TEST BANK for Marketing 20th Edition by William Pride and Ferrell by digitaldownload87

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Chap 01_20e Indicate whether the statement is true or false. 1. Changes in the marketing environment always hurt marketing efforts. a. True b. False 2. Relationship marketing focuses on satisfying customers to generate the most profit. a. True b. False 3. For an exchange to occur, at least one of the parties must be willing to give up his or her "something of value." a. True b. False 4. Marketing activities can occur even when an exchange doesn't take place. a. True b. False 5. The distribution variable in a marketing mix is directed toward making products available in the quantities desired to as many target market customers as possible and keeping the total inventory, transportation, and storage costs as low as possible. a. True b. False 6. It is a good idea to consider parents as part of the target market when marketing new children's lunchboxes that stay colder longer. a. True b. False 7. Marketing costs consume about one-quarter of a buyer's dollar. a. True b. False 8. Marketing consists primarily of selling and advertising. a. True b. False 9. Value = customer costs − customer benefits. a. True b. False 10. The marketing environment is a set of static, unchanging surroundings. a. True b. False

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Chap 01_20e 11. Achievement of the firm's overall goals is part of the marketing concept. a. True b. False 12. In marketing, a product can be a good or a service but not an idea. a. True b. False 13. The marketing concept stresses that a business organization can best achieve its goal by providing customer satisfaction through coordinated activities. a. True b. False 14. When assessing value, customers consider nonmonetary costs such as time and effort. a. True b. False 15. A target market is a specific group of customers on whom an organization focuses its marketing efforts. a. True b. False 16. The actual physical production of goods is a marketing activity. a. True b. False 17. For a business organization to remain healthy and to survive, it must sell products and make profits. a. True b. False 18. The marketing concept is a philosophy that a business organization should employ to satisfy customers' needs while achieving the overall goals of the organization. a. True b. False 19. Profit, even at the expense of customers' satisfaction, is the major thrust of the marketing concept. a. True b. False 20. The market concept developed out of a sequence of three eras: the production orientation, the marketing orientation, and the industrial orientation. a. True b. False 21. Marketing efforts do not involve the design and development of products. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 22. Price is seldom used as a competitive tool. a. True b. False 23. The marketing concept is a philanthropic philosophy aimed at helping customers at the expense of the business organization. a. True b. False 24. Customer benefits include time and effort. a. True b. False 25. Customer relationship management is the use of information about customers to create marketing strategies that develop and sustain desirable customer relationships. a. True b. False 26. During the market orientation, businesspeople realized that products, which by this time could be made relatively efficiently, would have to be promoted through much personal selling and advertising. a. True b. False 27. Marketing costs consume about one-half of a buyer's dollar. a. True b. False 28. Products can be goods, services, or ideas. a. True b. False 29. Customers are the focal point of all marketing activities. a. True b. False 30. The process people use to determine the value of a product is not highly scientific. a. True b. False 31. To satisfy customers' objectives as well as its own, a company must coordinate all its activities. a. True b. False 32. Organizations have to define their products as what they make or produce. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 33. The impact of environmental forces on value can be extensive as market changes can easily influence how stakeholders perceive certain products. a. True b. False 34. Knowing about marketing can help you evaluate the types of corrective measures needed to stop questionable marketing practices. a. True b. False 35. The ability to identify individual customers allows marketers to shift their focus from increasing their share of an individual customer’s purchases to targeting groups of similar customers. a. True b. False 36. The marketing mix consists of three major variables: product, price, and distribution. a. True b. False 37. The marketing concept directly affects marketing activities but should have negligible impact on other organizational activities. a. True b. False 38. To implement the marketing concept, an organization must first establish an information system to discover customers' real needs and then use the information to create products to satisfy those needs. a. True b. False 39. Promotion can help sustain interest in established products that have long been available. a. True b. False 40. There are four conditions that must be met before an exchange can take place. Once these conditions are met, an exchange will always take place. a. True b. False 41. At the most basic level, profits can be obtained through relationships by acquiring new customers, enhancing the profitability of existing customers, and extending the duration of customer relationships. a. True b. False

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Chap 01_20e 42. During the market orientation, businesspeople realized that if they could produce products efficiently, customers would buy them. a. True b. False 43. Services are provided by applying human and mechanical efforts to people or objects to provide intangible benefits to customer. a. True b. False 44. Basic and extended warranties can reduce risk, a major customer cost. a. True b. False 45. Customers are interested in a product's price because they are concerned about the value obtained in an exchange. a. True b. False 46. The marketing concept is a management philosophy, not a second definition of marketing. a. True b. False 47. The broadest and simplest definition of marketing states that it is the development and efficient distribution of products for consumer segments. a. True b. False 48. The market concept stresses that an organization can best achieve its objectives by being customer-oriented. a. True b. False 49. The outcomes of a marketer's decisions and actions may be affected by the variables in the marketing environment. a. True b. False 50. To reduce customer costs and thereby increase their sense of value, companies can increase product availability. a. True b. False

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Chap 01_20e 51. Payton is a salsa dancer who wants to become a professional. Every time she has a performance, she places a flyer in the local community center and encourages her friends to tell others about the performance. Payton is engaging in marketing activities. a. True b. False 52. The reason the marketing concept is named this way is that it pertains solely to marketing. a. True b. False 53. A market orientation requires the organization-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization-wide responsiveness to it. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 54. Organizations should define themselves not according to the products they produce but according to a. how profitable they are. b. the price of their stock. c. the abundance of their product selection. d. how they treat employees. e. how they satisfy customers. 55. Businesses that view sales as the major means of increasing profits are operating with a _____ orientation. a. production b. market c. disruptive d. sales e. green 56. The marketing concept a. is a definition of marketing to attract customers. b. focuses on selling and advertising to achieve organizational goals. c. focuses on production and selling to achieve organizational goals. d. is a strategy for achieving organizational goals by following management intuition. e. is a management philosophy that affects all organizational activities.

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Chap 01_20e 57. The marketing concept affects a. just the marketing department. b. all organizational activities. c. only marketing and finance. d. only production and marketing. e. few decisions in an organization. 58. The product variable of the marketing mix can include all of the following except a. creation of brand names. b. consumer perception of the product price. c. development of product packaging. d. warranty issues e. repair services. 59. Which of the following about marketing is true? a. Marketing knowledge enhances consumer awareness. b. Marketing is only used by for-profit and government organizations. c. Marketing is more likely to lead to a more just government. d. Marketing activities are declining due to new technology. e. The marketing profession is the highest-paying profession.

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Chap 01_20e Scenario 1.3 Use the following the answer the questions. A recent meeting of the Council of Logistics Management Professionals featured an executive from HP, which is known for its ability to customize computers to customers’ needs as well as the ability to provide quality products through its retail channel. The executive discussed the firm’s capabilities regarding the ability to produce products that are “built-to-order” and noted that recent customer insight showed customers were less willing to wait 7 to 10 days to receive their computer even though it was built to their specifications. As a result of this customer trend, HP began forging relationships with retailers such as Best Buy to provide a limited number of computer models in the retailers’ stores. In order to fulfill the orders to Best Buy, HP was required to make changes in its production and manufacturing such as holding more products in inventory and utilizing different modes of transportation. For example, HP was able to shift from a focus on air transportation to overthe-road trucking, which enabled it to cut costs in some areas. As HP shifted from a “build-to-order” manufacturer to a “make-to-stock” manufacturer, it also had to make investments in customer analytics to identify customer needs as well as collect insight regarding pricing. This customer insight was especially important to the retail partners like Best Buy, which requires its vendors to justify product stock decisions and provide proof that retail inventory will sell at the projected price points. HP’s ability to modify its business model by forging relationships with retailers such as Best Buy as well as customer insights has helped the company achieve its revenue and profitability goals. 60. Refer to Scenario 1.3. Which environmental factor is exemplified by the customer trend that consumers were no longer willing to wait 7 to 10 days for a “build-to-order” computer and led HP to modify its business model to become a “make-to-stock” manufacturer? a. Economic b. Competitive c. Legal d. Sociocultural e. Regulatory 61. A marketing manager for a small laptop manufacturer is analyzing the potential effects of political, legal, sociocultural, and economic forces on the firm's operations. The marketing manager is examining the ____ that influence(s) the firm's strategy. a. operating situation b. marketing environment c. surroundings d. economic conditions e. trends 62. To fulfill customer expectations about a seller’s future behavior, marketers must a. deliver on promises made. b. advertise and sell products. c. create, distribute, promote, and price products. d. maintain favorable relationships with stakeholders. e. tell the truth on social media.

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Chap 01_20e 63. The public is becoming more aware of how marketers' activities affect the welfare of consumers and society. As a result, more firms are working to a. raise prices in order to increase their profits so that they can contribute to philanthropic causes. b. reduce the quality of their products in order to save money and provide less expensive products to their consumers. c. reduce their profits by donating more time and money to improve social welfare and environmental conditions. d. enact laws requiring companies to work toward the welfare of customers and society. e. create a responsible approach to developing long-term relationships with customers and society. 64. You will give the keynote address at the annual meeting of the American Cereal Makers Association. You realize most of the attendees think marketing is just advertising. So, you decide to start your keynote address by defining what marketing is in order to set the proper context for your speech. You define marketing as: a. the process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers. b. the process of persuading or seeking to persuade a customer or organization to take a preferred course of action. c. the process of speaking or writing in support or defense of a firm’s products or services. d. the process or practice of calling public attention to a firm’s goods and services through communications in print media, social media or other forms of information distribution. e. the process of proving that a product or service offered by an organization meets or exceeds customers’ expectations. 65. H&M conducted marketing research to identify explanations for the sales declines its retail stores are experiencing across the United States. The research focused on understanding the shopping habits and desires of a key target market—the Millennial generation. The results indicate that Millennials are more interested in supporting organizations that stand for something—or support a cause or contribute to providing social justice. The information can assist H&M in reorganizing the company, developing new products and communicating with its target audiences to be more effective. Based on this information, which orientation best applies to H&M? a. Sales orientation b. Target market orientation c. Market orientation d. Production orientation e. Stakeholder orientation 66. The marketing concept focuses on a. achieving the goals of top executives. b. creating maximum visibility for the firm. c. maximizing sales in a way that helps to achieve organizational objectives. d. maximizing market share in a way that helps to achieve organizational objectives. e. satisfying customers' needs in a way that helps to achieve organizational objectives. Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 67. Which one of the following statements by a company president best reflects the marketing concept? a. We have organized our business to make certain that customers get what they want. b. We believe that the marketing department must organize to sell what we produce. c. We have organized an aggressive sales force in our company to promote our products. d. We try to produce only high-quality, technically efficient products. e. We try to encourage company growth. 68. You believe one of the most effective ways to remind your staff about key marketing concepts and objectives is to give them desk plaques with simple phrases. You want to create a phrase that reminds them that their primary focus should be creating customer value. Which of the following phrases best tells the story of what customer value is? a. “Customer Benefits = Customer Value – Customer Costs” b. “ Customer Value = Customer Benefits + Customer Costs” c. “ Customer Costs > Customer Benefits = Customer Value” d. “Customer Value = Customer Benefits – Customer Costs” e. “ Customer Value = Customer Benefits = Customer Costs” 69. Target's tagline "Expect More, Pay Less" emphasizes which marketing mix variable? a. Promotion b. Pricing c. Exchange d. Product e. Distribution 70. Higher prices can be used competitively to a. achieve higher market share. b. achieve greater profits. c. start a price war. d. establish a product’s premium image. e. convey value.

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Chap 01_20e Scenario 1.1 Use the following to answer the questions. Green Hills Cemetery in upstate New York offers a full-service funeral and burial that is non-toxic to the environment. All materials used in the burial are natural and will decompose with no negative impact. Green Hills' service is relatively new in the United States, but services of this type are common in Great Britain. A typical burial in Green Hills' cemetery includes a casket made from bamboo, wicker, paper, or other natural material. There are no headstones of stone or concrete that will detract from the landscape, but trees and plants as "markers" are allowed. The cost for a burial at Green Hills is approximately $3,000, compared to about $6,000 at most traditional cemeteries. Although business was slow at first, Green Hills is now experiencing an increase in the number of burials, due to referrals and a newly-developed website. The owners of Green Hills were previously in the cemetery business, and are active conservationist and wanted to make their business more sustainable. After conducting research and finding that there were natural burial sites in Great Britain, they wanted to provide an alternative to other environmentally-conscious Americans like themselves. 71. Refer to Scenario 1.1. A new website has helped Green Hills' pre-planned funeral business grow. This would come under which of the following marketing mix variables? a. Product b. Price c. Distribution d. Promotion e. Promotion and price 72. A market orientation is an organization-wide effort that includes all of the following activities except a. researching customers' needs. b. focusing just on the marketing department. c. generating marketing intelligence for use in the organization. d. being responsive to customers' ever-changing wants and needs. e. disseminating marketing intelligence across departments within the organization. 73. Which of the following is most likely to be an idea marketer? a. Car salesperson b. Airline pilot c. Attorney d. Abuse counselor e. Orthodontist 74. The marketing concept is a. a management philosophy. b. synonymous with exchange. c. a component of the marketing mix. d. a function of the marketing environment. e. focused solely on satisfying customer objectives.

