: A customer-centered company focuses more on customer developments in designing its strategies. By watching customer needs evolve, a customer-centered company can decide what customer groups and what emerging needs are the most important to serve. AACSB: Written and oral communication Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Easy 164) Discuss the four evolving company orientations. Which orientation is considered most successful and why? Answer: In the first orientation, companies are product oriented, paying little attention to either customers or competitors. In the second orientation, they become customer oriented and start to pay attention to customers. In the third orientation, when they start to pay attention to competitors, they become competitor oriented. Today, companies need to be market oriented, paying balanced attention to both customers and competitors. Rather than simply watching competitors and trying to beat them on current ways of doing business, companies need to watch customers and find innovative ways to build profitable customer relationships by delivering more customer value than competitors do. AACSB: Analytical thinking Skill: Concept Objective: LO 18.3: Illustrate the need for balancing customer and competitor orientations in becoming a truly market-centered organization. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 19 The Global Marketplace 1) Which of the following does NOT characterize international trade in the past 30 years? A) Since 1990, the number of multinational corporations has soared. B) About half of the 150 largest economies in the world are corporations. C) Global trade value of products and services accounts for about 27% of GDP worldwide. D) Many U.S. companies, such as McDonald's and Starbucks, are successful at international marketing. E) Competition in international markets is waning. Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 2) According to the text, what location does Coca-Cola consider a promising long-term growth opportunity? A) Russia B) Brazil C) China D) Africa E) India Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 3) Which of the following is most likely to be the consequence of increased growth of global trade? A) Home markets become richer in opportunities. B) Foreign firms expand aggressively into new international markets. C) Global competition is curbed. D) Industries become safe from foreign competition. E) Domestic companies increase their chances to dominate their home markets. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

4) Firms that decide against international expansion to play it safe ________. A) protect themselves from competition at home B) gain a competitive edge against imports in their home markets C) successfully shield themselves from foreign competition D) risk losing their home markets E) increase their chances of entering other markets Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 5) Companies risk losing their home markets ________. A) by protecting themselves from competition at home B) to other domestic competitors C) as they may find foreign competitors in their own backyards D) by focusing only on their home markets E) in hopes of growing market share at home Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 6) Which of the following is a risk associated with international trade? A) technological obsolescence B) highly unstable governments C) market monopolization D) lack of trade barriers E) currency stagnation Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

7) Risks of global trade include all of the following EXCEPT ________. A) high trade barriers B) corruption C) restrictive government policies D) unstable currencies E) increased opportunities for growth Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 8) A ________ firm is one that, by operating in more than one country, gains marketing, production, research and development, and financial advantages that are not available to purely domestic competitors. A) global B) domestic C) federally chartered D) direct investment E) free trade zone Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 9) Since the global company sees the world as one market, it raises capital, obtains components and materials, and manufactures and markets its goods ________. A) at home B) in the lowest-cost country near where each product will be sold C) in each country in which it does business D) in the lowest-cost country on each continent E) wherever it can do the best job Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

10) Which question should most likely be answered by all companies due to the rapid move toward globalization? A) How should we eliminate domestic competition? B) Should we diversify in a new business area in the home country? C) Who will our global competitors be, and what are their strategies and resources? D) How should we fulfill our environmental obligations? E) Which medium of advertising should we use in our home country? Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 11) Before a company decides to go global, it must evaluate all of the following environments EXCEPT the ________ environment. A) cultural B) natural C) political-legal D) global marketing E) economic Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 12) Which of the following major decisions should a company make immediately after it decides to operate internationally? A) deciding which markets to enter B) deciding how to enter the market C) deciding on the global marketing organization D) deciding on the global marketing program E) deciding on the global communication program Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

13) Immediately after deciding which markets to enter, the company should determine ________. A) the most suitable global communication program B) how to price its products in different markets C) the global marketing organization D) the global marketing program E) how to enter the market Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 14) Which of the following terms refers to a tax levied by a foreign government against certain imported products to raise revenue or to protect domestic firms? A) embargo B) tariff C) excise D) exchange control E) quota Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 15) Which of the following is a nontariff trade barrier? A) strike B) quota C) boycott D) exchange premium E) restrictive product standards Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

16) A(n) ________ is a limit on the amount of goods that an importing country will accept in certain product categories. A) embargo B) tariff C) benchmark D) quota E) exchange control Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 17) A(n) ________ serves to limit the amount of foreign exchange and the exchange rate against other currencies. A) exchange premium B) free trade zone C) quota D) exchange control E) tariff trade barrier Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 18) Which of the following was designed to help foster trade between nations? A) tariffs B) GATT C) exchange controls D) quotas E) nontariff trade barriers Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

19) Bias against bids made by American companies is an example of a(n) ________. A) quota B) tariff C) boycott D) nontariff trade barrier E) exchange control Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 20) Foreign businesses in India appear to receive unusually close scrutiny and special regulations, aimed at protecting the local businesses. This is an example of a(n) ________. A) nontariff trade barrier B) tariff C) boycott D) exchange control E) quota Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 21) The ________, established in 1947 and modified in 1994, was designed to promote world trade by reducing tariffs and other international trade barriers. A) WTO B) NAFTA C) EU D) CAFTA-DR E) GATT Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

22) ________ was established to replace GATT in 1995 and now oversees the original GATT provisions. A) The WTO B) The EU C) NAFTA D) CAFTA E) NATO Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 23) Which of the following was a result of the first seven rounds of global GATT and WTO trade talks? A) Tariffs on the world's remaining merchandise increased by 30 percent. B) The international protection of copyrights, patents, and trademarks is no longer a point of dispute. C) The average worldwide tariff on manufactured goods fell from 45 percent to 5 percent. D) NATO was established for purposes of collective security. E) The EU agreed to reduce trade barriers and increase cooperation among its members. Answer: C Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 24) Growing Green, a U.S. company that markets organic and environmentally friendly gardening and landscaping supplies and equipment, wants to expand the business internationally. Growing Green managers are currently examining the rules imposed by the WTO and the agreements made by NAFTA and the EU. In which decision stage of the international marketing process is Growing Green? A) deciding on the global pricing strategies B) deciding which markets to enter C) deciding how to enter the market D) deciding on the global marketing program E) looking at the global marketing environment Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

25) A(n) ________ community is a group of nations organized to work toward common goals in the regulation of international trade. A) joint venture B) strategic marketing C) economic D) joint-stock E) multilateral Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 26) Economic communities are also known as ________. A) global firms B) free trade zones C) management communities D) production communities E) open channels Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 27) Which of the following is an example of an economic community? A) NATO B) BRICS C) CPTPP D) GATT E) WTO Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

28) Formed in 1957, ________ set out to create a single European market by reducing barriers to the free flow of products, services, finances, and labor among member countries and developing policies on trade with nonmember nations. A) NAFTA B) the European Union C) the European Organization D) the European Central Bank E) CPTPP Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 29) Which of the following is a problem caused by a policy of the EU? A) Barriers to the free flow of products, services, finances, and labor decreased. B) Policies on trade with nonmember nations were developed. C) Economic powers stepped in to prop up weaker economies. D) Adopting a common currency decreased currency risk. E) The EU represents one of the world's largest single markets. Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 30) The EU helped unify Europe by adopting the euro as a common currency. Adopting a common currency has caused problems as stronger economic countries have had to prop up all the following European countries EXCEPT ________. A) Cyprus B) Portugal C) France D) Greece E) United States Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

31) In 1994, ________ established a free trade zone among the United States, Canada, and Mexico. A) GATT B) the WTO C) NAFTA D) the EU E) CAFTA Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 32) Trusted Wholesalers is a company that purchases products produced in Mexico and sells them to companies based in the United States and Canada. Management at Trusted Wholesalers would most likely be interested in becoming experts in the policies developed by ________. A) the EU B) NAFTA C) CPTPP D) APTA E) the BRICS countries Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 33) A recently signed trade agreement, ________, promises to lower trade barriers and increase economic cooperation among 11 Pacific Rim countries. A) CPTPP B) GATT C) USMCA D) NAFTA E) the EU Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

34) Trusted Wholesalers is a company that currently purchases products made in Mexico and sells them to companies based in the United States and Canada. Trusted Wholesalers is considering whether to also purchase products produced in Australia and Malaysia. To make their decision, members of management at Trusted Wholesalers will most likely evaluate the agreements made by ________. A) the EU B) NAFTA C) CPTPP D) GATT E) USMCA Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 35) The ________ trade agreement covers 11 nations with a collective population of 495 million people that account for 13.5 percent of the world's GDP. A) NAFTA B) Brexit C) CPTPP D) EU E) GATT Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 36) The two key economic factors reflecting a country's attractiveness as a market are its industrial structure and its ________. A) communication adaptation B) nontariff trade barriers C) exchange controls D) income distribution E) transportation systems Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

37) A country's ________ shapes its product and service needs, income levels, and employment levels. A) international trade system B) income distribution C) industrial structure D) political structure E) foreign exchange system Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 38) Which of the following is a type of industrial structure? A) marketing economies B) subsistence economies C) laissez-faire economies D) capitalistic economies E) socialistic economies Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 39) In a(n) ________, the vast majority of people engage in simple agriculture and consume most of their output. A) raw material economy B) subsistence economy C) industrializing economy D) emerging economy E) industrial economy Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

40) Which of the following industrial structures presents the fewest market opportunities? A) subsistence economies B) raw material exporting economies C) industrializing economies D) emerging economies E) industrial economies Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 41) Which of these countries is one of the BRICS? A) Sweden B) Russia C) the United Kingdom D) Chile E) Indonesia Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 42) In recent years, as growth has slowed in both domestic and emerging markets, many companies have shifted their sites to nations with some of the world's poorest consumers, the socalled ________. A) MENA countries B) BRICS nations C) bottom of the economic pyramid D) industrialized economies E) privatized economies Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

43) Which of these countries is more likely to be experiencing rapid economic growth and industrialization? A) the United Kingdom B) Nigeria C) Japan D) Brazil E) France Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 44) Which of these classifications describes a country that is a major importer and exporter of manufactured goods and services. A) industrial B) subsistence C) financial D) political E) emerging Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 45) BRICS countries are examples of ________ economies. A) raw material exporting B) industrializing or emerging C) subsistence D) industrial E) totalitarian Answer: B AACSB: Application of knowledge Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

46) Which of the following characterizes emerging economies? A) Industrialization typically creates a new rich class and a growing middle class, both demanding new types of imported goods. B) They trade goods among themselves and also export them to other types of economies for raw materials and semifinished goods. C) Most African countries fall into this category. D) They consume most of their output and barter the rest for simple goods and services. E) These countries are the best markets for large equipment, tools and supplies, and trucks. Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 47) The BRICS countries are ________. A) Bolivia, the Republic of Haiti, Israel, and Chile B) Britain, the Republic of the Marshall Islands, Ireland, and the Commonwealth of Australia C) Brazil, Russia, India, China, and South Africa D) Burundi, Rwanda, Ivory Coast, and Congo E) Belarus, Romania, Iceland, and Czech Republic Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 48) Industrializing economies are also known as ________ economies. A) emerging B) raw material exporting C) totalitarian D) subsistence E) capitalist Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