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Chap 01_20e 75. The United Methodist Church has used advertising for many years, airing TV commercials that show children answering questions. The church is using marketing to promote its a. goods. b. services. c. experiences. d. production. e. ideas. 76. F or most firms, the costs of marketing activities consume approximately what portion of the consumer's dollar? a. One-half b. One-fifth c. One-fourth d. One-third e. One-sixth 77. Which of the following is NOT a condition for an exchange to occur? a. Two or more parties must participate, and each must possess something of value. b. The exchange must meet expectations. c. Each party must have confidence in the something of value held by the other. d. The exchange should provide a benefit or satisfaction to only the buyer. e. The exchange should provide a benefit or satisfaction to both parties. 78. Which of the following relates to activities used to inform and persuade or create a desired response? a. Promotion b. Pricing c. Distribution d. Research and development e. Product development 79. The forces of the marketing environment include a. political, legal and regulatory, sociocultural, technological, economic, and competitive. b. sociocultural, legal, regulatory, economic, pricing strategies, and competitive. c. legal, regulatory, political, sociocultural, pricing strategies, and technological. d. legal and regulatory, competitive and noncompetitive forces that affect most lifestyles. e. political, legal and regulatory, pricing strategies,fairly static components.

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Chap 01_20e Scenario 1.1 Use the following to answer the questions. Green Hills Cemetery in upstate New York offers a full-service funeral and burial that is non-toxic to the environment. All materials used in the burial are natural and will decompose with no negative impact. Green Hills' service is relatively new in the United States, but services of this type are common in Great Britain. A typical burial in Green Hills' cemetery includes a casket made from bamboo, wicker, paper, or other natural material. There are no headstones of stone or concrete that will detract from the landscape, but trees and plants as "markers" are allowed. The cost for a burial at Green Hills is approximately $3,000, compared to about $6,000 at most traditional cemeteries. Although business was slow at first, Green Hills is now experiencing an increase in the number of burials, due to referrals and a newly-developed website. The owners of Green Hills were previously in the cemetery business, and are active conservationist and wanted to make their business more sustainable. After conducting research and finding that there were natural burial sites in Great Britain, they wanted to provide an alternative to other environmentally-conscious Americans like themselves. 80. Refer to Scenario 1.1. Green Hills' competitors, the traditional cemeteries, focus on advertising and personal selling of their services. This indicates a(n) ____ orientation. a. environmental b. marketing c. production d. sales e. marketing concept 81. Changing the hours of operation for a service business involves the ____ component of the marketing mix. a. product b. price c. distribution d. promotion e. marketing concept 82. A target market a. involves a large number of customers. b. is a specific group of customers on whom an organization focuses its marketing efforts. c. already has several competitors vying for customers' business. d. is the same as a salesperson's prospective client list. e. is a customer group classified as people with similar demographic characteristics. 83. United Airlines introduced a new “basic economy” seat category to better compete with discount airlines like Southwest and Spirit. Which of the following aspects of the marketing mix is United likely altering? a. Price b. Promotion c. Distribution d. Product e. Target market Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 84. Marketing facilitates exchange relationships between buyers and sellers. What is marketing's intended outcome for this relationship? a. Profits for the seller b. A good bargain on the product for the buyer c. Reducing the seller's inventory d. One party having to compromise in the exchange e. Satisfaction for both the buyer and seller 85. Advances in technology, along with falling political and economic barriers and the universal desire for a higher standard of living, have made a. it harder to compete. b. implementing the marketing concept easier. c. marketing online challenging. d. marketing across national borders rare. e. marketing across national borders commonplace. 86. Which of the following can help sustain interest in a product that has been around for a long time? a. Product b. Price c. Promotion d. Distribution e. Marketing concept 87. Distribution, price, promotion, and product are all elements of a. marketing strategy. b. the marketing mix. c. a target market. d. a consumer good. e. a business strategy. 88. The successful marketer understands that the key to her success is the relationships her firm is able to develop with current customers and potential customers. Moreover, her goal is to achieve the full potential of each of these relationships for the benefit of the firm. This marketer clearly understands a. that the only way for the firm to increase profits is to constantly acquire new customers. b. that customers’ needs, desires and habits are homogeneous. c. that customer loyalty leads to increasing long-term profitability for the firm. d. that data is of limited use in helping the firm understand the needs of customers. e. that customer lifetime value includes only the value of what customers purchase from the firm.

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Chap 01_20e 89. Which of the following is true about the marketing environment? a. Competitive marketing environment forces are the hardest to understand. b. Changing marketing environment forces are always advantageous for marketers. c. The effects of marketing environment forces can be difficult to predict. d. Marketing environment forces usually do not impact one another. e. Good marketers are able to anticipate all marketing environment forces before they arise. 90. Ace Manufacturing Company is not attracting sufficient customers. It has long defined itself as being a maker of shelving products. To improve its sales and long-term viability, it should perhaps consider redefining itself as a. an employer of shelving makers. b. helping potential customers satisfy their needs with Ace shelving products. c. helping the environment with shelving products. d. housing the homeless with shelving products. e. selling shelving products. 91. A junior marketing executive at HealthyStart Cereals suggests increasing the package size and price of its bestselling brand without increasing the amount of cereal inside the box. Her superior warns that this might be a bad idea because HealthyStart's long-term survival, like most companies, depends on a. cost-cutting measures. b. continually selling to new customers and markets. c. creating and maintaining satisfying exchange relationships. d. high-volume, low-margin sales. e. increasing shelf space for their brands. 92. T-Mobile implemented a program of texting its current customers to find out what changes they would like to see in the services provided. The firm is exhibiting characteristics associated with which of the following orientations? a. Production b. Sales c. Market d. Social e. Development 93. Which of the following would NOT be a customer cost considered in the determination of product value? a. Product's purchase price b. Time spent purchasing the product c. Effort spent purchasing the product d. Benefits received in the exchange for the products e. Risk of purchasing the product

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Chap 01_20e 94. The marketing environment is best described as being a. composed of controllable variables. b. composed of variables independent of one another. c. an indirect influence on the performance of marketing activities. d. dynamic and changing. e. slow, with infrequent fluctuations. 95. In today's market environment, you might pay $16 for a vinyl LP record by your favorite musical artist. Approximately how much of that price goes to activities related to marketing (promotion, distribution, profit margins)? a. $10.25 b. $4.00 c. $5.10 d. $8.00 e. $12.75 96. Apple’s CEO Tim Cook has a public email address and encourages customers to contact him if they have problems that have not been resolved. Apple seems to embrace a ___________ orientation. a. value b. sales c. production d. stakeholder e. market 97. A New York-based brand and customer loyalty and engagement research consulting firm called Brand Keys conducts research annually to identify the top 100 brands with the highest levels of customer loyalty. Amazon, Google, Apple, and Netflix lead the pack and demonstrate that consumers are enjoying long-term engagement with these companies. The top companies' ability to generate high levels of customer loyalty demonstrates these firms are engaging in ________ marketing. a. relationship marketing b. competitive marketing c. production marketing d. sales-oriented marketing e. strategic marketing

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Chap 01_20e Scenario 1.2 Use the following to answer the questions. Stay and Play Hotel is a full-service pet salon and boarding kennel. Stay and Play has an interactive website where customers can directly book a grooming appointment, obedience class, or overnight accommodations for their dog or cat. Stay and Play has several unexpected services, such as a 600-square-foot swimming pool, complete with slide and dog-friendly graduated steps to help them exit the pool. Customers can also drop their dog or cat off each morning for pet day care. Stay and Play has a pick-up and delivery service, webcams in every kennel so that pet families can view their pets while away, and pet "furniture" so that the cats and dogs can lie on sofas just like at home. Stay and Play is also open 24 hours a day, 365 days each year so that customers can pick up their pet at any time. The cost for an overnight stay at Stay and Play averages $50, compared to competing kennels at about $30. The day care costs are $25 for either a dog or cat. The majority of Stay and Play' competitors don't offer the day care service, and require a two-day minimum for overnight stays. Informal discussions with customers led to the addition of pet day care and 24-hour hours of operation. Previously, Stay and Play was more interested in competing based on its prices. 98. Refer to Scenario 1.2. The fact that Stay and Play is open 24 hours each day is part of the _______ marketing mix variable while the swimming pool is part of the _______ variable. a. product; distribution b. price; product c. distribution; promotion d. distribution; product e. distribution; environment

99. Honda conducts extensive consumer research and discovered that Latinos are reportedly 15% more likely to

buy a Japanese auto brand, like Nissan, Honda, or Toyota, than any other group ethnic group. Honda is interested in the Latino market since it represents 20% to 30% of the brands’ overall consumers. Due to its extensive use of research and customer insight, Honda has been the top-selling brand for Latinos for over 10 years thanks to effective marketing, like its partnership with the “La Reina de la Cancion” singing competition and an advertising campaign on Spanish-language TV. Based on this information, which orientation best applies to Honda? a. Environmental orientation b. Target market orientation c. Sales orientation d. Production orientation e. Market orientation

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Chap 01_20e 100. The three basic forms that a product can take are a. markets, products, and images. b. goods, ideas, and intangibles. c. brands, services, and tangibles. d. services, ideas, and goods. e. ideas, services, and things. 101. Sara Lee introduced a new bread made with light whole wheat and packaged in smaller loaves as a response to the number of health-conscious customers who live alone. In this case, Sara Lee was most likely following the ________. a. selling concept b. production concept c. marketing concept d. customer concept e. retailing concept 102. Creating long-term relationships with customers is a key component to surviving and thriving in today’s competitive business landscape. One tactic many companies are deploying is the use of membership or loyalty programs where customers can accumulate points and receive discounts or free merchandise. For example, Best Western encourages customers to join their membership program and provide key contact information such as their e-mail, address, and phone number. Best Western offers benefits such as upgrades and free room nights based on the number of stays or points a customer has accumulated. This example demonstrates how Best Western is utilizing a. marketing mix deployment. b. customer relationship management. c. marketing technology. d. competitive insight. e. the marketing concept. 103. A company’s customers, employees, shareholders, suppliers, governments, communities, and competitors comprise its a. stakeholders. b. stockholders. c. public. d. marketing mix. e. target market. 104. Long-term relationships with profitable customers is the key objective of a. personal selling. b. customer relationship management. c. production oriented firms. d. e-marketing. e. distribution channels. Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 105. Today, establishing long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges is known as a. marketing synthesis. b. relationship marketing. c. a marketing orientation. d. the marketing concept. e. strategic marketing. 106. Clive Lilywhite is in the process of creating, pricing, distributing, and promoting a new app to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment. Clive is engaging in a. advertising. b. selling. c. marketing. d. target marketing. e. disruption. Scenario 1.2 Use the following to answer the questions. Stay and Play Hotel is a full-service pet salon and boarding kennel. Stay and Play has an interactive website where customers can directly book a grooming appointment, obedience class, or overnight accommodations for their dog or cat. Stay and Play has several unexpected services, such as a 600-square-foot swimming pool, complete with slide and dog-friendly graduated steps to help them exit the pool. Customers can also drop their dog or cat off each morning for pet day care. Stay and Play has a pick-up and delivery service, webcams in every kennel so that pet families can view their pets while away, and pet "furniture" so that the cats and dogs can lie on sofas just like at home. Stay and Play is also open 24 hours a day, 365 days each year so that customers can pick up their pet at any time. The cost for an overnight stay at Stay and Play averages $50, compared to competing kennels at about $30. The day care costs are $25 for either a dog or cat. The majority of Stay and Play' competitors don't offer the day care service, and require a two-day minimum for overnight stays. Informal discussions with customers led to the addition of pet day care and 24-hour hours of operation. Previously, Stay and Play was more interested in competing based on its prices. 107. Refer to Scenario 1.2. If Stay and Play employs the philosophy of building a relationship with its dog and cat customers, and their owners, it will be implementing the a. environment. b. marketing mix. c. sales concept. d. production concept. e. marketing concept.

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Chap 01_20e 108. To fully appreciate what an effective marketing concept means to the firm, the marketer must first understand that _______________ is the major focus of the marketing concept. This in turn should enable the firm to _______________. Ultimately, this all leads to _________________. a. customer satisfaction; earn long-term profits; increased shareholder value b. securing management; earn long-term profits; management continuity c. employee satisfaction; earn long-term profits; positive labor relations d. selling products; earn long-term profits; organizational stability e. regulatory compliance; earn long-term profits; reduced regulatory costs 109. Without _____, businesses would find it difficult, if not impossible, to buy more raw materials, hire more employees, attract more capital, and create additional products that, in turn, make more profits. a. marketing b. distribution c. promotion d. profits e. production 110. Businesses that strive to determine what customers need or want and then develop products to satisfy those needs and wants are operating in a(n) ____ orientation. a. production b. disruptive c. sales d. evolutionary e. market 111. To build long-term customer relationships, marketers are turning to a. stakeholder analytics. b. marketing research. c. data analytics. d. marketing research and data analytics. e. the marketing environment and a sales orientation. 112. You work in the marketing department of a company that sells computers directly to customers. Recently, your CEO decided he wants to expand and begin selling through popular retailers. You have been given the task of identifying retailers that reach a significant portion of the target market but that also fit with the quality of your company's brand. Once these retailers are selected, you are to work with these retailers to negotiate shelf placement. Your job deals mainly with which marketing mix element? a. Promotion b. Distribution c. Packaging d. Pricing e. Product

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Chap 01_20e 113. Coca-Cola has in recent years developed or acquired new non-cola products to appeal to changing consumer preferences for less sugar in their products. The most likely factor in this change is changes in a. the sociocultural forces of the marketing environment. b. the economic forces of the marketing environment. c. the technological forces of the marketing environment. d. the marketing mix. e. the marketing concept. Scenario 1.3 Use the following the answer the questions. A recent meeting of the Council of Logistics Management Professionals featured an executive from HP, which is known for its ability to customize computers to customers’ needs as well as the ability to provide quality products through its retail channel. The executive discussed the firm’s capabilities regarding the ability to produce products that are “built-to-order” and noted that recent customer insight showed customers were less willing to wait 7 to 10 days to receive their computer even though it was built to their specifications. As a result of this customer trend, HP began forging relationships with retailers such as Best Buy to provide a limited number of computer models in the retailers’ stores. In order to fulfill the orders to Best Buy, HP was required to make changes in its production and manufacturing such as holding more products in inventory and utilizing different modes of transportation. For example, HP was able to shift from a focus on air transportation to overthe-road trucking, which enabled it to cut costs in some areas. As HP shifted from a “build-to-order” manufacturer to a “make-to-stock” manufacturer, it also had to make investments in customer analytics to identify customer needs as well as collect insight regarding pricing. This customer insight was especially important to the retail partners like Best Buy, which requires its vendors to justify product stock decisions and provide proof that retail inventory will sell at the projected price points. HP’s ability to modify its business model by forging relationships with retailers such as Best Buy as well as customer insights has helped the company achieve its revenue and profitability goals. 114. Refer to Scenario 1.3. Based on the information provided regarding HP, which orientation would best describe its approach to marketing? a. Marketing concept b. Sales orientation c. Competitive orientation d. Production orientation e. Market orientation

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Chap 01_20e Scenario 1.1 Use the following to answer the questions. Green Hills Cemetery in upstate New York offers a full-service funeral and burial that is non-toxic to the environment. All materials used in the burial are natural and will decompose with no negative impact. Green Hills' service is relatively new in the United States, but services of this type are common in Great Britain. A typical burial in Green Hills' cemetery includes a casket made from bamboo, wicker, paper, or other natural material. There are no headstones of stone or concrete that will detract from the landscape, but trees and plants as "markers" are allowed. The cost for a burial at Green Hills is approximately $3,000, compared to about $6,000 at most traditional cemeteries. Although business was slow at first, Green Hills is now experiencing an increase in the number of burials, due to referrals and a newly-developed website. The owners of Green Hills were previously in the cemetery business, and are active conservationist and wanted to make their business more sustainable. After conducting research and finding that there were natural burial sites in Great Britain, they wanted to provide an alternative to other environmentally-conscious Americans like themselves. 115. Refer to Scenario 1.1. The customers of Green Hills Cemeteries are most likely choosing the Green Hills business because of its _______, which is evidence of a ______. a. pricing; sales orientation b. environmental consciousness; market orientation c. novelty; production orientation d. environmental consciousness; business orientation e. pricing; profit orientation 116. Before marketers can develop an appropriate marketing mix, they must a. adopt a sales orientation. b. determine the customer lifetime value. c. build relationships with stakeholders. d. practice the marketing concept. e. collect in-depth, up-to-date information about customer needs. 117. ____ is a customer's subjective assessment of benefits relative to costs in determining the worth of a product. a. Marketing orientation b. Monetary price c. Product assessment d. Price assessment e. Value 118. What percent of all civilian workers in the United States perform marketing activities? a. 100% b. 50% c. 25 - 49% d. 51 - 75% e. 25 - 33%

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Chap 01_20e 119. The focal point of all marketing activities a. are products. b. is the marketing mix. c. are profits. d. are sales. e. are customers. 120. During the 1920s, competition increased and businesspeople realized they had to do more than just focus on manufacturing, which led to the ____ orientation. a. production b. market c. revolutionary d. sales e. reduction 121. The primary value that a marketer expects to receive from a customer in an exchange relationship is a. the price charged for the product. b. customer satisfaction. c. references to other potential customers. d. quality merchandise that meets expectations. e. few returns of the merchandise purchased. 122. The definition of marketing implies that ____ should receive benefits from exchange relationships. a. only customers b. only businesses c. company management d. both customers and businesses e. only the most important customers 123. Marketing activities are a. used by all sizes of organizations including for-profit, nonprofit, and government agencies. b. limited to use by larger for-profit and nonprofit organizations. c. implemented only to increase profits for the organization and to expand the scope of its customer base. d. used by all types and sizes of businesses but are not used by nonprofit organizations. e. used by small businesses and small nonprofit organizations the most. 124. Which of the following scenarios involves the distribution element of the marketing mix? a. Deciding whether or not a certain product should continue to be sold b. Determining whether an advertising message would be more effective on television or in magazines c. Choosing between a company jet or the airlines for executive travel d. Deciding whether or not to have retail outlets in addition to a website e. Developing a new warranty policy for an existing product Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 125. Deciding to add gel insoles to its running shoes would be a change in the ____ element of the marketing mix for Nike. a. price b. good c. product d. promotion e. distribution 126. During the Industrial Revolution, most firms operated using a(n) ____ orientation. a. market b. societal c. sales d. evolutionary e. production 127. The primary value that a customer expects to receive from a marketer in an exchange relationship is a. a reward or benefit greater than the costs incurred in the transaction. b. the price charged for the product. c. customer satisfaction. d. quality merchandise that meets expectations. e. a discounted price. 128. Which of the following companies is the best example of a service marketer? a. UPS b. Sony c. American Eagle Outfitters d. The Democratic Party e. General Electric 129. Initiatives intended to improve an organization's positive impact on society and the natural environment are called a. environmental marketing. b. green marketing. c. socially-responsible marketing. d. energy-conscious marketing. e. socially-conscious marketing.

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Chap 01_20e 130. The marketing concept is a philosophy that states that an organization should try to satisfy customers' needs and also a. increase market share. b. increase sales. c. achieve the organization's goals. d. produce high-quality products. e. coordinate its activities to increase production. 131. The application of mechanical and human efforts to either people or objects to provide intangible benefits to customers is known as a(n) a. issue. b. experience c. idea. d. good. e. service. Scenario 1.3 Use the following the answer the questions. A recent meeting of the Council of Logistics Management Professionals featured an executive from HP, which is known for its ability to customize computers to customers’ needs as well as the ability to provide quality products through its retail channel. The executive discussed the firm’s capabilities regarding the ability to produce products that are “built-to-order” and noted that recent customer insight showed customers were less willing to wait 7 to 10 days to receive their computer even though it was built to their specifications. As a result of this customer trend, HP began forging relationships with retailers such as Best Buy to provide a limited number of computer models in the retailers’ stores. In order to fulfill the orders to Best Buy, HP was required to make changes in its production and manufacturing such as holding more products in inventory and utilizing different modes of transportation. For example, HP was able to shift from a focus on air transportation to overthe-road trucking, which enabled it to cut costs in some areas. As HP shifted from a “build-to-order” manufacturer to a “make-to-stock” manufacturer, it also had to make investments in customer analytics to identify customer needs as well as collect insight regarding pricing. This customer insight was especially important to the retail partners like Best Buy, which requires its vendors to justify product stock decisions and provide proof that retail inventory will sell at the projected price points. HP’s ability to modify its business model by forging relationships with retailers such as Best Buy as well as customer insights has helped the company achieve its revenue and profitability goals. 132. Refer to Scenario 1.3. Which variable of the marketing mix is most affected by Dell’s decision to become a “make-to-stock” manufacturer? a. Product variable b. Pricing variable c. Distribution variable d. Promotion variable e. Strategic variable

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Chap 01_20e 133. Issues of inventory levels and storage costs are both concerns relating to the ____ variable of the marketing mix. a. distribution b. product c. exchange d. price e. promotion 134. Kraft made the announcement that it was eliminating artificial food additives. Which of the following most likely influenced Kraft’s decision? a. Marketing costs b. Regulatory variables c. Marketing environment d. Marketing task e. Marketing mix 135. The marketing concept is best defined as a. a second definition of marketing. b. a philosophy stating that an organization should try to satisfy customers' needs through a coordinated set of activities that allows the organization to achieve its goals. c. the performance of business activities that direct the flow of goods and services from producer to customer or user. d. a philosophy stating that an organization should attempt to accomplish its goals with no regard for the needs of customers. e. the inclusion of marketing activities in the activities of an organization. 136. Dunkin’ is introducing some of its products into supermarkets, vending machines, college campuses, and other locations to increase its product availability and convenience. One reason Dunkin’ is doing so is to a. decrease customer benefits. b. increase customer costs. c. increase customer value. d. increase distribution expenses. e. decrease promotion expenses. 137. Making modifications to packaging or brand names involves the ____ component of the marketing mix. a. price b. promotion c. market d. distribution e. product

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Chap 01_20e 138. Special K cereal is aimed at people concerned about their weight. These people represent the Special K a. marketing mix. b. marketing strategy. c. target market. d. marketing tactic. e. consumer advocates. 139. If a family spends $2,000 a month on goods and services, how much of that $2,000 goes for marketing activities? a. $2,000 b. $1,500 c. $1,000 d. $500 e. $0 140. Which of the following statements about marketing environment forces is NOT true? a. They do not influence customers' reactions to a firm's marketing mix. b. They influence customers by affecting their lifestyles, standards of living, and preferences and needs for products. c. They fluctuate quickly and thereby create threats to a firm's marketing mix. d. They may create opportunities as well as threats. e. They influence whether and how a marketing manager performs certain marketing activities. 141. During the Industrial Revolution demand for manufactured goods was a. weak. b. nonexistent. c. declining. d. strong. e. mediocre. 142. According to the marketing concept, an organization should try to a. consider short-run objectives and cash flow needs before developing new products. b. define its business as "making a product." c. provide products that satisfy customers' needs and allow the organization to achieve its goals. d. put most of its emphasis on marketing activities and be less concerned with finance, accounting, and personnel. e. view selling activities as the major means of increasing profits.

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Chap 01_20e 143. Amazon Prime has one of the highest customer loyalty ratings in the entertainment industry with a significant percentage of current video streaming subscribers continuing to renew their subscription with Amazon on a yearly or month-to-month basis. In addition, many customers have cancelled their cable or satellite subscriptions and rely almost exclusively on streaming services such as Amazon Prime and Netflix for their entertainment. Amazon Prime video streaming is available as part of Amazon’s $99/year Amazon Prime suite of offerings that includes free 2-day shipping on many Amazon.com orders. Customers can also choose to pay by the month for $12.99/month. If a significant percentage of subscribers continue their service on an annual basis, Amazon is able to build a stable revenue stream based on repeat purchasers. A quick snapshot of one customer revealed that the customer had subscribed to Prime for five years and generated over $700 in revenue to Amazon. Which of the following marketing terms best captures the importance of customer loyalty and its impact on Amazon? a. Customer impact score b. Customer retail calculation c. Customer patronage value d. Customer profitability value e. Customer lifetime value 144. Customer costs include anything the buyer must give up in order to obtain the benefits the product provides. The most obvious customer cost is a. risk. b. time. c. monetary price. d. effort. e. availability. 145. The element of the marketing mix used to increase awareness of a product or company is a. information. b. product. c. price. d. distribution. e. promotion. 146. Organizations try to retain and increase long-term profitability through customer loyalty, which results from increasing a. production. b. market share. c. sales. d. market value. e. customer value.