49) India needs more imports of raw materials such as textiles, steel, and heavy machinery and fewer imports of finished textiles, paper products, and automobiles. In the context of industrial structures, India is most likely a(n) ________ economy. A) subsistence B) totalitarian C) raw material exporting D) agrarian E) industrializing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Challenging 50) ________ are major importers and exporters of manufactured goods and services A) Raw material exporting economies B) Subsistent economies C) Industrializing economies D) Industrial economies E) Emerging economies Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 51) Which of the following is an example of an industrial economy? A) Japan B) China C) Vietnam D) India E) North Korea Answer: A AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

52) Countries with ________ economies consist mostly of households with very low family incomes. A) industrial B) industrializing C) raw material exporting D) emerging E) subsistence Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 53) The United States and Norway are examples of ________ economies. A) subsistence B) industrializing C) emerging D) industrial E) raw material exporting Answer: D AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 54) Which of the following is an economic factor that a company should consider before deciding to enter into a new country? A) industrial structure B) natural resources C) cultural and social norms D) political stability E) climate Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

55) Income distribution is the second economic factor. While much of Africa consists of countries with subsistence economies, companies are increasingly targeting ________ consumers in subsistence and emerging economies. A) upper-class B) "bottom of the economic pyramid" C) middle-income D) low-income E) middle-income and low-income Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 56) Foreign businesses in India appear to receive unusually close scrutiny and must meet special regulations, aimed at protecting local businesses. This includes nontariff trade barriers. This reflects that a country's ________ should be carefully considered before doing business in that country. A) political-legal environment B) industrial structure C) cultural norms D) natural resources E) income distribution Answer: A AACSB: Application of knowledge Skill: Synthesis Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 57) A company should consider political and legal factors such as monetary regulations, political stability, the country's attitudes toward international buying, and ________ when determining whether to enter a specific country. A) size of population B) government bureaucracy C) natural resources D) income distribution E) cultural norms Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Challenging

58) Which of the following is a political and legal factor that a company should consider before deciding to enter into a new country? A) monetary and trade regulations B) transportation structure C) population size and growth D) industrial infrastructure E) business norms and approaches Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 59) Sellers might accept a(n) ________, one whose removal from the country is restricted by the buyer's government, if they can buy other goods in that country that they need themselves or can sell elsewhere for a needed currency. A) blocked currency B) countervailing duty C) custom duty D) anti-dumping duty E) tariff Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 60) Which of the following involves the direct exchange of goods and services? A) cash transaction B) compensation C) buyback D) blocked currency E) barter Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy

61) Demographic characteristics, geographic characteristics, economic factors, sociocultural factors, and political and legal factors all help a company ________. A) determine a market's potential B) determine a country's degree of globalization C) evaluate its marketing objectives D) evaluate its value delivery network E) determine a country's income distribution Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 62) If Azerbaijan imported wheat from Romania in exchange for crude oil, and Vietnam exchanged rice for Philippine fertilizer and coconuts then these scenarios would be examples of ________. A) cash transaction B) compensation C) buyback D) blocked currency E) barter Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 63) Which of the following is a demographic factor that a company should consider before deciding to enter into a new country? A) transportation structure B) natural resources C) political stability D) languages E) education Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

64) Nike inadvertently offended Chinese officials when it ran an ad featuring LeBron James crushing a number of revered Chinese figures in a kung fu-themed television ad. As a result, Nike had to release a formal apology. This is an example of the impact of ________ on marketing strategy. A) culture B) political stability C) level of industrialization D) income distribution E) monetary regulations Answer: A AACSB: Analytical thinking; Diverse and multicultural work environments Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 65) Which of the following is a sociocultural factor that a company should consider before deciding to enter into a new country? A) political stability B) population density (urban vs. rural) C) education D) income distribution E) consumer lifestyles, beliefs, and values Answer: E AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 66) Which of the following would a defender of globalization most likely use as an example to argue that concerns of Americanization are overblown and that globalization is indeed a two-way street? A) the view of McDonald's being a domestic brand in China B) the growing popularity of coffee in China since the introduction of Starbucks C) the growing number of IKEA furniture stores in the United States D) the initial failure of Disneyland Paris E) the anti-globalization protests aimed at KFC Answer: C AACSB: Analytical thinking; Diverse and multicultural work environments Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Challenging

67) Which of the following is a geographic factor that a company should consider before deciding to enter into a new country? A) climate B) population size C) GDP size and growth D) government bureaucracy E) business norms and approaches Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 68) Which of the following is the LEAST critical decision a company should make before going abroad? A) Can the company learn to understand buyer behavior of consumers in other countries? B) Can the company offer competitively attractive products? C) Can the company adapt to other countries' business cultures? D) How many foreign nationals should the company employ? E) Do the company's managers have the necessary international experience? Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 69) A company should make several important decisions before deciding which markets to enter. These include all of the following EXCEPT ________. A) how many countries it wants to enter B) what volume of foreign sales it wants C) how many different products it wants to offer in a specific country D) what its international marketing objectives are E) what its international marketing policies are Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Challenging

70) Market size, market growth, the cost of doing business, competitive advantage, and risk level all help a company ________. A) determine a market's potential B) determine a country's degree of globalization C) evaluate its marketing objectives D) evaluate its value delivery network E) determine a country's income distribution Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate Refer to the scenario below to answer the following question(s). Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be more profitable after all. Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting. With the assistance of a domestic export department, Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there." 71) What did Selman & Saks hope to gain by entering the French market? A) access to new consumer markets B) access to less expensive labor C) access to less expensive materials D) access to foreign investment incentives E) the ability to offset domestic economic cycles Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

72) Foreign firms are expanding aggressively into new international markets, and home markets are no longer as rich in opportunity. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 73) Tariffs are limits on the amount of foreign imports that a country will accept in certain product categories. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 74) Nontariff trade barriers include restrictive product standards. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 75) The World Trade Organization established the General Agreement on Tariffs and Trade, which replaced the WTO in 1995 and now oversees the original WTO provisions. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 76) The EU acts as an umbrella organization that oversees GATT and mediates global disputes. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

77) Widespread adoption of the euro has decreased much of the currency risk associated with doing business in Europe, making member countries with previously weak currencies more attractive markets. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 78) In 1994, the North American Free Trade Agreement (NAFTA) established a free trade zone among the United States and Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 79) CPTPP has eliminated all trade barriers and investment restrictions among the United States, Canada, and Mexico. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 80) BRICS is the economic community of South American nations. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Easy 81) In a subsistence economy, fast growth in manufacturing results in rapid overall economic growth. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

82) Industrial economies are major importers of manufactured goods, services, and investment funds. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 83) The exchange of U.S. wheat for Russian vodka would be an example of barter. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 84) As more developed markets stagnate and become increasingly competitive, many marketers are now targeting growth opportunities in emerging markets. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 85) Poor or emerging economies are unattractive markets for many kinds of goods. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 86) The "bottom of the economic pyramid" has become an attractive target for many companies. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

87) Business norms vary from country to country. A company will likely be more successful in expanding internationally if it understands cultural traditions, preferences, and behaviors in the target countries. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 88) Briefly explain why the European Union could be considered a threat to U.S. marketers that want to do business in Europe. Answer: As a result of increased unification, European companies will grow bigger and more competitive. A concern is that lower barriers within Europe will lead to higher barriers between Europe and non-EU countries. Some observers envision a "Fortress Europe" that heaps favors on firms from European Union countries but hinders outsiders. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 89) Companies that go global confront several major risks. Describe three of these risks. Answer: Companies that go global may face unstable governments and currencies abroad, as well as restrictive government policies and regulations designed to protect domestic companies or to protect the culture. High trade barriers are another issue. Also, some companies have to deal with corruption abroad, as some officials award business contracts to the highest briber. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 90) Compare and contrast a tariff and a quota. Answer: A tariff is a tax levied by a foreign government against certain imported products. A quota is a set of limits on the amount of goods the importing country will accept in certain product categories. Both tariffs and quotas can be used to protect domestic firms from foreign competition. AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

91) Briefly explain why economic communities are formed. Answer: Economic communities are groups of nations organized to work toward common goals in the regulation of international trade; economic communities benefit member nations by reducing barriers to the free flow of products, services, finances, and labor across borders. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 92) Why is it important for companies to understand cultural differences and nuances before entering a foreign country's market? Give two examples of cultural differences that would be important for a company to know. Answer: Student answers will vary. Before planning a marketing program in a new country, a seller should understand the ways that consumers in that country think about and use the product. To succeed abroad, a company must adapt to local cultural values and traditions rather than trying to force its own. Examples could include the following: French men use twice as many grooming aids as French women, many Chinese women put on makeup before going to bed while American women take off makeup at that time, and a clock is an inappropriate gift in China. AACSB: Reflective thinking Skill: Application Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Challenging 93) Describe the factors that might draw a company into the international arena. Answer: Any of several factors might draw a company into the international arena. Global competitors might attack the company's home market by offering better products or lower prices. The company might want to counterattack these competitors in their home markets to tie up their resources. The company's customers might be expanding abroad and require international servicing. Or the company's home market might be stagnant or shrinking, and foreign markets may present additional sales and profit opportunities. AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

94) Explain why some critics worry that American multinationals are causing countries around the globe to lose their individual identities. Give an example of the "Americanizing" of the world's cultures. Answer: Student answers will vary. Some critics are concerned because people in diverse countries and cultures throughout the world now regularly use American products and services that have changed their daily habits. For example, most people in China did not drink coffee until Starbucks entered the market, and teens in India watch MTV and ask their parents for clothing and other symbols of American culture. AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 95) Many studies reveal that instead of "Americanizing" the world's cultures, the cultural exchange between America and other countries goes two ways. Give two examples of how America has been influenced culturally by foreign products or services. Answer: Student answers will vary but could include the following: Teens in Turkey stream American movies, connect with others globally through Facebook and Twitter, and ask their parents for more Westernized clothes and other symbols of American pop culture and values. Grandmothers in small European villas no longer spend each morning visiting local meat, bread, and produce markets to gather the ingredients for dinner. Instead, they now shop at Walmart. Women in Saudi Arabia see American films, question their societal roles, and shop at any of the country's growing number of Victoria's Secret boutiques. AACSB: Application of knowledge Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 96) Name two of the five indicators of market potential and provide an example of each. Answer: Student answers will vary. The five indicators of market potential include demographic characteristics (education, population size and growth, population age composition), geographic characteristics (climate, country size, population density), economic factors (GDP size and growth, income distribution, natural resources, industrial infrastructure), sociocultural factors (consumer lifestyles and beliefs, languages, business norms, cultural and social norms), and political and legal factors (national priorities, political stability, government bureaucracy, monetary and trade regulations). AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate

97) Describe the purpose, roles, and achievements of GATT and the WTO. Answer: The General Agreement on Tariffs and Trade (GATT), established in 1947 and modified in 1994, was designed to promote world trade by reducing tariffs and other international trade barriers. Member nations, currently numbering 164, have met repeatedly to reassess trade barriers and set new rules for international trade. The most recently completed GATT negotiations promote long-term global trade growth, reducing the world's remaining merchandise tariffs, extending GATT to cover trade in agriculture and a wide range of services, and toughening international protection of copyrights, patents, trademarks, and other intellectual property. The most recent round of GATT negotiations resulted in the creation of the World Trade Organization (WTO) to enforce GATT rules. In general, the WTO acts as an umbrella organization, overseeing GATT, mediating global disputes, and imposing trade sanctions. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 98) Describe the political-legal factors that a company should consider before deciding to conduct business in a foreign country. Answer: A company should consider the country's attitudes toward international buying, as well as the country's bureaucracy, political stability, and monetary regulations. Some countries are receptive to foreign firms, offering incentives and favorable operating conditions, while other countries set restrictions and limitations designed to discourage foreign business. A country that is politically unstable, with frequent and sometimes violent changes in leadership, offers a less certain environment for business and financial matters. A country may also have monetary regulations, such as a blocked currency whose removal from the country is restricted, that a company should evaluate. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 99) Compare the three different types of industrial structures. Answer: The three different types of industrial structures are subsistence economies, emerging economies, and industrial economies. In a subsistence economy, most people work in simple agriculture and consume most of their output. Most people barter for simple goods and services. An emerging economy is industrializing, with fast growth coming from manufacturing. These countries typically have a new upper class and a small but growing middle class. Industrial economies are the major importers and exporters of manufactured goods and services. They have varied economic activities and large middle classes. AACSB: Analytical thinking Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 31 Copyright © 2021 Pearson Education, Inc.