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Chap 01_20e 147. When companies offer basic or extended warranties, they are ______ for customers. a. reducing benefits b. reducing costs c. reducing value d. increasing effort e. increasing risk 148. Holden, a buyer for a medium-sized company, is assessing the value of competing software products for use in his firm. Which of the following would NOT be a customer benefit considered in his determination of this product's value? a. Speed of delivery b. Ease of installation c. Availability of technical support d. Availability of training assistance e. Monetary price Scenario 1.2 Use the following to answer the questions. Stay and Play Hotel is a full-service pet salon and boarding kennel. Stay and Play has an interactive website where customers can directly book a grooming appointment, obedience class, or overnight accommodations for their dog or cat. Stay and Play has several unexpected services, such as a 600-square-foot swimming pool, complete with slide and dog-friendly graduated steps to help them exit the pool. Customers can also drop their dog or cat off each morning for pet day care. Stay and Play has a pick-up and delivery service, webcams in every kennel so that pet families can view their pets while away, and pet "furniture" so that the cats and dogs can lie on sofas just like at home. Stay and Play is also open 24 hours a day, 365 days each year so that customers can pick up their pet at any time. The cost for an overnight stay at Stay and Play averages $50, compared to competing kennels at about $30. The day care costs are $25 for either a dog or cat. The majority of Stay and Play' competitors don't offer the day care service, and require a two-day minimum for overnight stays. Informal discussions with customers led to the addition of pet day care and 24-hour hours of operation. Previously, Stay and Play was more interested in competing based on its prices. 149. Refer to Scenario 1.2. Previously, Stay and Play was most likely using a ____ orientation, while now it is now in the process of employing the _______. a. sales; marketing concept. b. sales; marketing mix. c. promotion; marketing concept. d. sales; promotion orientation. e. sales; product orientation.

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Chap 01_20e 150. The marketing mix is built around the a. product. b. company. c. customer. d. employee. e. retail outlet. 151. The equation a buyer applies to assess a product's value is a. value = monetary price − customer benefits. b. value = customer costs − customer benefits. c. value = customer benefits − customer costs. d. value = customer benefits − monetary price. e. value = customer benefits − time and effort. 152. Which of the following best describes the acceptance of the marketing concept by all organizations? a. The marketing concept has yet to be fully accepted by all organizations. b. All organizations fully utilize the marketing concept to run their businesses. c. Nearly half of all organizations are still in the sales orientation and have not implemented the marketing concept. d. Most organizations have really not accepted the marketing concept because of its many costs and problems. e. Although American organizations fully accept the marketing concept, many foreign companies do not. 153. Marketing knowledge and skills a. are not necessary for a nonprofit organization. b. are valuable personal and professional assets. c. constitute the marketing mix. d. were most important during the production era. e. are most valuable for advertising executives but less important for wholesalers and distributors. 154. Naomi owns a company that sells snowboards. During the winter, she sells so many snowboards that she constantly has to restock. However, Naomi always seems to have dozens of snowboards left in inventory once spring hits and demand falls rapidly. To try and sell these excess snowboards, Naomi offers steep discounts on her products, invests heavily in advertising to make consumers aware of the discounts, and instructs her in-store salespeople to use strong persuasion tactics to convince them to purchase the remaining snowboards. During this period of time, what type of orientation is Naomi embracing? a. Production b. Sales c. Market d. Promotion e. Marketing concept

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Chap 01_20e 155. Recent years have seen the introduction of Uber and Lyft, which enable customers to find a ride using an app on their smartphone. In many cities, the two services undercut traditional taxi fares, leading to phenomenal growth. Uber and Lyft are best described as the a. environmental marketing model. b. sustainable marketing model. c. marketing concept. d. sharing economy economic model. e. customer lifetime value model. 156. The essence of marketing is a. to select a target market big enough to make marketing efforts worthwhile. b. to collect market information and use it to develop long-lasting customer relationships. c. to develop satisfying exchanges from which both customers and marketers benefit. d. to modify marketing mix variables so as to secure the highest market share. e. to provide customers with the greatest amount of value. Scenario 1.1 Use the following to answer the questions. Green Hills Cemetery in upstate New York offers a full-service funeral and burial that is non-toxic to the environment. All materials used in the burial are natural and will decompose with no negative impact. Green Hills' service is relatively new in the United States, but services of this type are common in Great Britain. A typical burial in Green Hills' cemetery includes a casket made from bamboo, wicker, paper, or other natural material. There are no headstones of stone or concrete that will detract from the landscape, but trees and plants as "markers" are allowed. The cost for a burial at Green Hills is approximately $3,000, compared to about $6,000 at most traditional cemeteries. Although business was slow at first, Green Hills is now experiencing an increase in the number of burials, due to referrals and a newly-developed website. The owners of Green Hills were previously in the cemetery business, and are active conservationist and wanted to make their business more sustainable. After conducting research and finding that there were natural burial sites in Great Britain, they wanted to provide an alternative to other environmentally-conscious Americans like themselves. 157. Refer to Scenario 1.1. Green Hills' main competitive advantage over traditional cemeteries comes from its attention to which element in the marketing mix? a. Product b. Packaging c. Promotion d. Distribution e. Marketing research

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Chap 01_20e 158. Consumers buying products online have dramatically affected the ____ variable of the marketing mix. a. product b. price c. distribution d. research e. promotion 159. When Shaw Industries develops new carpet fibers that are highly stain-resistant and durable, it must educate consumers about the product's benefits. This calls for activity in which of the following marketing mix variables? a. Price b. Promotion c. Distribution d. Product e. Packaging 160. Which of the following is the least uncontrollable factor in developing a marketing mix? a. Product adaptations b. Pricing strategies c. Government regulations d. Advertising campaigns e. Retail locations 161. HealthCare Guardian Insurance rolls out an innovative nurse-on-call information system available online. The product is not widely accepted because patients don't see the need for such a service. This situation represents a failure in which aspect of implementing the marketing concept? a. An information system to determine customer needs b. The organizational structure c. Top-management commitment d. Technological advancement e. Scanning corporate capabilities 162. Amos Holden runs a successful wholesale business that sells equipment to restaurants throughout the Southwest. He is considering purchasing his own fleet of trucks to deliver the equipment instead of relying on a shipper as he is currently doing. This most closely represents a decision about a. which market he should target. b. the best way to distribute his products. c. how to effectively promote his business. d. the product he provides to his customer. e. which supplier he should use.

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Chap 01_20e 163. Which of the following is NOT an example of the implementation of the marketing concept? a. Jimmy Dean's Sausage introduces turkey sausage patties for a healthier alternative to pork. b. Ford asks customers to vote online for a new color for next year’s Ford Focus. c. McDonald's reduces the labor costs to produce its sausage-egg biscuits. d. Linx offers rewards for users who can find flaws in its new software. e. Volkswagen introduces pop-up rollover bars in its convertibles to protect its consumers in the event of a serious collision. 164. The majority of the heads of marketing for most multinational corporations would likely describe marketing as a very complex discipline. They will give a long list of variables and factors that influence a company’s marketing success. Most of these variables and factors are part of what is called the marketing environment. The U.S. unemployment rate would fall under which set of forces in the marketing environment? a. Sociocultural forces b. Political forces c. Economic forces d. Competitive forces e. International trade forces 165. Your competition is beating you on price in your most important product market. In response, you decide to launch a new ad campaign focusing your customers on the price attribute of your marketing mix. You need a catchy slogan that conveys the attractiveness of your product’s pricing. Which of the following slogans should you use to convey this message most effectively? a. “Every Day You Get Our Best” b. “Growing and Protecting Your Wealth” c. “Expect More. Pay Less” d. “There Is No Substitute” e. “Always On Time . . . Or You Don’t Pay A Dime” 166. Which of the following is NOT one of the ways in which a firm can obtain profit through customer relationships? a. Shortening the duration of customer relationships b. Acquiring new customers c. Enhancing the profitability of existing customers d. Regaining and managing relationships with customers who have stopped doing business with the firm. e. Extending the duration of customer relationships

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Chap 01_20e 167. When Smartsheet, a producer of software, delayed the introduction of its new app to modify the package, its scheduled TV advertisements announcing the new product needed to be revised. In this case, a change in the ____ variable caused changes in the ____ variable of the marketing mix. a. distribution; promotion b. distribution; product c. product; price d. product; promotion e. promotion; price 168. Never Again MSD is a group that works to change attitudes and laws about gun control. Never Again MSD primarily markets a. goods. b. ideas. c. services. d. political figures. e. applications. 169. The marketing concept is a management philosophy that affects a. only marketing activities. b. all efforts of the organization. c. mainly the efforts of sales personnel. d. mainly customer relations. e. only business organizations. 170. Marketing is the process of a. promoting products through personal selling and advertising to develop and maintain favorable relationships with customers and stakeholders. b. creating, distributing, promoting, and pricing products to facilitate satisfying exchange relationships with customers and to develop and maintain favorable relationships with stakeholders in a dynamic environment. c. delivering a standard of living to a society. d. creating, distributing, promoting, and pricing goods, services, and ideas to facilitate the achievement of the firm's objectives. e. focusing on customers' needs. 171. A physical product you can touch is a(n) a. service. b. good. c. idea. d. concept. e. philosophy.

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Chap 01_20e 172. Your company provides oil exploration services to major oil companies in Russia. The United States government just announced it is imposing economic sanctions on Russia because of the military actions it has taken in Ukraine. This situation is an example of which of the following types of forces that constantly impact a company’s dynamic marketing environment? a. Technological force b. Sociocultural force c. Political force d. Legal and regulatory force e. Economic force 173. A marketing manager decides what combination of variables is needed to satisfy customers' needs for a general type of product. What are the essential variables that the marketing manager combines? a. Product, price, distribution, and promotion variables b. Marketing environment variables c. Product and promotion variables d. Product, price, and customer variables e. Product, price, customer, and promotion variables 174. Define the term target market and provide an example for a product of your choice.

175. Explain why marketing efforts should be oriented toward creating and sustaining satisfying exchange relationships.

176. Explain why a knowledge of marketing is beneficial for all students.

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Chap 01_20e 177. Describe the three different types of products.

178. Describe several activities encompassed by the distribution variable.

179. Why is marketing important to businesses and to the economy?

180. Discuss the concept of green marketing and why it is important to marketers.

181. Define the term value, and explain how people determine a product's value.

182. What is meant by the term marketing concept, and what departments of a company does it affect?

183. What is meant by the term relationship marketing? How does relationship marketing affect the customer?

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Chap 01_20e 184. Discuss the evolution of the marketing concept through the various types of orientation.

185. What are the three ways that marketing environment forces affect a marketer's ability to create satisfying exchange relationships?

186. Suppose you are a marketing manager at SC Johnson for a new, all-purpose cleaning product. List four marketing mix variables and describe the decisions and activities associated with each.

187. What does it mean for a company to be marketing-oriented? What are the most important factors involved in being marketing-oriented?

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Chap 01_20e Answer Key 1. False 2. False 3. False 4. True 5. True 6. True 7. False 8. False 9. False 10. False 11. True 12. False 13. True 14. True 15. True 16. False 17. True 18. True 19. False 20. False 21. False 22. False 23. False 24. False 25. True 26. False

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Chap 01_20e 27. True 28. True 29. True 30. True 31. True 32. False 33. True 34. True 35. False 36. False 37. False 38. True 39. True 40. False 41. True 42. False 43. True 44. True 45. True 46. True 47. False 48. True 49. True 50. True 51. True 52. False 53. True 54. e Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 55. d 56. e 57. b 58. b 59. a 60. d 61. b 62. a 63. e 64. a 65. c 66. e 67. a 68. d 69. b 70. d 71. d 72. b 73. d 74. a 75. e 76. a 77. d 78. a 79. a 80. d 81. c 82. b Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 83. a 84. e 85. e 86. c 87. b 88. c 89. c 90. b 91. c 92. c 93. d 94. d 95. d 96. e 97. a 98. d 99. e 100. d 101. c 102. b 103. a 104. b 105. b 106. c 107. e 108. a 109. d 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 111. d 112. b 113. a 114. e 115. b 116. e 117. e 118. e 119. e 120. d 121. a 122. d 123. a 124. d 125. c 126. e 127. a 128. a 129. b 130. c 131. e 132. a 133. a 134. c 135. b 136. c 137. e

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Chap 01_20e 138. c 139. c 140. a 141. d 142. c 143. e 144. c 145. e 146. e 147. b 148. e 149. a 150. c 151. c 152. a 153. b 154. b 155. d 156. c 157. a 158. c 159. b 160. c 161. a 162. b 163. c 164. c 165. c Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 166. a 167. d 168. b 169. b 170. b 171. b 172. c 173. a 174. Organizations generally focus their marketing efforts on a specific group of customers called a target market. A target market is the group of customers toward which a company directs a set of marketing efforts. 175. The essence of marketing is to develop satisfying exchanges from which both customers and marketers benefit. The customer expects to gain a reward or benefit greater than the costs incurred in a marketing transaction. The marketer expects to gain something of value in return, generally the price charged for the product. To fulfill these expectations, the marketer must deliver on promises made. Over time, this interaction results in relationships between the two parties. 176. Studying marketing allows us to understand the importance of marketing to customers, organizations, and our economy. Thus, we can analyze marketing efforts that need improvement and how to attain that goal. As a consumer becomes more aware it is possible to improve purchasing decisions. Understanding marketing enables people to evaluate corrective measures (such as laws, regulations, and industry guidelines) that could stop unfair, damaging, or unethical marketing practices. 177. A product can be a good, a service, or an idea. A good is a physical entity you can touch. A branded pair of spectacles or a branded pair of jeans is an example of a good. A service is the application of human and mechanical efforts to people or objects to provide intangible benefits to customers. Air travel, education, and child day care are examples of services. Ideas include concepts, philosophies, images, and issues. For instance, a marriage counselor, for a fee, gives spouses ideas to help improve their relationship. 178. When considering the distribution variable, a marketing manager makes products available in the quantities desired to as many target-market customers as possible, keeping total inventory, transportation, and storage costs as low as possible. A marketing manager also may select and motivate intermediaries (wholesalers and retailers), establish and maintain inventory control procedures, and develop and manage transportation and storage systems. The advent of the Internet and electronic commerce also has dramatically influenced the distribution variable. Companies now can make their products available throughout the world without maintaining facilities in each country. 179. Businesses must engage in marketing to survive and grow, and marketing activities are needed to reach customers and provide products. Financial resources generated from sales are necessary for the operations of a firm and to provide financial returns to investors. Innovation in operations and products drive business success and customer loyalty. Marketing activities help to produce the profits that are essential to the survival of individual businesses. Without profits, businesses would find it difficult, if not impossible, to buy more raw materials, hire more employees, attract more capital, and create additional products that, in turn, make more profits. Therefore, marketing helps create a successful economy and contributes to the well-being of society. Copyright Cengage Learning. Powered by Cognero.

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Chap 01_20e 180. Green marketing refers to a strategic process involving stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment. Such initiatives not only reduce the negative impact that businesses have on the environment but also serve to enhance their reputations as sustainability concerns continue to grow. By addressing concerns about the impact of marketing on society, a firm can contribute to society through socially responsible activities as well as increase its financial performance. 181. Value is defined as a customer’s subjective assessment of benefits relative to costs in determining the worth of a product (customer value = customer benefits – customer costs). Consumers develop a concept of value through the integration of their perceptions of product quality and financial sacrifice. 182. Marketing concept refers to a management philosophy guiding an organization’s overall activities Departments such as production, finance, accounting, human resources, and marketing must work together to establish the marketing concept. The overall objectives of a business might relate to increasing profits, market share, sales, or a combination of all three. The marketing concept stresses that an organization can best achieve these objectives by being customer oriented. 183. Relationship marketing refers to “long-term, mutually beneficial arrangements in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges.” Relationship marketing continually deepens the buyer’s trust in the company, and as the customer’s confidence grows, this, in turn, increases the firm’s understanding of the customer’s needs. Buyers and marketers can thus enter into a close relationship in which both participate in the creation of value. 184. T he marketing concept may seem like an obvious approach to running a business. However, business people have not always believed that the best way to make sales and profits is to satisfy customers. The first type of orientation is known as production orientation. In production orientation, with new technology and new ways of using labor, products poured into the marketplace, where demand for manufactured goods was strong. According to the sales orientation, businesses viewed sales as the major means of increasing profits, and this period came to have a sales orientation. Business people believed that the most important marketing activities were personal selling, advertising, and distribution. Market orientation requires the "organization wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization wide responsiveness to it." Market orientation is linked to new product innovation by developing a strategic focus to explore and develop new products to serve target markets. 185. The marketing environment forces affect a marketer’s ability to facilitate value driven marketing exchanges in three general ways. First, they influence customers by affecting their lifestyles, standards of living, and preferences and needs for products. Second, marketing environment forces help to determine whether and how a marketing manager can perform certain marketing activities. Third, environmental forces may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix.

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Chap 01_20e 186. Marketers consider activities such as product, pricing, distribution, and promotions as the marketing mix because they decide what type of each element to use and in what amounts. The product variable of the marketing mix deals with researching customers’ needs and wants and designing a product that satisfies them. A product can be a good, a service, or an idea. The product variable also involves creating or modifying brand names and packaging and may include decisions regarding warranty and repair services. In dealing with the distribution variable, a marketing manager makes products available in the quantities desired to as many target-market customers as possible, keeping total inventory, transportation, and storage costs as low as possible. The promotion variable relates to activities used to inform individuals or groups about the organization and its products. Promotion can aim to increase public awareness of the organization and of new or existing products. The price variable relates to decisions and actions associated with establishing pricing objectives and policies and determining product prices. Price is a critical component of the marketing mix because customers are concerned about the value obtained in an exchange. Price is often used as a competitive tool, and intense price competition sometimes leads to price wars. 187. A market orientation requires the organization wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and organization wide responsiveness to it. Market orientation is linked to new product innovation by developing a strategic focus to explore and develop new products to serve target markets. Top management, marketing managers, non-marketing managers (those in production, finance, human resources, and so on), and customers are all important in developing and carrying out a market orientation. Trust, openness, honoring promises, respect, collaboration, and recognizing the market as the raison d’etre are six values required by organizations striving to become more market oriented. Unless marketing managers provide continuous customer-focused leadership with minimal interdepartmental conflict, achieving a market orientation will be difficult. Non-marketing managers must communicate with marketing managers to share information important to understanding the customer. Finally, a market orientation involves being responsive to everchanging customer needs and wants.

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Chap 02_20e Indicate whether the statement is true or false. 1. A marketing objective need not be consistent with the firm's overall objectives. a. True b. False 2. The Boston Consulting Group approach is based on a philosophy that a product's market growth rate and its market share relative to competition should be helpful in determining its marketing strategy. a. True b. False 3. Marketing objectives should be stated in such a way that the degree of accomplishment can be measured accurately. a. True b. False 4. A market is a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase these products. a. True b. False 5. Corporate strategy determines the means for utilizing resources in the functional areas of business to reach the organization's goals. a. True b. False 6. Product development is a strategy of increasing sales by improving present products or developing new products for current markets. a. True b. False 7. The strategic planning process begins with a detailed analysis of the organization's strengths and weaknesses and the identification of opportunities and threats within the marketing environment. a. True b. False 8. A sustainable competitive advantage is one that cannot be copied by a firm's competitors. a. True b. False 9. The marketing plan provides a framework to stimulate thinking and provide strategic direction. a. True b. False

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Chap 02_20e 10. The decisions made in creating a marketing mix are only as good as the organization's understanding of the target market. a. True b. False 11. A core competency is something a firm does extremely well-sometimes so well that it gives the company an advantage over its competition. a. True b. False 12. When the right combination of circumstances and timing permits an organization to take action to reach a particular target market, a core competency exists. a. True b. False 13. Companies that truly adopt the marketing concept develop an organizational culture that is based on a centralized set of beliefs that places the organization’s needs at the center of decisions about strategy and operations. a. True b. False 14. Marketing objectives directly or indirectly set forth performance standards, usually in terms of sales, costs, or communication dimensions, such as brand awareness or product feature recall. a. True b. False 15. A competitive advantage is created when a company matches its core competency to the opportunities it has discovered in the market. a. True b. False 16. Marketing cost analysis uses sales figures to evaluate a firm's current performance. a. True b. False 17. In the strategic planning process, marketers conduct their SWOT analyses before developing corporate and business-unit strategies. a. True b. False 18. A strategic business unit is not self-supporting in terms of sales, markets, production, and other resources. a. True b. False

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Chap 02_20e 19. Changes in the strategies of one company can affect the market shares of one or all companies in that industry. a. True b. False 20. An organization's goals focus on the ends or results that the firm seeks. a. True b. False 21. Centralized decision making may prove effective in firms that must respond quickly to fluctuations in customer demand. a. True b. False 22. A long-term view, or vision, of what the organization wants to become is called a mission proclamation. a. True b. False 23. A marketing strategy is a written document that specifies the activities to be performed to implement and control a firm's marketing activities. a. True b. False 24. The long-term health of the firm depends solely on having products that generate cash and provide acceptable reported profits. a. True b. False 25. Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process. a. True b. False 26. Corporate strategic planners focus on dimensions such as competition, diversification, differentiation, environmental focus, and interrelationships among SBUs. a. True b. False 27. The primary way to reduce the discrepancy between planned and actual performance is to rewrite the performance standard. a. True b. False 28. Each of the marketing mix elements must work together with the others. a. True b. False

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Chap 02_20e 29. Marketing strategies should be established before marketing objectives are decided. a. True b. False 30. The Boston Consulting Group's model serves as a diagnostic tool to spotlight strategic business units that have an opportunity to grow rather than as a guide for making strategy prescriptions. a. True b. False 31. Marketing objectives state what is to be accomplished through marketing activities. a. True b. False 32. A firm's organizational mission should be derived from its goals. a. True b. False 33. When conducting a SWOT analysis, Walmart's massive distribution network should be classified as an opportunity. a. True b. False 34. An organization's goals focus on the end results the organization seeks. a. True b. False 35. Question marks exist at a cost disadvantage and exhibit few opportunities for growth at a reasonable cost. a. True b. False 36. Financial controls information will most likely be found in the performance evaluation section of the marketing plan. a. True b. False 37. Stars are profitable products that usually generate more cash than is required to maintain share. a. True b. False 38. The analysis of strengths and weaknesses focuses on internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets. a. True b. False

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Chap 02_20e 39. Cash cows are market leaders that are growing fast, with substantial reported profits. a. True b. False 40. Marketing planning and implementation are inextricably linked in successful businesses. a. True b. False 41. Marketing managers can classify a firm's products into four basic types: stars, cash cows, dogs, and question marks. a. True b. False 42. Strategic marketing management is the process of effectively and efficiently planning, implementing, and evaluating the performance of marketing activities and strategies. a. True b. False 43. Pinpointing which activities can be performed simultaneously will reduce the total amount of time needed to put a given marketing strategy into practice. a. True b. False 44. Training is an unnecessary element of communicating with marketing employees. a. True b. False 45. The strategic planning process begins with a detailed analysis of the organization's strengths and weaknesses and the identification of opportunities and threats within the marketing environment. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 46. Communicating with the marketing unit, motivating marketing personnel, and coordinating marketing activities are part of the _____________ component of strategic planning. a. Formulating marketing strategies b. Assessing organizational resources c. Marketing evaluation d. Developing the marketing plan e. Marketing implementation

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Chap 02_20e 47. Which of the following is a characteristic of a marketing objective? a. It is consistent with both business-unit and corporate strategy. b. It is a verbal agreement, not in writing. c. It is not written in measurable terms. d. It does not specify a time frame for its accomplishment. e. It clearly identifies how marketing strategy will be implemented. 48. You asked your stockbroker to consider buying some shares of Facebook, Inc. for your investment account. But, first you want to review the summary points in the SWOT analysis the stockbroker’s firm did on the company. The following summary points were listed in the SWOT analysis: 1. Facebook has a reputation as a market leader and it has a formidable brand loyalty amongst its users. 2. Because of its position in the industry, it risks incurring high costs associated with creating and marketing new products that are designed to perpetuate its industry leadership. These summary points suggest a. that Facebook’s products are cash cows. b. that Facebook has a first-mover advantage. c. that Facebook’s products are question marks. d. that Facebook has a questionable marketing strategy. e. that Facebook has a late-mover advantage. 49. Marketers understand that the best marketing strategy in the world is doomed to fail if it is not properly implemented. With that in mind, an effective implementation strategy a. begins with identifying the activities to be performed, and ends with assigning responsibility for each activity to one or more team members. b. begins with identifying team members, and ends with assigning activities to each team member. c. has an open-ended timetable to allow for unexpected delays. d. organizes all activities in sequential order even if they can be performed simultaneously. e. organizes tasks in order according to their level of complexity. 50. Which of the following is NOT a component of a marketing plan? a. Environmental analysis b. Marketing strategies c. Product specifications d. Executive summary e. Marketing implementation

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Chap 02_20e 51. Tom’s of Maine’s natural toothpaste is highly popular but is unlikely to experience much more market growth. As a result, Tom’s of Maine is examining other forms of toothpaste with high potential for growth. However, because its natural toothpaste remains so profitable, it can use these profits to invest in newer toothpastes. Trident’s natural toothpaste is an example of a a. cash cow. b. star. c. dog. d. question mark. e. strategic window. 52. A first-mover advantage is a. the ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace. b. the ability of an innovative company to achieve long-term competitive advantages by being the first to offer a certain product in the marketplace. c. the result of a company matching a core competency to opportunities it has discovered in the marketplace. d. a combination of circumstances and timing that permits an organization to take action to reach a particular target market. e. the selection of a target market and the creation of a marketing mix that will satisfy the needs of that target market. 53. Which of the following is a strategy of increasing sales of current products in new markets? a. Diversification b. Product development c. Market share d. Market penetration e. Market development 54. To be truly useful for sales analyses, marketers must compare current sales data with forecasted sales, industry sales, specific competitors’ sales, and a. business-unit objectives. b. business-unit costs. c. the costs incurred from marketing efforts to achieve the sales volume. d. performance standards. e. market share. 55. An expected level of performance against which actual performance can be compared is a a. standard performance. b. standard of excellence. c. step in sales analysis. d. performance standard. e. performance objective. Copyright Cengage Learning. Powered by Cognero.