100) Discuss the international marketing objectives and policies a company should try to define before going abroad. Answer: Before going abroad, the company should try to define its international marketing objectives and policies. It should decide what volume of foreign sales it wants. Most companies start small when they go abroad. The company also needs to choose in how many countries it wants to market. Companies must be careful not to spread themselves too thin or to expand beyond their capabilities by operating in too many countries too soon. Next, the company needs to decide on the types of countries to enter. A country's attractiveness depends on the product, geographical factors, income and population, political climate, and other factors. The seller may prefer certain country groups or parts of the world. AACSB: Written and oral communication Skill: Concept Objective: LO 19.1: Discuss how the international trade system and the economic, politicallegal, and cultural environments affect a company's international marketing decisions. Difficulty: Moderate 101) PharmaCom serves millions of customers across several Asian countries after joining forces with foreign investors to create local businesses in which they share possession and control. PharmaCom now has several joint pharmaceutical manufacturing sites in China, Japan, and Korea. This is an example of ________. A) licensing B) exporting C) joint ownership D) contract manufacturing E) management contracting Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 102) The simplest way to enter a foreign market is through ________. A) joint venturing B) direct investment C) exporting D) joint ownership E) contract manufacturing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy

103) When entering a foreign market, companies typically start with ________, working through independent intermediaries to sell products produced in the home country. A) direct exporting B) embargo C) product adaptation D) indirect exporting E) licensing Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 104) Which of the following characterizes indirect exporting? A) It requires more investment than joint venturing. B) It requires an overseas marketing organization or network. C) It involves less risk and investment than other entry methods. D) The potential returns are greater than direct exporting. E) It involves joining with foreign companies to produce or market products or services. Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 105) In the case of ________ exporting, sellers handle their own exports. A) direct B) licensed C) indirect D) countervailing E) multilateral Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy

106) Think Ink is a growing company that sells a variety of inks for home and business printers. Management at Think Ink has decided to open a sales branch overseas to handle sales and distribution abroad. Think Ink is engaging in ________. A) indirect exporting B) direct exporting C) licensing D) joint ownership E) management contracting Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Challenging 107) Working with foreign companies to produce or market products or services is known as ________. A) direct export B) global distribution C) direct investment D) joint venturing E) indirect export Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 108) Which of the following is a type of joint venturing? A) trade embargo B) licensing C) direct investment D) direct exporting E) indirect exporting Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy

109) Which of the following is NOT a type of joint venturing? A) joint ownership B) management contracting C) direct export D) licensing E) contract manufacturing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 110) Through ________, an organization in the foreign market buys the right to use a company's manufacturing process, trademark, patent, trade secret, or other item of value. A) indirect exporting B) licensing C) contract manufacturing D) management contracting E) joint ownership Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 111) In Japan, Budweiser beer flows from Kirin breweries, and Moringa Milk Company produces Sunkist fruit juice. These are examples of ________. A) contract manufacturing B) management contracting C) licensing D) joint venturing E) direct investment Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate

112) An advantage of licensing to a company is that it ________, while the licensee gains production expertise or a well-known product without having to start from scratch. A) does not maintain the same level of control over product quality B) must send employees to work with the licensee in training, selling, and distribution C) might create a competitor D) gains entry to a foreign market at little risk E) requires significant financial investment Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 113) Sears opened up department stores in Mexico and Spain, where it found qualified local manufacturers to produce many of the products it sells. This type of joint venture is known as ________. A) joint ownership B) licensing C) management contracting D) indirect exporting E) contract manufacturing Answer: E AACSB: Application of knowledge Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 114) Which of the following is true of contract manufacturing? A) It provides a chance to start faster but with more risks. B) It involves decreased control over the manufacturing process. C) It leads to an increase in potential profits on manufacturing. D) It is the simplest way to enter a foreign market. E) It involves entering a foreign market by exporting surplus products. Answer: B AACSB: Application of knowledge Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate

115) Potential advantages of contract manufacturing include all of the following EXCEPT ________. A) reducing plant investment B) starting faster with less risk C) providing a later opportunity to form a partnership with the local manufacturer D) decreasing tariff costs while meeting the country's local manufacturing regulations E) loss of potential profits on manufacturing Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 116) Hilton helps others run their hotels by providing the management know-how. This type of joint venture is known as ________. A) contract manufacturing B) licensing C) management contracting D) joint ownership E) direct investment Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 117) Campbell Soup recently joined forces with Hong Kong-based Swire Pacific to form an entity called Campbell Swire to better distribute the company's soups in China. This is an example of ________. A) licensing B) contract manufacturing C) management contracting D) joint ownership E) indirect exporting Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate

118) ________ ventures consist of one company joining forces with foreign investors to create a local business in which they share ownership and control. A) Joint ownership B) Licensing C) Contract manufacturing D) Management contracting E) Indirect exporting Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 119) ________ involves entering a foreign market by developing foreign-based assembly or manufacturing facilities. A) Indirect exporting B) Direct investment C) Joint venturing D) Contract manufacturing E) Direct exporting Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 120) Lower costs in the form of cheaper labor or raw materials, foreign government investment incentives, freight savings, and the opportunity to improve the company image are the factors that would most likely lead a company to enter a foreign market using the market entry strategy of ________. A) direct exporting B) licensing C) management contracting D) indirect exporting E) direct investment Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 121) The simplest way to enter a foreign market is through direct investment. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 38 Copyright © 2021 Pearson Education, Inc.

122) Sellers must understand the ways that consumers in different countries think about and use certain products before planning a marketing program. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 123) Joint venturing involves the least change in the company's product lines, organization, investments, or mission. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 124) When Tool Trade, an American company, uses qualified Brazilian manufacturers to produce many of the products it sells to retailers in South America, Tool Trade is using contract manufacturing. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 125) The biggest involvement in a foreign market comes through exporting–entering foreign markets by selling goods produced in the company's home country. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Easy 126) How is joint venturing more risky and complex than merely exporting? Answer: With a joint venture, a company joins forces with another foreign company to produce or market products or services. With a joint venture, the company is not merely producing domestically and then shipping abroad; the company is working hand-in-hand with a foreign company toward a common purpose. AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate

127) What are two possible risks involved with licensing? Answer: The firm has less control over the licensee than it would over its own production facilities. Furthermore, if the licensee is very successful, the firm has given up these profits, and if and when the contract ends, it may find it has created a competitor. AACSB: Analytical thinking Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 128) What are two possible reasons that management contracting is prevalent in the hotel industry? Answer: Student answers will vary. A hotel, such as Hilton, that has an international reputation and is highly regarded would bring brand value as well as experience to a foreign firm. For the company supplying the contracting, the investment is minimized because the foreign company supplies the capital. AACSB: Analytical thinking Skill: Application Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate 129) Discuss direct and indirect exporting. What are the advantages of exporting? Answer: Companies typically start with indirect exporting, working through independent international marketing intermediaries. Indirect exporting involves less investment because the firm does not require an overseas marketing organization or network. It also involves less risk. International marketing intermediaries bring know-how and services to the relationship, so the seller normally makes fewer mistakes. Sellers may eventually move into direct exporting, whereby they handle their own exports. The investment and risk are somewhat greater in this strategy, but so is the potential return. One advantage of exporting is that the company produces all of its goods in its home country, so it does not need to invest in manufacturing facilities abroad. Also, exporting involves the least change in the company's product lines, organization, investments, and mission. With exporting, a company can make a minimal commitment to a foreign market and take minimal risks. AACSB: Application of knowledge Skill: Concept Objective: LO 19.2: Describe three key approaches to entering international markets. Difficulty: Moderate

130) ________ involves essentially using the same marketing strategy approaches and marketing mix worldwide A) Adapted global marketing B) Ambush marketing C) Standardized global marketing D) Export marketing E) Niche marketing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy 131) ________ means adjusting the marketing strategy and mix elements to each international target market. A) Standardized global marketing B) Ambush marketing C) Adapted global marketing D) Mass marketing E) Whole channel viewing Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy 132) ________ means marketing a product in a foreign market without making any changes to the product. A) Product adaptation B) Product invention C) Communication adaptation D) Straight product extension E) Product augmentation Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy

133) Heineken beer is sold successfully in the same form around the world. Which of the following product strategies is illustrated in this example? A) product adaptation B) straight product extension C) product invention D) product augmentation E) communication adaptation Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 134) Kraft has adapted its popular Oreo cookie to the unique tastes of consumers all around the world, whether it's mango-and-orange flavored Oreos in the Asia Pacific region, green tea Oreos in China, a chocolate and peanut variety in Indonesia, or banana and dulce de leche in Argentina. This is an example of ________. A) product invention B) straight product extension C) product adaptation D) product augmentation E) communication adaptation Answer: C AACSB: Application of knowledge Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 135) ________ involves changing the product to meet local requirements, conditions, or wants. A) Product invention B) Straight product extension C) Standard global marketing D) Communication adaptation E) Product adaptation Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

136) Vidal Sassoon shampoos contain different amounts of scent according to the country in which they are sold. This is an example of ________. A) straight product extension B) product invention C) product adaptation D) communication adaptation E) standardized global marketing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 137) ________ consists of creating something new to meet the needs of consumers in a given country. A) Communication adaptation B) Joint venturing C) Product invention D) Straight product extension E) Product adaptation Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 138) GigaTalk, a U.S. based computer manufacturing company, found that Japanese commuters had difficulty using standard laptops on crowded rush-hour trains because, while standing, commuters cannot use their laptops. So GigaTalk created a standing computer. This computer includes a touch screen and small keyboard that can be used while standing or on the move. This is an example of ________. A) straight product extension B) standardized global marketing C) product adaptation D) dual adaptation E) communication adaptation Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

139) Changing promotions to suit local markets is known as ________. A) straight product extension B) ambush marketing C) communication adaptation D) product adaptation E) standardized global marketing Answer: C AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy 140) Kellogg ads in the United States promote the taste and nutrition of Kellogg's cereals versus competitors' brands. In France, where consumers drink little milk and eat little for breakfast, Kellogg's ads must convince consumers that cereals are a tasty and healthful breakfast. Which marketing strategy is being followed by Kellogg? A) straight product extension B) product adaptation C) product invention D) communication adaptation E) straight communication extension Answer: D AACSB: Application of knowledge Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 141) In Chinese, the KFC slogan "finger-lickin' good" came out as "eat your fingers off." And Motorola's Hello-moto ringtone sounded like "Hello, Fatty" in India. Which of the following strategies can be used to avoid such mistakes? A) communication adaptation B) standardized global marketing C) straight product extension D) product adaptation E) communication extension Answer: A AACSB: Application of knowledge; Diverse and multicultural work environments Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

142) Advertising media must be adapted internationally. Which of the following is NOT true about the need for communication adaptation? A) Advertising time is limited in Europe. B) Mobile phone ads are widely accepted in Europe and Asia. C) Advertisers must buy advertising time far in advance. D) The same advertisement can be presented in all countries in Europe. E) Magazines are important in Italy, but not in Austria. Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Challenging 143) Assume that a Gucci handbag sells for $60 in Italy and $240 in the United States because Gucci must add the cost of transportation, tariffs, importer margin, wholesaler margin, and retailer margin to its factory price. This information indicates that Gucci faces a ________ problem. A) dumping B) tariff C) licensing D) product adaptation E) price escalation Answer: E AACSB: Reflective thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Challenging 144) Designing international channels that take into account the entire global supply chain and marketing channel, thus forging an effective global value delivery network, recognizes a company must have a ________. A) whole-channel view B) direct-distribution channel C) large-scale channel D) transportation network E) retail channel Answer: A AACSB: Diverse and multicultural work environments Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy

145) ________ are the first link between the seller and the final buyer. They move company products from points of production to the borders of countries within which they are sold. A) Channels between nations B) Channels within nations C) Retail channels D) Large-scale channels E) Value chain channels Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Easy Refer to the scenario below to answer the following question(s). Selman & Saks, a maker of men's and women's razors and electric hair trimmers, had little reason to become involved in the global arena. But after acquiring Wellman Enterprises, whose largest division engages in a licensing agreement with a German firm to produce women's hosiery, managers at Selman & Saks wondered whether a company-wide global focus would be more profitable after all. Managers at Selman & Saks studied Wellman's licensing agreement in great detail. Even after seeing the benefits Wellman achieved with the licensing agreement, managers decided that Selman & Saks would target the French market merely via exporting. With the assistance of a domestic export department, Selman & Saks razors and hair trimmers entered France. For six months, sales were mediocre. But after that, sales suffered. Opinions varied among numerous managers as to the cause of the failure. "Who knows the local market better than people who live there?" was a comment heard throughout Selman & Saks. "Maybe we needed an alliance with a French firm, or a licensing agreement, before racing to get there." 146) If Selman & Saks allowed a French company to produce and market razors and trimmers carrying the company's brand in exchange for a royalty, Selman & Saks would be using the market entry strategy of ________. A) exporting B) franchising C) licensing D) contract manufacturing E) joint ownership Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 46 Copyright © 2021 Pearson Education, Inc.

147) Selman & Saks offered the same razors and trimmers in France as in the United States. Selman & Saks is an example of a ________. A) product adaptation B) communication adaptation C) product invention D) straight product extension E) standardized global marketing plan Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 148) Dove body soaps are sold successfully in essentially the same form around the globe. This is an example of straight product extension. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 149) Oreos are less sweet or less bitter in certain countries. This is an example of straight product extension. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 150) A cell phone maker customized its cell phones for the Asian market by raising the ring volume so that phones could be heard on crowded streets. This is an example of product invention. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

151) If Audi develops a new low-priced model for entry-level consumers in Europe, it would be an example of straight product extension. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 152) The whole-channel view recognizes that to compete internationally a company must effectively design and manage a standardized global marketing plan. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 153) To overcome price escalation when selling to less-affluent consumers in developing countries, companies offer their same products at lower prices. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 154) The internet is making global price differences more obvious, forcing companies toward more standardized international pricing. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 155) What types of products would be successful with standardized global marketing? Answer: Products that require no change to the product itself or to the product's promotion would follow a standardized marketing mix. AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

156) Explain why a global company would need to make adjustments to a highly standardized promotion campaign for different markets. Answer: Some language and cultural differences make adjustments necessary, as a slogan might not translate well or a certain image or color may hold a vastly different meaning in a different culture. AACSB: Application of knowledge Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 157) Why is a company unlikely to set a uniform price all around the world? Answer: A uniform price would be too low in rich countries and too high in poor ones; the price would not reflect the costs of transportation, tariffs, wholesale margins, and retailer margins that will differ from country to country. AACSB: Application of knowledge Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate 158) Identify and describe the three product strategies a company entering a foreign market can use. Answer: A company can choose straight product extension, product adaptation, or product invention. Straight product extension means marketing a product in a foreign market without any change. This involves no additional product development costs, manufacturing changes, or new promotion. But it can be costly in the long run if products fail to satisfy foreign consumers. Product adaptation involves changing the product to meet local conditions or wants. Product invention consists of creating something new for a specific country market. AACSB: Application of knowledge; Written and oral communication Skill: Concept Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Moderate

159) Compare and contrast the advantages and disadvantages of standardized global marketing and adapted global marketing. Answer: Companies that use standardized global marketing use largely the same marketing strategy approaches and marketing mix worldwide. On the other hand, with adapted global marketing, the producer adjusts the marketing strategy and mix elements to each target market, bearing more costs but hoping for a larger market share and return. Some global marketers believe that technology is making the world a smaller place and that consumer needs around the world are becoming more similar. This paves the way for "global brands" and standardized global marketing. Global branding and standardization, in turn, result in greater brand power and reduced costs from economies of scale. On the other hand, the marketing concept holds that marketing programs will be more effective if tailored to the unique needs of each targeted customer group. Despite global convergence, consumers in different countries still have widely varied cultural backgrounds and still differ significantly in their needs and wants, spending power, product preferences, and shopping patterns. Standardized global marketing does not take these differences into account and may therefore be less effective, albeit less expensive. AACSB: Analytical thinking Skill: Application Objective: LO 19.3: Explain how companies adapt their marketing strategies and mixes for international markets. Difficulty: Challenging 160) A company can manage its international marketing in all of the following ways EXCEPT ________. A) becoming a global organization B) organizing an export department C) creating an international division D) advertising internationally E) shipping its goods internationally Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Easy 161) A firm often enters international marketing by simply shipping its goods out of the country. If its international sales expand, the company often organizes a(n) ________. A) indirect exporting venture B) joint ownership C) export department D) international division E) standardized global marketing strategy Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Easy 50 Copyright © 2021 Pearson Education, Inc.

162) World product groups, geographical organizations, and international subsidiaries are all options for organizing a(n)________. A) export department B) indirect exporting venture C) joint ownership D) international division E) standardized global marketing strategy Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate 163) When a company exports to one country, licenses to another, has a joint ownership venture in a third, and owns a subsidiary in a fourth, it likely will create a(n) ________ to handle its international activity. A) global organization B) international division C) world product group D) export department E) indirect exporting venture Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate 164) International divisions are organized in several ways. Their operating units can include all of the following EXCEPT ________. A) international subsidiaries B) world product groups C) corporate staff providing services to operating units D) geographical organizations E) departmental units Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate

165) In a(n) ________, executives are trained in worldwide operations, not just domestic or international operations. A) direct exporting company B) joint venture C) international division D) international subsidiary E) global organization Answer: E AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Easy 166) At Comfort Homes, a manufacturer of furniture and home accessories, the global operating units report directly to the chief executive instead of a head of an international division. The company recruits management from many countries and buys components and supplies where they cost the least. Comfort Homes is most accurately classified as a(n) ________. A) direct exporter B) geographical organization C) international subsidiary D) global organization E) world product group Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate 167) If a firm moves into joint ventures and direct investments, it will eventually need to create an export department. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate 168) International divisions can be organized as geographical organizations, world product groups, or international subsidiaries. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Easy

169) Global organizations don't think of themselves as national marketers that sell internationally, but as global marketers. Answer: TRUE AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Easy 170) Identify the three major ways a company can manage its international marketing. Answer: The company must develop an effective organization for international marketing. Most firms start with an export department and graduate to an international division. A few become global organizations, with worldwide marketing planned and managed by the top officers of the company. Global organizations view the entire world as a single, borderless market. AACSB: Written and oral communication Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate 171) What might drive a company to create international divisions or subsidiaries? Discuss the three ways these divisions can be organized. Answer: Many companies get involved in several international markets and ventures, such as exporting to one country, licensing to another, having a joint ownership venture in a third, and owning a subsidiary in a fourth. With increased international activity, the company will need to move from simply having an export department to having more specialized international divisions or subsidiaries. International divisions are organized in a variety of ways. An international division's corporate staff consists of marketing, manufacturing, research, finance, planning, and personnel specialists. It plans for and provides services to various operating units, which can be organized in one of three ways. They can be geographical organizations, with country managers who are responsible for salespeople, sales branches, distributors, and licensees in their respective countries. Or the operating units can be world product groups, each responsible for worldwide sales of different product groups. Finally, operating units can be international subsidiaries, each responsible for its own sales and profits. AACSB: Analytical thinking Skill: Concept Objective: LO 19.4: Identify the three major forms of international marketing organization. Difficulty: Moderate

Principles of Marketing, 18e (Kotler) Chapter 20 Sustainable Marketing: Social Responsibility and Ethics 1) The marketing concept is a philosophy of ________. A) sales and profit maximization B) customer value and mutual gain C) serving short-term interests over long-term gains D) serving the company's interests over the consumers' E) promotion value and company gain Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Moderate 2) The marketing concept focuses on meeting the company's short-term sales, ________, and profit needs, though that doesn't always serve the future best interests of either customers or the business. A) market share B) customer value C) growth D) competitive advantages E) manufacturing productivity Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Moderate 3) ________ calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. A) Sustainable marketing B) Ambush marketing C) Consumerism D) Environmentalism E) Strategic planning Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy

4) The ________ concept is specifically focused on future company needs. A) societal marketing B) strategic planning C) direct marketing D) telemarketing E) consumer business Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 5) According to the text, McDonald's was criticized for all of the following EXCEPT ________. A) the sizable environmental footprint of its global operations B) wasteful packaging and solid waste creation C) inefficient energy use in its stores D) marketing tasty fast foods E) contributing to the obesity epidemic Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 6) The ________ concept is specifically focused on the future welfare of consumers. A) strategic planning B) direct marketing C) societal marketing D) consumer business E) telemarketing Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy