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Chap 02_20e 56. A ____ is created when a company matches its core competency to opportunities it has discovered in the marketplace. a. market opportunity b. market requirement c. competitive advantage d. strategic window e. competitive opportunity 57. The ____________ section of the marketing plan states what the company wants to accomplish through marketing activities, using a(n) ___________ of where the firm stands in the market. a. marketing objectives; performance evaluation b. marketing strategies; implementation timetable c. SWOT analysis; marketing concept d. marketing objectives; SWOT analysis e. environmental analysis; SWOT analysis 58. Which of the following states what is to be accomplished through marketing strategies? a. Business-unit objectives b. Marketing objectives c. Corporate objectives d. Financial objectives e. Operational objectives 59. When the right combination of circumstances occurs at the right time to allow an organization to take action toward a target market, the firm is faced with a a. market objective. b. market requirement. c. strategic market plan. d. market opportunity. e. corporate objective. 60. One way that Kia evaluates its product and service level is by how well it ranks on the J. D. Power & Associates Sales Satisfaction Survey. In doing so, Kia is a. controlling marketing activities. b. taking corrective action. c. empowering its employees. d. evaluating actual performance. e. setting performance standards.

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Chap 02_20e 61. The foundation on which a company can develop its marketing mix is a. articulation of its marketing strategy. b. articulation of its competitive advantage. c. identification and analysis of the current market opportunity. d. identification and analysis of the marketing environment. e. identification and analysis of a target market. 62. Apple has been successful by anticipating what consumers would want in new technological advances, convenience, and ease of use. The introduction of the iPad was an example of a _____ for Apple, something that an organization does extremely well and may give a company an advantage over its competition. a. benchmark b. sustainable competitive advantage c. core competency d. strategic vision e. marketing opportunity 63. Analyzing demographic information, customer needs, preferences, and behaviors with respect to product design, pricing, distribution, and promotion is which of the following parts of strategic planning? a. Assessing organizational resources and opportunities b. Managing marketing implementation c. Establishing mission and goals d. Developing a written document known as the marketing plan e. Developing marketing objectives and marketing strategies 64. Marketing planning and ______ are closely linked in successful companies. a. communication b. market share c. human resources d. implementation e. production 65. The reputation and well-known brand name of Mercedes-Benz automobiles represents a ____ for MercedesBenz. a. competitive advantage b. core competency c. market opportunity d. strategic window e. pricing strategy

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Chap 02_20e 66. You are the senior financial analyst supporting the marketing department in your company, and head of marketing has asked you to come up with one performance metric that can be used to evaluate how effective each advertising campaign is in terms of contribution to the firm’s profits. It should be a metric that can be easily used to compare different advertising campaigns against each other. In response, you propose using: a. A metric that takes the total new sales dollars generated by a campaign and divides it by the total office expense of the campaign. b. A metric that takes the total new sales dollars generated by a campaign and divides it by the total fixed cost of the campaign. c. A metric that takes the total new sales dollars generated by a campaign and divides it by the total variable cost of the campaign. d. A metric that takes the total new sales dollars generated by a campaign and divides it by the total supplies expense for the campaign. e. A metric that takes the total new sales dollars generated by a campaign and divides it by the total cost of the campaign. 67. You are leading the breakout session on developing the marketing strategy at your company’s strategic planning conference. You have prepared discussion guidelines and rules of engagement to keep all attendees in the session focused on the task at hand. Your guidelines for developing the company’s marketing strategy a. suggest that the marketing objectives be written in general terms so that the strategy and be change along the way if necessary. b. suggest that the target market should be identified before the marketing objectives are established. c. suggest that the target market should be selected to fit the marketing mix. d. suggest that the marketing objectives should be consistent with both the business-unit and the corporate strategies. e. suggest that marketing should not worry about the strategy’s impact on company profits because the finance department will handle that aspect. 68. The Escapade Academy is developing its marketing mix for the coming year. Its managers know that they must first select ____ which may be the most important decision they make in the planning process. a. the promotional strategy b. a distribution method c. the pricing strategy d. a target market e. the desired profit margin 69. Regardless of how sales are measured, the basic unit of measurement is the a. performance standard. b. sales transaction. c. market share. d. marketing objective. e. marketing costs. Copyright Cengage Learning. Powered by Cognero.

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Chap 02_20e 70. Simonton Window Company is a closely held family-owned company that sells windows to businesses and homeowners. The business-to-business market is designed to serve a variety of businesses by replacing inefficient windows with vinyl double-pane windows. In addition, they can customize windows to match any size that a business or homeowner might desire. Simonton Window employs approximately 35 individuals who report directly to the company president and owner, Dan Simonton. Dan learned about managing and leading the company from his father, who was a strict but friendly man. Dan has developed a reputation as a shrewd businessperson who believes that his way is the right way. He sets all company policies and standards, and expects all employees to follow the rules and standards he has implemented. Employees enjoy the work environment at Simonton Window Company but are sometimes frustrated because they’re not able to quickly respond to customer requests or changes in their needs and are not empowered to make decisions. It’s likely that Simonton Window Company has implemented a ____________ organizational structure. a. centralized b. decentralized c. controlled d. paternal e. organic 71. The process of putting marketing strategies into action is called a. marketing implementation. b. marketing control. c. marketing action. d. marketing auditing. e. the marketing action plan. 72. The percentage of a market which actually buys a specific product from a specific company is referred to as that product's a. strategic segment. b. target market. c. market share. d. market cut. e. market position. 73. Takeshi, a 17-year-old high school student, wants to buy a pack of Marlboro Lights. He has the money to purchase them, but he is still not considered to be a market for the product due to his lack of ____ to buy. a. ability b. willingness c. authority d. need e. buying power

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Chap 02_20e 74. Southwest Airlines’ planes are easily recognizable even when in the air due to their vibrant color scheme, striped tail, distinctive font, and striped heart. Southwest carries this color scheme and heart symbol throughout much of its communication—airport signs, print and television advertising, even its smartphone app. This use of color, font, and symbols to convey Southwest Airlines’ personality is an example of a(n) a. ethics statement. b. marketing plan. c. mission statement. d. corporate logo. e. corporate identity. 75. An analysis of ____ examines internal factors that give the organization certain advantages and disadvantages in meeting the needs of its target markets. a. opportunities and threats b. market opportunities c. strengths and weaknesses d. activities and responsibilities e. organizational resources 76. Bōte is a Florida-based stand-up paddleboard maker that markets its products directly to consumers via its website. Bōte’s mission is to spread the sport of stand up paddle surfing from oceans to lakes and rivers around the world. Stand up paddle surfing or boarding is a relatively new sport but is growing due to the relatively low price of the boards, ease in transportation and storage of the boards as well as the sport providing a fun way to exercise and allow users to enjoy the outdoors. Which of the following would be the “best” target market for Bōte paddle board products? a. Active adults aged 24 to 40 who enjoy outdoor recreational activities b. High school students aged 15 to 18 who are looking for alternatives to traditional sports activities c. Sporting goods retailers such as Dicks Sports who are seeking new products to sell in their retail

stores d. Professional surfers who compete in surfing competitions across the globe e. Men aged 50 to 64 77. Which of the following statements is incorrect? a. Of the three levels of planning, corporate strategy is the broadest. b. Business-unit strategy should be consistent with the corporate strategy. c. Marketing strategy should be consistent with both the business-unit and corporate strategies. d. Strategic planning begins at the marketing level and proceeds through business-unit and corporate levels. e. Strategic planning begins at the corporate level and proceeds through business-unit and marketing levels.

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Chap 02_20e 78. Which of the following is NOT one of the steps of evaluating marketing strategies? a. Establishing performance standards b. Identifying target markets c. Modifying the marketing strategy, if needed d. Comparing actual performance with established standards e. Measuring actual performance 79. According to the text, a market is defined as a. a place to buy products. b. the buyers of the products that a company develops, promotes, prices, and distributes. c. the specific group of customers on whom an organization focuses its marketing efforts. d. a group of individuals and/or organizations that have needs for products in a product class and have the ability, willingness, and authority to purchase those products. e. the percentage of a group of customers that actually buys a specific product from a specific company. 80. Which of the following is true about the development of a marketing plan? a. It is the largest strategic business plan in the organization. b. It is the final step in strategic planning. c. It is only useful for the company as a whole. d. It should be an adaptive response to day-to-day issues and unanticipated situations. e. It should be unique to the organization for which it was created. 81. Jessica Cage is the supply chain manager for a large plastics manufacturing company. She is responsible for procuring a wide variety of raw materials to be utilized in the manufacturing process of the firm’s plastic products. As part of an annual quality control and expense analysis, Jessica is reviewing the prices charged by the raw materials suppliers and also seeking bids from competing suppliers to determine whether any savings could be realized. Jessica is rewarded by the company with bonuses when she is able to reduce expenses associated with the raw materials as this could lead to higher profit margins on the products they manufacture. Jessica knows that saving a few cents can make a dramatic difference because the firm manufactures thousands of products at its state-of-the-art facility in Indiana. What type of analysis do you believe Jessica Cage can perform utilizing the data related to the prices charged by their current and prospective raw materials suppliers? a. Cost analysis b. Sales analysis c. Advertising analysis d. Engagement analysis e. Breakeven analysis

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Chap 02_20e 82. What is one way to analyze costs when conducting marketing cost analysis? a. Use fixed costs to determine how to use marketing funds more effectively b. Contrast marketing costs to sales transactions c. Compare a company's costs with industry averages d. Divide sales transactions by fixed costs e. Compare its market share with the market share of competitors 83. After determining that consumers had concerns about certain ingredients that may cause health issues, Patrizzi’s Pizza began offering a gluten-free pizza product. The creation of this new product was the result of a. a competitive advantage. b. a well-defined mission statement. c. good strategic planning. d. a market opportunity. e. opportunistic behavior. 84. Competitive growth strategies are based on a. a unit's market share and market growth. b. the type of marketing mix chosen. c. the Boston Consulting Group's matrix. d. analyses of each product or business unit. e. new types of target markets. 85. Sales analysis is a common method of evaluation because a. buying behavior data are readily available and can reflect the target market’s reactions to a marketing mix. b. cost data are readily available and can reflect the target market’s reactions to a marketing mix. c. sales data are readily available and can reflect the target market’s reactions to a marketing mix. d. sales data are readily available and can reflect shareholders’ reactions to a marketing mix. e. it reflects market share.

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Chap 02_20e Scenario 2.2 Use the following to answer the questions. EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. 86. Refer to Scenario 2.2. The fact that college enrollments have been increasing at a fast rate the past few years is an example of ____ and creates a ____ for EXperience Limited. a. an environmental factor; strategic door b. an environmental factor; marketing opportunity c. a company strength; marketing opportunity d. a company strength; competitive advantage e. a marketing opportunity; competitive advantage 87. A strategic window is a. the right combination of circumstances and timing that permit an organization to take action to reach a particular target market. b. what determines the factors that are most important in making a market attractive or strong. c. customers' requirements or desired benefits. d. a temporary period of optimum fit between the key requirements of a market and the particular capabilities of a firm competing in that market. e. the process that seeks information about events and relationships in a company's outside environment. 88. Favorable conditions in the marketplace environment that could produce business rewards for the organization if acted upon properly are called a. strengths. b. market strategies. c. market niches. d. threats. e. opportunities. 89. Which of the following describes the relationships among the three planning levels, from broadest to narrowest? a. Marketing strategy; corporate strategy; business-unit strategy b. Corporate strategy; marketing strategy; business-unit strategy c. Business-unit strategy; corporate strategy; business-unit strategy d. Corporate strategy; business-unit strategy; marketing strategy e. Marketing strategy; business-unit strategy; corporate strategy

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Chap 02_20e 90. Gucci, a marketer of high-fashion products, achieved a company turnaround by ensuring that its brand had the same image and proper display around the world. It also lowered prices on some items, like handbags, to be more competitive. This illustrates a company working to develop a marketing mix that is both ____ and ____. a. consistent; flexible b. formal; flexible c. variable; flexible d. consistent; rigid e. consistent; formal 91. The ability of later market entrants to achieve long-term competitive advantages by not being the first to offer a certain product in a marketplace is called a. first-mover advantage. b. early-mover advantage. c. first-mover disadvantage. d. strategic window. e. late-mover advantage. 92. A group that has the willingness, ability, and authority to buy a product is a a. market. b. consumer. c. strategic business unit. d. business customer. e. strategic window. 93. Business decisions made in creating a marketing mix a. are made before a target market is identified. b. are unchangeable once they are agreed upon by management. c. are only as good as the organization's understanding of the needs of the target market. d. usually take place when a strategic window is open. e. must always be consistent with the firm's opportunities. 94. _ ___ strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization's goals. a. Corporate b. Business-unit c. Marketing d. Mission statement e. Marketing mix