7) The ________ concept calls for socially and environmentally responsible actions that meet both the immediate and future needs of customers and the company. A) societal marketing B) business-to-business C) direct marketing D) strategic planning E) sustainable marketing Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 8) McDonald's "Commitments to Offer Improved Nutrition Choices" strategy has added healthy food options to its menu, phased out traditional artery-clogging trans fats, launched a major multifaceted education campaign, and addressed environmental issues. This strategy best exemplifies the ________ concept. A) sustainable marketing B) direct marketing C) mercantilism D) strategic planning E) consumer business Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Moderate 9) The BeautyShop, a manufacturer of skin care products, uses only plant-based materials for its cosmetic products. It supports several environmental protection movements and movements defending human rights. This accounts for the company's efforts to build good will and corporate social responsibility. This exemplifies the ________ concept. A) consumer business B) strategic planning C) consumerism D) direct marketing E) sustainable marketing Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Moderate

10) Sustainable marketing includes all of the following EXCEPT ________. A) going beyond caring for the needs and wants of today's customers B) focusing on profits and return to shareholders and employees above all else C) having concern for tomorrow's customers in ensuring the success of the business, employees, and the broader world D) pursuing a mission of shared value and triple bottom line: people, planet, profits E) provides context for companies to engage customers and build profitable relationships with them by creating value for customers in order to capture value from customers in return, now and in the future. Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 11) Societal marketing calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 12) Sustainable marketing requires a smooth-functioning marketing system in which consumers, companies, public policy makers, and others work together to ensure socially and environmentally responsible marketing actions. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Easy 13) Briefly define the four marketing concepts. Answer: Sustainable marketing calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. The marketing concept recognizes that organizations thrive from day to day by determining the current needs and wants of target group customers and fulfilling those needs and wants more effectively and efficiently than the competition. The societal marketing concept considers the future welfare of consumers while the strategic planning concept considers future company needs. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.1: Define sustainable marketing and discuss its importance. Difficulty: Moderate

14) Consumer advocates, government agencies, and other critics have accused marketing of harming consumers through ________. A) technological obsolescence B) sales promotion tactics C) viral marketing D) anti-trust laws E) planned obsolescence Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 15) ________ includes practices such as misrepresenting the product's features or performance or luring customers to the store for a bargain that is out of stock. A) Deceptive packaging B) Deceptive promotion C) Deceptive pricing D) Deceptive distribution E) Deceptive branding Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 16) Critics point to which of the following factors when they accuse marketing of harming consumers through high prices? A) quotas B) nontrade tariffs C) excessive markups D) government taxes E) changes in currency values Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

17) When criticized about the value of intermediaries, marketers and resellers respond that intermediaries ________. A) are too few in number B) are inefficient C) provide only necessary services that must be provided by someone D) actually underprice their services E) are too competitive and difficult to work with Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 18) A longstanding charge against intermediaries is that they mark up prices beyond the ________. A) value of their services B) delivery charges C) going market price D) promotion cost E) resale value Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 19) Critics charge that promotion adds only ________ to a product. A) functional value B) psychological value C) moderate value D) strategic value E) qualitative value Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

20) Marketers respond to charges of high advertising and promotion costs that unnecessarily increase retail prices, by arguing that advertising and promotion ________. A) support consumerism B) standardize the product C) add quality to the product D) provide information about a product E) help increase competition in the market Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 21) Marketers respond to criticism about the value of promotion by showing that ________. A) brand name products cost more B) functional value also matters C) development costs should be covered in the price of the product D) consumers want and are willing to pay more for products that provide psychological benefits E) the services provided are demanded by customers Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging 22) A major step in regulating "unfair or deceptive business acts and practices" was the enactment of the ________ in 1938. A) Robinson-Patman Act B) Wheeler-Lea Act C) Interstate Commerce Commissions D) Taft-Hartley Act E) Stamp Act Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

23) Dan's Drugstore sells medicine to consumers for $20 that only costs $2 to produce. Critics accuse Dan's of ________. A) deceptive promotion B) deceptive packaging C) false advertising D) excessive markups E) redlining Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 24) Cybertron Inc. was accused of deceptive pricing. Which of the following explains what most likely occurred? A) Cybertron refused to advertise sale prices in the local paper. B) Cybertron sold only defective products at the advertised price. C) Cybertron advertised a large price reduction from a phony high retail list price. D) Cybertron misrepresented a product's features in an ad. E) Cybertron used misleading labeling. Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging 25) Deceptive practices fall into three groups: pricing, promotion, and ________. A) product B) placement C) packaging D) publicity E) service Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

26) Deceptive promotion includes practices such as misrepresenting the product's ________. A) price or packaging B) features or performance C) size or quantity D) wholesale or retail price E) packaged contents Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 27) Hart's Department Store was accused of deceptive promotion. Which of the following best explains what might have happened? A) Hart's refused to advertise sale prices in the local paper. B) Hart's advertised a bargain price on an out-of-stock product. C) Hart's advertised a large price reduction from a phony high retail list price. D) Hart's used misleading labeling on certain products. E) Hart's exaggerated its package contents through subtle design. Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging 28) A federal agency ordered a fast food chain to stop running ads with false claims that its fried chicken is compatible with certain weight loss programs. Which agency had the authority to issue this order? A) the Federal Trade Commission B) the Food and Drug Administration C) the Consumer Product Safety Commission D) the Environmental Protection Agency E) the American Marketing Association Answer: A AACSB: Reflective thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging

29) In advertising, puffery is a term that refers to ________. A) a straightforward promotional message B) innocent exaggeration for effect C) hidden advertising messages to consumers D) subliminal appeals to consumers E) value-added promotions Answer: B AACSB: Written and oral communication Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 30) Which of the following advertising situations would LEAST likely be considered "puffery"? A) Mr. Clean coming to a housewife's rescue B) instantly toned thighs and legs as a result of using the Thigh Master for only 15 minutes C) children immediately growing into attractive adults as a result of drinking milk D) a retired couple drinking a vitamin and protein shake and then going bicycling E) a sleepy mom who wakes up to a gray day, drinks a cup of coffee, and then looks out her window to see golden sunshine, beautiful flowers blooming, songbirds singing, and a rainbow on the horizon Answer: D AACSB: Reflective thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging 31) ________ involves persuading people to buy goods they had no thought of buying. A) Sustainable marketing B) High-pressure selling C) Strategic marketing D) Redlining E) Reverse redlining Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

32) When critics argue that insurance, real estate, and used cars are sold, not bought, they are accusing marketers of ________. A) deceptive promotions B) excessive markups C) high-pressure selling D) shoddy products E) excessive materialism Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 33) In which of the following scenarios would high-pressure selling tactics typically be most advantageous for marketers? A) selling situations with long-time customers B) selling situations with new customers with a high likelihood of becoming repeat customers C) selling situations with a company's most highly valued customers D) selling situations with one-time customers E) selling situations with dissatisfied customers Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 34) The success of the Tom Dennis Ford dealership has been built largely on return customers and word-of-mouth recommendations. The majority of sales are made to customers who previously purchased a vehicle at the dealership or who know someone who had a positive experience of purchasing a vehicle there. The sales force at the Tom Dennis Ford dealership most likely knows that using high-pressure selling is ineffective if the dealership wants to ________. A) achieve short-term gains B) move last year's models C) obey local and federal law D) build long-term customer relationships E) maintain a database of local customers Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

35) Recently, a class-action lawsuit was brought against BigBurger, a fast food chain, charging that its food has contributed to the nationwide obesity epidemic. The suit was eventually dismissed, but many critics continue to point out the health dangers of typical "fast food" menu items. These critics are most likely concerned that the fast food industry has provided ________. A) high-pressure selling B) deceptive promotions C) deceptive pricing D) deceptive packaging E) harmful products Answer: E AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Challenging 36) Most companies are unlikely to intentionally provide shoddy, harmful, or unsafe products because ________. A) they won't face liability lawsuits and expensive awards for damages B) they want to develop long-term relationships with their customers C) they know that customers will shrug off errors for a while D) they are confident they can appease consumer groups and regulators E) it costs more to provide quality products Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 37) Critics have accused some producers of practicing ________ by using materials and components that will break, wear, rust, or rot sooner than they should. A) high-pressure selling B) short-term planning C) planned obsolescence D) nonfunctional warranty E) deceptive promotion Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

38) ________ refers to the practice of continually changing consumer concepts of acceptable styles to encourage more and earlier buying. A) Perceived obsolescence B) Technological obsolescence C) Bait-and-switch advertising D) Functional obsolescence E) High-pressure selling Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 39) Critics say marketing benefits ________ more than ________. A) consumers; manufacturers B) industry; consumers C) stores; manufacturers D) exporters; importers E) independent sellers; chain stores Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 40) Trendy Teens manufactures fashionable clothing and accessories for the tween and teen female markets. New merchandise with a very different look is rolled out each season and heavily promoted as the "must-have" style in a variety of media. This information indicates that Trendy Teens is most likely to be criticized for ________. A) deceptive promotions B) shoddy products C) high-pressure selling D) poor service to disadvantaged consumers E) perceived obsolescence Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

41) How do marketers respond to charges of planned obsolescence? A) Consumers dislike constant style changes. B) It promotes the all-American value of consumerism. C) The product will eventually wear out anyway. D) Most consumers are materialistic. E) Consumers get tired of old goods. Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 42) The following quote best describes ________. "The marvels of modern technology include the development of a soda can which, when discarded, will last forever, and a car, which when properly cared for, will rust out in two or three years." A) planned obsolescence B) product failure C) deceptive promotions D) deceptive packaging E) excessive markups Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 43) Critics claim that companies in the ________ industries introduce planned streams of new products that make older models obsolete, a form of planned obsolescence that harms consumers. A) car and truck B) housing and construction C) food and beverage D) consumer electronics E) financial and entertainment Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

44) When major chain retailers avoid placing stores in disadvantaged neighborhoods, they are likely to be accused of the discriminatory practice of ________. A) embargo B) licensing C) redlining D) puffery E) scrambled merchandising Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 45) Marketers are most effective when they appeal to ________ rather than when they ________. A) short-term needs; focus on long-term needs B) teenagers; target older people C) existing wants; attempt to create new ones D) emotions; appeal to actual needs E) the mass market; appeal to market segments Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 46) The high failure rate of new products shows that companies are not able to ________. A) control demand B) advertise enough C) understand international laws D) find outlets E) identify consumer needs Answer: A AACSB: Analytical thinking Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

47) The nation's poor areas have 30 percent fewer supermarkets than do affluent areas. As a result, many low-income consumers find themselves ________. A) buying due to high-pressure methods B) in food deserts C) redlining D) being influenced by heavy advertising and promotion E) influenced by predatory pricing tactics Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 48) The overselling of private goods results in ________ as they require more public services that may not be available. A) cultural pollution B) misdirected funding C) social costs D) materialism E) opportunity expenses Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 49) Which of the following is one of the social costs associated with cars? A) traffic congestion B) water pollution C) new highways D) new automobile models E) cleaner roads Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

50) TerraPass is a company that offers consumers the opportunity to buy carbon offsets, which are contributions to projects that combat global warming by reducing carbon emissions. TerraPass offers contribution packages for driving, flying, and home energy use. Through TerraPass, consumers can pay some of the ________ costs of their private goods and services. A) promotional B) safety C) health D) distribution E) social Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 51) Which of the following leads to cultural pollution? A) commercial noise B) air pollution C) language barriers D) inflation E) redlining Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 52) Which of the following is an example of cultural pollution? A) gasoline shortages B) congestion tolls C) street signs in cities D) overpasses in suburban areas E) billboards marring beautiful scenery Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

53) In response to charges of ________, marketers point out that because of ads, many television and radio sites are free to users and also keep down the cost of magazines and newspapers. A) deceptive pricing B) creating false wants C) creating materialism D) high promotion costs E) cultural pollution Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 54) Karl Harris, a marketing critic, is concerned about the pervasiveness of marketing. He points out that advertising messages are everywhere, from Web sites and e-mails to unwanted direct mail and catalogs to television commercials and product tie-ins to billboards and store signage. Karl is concerned about ________. A) high packaging costs B) cultural pollution C) deceptive practices D) false wants and too much materialism E) the balance between private goods and social goods Answer: B AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 55) Critics claim that firms are harmed and competition is reduced when companies expand by ________. A) developing their own new products B) diversifying into new industries C) acquiring competitors D) developing new markets E) initiating joint ventures Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy

56) Critics argue that large marketing companies use patents and heavy promotion spending to ________. A) acquire smaller companies B) bear the social costs of their operations C) bar new companies from entering an industry D) achieve economies of scale E) offset cultural pollution Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 57) How are acquisitions good for society? A) Acquisitions eliminate barriers to entry. B) Acquisitions require little government oversight. C) An acquiring company may improve the efficiency of an acquired company. D) An industry may become less competitive after an acquisition. E) The acquisition may result in higher costs, leading to higher prices for consumers. Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 58) Critics charge that a company's marketing practices can harm other companies and reduce competition. One of the problems critics identified is ________. A) pollution B) barriers to entry C) unfair discrimination D) bait-and-switch advertising E) fair packaging and labeling Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

59) Critics who assert that the marketing system promotes too much interest in material possessions are most likely concerned that the result of successful marketing will be ________. A) high-pressure selling tactics B) unsustainable overconsumption C) perceived obsolescence D) planned obsolescence E) deceptive pricing Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 60) Setting prices below cost, threatening to cut off business with suppliers, and discouraging the purchase of a competitor's products are all examples of ________. A) oligopolistic competition B) social costs C) predatory competition D) acquisitions E) cultural pollution Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Bryant and Anne are the owners of the Good Green Grocer, a small but successful chain of organic food stores. The organic food sold by Good Green Grocer is of good quality. Also, it is tasty and has long-term health benefits. Bryant and Anne's business has expanded as more and more consumers are interested in eating organic foods. What started as one shop in Vermont has expanded to 15 stores in Vermont, New Hampshire, Massachusetts, and Maine. Much to their delight, Bryant and Ann have found that many people are willing to pay a bit more for food that is organically grown. Sunday ads for the Good Green Grocer run in area newspapers, with special promotional prices offered for a list of the "Top Ten Take Homes" each week. Regular customers of the Good Green Grocer know that the promotional items often run out of stock by mid-week, so the store typically sees its heaviest traffic on Sunday and Monday. 61) Some customers believe that the Good Green Grocer purposefully runs weekly promotional prices on items that are low in stock, leaving most customers who come to the store hoping for lower prices but unable to buy the out-of-stock sale items. If this were true, then the Good Green Grocer would most likely be accused of ________. A) using puffery B) deceptive pricing C) deceptive promotions D) deceptive packaging E) green washing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 62) The major criticisms of marketing include harming consumers through high prices, deceptive practices, high-pressure selling, shoddy or unsafe products, planned obsolescence, and poor service to disadvantaged countries. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 63) Consumers can never buy functional versions of highly promoted branded products at lower prices. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 21 Copyright © 2021 Pearson Education, Inc.

64) Brand name products give buyers assurances of consistent quality. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 65) Though marketers may make long-term gains with high-pressure selling tactics, this approach can do serious damage to short-term customer relationships. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 66) Perceived obsolescence involves continually changing consumer concepts of acceptable styles to encourage more and earlier buying. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 67) The American marketing system never has been accused of poorly serving disadvantaged consumers. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 68) Critics of marketing view consumer interest in material things as a natural state of mind rather than as a matter of false wants created by marketing. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 69) Marketers are the least effective when they appeal to existing wants rather than when they attempt to create new ones. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 22 Copyright © 2021 Pearson Education, Inc.

70) Acquisitions of competitors can be an effective way to gain economies of scale that can lead to lower costs and, subsequently, lower prices. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 71) How do resellers answer criticism of the high costs of distribution? Answer: Resellers argue that intermediaries provide services that customers want, such as more convenience, more service, longer store hours, and return privileges. Also, retail competition is so intense that profit margins are actually quite low. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 72) Explain how marketers and marketing critics disagree about the psychological value of advertising. Answer: Marketing critics believe that the psychological value advertising may add to a product is not worth the higher retail prices that must be charged to finance the advertising that creates the psychological value. Marketers believe that consumers want and are willing to pay more for the psychological benefits–such as feeling wealthy, attractive, or special–created by advertising. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 73) Explain why most marketers avoid deceptive practices. Answer: Deceptive practices make consumers believe they are buying something more than what they are actually getting; when consumers do not get what they expect, they will switch to more reliable products. Deceptive practices prohibit marketers from building value and trust with their customers, both keys to profitable customer relationships. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 74) Why might salespeople use high-pressure selling tactics that do not lead to long-term relationships with customers? Answer: Salespeople might be more motivated by short-term gains, particularly when sales contests promise big rewards to those who sell most. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 23 Copyright © 2021 Pearson Education, Inc.

75) What are the various risks a company takes when producing shoddy, harmful, or unsafe products? Answer: Companies that market shoddy, harmful, or unsafe products risk damaging their reputation, conflicts with consumer groups and regulators, liability lawsuits, and loss of customers. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Easy 76) Explain the practice of redlining and why it is criticized. Answer: Redlining is a type of economic discrimination in which major chain retailers avoid placing stores in disadvantaged neighborhoods. Because of redlining, the urban poor do not have as many shopping options and must buy their goods in smaller stores that carry inferior products and charge higher prices. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 77) What is meant by cultural pollution? Give two examples. Answer: Student answers will vary. Cultural pollution is the constant assault on our senses by advertising. Examples will vary but may include commercials that interrupt serious programs, pages of ads that obscure magazine articles, spam that fills e-mailboxes, and billboards that mar beautiful scenery. AACSB: Analytical thinking Skill: Application Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 78) Why are critics concerned about companies acquiring competitors? Answer: Critics are concerned that when companies acquire competitors, such acquisitions harm the acquired firms and reduce competition within an industry; also, there is concern that acquisitions discourage new competitors from entering the market. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

79) Discuss the ways in which critics accuse marketing of harming the consumer. Answer: Marketers are charged with causing prices to be higher than they need to be. They are sometimes accused of deceptive practices that lead consumers to believe they will get more value than they actually do. Sometimes salespeople pressure consumers to purchase products they neither want nor can afford. Others are accused of selling shoddy or unsafe products. Others are blamed for developing products that become obsolete before they actually need replacement. Last, marketers are accused of delivering poor service to disadvantaged consumers or not making products available to them. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 80) Describe and compare the three different categories of deceptive marketing practices. Answer: Deceptive pricing includes practices such as falsely advertising factory or wholesale prices or advertising a large price reduction from a phony high retail list price. Deceptive promotion includes practices such as misrepresenting the product's features or performance or luring customers to the store for a bargain that is out of stock. Deceptive packaging includes exaggerating package contents through subtle design, using misleading labeling, or describing size in misleading terms. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 81) How do marketers respond to critics' accusations of planned obsolescence? Answer: Marketers respond that consumers like style changes; they get tired of the old goods and want a new look in fashion. Or they want the latest high-tech innovations, even if older models still work. No one has to buy the new product, and if too few people like it, it will simply fail. Finally, most companies do not design their products to break down earlier; they do not want to lose customers to other brands. Instead, they seek constant improvement to ensure that products will consistently meet or exceed customer expectations. Much of the so-called planned obsolescence is the working of the competitive and technological forces in a free society–forces that lead to ever-improving goods and services. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

82) Identify the social costs of increased automobile ownership, and then describe two options for restoring the balance between private and public goods. Give specific examples. Answer: For cars, some of the social costs include traffic congestion, gasoline shortages, and air pollution. One option for restoring the balance between private and public goods is to make producers bear the full social costs of their operations. The government could require automobile manufacturers to build cars with more efficient engines and better pollution control systems. Automakers would then raise their prices to cover extra costs. A second option is to make consumers pay the social costs. For example, many cities around the world are starting to charge "congestion tolls" in an effort to reduce traffic congestion; drivers entering high-traffic areas are required to pay a fee. Similarly, the U.S. government has recently proposed a bill that would create rush-hour fees in congested urban areas across the country. If the costs of driving increase enough, the government hopes, consumers will travel at nonpeak times or find alternative transportation modes. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate 83) How do marketers respond to charges of "commercial noise"? Answer: Marketers answer the charges of "commercial noise" with these arguments. First, they hope that their ads reach primarily the target audience. But because of mass-communication channels, some ads are bound to reach people who have no interest in the product and are therefore bored or annoyed. People who buy magazines addressed to their interests–such as Vogue or Fortune–rarely complain about the ads because the magazines advertise products of interest. Second, ads make much of television and radio free to users and keep down the costs of magazines and newspapers. Many people think commercials are a small price to pay for these benefits. Consumers find many television commercials entertaining and seek them out–for example, ad viewership during the Super Bowl usually equals game viewership. Finally, today's consumers have alternatives. For example, they can zip or zap TV commercials on recorded programs or avoid them altogether on many paid cable or satellite channels. Thus, to hold consumer attention, advertisers are making their ads more entertaining and informative. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.2: Identify the major social criticisms of marketing. Difficulty: Moderate

84) The two major citizen movements to keep businesses in line are environmentalism and ________. A) consumerism B) protectionism C) liberalism D) capitalism E) materialism Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 85) ________ is an organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers. A) Environmentalism B) Protectionism C) Liberalism D) Consumerism E) Capitalism Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 86) Which of the following is a traditional sellers' right? A) the right to create a monopoly in the market B) the right to acquire competitors to prevent competition C) the right to promote any product to any audience D) the right to add additional taxes if necessary E) the right to introduce any product in any size and style Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate