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Chap 02_20e 95. According to the Boston Consulting Group, which of the following has a small share of a growing market and usually requires a large amount of cash to build market share? a. Question marks b. Dogs c. Cash cows d. Stars e. First movers 96. The Forever 21 chain of retail stores has a reputation as one of the “coolest” brands according to Piper Jaffray. Their stores feature the latest trends, must-have styles, and the hottest deals for shoppers. The retail stores are typically found in shopping malls across the country and are comfortable places to shop—featuring interesting displays, pop music, and bright lights. Forever 21’s selection of denim is the most popular product appealing to both genders and has helped them achieve double-digit growth. Which of the following would most likely be the “best” target market for Forever 21? a. Men and women aged 35 to 49 b. Children aged 12 or under c. Men and women aged 18 to 24 d. Active seniors—men and women aged 65 or older e. Men and women aged 50 to 64 97. Jo’s Coffee Shop wants to increase customer satisfaction. Currently, only 75% of customers indicate they are satisfied with the services offered. In the next six months, it plans on implementing a number of changes to improve its services. Jo’s Coffee plans to implement a survey at the end of the six-month period to determine whether customer satisfaction has improved. Jo’s wants 90% of its customers to indicate they are satisfied with its service. This is an example of a ________________. a. core competency b. strategic window c. marketing plan d. marketing objective e. marketing control

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Chap 02_20e Scenario 2.1 Use the following to answer the questions. Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recently, airlines have started to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. 98. Refer to Scenario 2.1. The fact that Southwest Airlines has a history of being able to retain its employees is a(n) ____ in its SWOT analysis. This low turnover creates more knowledgeable and satisfied employees, a potential _______. a. weakness; opportunity b. strength; competitive advantage c. threat; market opportunity d. opportunity; competitive advantage e. strength; market opportunity 99. Performance standards are derived from _____________ that were set while developing the marketing strategy. a. past measures of actual performance b. core competencies c. marketing objectives d. marketing costs e. market opportunities 100. Kroger is involved in identifying and analyzing a target market. The firm then develops a marketing mix to satisfy individuals in that market to gain long-term competitive advantages. Based on this example, Kroger is creating a a. corporate strategy. b. target design. c. mix strategy. d. marketing strategy. e. marketing tactic.

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Chap 02_20e 101. The Kimmy J Social Beauty Company is struggling to meet its marketing objective despite the strong social media presence of its founder. To determine why the firm is failing to reach its performance targets, the company’s executives are conducting a cost analysis in the hopes of identifying ways to reduce costs so that they can lower prices and promote the greater value of their products. Which of the following is NOT a fixed cost that is easily lowered? a. Material costs b. Selling costs c. Commissions d. Employees’ salaries e. Shipping costs 102. According to the Boston Consulting Group, marketers may classify their products as all of the following except a. dogs. b. cash pig. c. question marks. d. stars. e. cash cows. 103. What is the final step in establishing an implementation timetable? a. Assigning responsibility for completing each activity b. Organizing activities in their proper order c. Determining time required for completion d. Identifying the activities to be performed e. Separating activities to be performed in sequence from those performed simultaneously 104. Based on the work by the Boston Consulting Group, products with a dominant share of the market and good prospects for growth are a. dogs. b. cash cows. c. stars. d. question marks. e. cats. 105. Apple introduced the HomePod, a smart speaker/home automation device. For Apple, HomePod represents a strategy of a. question mark. b. diversification. c. product development. d. market penetration. e. market development.

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Chap 02_20e 106. You are writing an Environmental Analysis for the marketing plan for your company. You were given the following master list of environmental factors that should be addressed in the plan: 1. Foreign exchange rates 2. Trade policy 3. Population growth rates 4. Tax policy 5. Environmental regulations 6. Production automation trends 7. Health and medical trends You are responsible for the subsection dealing with political and regulatory factors that will impact your company’s marketing strategies. Which of the factors from the master list of environmental factors will you include in your subsection? a. Foreign exchange rates; Trade policy; Population growth rates b. Trade policy; Tax policy; Environmental regulations c. Tax policy; Environmental regulations; Health and medical trends d. Trade policy; Health and medical trends; Tax policy e. Environmental regulations; Foreign exchange rates; Tax policy 107. Valeria Suarez is responsible for the traditional media marketing activities for her company and currently utilizes billboards, radio advertising, newspaper advertising, and cable TV advertising to communicate with customers, reinforce customer relationships, and drive revenues and profitability. Valeria’s company has invested in a proprietary technology scheduling program that allows her to plan the various media investments, messages, and timing over the year to match the various media content to specific marketing objectives, according to the days or months of the year that are most appropriate for the company. Therefore, the proprietary scheduling program assists Valeria’s with which of the following marketing implementation activities? a. Establishing a timetable for implementation b. Coordinating marketing activities c. Communicating within the marketing unit d. Motivating marketing personnel e. Establishing performance standards 108. Mama Maggie’s Bakery is a family-owned business with more than $1 million in annual revenues and six locations. At Miss Maiden’s, decisions are sometimes slow in coming and top-level managers delegate very little authority to lower-level employees. Mama Maggie’s is a(n) ____ organization. a. centralized b. decentralized c. empowered d. marketing-oriented e. sustainable

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Chap 02_20e 109. ______ communication allows marketing managers to understand the problems and requirements of lower-level employees. a. Coordination b. Downward c. Upward d. Centralized e. Decentralized 110. eScooters Inc. is preparing a written document specifying the activities to be performed to implement and control its marketing activities. This document is called the a. profit plan. b. marketing program. c. strategic market program. d. strategic business plan. e. marketing plan. 111. In many cases, companies that enter a market after innovative products have been introduced can achieve longterm competitive advantages by continuing to develop a better mousetrap. For example, MicroPro was the first company to introduce a word processing program, but SSI cornered a large market share when it introduced the Word Perfect program. Today, however, Microsoft’s Word is the dominant word-processing software program and has continued to endure due to the popularity of the Microsoft Office Suite of products. MicroPro’s WordStar possessed a ___________ advantage while Microsoft enjoyed a ___________ advantage. a. first-mover; late-mover b. late-mover; first-mover c. sustainable; unsustainable d. economic; technological e. sustainable; late-mover 112. Sony's strong name recognition and solid customer demand for its televisions and game systems are two elements of the firm's a. strengths. b. opportunities. c. weaknesses. d. threats. e. strategies. 113. An organization's business goals should be derived from its a. mission statement. b. strategic plan. c. strategic business plan. d. marketing plan. e. marketing strategy.

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Chap 02_20e 114. Hershel Jones is working on outlining the hierarchical relationships among personnel and specifying who is responsible for performing certain activities and making decisions in order to implement his firm’s marketing strategies. Hershel’s activity is best described as a. controlling. b. communicating. c. organizing. d. motivating. e. coordinating. 115. C.J. Foods, a pet food maker, purchased Lortscher Animal Nutrition, Inc. (LANI), a miller and ingredient supplier, and now operates this division as a separate profit center within the firm. In this example, LANI is a(n) ____ unit of C.J. Foods. a. strategic business b. marketing c. dependent d. independent e. corporate Scenario 2.2 Use the following to answer the questions. EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. 116. Refer to Scenario 2.2. The college-aged student represents EXperience Limited's ____, and the tours its operates represent the ____ element of the marketing mix. a. target market; distribution b. customer relationships; distribution c. cash cow; product d. cash cow; distribution e. target market; product

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Chap 02_20e 117. The owners of the newly created Colorado Steakhouse Corp. have conducted a SWOT analysis of its competition and sees a marketing opportunity for its new Colorado Steakhouse restaurant. They have developed its marketing plan to include the type of products it will sell, the location for the restaurant, and the pricing strategy it will use. Their plan includes a marketing objective to make a profit of 5% the first year of operation. So far, the owners of the restaurant have eliminated a key piece of the marketing plan, which is a. developing a qualitative measure for their objective. b. how they will address the competition's prices. c. coming up with a quantitative measure for their objective. d. specifying their target market. e. assessing their weaknesses. Scenario 2.1 Use the following to answer the questions. Southwest Airlines has a history of being able to retain its employees due to the atmosphere and culture of the company. Employees have been known to dress up in costume on an airplane, engage in "games" with the passengers, and generally provide a fun atmosphere for traveling. While other airlines have low rates of customer satisfaction, Southwest tends to maintain a high rating with its customers. Recently, airlines have started to charge for checked luggage and to fill every flight to its maximum, adding to the negative experience of airline travel. Southwest keeps its costs low through several methods, one being that they do not serve meals on flights, or provide pre-boarding passes. The typical flight is two hours or less and occurs between several selected cities rather than flying to practically anywhere in the country. Southwest is known for its low fares, its dependability, and its on-time flights. 118. Refer to Scenario 2.1. Southwest's low fares, dependability, and its on-time flights represent its a. competitive advantage. b. marketing opportunity. c. marketing plan. d. marketing objectives. e. strategic window. 119. Managers at the Tycho Manufacturing are engaged in a complex process of revising their organization's mission and goals and developing corporate strategy, marketing objectives, marketing strategy, and, eventually, a marketing plan. This process is called a. business-unit planning. b. strategic planning. c. marketing strategy. d. corporate strategy. e. strategic business planning.

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Chap 02_20e 120. Within a business organization, a profit center that is self-supporting in terms of sales, markets, production, and other resources is known as a a. profit entity. b. strategic business unit. c. marketing program. d. small business. e. diversified corporation. 121. Herbal Organics used actor and former NFL player Sweet Dave Brown to act as its spokesperson as the "Herbal Organics Man." It filmed humorous videos of the actor that went viral online. Herbal Organics saw sales of its deodorants increase substantially from the previous year. What type of competitive growth strategy did Herbal Organics use? a. Product penetration b. Market development c. Diversification d. Market penetration e. Product development 122. Pantene's new shampoo, AO1, is faltering badly in the market. Pantene’s marketing personnel are unsure who is responsible for various marketing tasks, when these tasks are to be completed, or what resources have been allocated. Suave Marketing Director Mei Lee said that the problem is that AO1 has the most poorly written ____ she has ever seen. a. marketing plan b. competitive plan c. implementation plan d. media schedule e. product specification sheet 123. Coca-Cola executives realized that more consumers are concerned with health. It has since expanded into the bottled water and bottled juice markets. This is an example of a firm identifying and capitalizing on a a. market opportunity. b. core competency. c. competitive advantage. d. strength. e. marketing strategy. 124. A marketing plan a. is characteristic of production-oriented firms and other mass producers. b. provides a framework for implementing and evaluating marketing activities. c. always increases the marketing manager's operating costs. d. produces plans that are short term in orientation. e. restricts the marketing manager's future options.

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Chap 02_20e 125. The Buddhas Brew Kombucha has become highly efficient in developing and manufacturing new kombucha products for the market. It far surpasses its competitors in these areas. Recently, major medical journals have started describing how kombucha can be highly advantageous for consumer health. This is likely to give Buddhas Brew Kombucha a ______________ because it is able to match its skills with opportunities in the marketplace. a. core competency b. competitive advantage c. new marketing objective d. market opportunity e. strategic advantage 126. The marketing plan is a. a plan of all aspects of an organization's business strategy. b. written about the same for each SBU. c. a written document detailing activities to be performed to implement and control marketing actions. d. designed to specify not only marketing, but all other functional areas of business activities as well. e. updated only periodically. 127. Darryl Grimes is director of career services at a major Midwestern university and works with corporations that are seeking to recruit recent college graduates. Darryl is interested in attracting Marathon Orthotics, Inc. to recruit entry-level marketing and sales representatives. Darryl has received very favorable word-of-mouth communication from alumni about Marathon Orthotics, and employees are extremely satisfied with the company’s culture and feel empowered to make decisions. In addition, they report that they are given a high degree of flexibility and autonomy, which enables them to quickly respond and adapt rapidly to changing customer needs. It’s likely that Marathon Orthotics has implemented a ____________ organizational structure. a. controlled b. centralized c. decentralized d. paternal e. matrix 128. All marketing mix decisions must have two characteristics: ____ and ____. a. consistency; flexibility b. consistency; rigidity c. formality; flexibility d. variability; flexibility e. formality; rigidity