87) Which of the following is a traditional buyers' right? A) the right to resell the product B) the right not to buy a product that is offered for sale C) the right not to pay any taxes included in the final price D) the right to exchange the product if it is of the wrong size or style E) the right to demand a discount on the product Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 88) Natural & Safe sells a concentrated, biodegradable bathroom cleaner in a recycled container. This is best described as a component of the company's internal ________ program. A) green marketing B) consumerism C) sustainability D) environmental E) sociological Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 89) Consumer advocates call for additional consumer rights, including ________. A) the right to be protected from unwanted marketing messages B) the right to be well informed about important product aspects C) the right not to pay any taxes included in the final price D) the right to resell the product E) the right to exchange the product if it is of the wrong size or style Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate

90) The proposed right to ________ includes the right to know the unit pricing, the ingredients in a product, the nutritional value of foods, product freshness, and the true benefits of a product. A) charge any price for the product B) be protected against questionable products C) influence products and marketing practices in ways that will improve "quality of life" D) expect the product to perform as claimed E) be well informed about a product Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 91) Proposals related to ________ include controlling the ingredients that go into certain products and packaging as well as reducing the level of advertising "noise." A) the right to be informed B) consumer protection C) preserving the world for future consumption D) the right to charge any price for the product E) quality of life Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 92) Proposals related to ________ include strengthening consumer rights in cases of business fraud and financial protections, requiring greater product safety, ensuring information privacy, and giving more power to government agencies. A) preserving the world for future consumption B) consumer protection C) truth in lending D) quality of life E) truth in advertising Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate

93) Proposals related to ________ include promoting the use of sustainable ingredients, recycling and reducing solid wastes, and managing energy consumption. A) the right to be informed B) consumer protection C) preserving the world for future consumption D) quality of life E) the right to charge any price for the product Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 94) ________ is an organized movement of concerned citizens, businesses, and government agencies to protect and improve people's current and future living conditions. A) Consumerism B) Environmentalism C) Protectionism D) Socialism E) Aestheticism Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 95) Environmentalists assert that the marketing system's goal should be to maximize ________. A) sales and profits B) consumer satisfaction C) life quality D) consumer choice E) consumption Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy

96) Environmentalism is concerned with damage to the ecosystem caused by global warming, toxic and solid waste, chemically treated food, resource depletion, and ________ along with other issues. A) wage inequity B) nutritional information C) technological changes impacting individuals D) the availability of fresh water E) truth in lending laws Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 97) ________ is a management approach that involves developing strategies that both preserve the environment and produce profits for the company. A) Aesthetic consumerism B) Profitable environmentalism C) Environmental sustainability D) Sustainable ecology E) Corporate marketing Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 98) At the most basic level of environmental sustainability, a company can practice ________. A) pollution prevention B) product stewardship C) beyond greening activities D) new clean technology E) sustainability vision Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy

99) Companies emphasizing pollution prevention have responded with ________. A) superficial green marketing activities B) internal beyond greening programs C) external green marketing activities D) external beyond greening activities E) internal green marketing programs Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 100) Nike produces shoes out of "environmentally preferred materials," recycles old sneakers, and educates young people about conserving, reusing, and recycling. Nike is practicing ________. A) new clean technology B) product stewardship C) pollution prevention D) sustainability vision E) design for environment Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 101) Packaging decisions that may be called into question under the law include ________. A) minimum pricing B) pollution C) product quality and safety D) exclusive territorial distributorship E) product warranty Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy

102) Which of the following is part of an internal green marketing program? A) design for environment practices B) cradle-to-cradle practices C) biodegradable packaging D) product stewardship E) new clean technology Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 103) Minimizing pollution from production and all environmental impacts throughout the full product life cycle is called ________. A) aesthetic consumerism B) sustainability vision C) product stewardship D) beyond greening E) pollution prevention Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 104) Electrola Inc. is currently designing a new product line with the goal of making each product easy to recover, reuse, or recycle. Electrola Inc. hopes to recover many of these products when they reach the end of their life cycle and reuse their components in new products. Electrola Inc. is in the ________ stage of environmental sustainability. A) pollution prevention B) new clean technology C) product stewardship D) beyond greening E) sustainability vision Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate

105) ________ involves thinking ahead in the design stage to create products that are easier to reuse, recycle, or recover. A) DSS B) Design for environment (DFE) C) Sustainability vision D) New clean technology E) Pollution prevention Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 106) Xerox Corporation's Equipment Remanufacture and Parts Reuse Program converts end-oflife office equipment into new products and parts. This not only helps sustain the environment, but it is also highly profitable for the company. This practice is an example of a ________. A) pollution prevention practice B) green marketing practice C) beyond greening practice D) cradle-to-cradle practice E) new environmental technology Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 107) Companies that plan to implement ________ develop innovative sets of environmental skills and capabilities. A) product stewardship B) a sustainability vision C) pollution prevention D) a new clean technology E) a DFE practice Answer: D AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Challenging

108) ________ serves as a guide to the future by showing how the company's products and services, processes, and policies must evolve and what new technologies must be developed to get there. A) New clean technology B) A cradle-to-cradle practice C) Pollution prevention D) Product stewardship E) A sustainability vision Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 109) A sustainability vision addresses not just challenges in the natural environment but also ________. A) challenges in the manufacturing and product development departments B) prods the firm's employees to identify personal ways to impact the environment C) strategic opportunities for using environmental strategies to create sustainable value for the firm D) in the economic and cultural environments E) enhances the company's reputation with consumers Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 110) Only citizens are part of the consumerism movement. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 111) On a deeper level, our wants and values are influenced not only by marketers but also by family, peer groups, religion, cultural background, and education. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 35 Copyright © 2021 Pearson Education, Inc.

112) One of the traditional buyer's rights is the right not to buy a product that is offered for sale. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 113) Whereas environmentalists consider whether the marketing system is efficiently serving consumer wants, consumerists are concerned with marketing's effects on the environment and with the environmental costs of serving consumer needs and wants. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 114) The management strategy of environmental sustainability focuses on developing ways to sustain the environment while also producing profits. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 115) Product stewardship involves minimizing not only pollution from production and product design but also all environmental impacts throughout the full product life cycle, and accepting increased costs. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 116) For a company to be both environmentally sustainable and profitable is very difficult as the environmental goals and standards have a negative impact on a company's expenses and profitability. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 36 Copyright © 2021 Pearson Education, Inc.

117) Compare the consumerism and environmentalism movements. Answer: Consumerism is an organized social movement intended to strengthen the rights and power of consumers relative to sellers. Environmentalism is an organized movement of concerned citizens, businesses, and government agencies designed to protect and improve people's current and future living environment. Citizens and government agencies are involved in both movements. AACSB: Analytical thinking Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 118) What are the various issues that are covered under environmentalism? Answer: Environmentalism is concerned with damage to the ecosystem caused by global warming, resource depletion, toxic and solid wastes, litter, the availability of fresh water, and other problems. Other issues include the loss of recreational areas and the increase in health problems caused by bad air, polluted water, and chemically treated food. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Easy 119) What is involved in pollution prevention? Give at least one example. Answer: Student answers will vary. Pollution prevention means more than pollution control, or the cleaning up of waste after it has been created. It involves the elimination or minimization of waste before it is created. Biodegradable packaging, better pollution controls, and more energyefficient operations are all examples of pollution prevention. AACSB: Analytical thinking Skill: Application Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 120) List the consumer rights called for by consumer advocates. Answer: Consumer advocates call for the following consumer rights: 1. The right to be well informed about important aspects of the product 2. The right to be protected against questionable products and marketing practices 3. The right to influence products and marketing practices in ways that will improve "quality of life" 4. The right to consume now in a way that will preserve the world for future generations of consumers AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 37 Copyright © 2021 Pearson Education, Inc.

121) What are the two levels in the sustainability portfolio that deal with "beyond greening" activities that tend to pay off in the longer term? Answer: Today's greening activities focus on improving what companies already do to protect the environment. The beyond greening activities look to the future. First, internally, companies can plan for new clean technology. Many organizations that have made good sustainability headway are still limited by existing technologies. To create fully sustainable strategies, they will need to develop innovative new technologies. Companies can also develop a sustainability vision, which serves as a guide to the future. It shows how the company's products and services, processes, and policies must evolve and what new technologies must be developed to get there. This vision of sustainability provides a framework for pollution control, product stewardship, and new environmental technology for the company and others to follow. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.3: Define consumerism and environmentalism and explain how they affect marketing strategies. Difficulty: Moderate 122) Enlightened marketing calls for building long-run consumer engagement, loyalty, and relationships by continually improving the benefits consumers receive from the firm's market offering. This is related to ________, one of the five sustainable marketing principles. A) consumer-oriented marketing B) innovative marketing C) sense-of-mission marketing D) societal marketing E) customer value marketing Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 123) Under the ________ concept, a company's marketing should support the best long-run performance of the marketing system. A) corporate social responsibility B) direct marketing C) sustainable marketing D) free enterprise system E) strategic planning Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy

124) A company's marketing should be guided by the sustainable marketing principle of ________ marketing. A) direct B) viral C) buzz D) value E) innovative Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 125) Jacob Engineering Group views and organizes its marketing activities from the viewpoint of its buyers. Management works hard to sense, serve, and satisfy the needs of its well-defined group of buyers. What does Jacob Engineering Group practice? A) consumer-oriented marketing B) societal marketing C) sense-of-mission marketing D) customer-value marketing E) innovative marketing Answer: A AACSB: Reflective thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 126) When a company makes improvements in a product's quality, features, or convenience, it is practicing ________. A) consumer-oriented marketing B) sense-of-mission marketing C) innovative marketing D) customer-value marketing E) societal marketing Answer: D Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy

127) The principle of ________ requires that the company continuously seek real product and marketing improvements. A) consumer-oriented marketing B) innovative marketing C) customer-value marketing D) sense-of-mission customer-value marketing E) ambush marketing Answer: B Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 128) The Wii system, developed by Nintendo, with its intuitive motion-sensitive controller and interactive games, appealed not only to teen boys but also to their sisters, moms, dads, and even grandparents. This is a successful example of ________ marketing. A) consumer-oriented B) innovative C) customer-value D) societal E) sense-of-mission Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Challenging 129) Some firms define their purpose in narrow product terms. Others that define their purpose in broad social terms follow ________. A) societal marketing B) sense-of-mission marketing C) consumer-oriented marketing D) customer-value marketing E) consumerism Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy

130) One look at a Pedigree ad or a visit to the Pedigree.com Web site confirms that the people behind the Pedigree Brand really do believe the "We're for dogs" mission. Associates are even encouraged to take their dogs to work. To further fulfill the "We're for dogs" brand promise, the company created the Pedigree Foundation, which along with the Pedigree Adoption Drive campaign, has raised millions of dollars for helping "shelter dogs" find good homes. This information indicates that Pedigree is practicing ________. A) consumerism B) environmental sustainability C) a sustainability vision D) innovative marketing E) sense-of-mission marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 131) Dove wanted to do more than just sell its beauty care products. The company was on a quest to discover "real beauty" and help women be happy just the way they are. As a result, the Dove Campaign for Real Beauty was successfully launched in 2004. Which of the following types of marketing did Dove use? A) sense-of-mission marketing B) consumer-oriented marketing C) customer-value marketing D) innovative marketing E) social marketing Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 132) While companies have learned that "doing good" and "doing well" go hand in hand, companies have also learned that to do good, they must first do well in terms of ________. A) successful advertising campaigns B) hiring of strong employees C) designing of attractive products D) profitable business operations E) ethical, as well as legal, decision making Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

133) When a company makes marketing decisions by considering consumers' wants and interests, the company's requirements, and society's long-run interests, it is practicing ________ marketing. A) value B) societal C) sense-of-mission D) consumer-oriented E) customer-value Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 134) Deficient products are products ________. A) that have neither immediate appeal nor long-run benefits B) that give high immediate satisfaction but only hurt consumers in the long run C) that have low appeal but may benefit consumers in the long run D) that are either unsafe or inferior E) in the decline stage of the product life cycle Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 135) Dale's Drugstore sells cough medicine that is sour and ineffective. This is an example of a ________ product. A) societal B) pleasing C) salutary D) deficient E) desirable Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

136) A company that makes products that give high immediate satisfaction but may hurt consumers in the long run makes ________ products. A) deficient B) pleasing C) salutary D) desirable E) threatening Answer: B AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 137) Examples of pleasing products include ________. A) cigarettes and junk food B) dental services and medications C) seat belts and air bags D) fruits and vegetables E) bicycle helmets and elbow pads Answer: A AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 138) A company that makes products that have low immediate appeal but may benefit consumers in the long run are ________ products. A) deficient B) desirable C) pleasing D) salutary E) profitable Answer: D AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy

139) Which of the following is an example of a salutary product? A) whitening toothpaste B) tasty and nutritious snacks C) life insurance D) fast food E) cigarettes Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 140) ________ products give both high immediate satisfaction and high long-run benefits. A) Deficient B) Pleasing C) Desirable D) Salutary E) Threatening Answer: C AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 141) Which of the following is the best example of a desirable product? A) breakfast cereal B) cigarettes C) effective but foul-tasting medicine D) junk food E) dental insurance Answer: A AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

142) In societal marketing, the ideal goal for companies is to turn all of their products into ________ ones. A) salutary B) desirable C) pleasing D) durable E) serviceable Answer: B AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 143) Maytag's front-loading Neptune washer provides superior cleaning and energy efficiency. The Neptune washer is an example of a ________ product. A) deficient B) pleasing C) salutary D) desirable E) nondurable Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 144) The challenge for makers of which type of product is to add long-run benefits without reducing the product's desirable qualities? A) salutary product B) desirable product C) pleasing product D) durable product E) deficient product Answer: C AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

145) Bicycle helmets have low immediate appeal, but they tend to benefit consumers in the long run. This indicates that a bicycle helmet is an example of a(n) ________ product. A) salutary B) desirable C) pleasing D) durable E) aesthetic Answer: A AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 146) The challenge posed by a(n) ________ product is to add some pleasing qualities so that they will become more desirable in consumers' minds. A) deficient B) pleasing C) desirable D) innovative E) salutary Answer: E AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 147) Envirosax reusable shopping bags are stylish and affordable, and they eliminate the need for plastic store bags. Envirosax reusable shopping bags most likely fall in the category of ________ products. A) deficient B) pleasing C) mature D) desirable E) unpleasing Answer: D AACSB: Ethical understanding and reasoning Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

Refer to the scenario below to answer the following question(s). Bryant and Anne are the owners of the Good Green Grocer, a small but successful chain of organic food stores. The organic food sold by Good Green Grocer is of good quality. Also, it is tasty and has long-term health benefits. Bryant and Anne's business has expanded as more and more consumers are interested in eating organic foods. What started as one shop in Vermont has expanded to 15 stores in Vermont, New Hampshire, Massachusetts, and Maine. Much to their delight, Bryant and Ann have found that many people are willing to pay a bit more for food that is organically grown. Sunday ads for the Good Green Grocer run in area newspapers, with special promotional prices offered for a list of the "Top Ten Take Homes" each week. Regular customers of the Good Green Grocer know that the promotional items often run out of stock by mid-week, so the store typically sees its heaviest traffic on Sunday and Monday. 148) Good Green Grocer wants to keep its customers happy. Its marketing strategy should be designed with this goal. Which strategy focuses on satisfying the needs of Good Green Grocer's customers? A) societal marketing B) customer-value marketing C) sense-of-mission marketing D) innovative marketing E) consumer-oriented marketing Answer: E AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 149) Sustainable marketing consists of five principles: consumer-oriented marketing, customervalue marketing, innovative marketing, sense-of-mission marketing, and societal marketing. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 150) New World Food Supplements continuously seeks real product and marketing improvements for its line of vitamin and protein supplements. This information indicates that New World is involved in consumer-oriented marketing. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

151) Sunset Lawn Service puts most of its resources into value-building marketing investments. The management at Sunset is practicing customer-value marketing. Answer: TRUE AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 152) A company that makes marketing decisions by considering consumers' wants and long-run interests, the company's requirements, and society's long-run interest is said to be practicing consumer-oriented marketing. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 153) Sense-of-mission marketing means that the company should define its mission in broad social terms rather than narrow product terms. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 154) When a company views and organizes its marketing activities from only the consumer's point of view, it is practicing societal marketing. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 155) Societal problems are opportunities for alert businesses. Answer: TRUE AACSB: Ethical understanding and reasoning; Reflective thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Easy 156) A cigarette is an example of a salutary product. Answer: FALSE AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 48 Copyright © 2021 Pearson Education, Inc.

157) Xorbate Blue is a relatively new food supplement that provides both high immediate satisfaction and high long-run benefits, such as improved energy levels and muscle tone. Xorbate Blue is best classified as a pleasing product. Answer: FALSE AACSB: Analytical thinking Skill: Application Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 158) How is consumer-oriented marketing different from customer-value marketing? Answer: Consumer-oriented marketing means that the company should view and organize its marketing activities from the consumer's point of view; customer-value marketing takes that a step further, as the company puts most of its resources into customer-value-building marketing investments. AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 159) Explain how a firm benefits from using sense-of-mission marketing. Answer: Sense-of-mission marketing means that the company should define its mission in broad social terms rather than narrow product terms; when a company defines a social mission, employees feel better about their work and have a clearer sense of direction. AACSB: Analytical thinking Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 160) Describe the five sustainable marketing principles. Answer: Consumer-oriented marketing acts from the consumers' point of view. Innovative marketing seeks real product and marketing improvements. Customer-value marketing exists when a firm puts most of its resources into value-building investments. When a company defines its mission in broad social terms rather than narrow product terms, it is practicing sense-ofmission marketing. Finally, societal marketing exists when the company makes its decisions by considering its own, consumers', and society's long-run interests. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate

161) Compare and contrast the four types of products in the societal classification of products. Provide examples of each. Answer: Student answers will vary. Deficient products are at the bottom because they have neither immediate appeal nor long-run benefits. Desirable products are at the top because they give both high immediate satisfaction and high long-run benefits. In between are pleasing products and salutary products. Pleasing products give high immediate satisfaction but may hurt consumers in the long run. Salutary products have low appeal but may benefit consumers in the long run. Examples will vary to include some of the following: cigarettes, junk food, sour-tasting and ineffective medicine, seatbelts, and tasty and nutritious breakfast foods. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.4: Describe the principles of sustainable marketing. Difficulty: Moderate 162) Monica Carey is a conscientious marketing manager. Sometimes it is unclear what decisions to make when she and her staff are faced with moral dilemmas. To help them handle such situations, Monica and other managers should create broad guidelines that everyone in the organization must follow. Which of the following terms best describes these guidelines? A) corporate value statements B) company mission statement C) company vision statement D) corporate marketing ethics policies E) company financial statement Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Moderate 163) Which of the following is being followed as a guiding principle by a company that produces and heavily markets cigarettes, with many promotions aimed at young (although legal age) nonsmokers? A) the philosophy that companies should have a social conscience and be morally responsible for current and future populations B) the philosophy that companies can do in good conscience whatever the market and legal systems allow C) the philosophy of environmentalism D) the philosophy of consumer-oriented marketing E) the philosophy of consumerism Answer: B AACSB: Analytical thinking Skill: Application Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Moderate

164) Under the ________ concept, each manager must look beyond what is legal and develop standards based on personal integrity, corporate conscience, and long-run consumer welfare. A) sustainable marketing B) consumer marketing C) societal marketing D) strategic planning E) direct marketing Answer: C AACSB: Analytical thinking Skill: Application Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Challenging Refer to the scenario below to answer the following question(s). Bryant and Anne are the owners of the Good Green Grocer, a small but successful chain of organic food stores. The organic food sold by Good Green Grocer is of good quality. Also, it is tasty and has long-term health benefits. Bryant and Anne's business has expanded as more and more consumers are interested in eating organic foods. What started as one shop in Vermont has expanded to 15 stores in Vermont, New Hampshire, Massachusetts, and Maine. Much to their delight, Bryant and Ann have found that many people are willing to pay a bit more for food that is organically grown. Sunday ads for the Good Green Grocer run in area newspapers, with special promotional prices offered for a list of the "Top Ten Take Homes" each week. Regular customers of the Good Green Grocer know that the promotional items often run out of stock by mid-week, so the store typically sees its heaviest traffic on Sunday and Monday. 165) The organic food sold by Bryant and Anne is of good quality. Also, it is tasty and has longterm health benefits. This information indicates that the organic food sold by Bryant and Anne would fall into the category of ________ products. A) salutary B) mature C) deficient D) desirable E) pleasing Answer: D AACSB: Analytical thinking Skill: Application Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Easy

166) When a company chooses what principle to follow on issues of ethics and social responsibility, there are two common philosophies to use as guides: let the free market and legal system decide or let individual managers and companies choose. Answer: TRUE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Moderate 167) Written ethics codes and ethics programs ensure ethical behavior. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Easy 168) A company must lower its ethical standards to successfully conduct business in countries with low standards. Answer: FALSE AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Easy 169) How is the societal marketing concept related to marketing ethics? Answer: The societal marketing concept requires a company and its marketing managers to work out a philosophy of responsible and ethical behavior, looking beyond what is legal and allowed and developing standards based on personal integrity, corporate conscience, and longrun consumer welfare. AACSB: Analytical thinking Skill: Concept Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Moderate 170) Compare and contrast the two common principles that can be used to guide companies and marketing managers on issues of ethics and social responsibility. Answer: One principle states that such issues should be decided by the free market and legal system. A second, and more enlightened principle, puts responsibility not in the system but in the hands of individual companies and managers. Each firm and marketing manager must work out a philosophy of socially responsible and ethical behavior. Under the societal marketing concept, managers must look beyond what is legal and allowable and develop standards based on personal integrity, corporate conscience, and long-term consumer welfare. AACSB: Ethical understanding and reasoning Skill: Concept Objective: LO 20.5: Explain the role of ethics in marketing. Difficulty: Moderate 52 Copyright © 2021 Pearson Education, Inc.