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Chap 02_20e 129. GEM Corporation saw an opportunity in the electric car industry. The company had studied major electric car brands such as the Toyota Prius and the Nissan Leaf. It believed it could avoid many of the challenges these companies had encountered with a new technology that would reduce costs. GEM also knew from watching competitors that it would have to work hard to convince skeptics that the electric car was a viable and dependable method to get around. By avoiding these mistakes and using its technology, GEM quickly gained market share once it began launching its vehicles. What type of advantage did GEM have? a. first-mover advantage b. core advantage c. late-mover advantage d. strategic advantage e. market share advantage 130. You want to include a detailed marketing organizational chart in the company marketing plan. Which of the following sections of the marketing plan will you include this chart in? a. SWOT Analysis b. Performance Evaluation c. Marketing Implementation d. Marketing Objectives e. Environmental Analysis 131. Which of the following is the most specific and detailed type of business strategy? a. Business-unit b. Marketing c. Corporate d. Customer service e. Tactical 132. You work in the marketing department of shoe firm Hermes Inc. Over the past month you have been working with management to revise the company's mission statement and set specific marketing goals for the upcoming year. Today you are meeting with your marketing team and discussing the next step in the strategic planning process. What is this next step? a. Formulating corporate and business-unit strategies b. Analyzing the organization's strengths and weaknesses and identifying its threats and opportunities c. Determining performance standards to analyze the successful implementation of goals d. Evaluating the performance of the marketing strategy e. Writing up a marketing plan

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Chap 02_20e 133. ACME was not the first to bring a selfie stick to market, but it is now introducing a selfie stick that can also be used as a cane, an umbrella, and a knife for self-defense. Which of the following is ACME benefiting from as a late mover? a. Taking advantage of patents and trademarks from the first movers b. Being able to earn a reputation as a pioneer and market leader c. Being able to improve on the product design and marketing strategy d. Getting customers who purchased the first movers’ product to switch to ACME’s product e. Dealing with uncertainty related to sales growth and product demand 134. Aroon’s employer is currently developing a new marketing strategy. The top managers have developed the marketing strategy and have given it to Aroon so that she can now develop an implementation plan. Aroon’s company will most likely end up with which type of strategy? a. Decentralized b. Centralized c. Rigid d. Intended e. Realized 135. Okoye Gurira is breaking down and classifying costs of her small business to determine which are associated with specific marketing efforts and then comparing these costs with results. Okoye is engaging in a. sales analysis. b. marketing cost analysis. c. market share analysis. d. production cost analysis. e. profit and loss analysis. 136. The Boston Consulting Group's matrix is based on the a. idea that a firm's market share and market attractiveness are the important factors for a marketing strategy. b. assumption that a firm's actions have a profitable impact on marketing strategy. c. business position and market attractiveness of the firm. d. philosophy that a product's market growth rate and its market share are important determinants of its marketing strategy. e. idea that a product's market growth rate and market attractiveness determine the marketing strategy.

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Chap 02_20e 137. Cameron Dunphee runs the marketing department of a large electronics firm. This firm operates in an extremely competitive business environment. Cameron wants to ensure that he is involved in all the daily decisions and that there is a clear chain of communication between himself and his marketing employees. He believes that his extensive marketing experience makes him the best person for making all the major marketing decisions. Cameron believes all employees should act together as a cohesive unit and know their roles. Under Cameron Dunphee, the marketing department most likely has a _______________ structure a. decentralized b. informal c. demoralizing d. opportunistic e. centralized 138. Which of the following is NOT one of the steps in establishing an implementation timetable? a. Assigning responsibility for completing each activity to employees, teams, or managers b. Combining activities to be performed simultaneously with those that must be performed in sequence c. Identifying the activities to be performed d. Organizing activities in the proper order e. Determining the time required to complete each activity 139. The first step in the strategic performance evaluation is to a. take corrective action. b. reduce the difference between actual and desired standards. c. evaluate actual performance. d. compare actual performance and standards. e. establish performance standards. 140. When managers at Initek Inc. are developing their firm’s strategic plan, they should use a market orientation as a guide to ensure that ____ is an integral part of the process. a. customer satisfaction b. employee satisfaction c. the best use of their marketing resources d. the marketing mix e. the marketing function 141. A marketing objective should be expressed in clear, simple terms; be _____________; specify a time frame for completion; and ensure the marketing objective is _____________ with both business-unit and corporate strategies. a. precise; centralized b. encompassing; consistent c. measurable; consistent d. legalistic; aligned e. detailed; decentralized

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Chap 02_20e 142. Which of the following includes a detailed assessment of the competitive, economic, political, legal, regulatory, technological, and sociocultural factors that could affect marketing activities? a. Executive summary b. Environmental analysis c. SWOT analysis d. Marketing implementation e. Performance evaluation 143. Honda executives have set an objective for the firm’s new HR-V to boost Honda’s market share by 10%. What is the main problem with this objective? a. It is not clear and simple. b. It does not specify a time period. c. It is not measurable. d. It is consistent with the firm’s overall objectives. e. It is not consistent with the firm’s overall objectives. 144. A market opportunity results from a. the right combination of circumstances and timing that permits an organization to take action to reach a particular target market. b. monitoring the firm's capabilities. c. an increase in market share and profits. d. an assessment of environmental forces. e. technological determinism. 145. To be effective, employee rewards should also be tied to a. human resources. b. decisions. c. organizational activities. d. organizational goals. e. other employees’ actions. 146. A marketing plan document usually begins with a(n) a. executive summary. b. introduction to the company's marketing objectives. c. summary of current performance as compared with past performance. d. situation analysis. e. opportunity and threat analysis.

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Chap 02_20e 147. Walmart's pricing, service, and continuing investment in improving its website with additional product offerings give it a(n) ____ over many other retailers. a. organizational opportunity advantage b. strategic window c. market requirement d. market opportunity e. competitive advantage 148. Road King Cycles Inc. is a manufacturer of bicycles and sells its bikes to retail outlets that serve the consumer market. Road King bicycles are priced at $900 and over and are typically sold to consumers who are recreational riders or those aspiring to compete in amateur cycling or triathlon events. Road King has enjoyed a steady stream of revenue from its line of road bicycles which are more traditional, multispeed bicycles for those who enjoy long rides on city or rural roads. Sales of road bikes are relatively stable and Road King does little to market the bikes to consumers because it has a dominant share of the market. However, hybrid bikes represent a growing segment as younger consumers prefer the upright riding position of the bikes and they can be utilized for either road or mountain biking. Road King is introducing a hybrid line of bikes and supporting it with extensive advertising in specialty magazines as well as social media marketing. Road King believes the category of hybrid bikes is growing but its market position is not as strong as other manufacturers, such as Cannondale. Using the Boston Consulting Group’s Growth Share Matrix, road bicycles would be categorized as __________ while hybrid bikes would fall into the ___________ category. a. cash cows; question marks b. stars; question marks c. cash cows; stars d. dogs; stars e. cash cows; dogs 149. Because of its history of innovation and well-known brand name, Sony has a ____ advantage over Vizio. a. nonsustainable competitive b. sustainable marketing c. sustainable control d. sustainable implementation e. sustainable competitive 150. Cyberdyne Industries’ clever promotion campaign, which included YouTube videos of its artificial intelligence software in action as well as clever tweets and Instagram posts, helped boost the firm’s product sales. This would suggest that Cyberdyne is using which of the following competitive strategies? a. Diversification b. Divestiture c. Product development d. Market development e. Market penetration

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Chap 02_20e 151. Successful business organizations should take actions to convert internal weaknesses into ____ and external threats into ____. a. opportunities; core competencies b. core competencies; strengths c. opportunities; strengths d. strengths; core competencies e. strengths; opportunities Scenario 2.2 Use the following to answer the questions. EXperience Limited is a company which offers tours and vacations that include participation in an extreme sport, such as hang-gliding, bungee jumping, skydiving, and motocross. Adrian Moss, EXperience Limited's owner, has just finished developing the strategic plan, including marketing objective of growing his customer base by 15% during the coming year. He believes that the best way of reaching that objective is to promote to the college-aged student. In the past, the majority of his sales have been to males under the age of 29, participating in hang-gliding and bungee jumping at various tourist locations. He wants to expand his skydiving and motocross tours, but isn't sure whether or not the expansion will be profitable. He currently has a database containing all the customers who have gone on a hang-gliding or bungee jumping vacation with his company. 152. Refer to Scenario 2.2. According to the BCG matrix, the hang-gliding and bungee jumping tours have been a ____ for EXperience Limited, while the skydiving and motocross tours represent a ____. a. star; dog b. cash cow; question mark c. cash cow; star d. star; cash cow e. star; question mark 153. Which employees are ideally positioned to understand customers’ needs and wants and thus a vital component in the chain of communications? a. Top executives b. Marketing managers c. Operations managers d. Manufacturing employees e. Customer-contact employees

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Chap 02_20e 154. Your quarterly strategic planning meeting will be held next month. You will schedule all the brainstorming and discussion activities for the meeting in a sequence and structure consistent with the structure of the traditional strategic planning process. Which of the following sequence of activities should you schedule in order to be most consistent with the structure of the traditional strategic planning process? a. 1: Develop functional area goals and objectives; 2: Complete a SWOT analysis for the company; 3: Develop business unit strategies; 4: Develop the company’s mission and goals. b. 1: Develop the company’s mission and goals; 2: Develop business unit strategies; 3: Complete a SWOT analysis for the company; 4: Develop functional area goals and objectives. c. 1: Complete an economic environment analysis; 2: Develop the company’s mission and goals; 3: Develop business unit strategies; 4: Complete a SWOT analysis for each business unit; 5: Develop functional area goals and objectives. d. 1: Complete a SWOT analysis for the company; 2: develop the company’s mission and goals; 3: Develop business unit strategies; 4: Develop functional area goals and objectives. e. 1: Develop the company’s mission and goals; 2: Develop business unit strategies; 3: Complete an economic environment analysis; 4: Develop functional area goals and objectives. 155. Arjen Pradesh recently graduated from an East Coast university and has joined a small start-up based in New York City. One of his first assignments is to work collaboratively with other members of the marketing team to draft the marketing plan for the next fiscal year. Arjen is highly skilled in conducting secondary research and, as an alumnus of his university, he continues to have complimentary access to the university’s library resources. He’s now realizing how important data analysis is to firms and is glad he took a marketing research course. Arjen is utilizing the library resources to uncover information about a variety of external factors that could provide opportunities or threats and is exploring such factors as competitive, economic, political, legal, regulatory, technological, and sociocultural. Which section of the marketing plan would be most appropriate for the information that Ethan is obtaining through secondary market research? a. Marketing strategy b. Executive summary c. Marketing objectives d. SWOT analysis e. Environmental analysis

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Chap 02_20e 156. Yoshi Ramen restaurant opened in 2017 and struggled to build a customer base for lunch, dinner, or event catering options. When the owners were planning the restaurant, they had projected they would sell 60 to 80 bowls daily with an average lunch price of $8.00 They believed that dinner sales could generate between 100 and 120 bowls per day at $12 per customer. However, the actual daily lunch and dinner totals were much less and the owners were barely breaking even and wondered if they should close the business. However, Yoshi Ramen began an aggressive promotion effort, offered lunch and dinner specials and promoted the restaurant as a family-friendly place where everyone could enjoy fresh, ramen dishes. As a result of their marketing efforts, the restaurant is selling out of its product almost daily and has built a takeaway business as well. They are selling 100 lunches daily with an average price of $10 and approximately 200 dinner plates at $15. The owners are pleased with the revenue stream they’re generating from the restaurant and considering opening a second location or adding space to accommodate more customers at the existing location. Using the data regarding number of bowls sold and the average order amount generated, what kind of analysis can the owners of the restaurant perform to assist them in understanding their business opportunities? a. Engagement analysis b. Sales analysis c. Advertising analysis d. Profit analysis e. Marginal cost analysis 157. The following passage is an often-expressed critique of one of the two types of decision-making structures: Another disadvantage of this structure is that the organization may become fragmented. Business units may lose their sense of team spirit and cooperation. Some business units may put their own interests ahead of those of the company as a whole. Innovative ideas that once spread through the company quickly may now remain within individual business units. Which one of the following decision-making structures is this critique referring to? a. Centralized organizational structure b. Remote organizational structure c. Functional organizational structure d. Process organizational structure e. Decentralized organizational structure 158. The marketing department establishes its objectives and develops strategies to achieve them after the firm has a. developed its mission statement. b. written the marketing plan. c. developed corporate and strategic business unit strategies. d. performed a detailed analysis of its strengths and weaknesses. e. analyzed the marketing environment.

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Chap 02_20e 159. The director of marketing for Duck Brand tells the rest of the management team, "When it comes to our duct tape unit, our strategy will be to use funds generated here to support our venture in the industrial bonding market." This strategy indicates that the duct tape unit falls into which one of the following classifications? a. Problem child b. Star c. Cash cow d. Dog e. Question mark 160. The strategic planning process begins with a. development of an organizational mission statement. b. development of marketing strategy. c. analysis of the marketing environment. d. analysis of target markets. e. development of a marketing plan. 161. Compare and contrast corporate strategy and marketing strategy.

162. Describe the two major components of marketing strategy. What should marketing managers consider when developing marketing strategy?

163. In what ways does having a mission statement help an organization achieve its goals?

164. Describe the two major methods for evaluating the actual performance of marketing strategies.

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Chap 02_20e 165. Discuss the creation of a marketing plan. What are the major components of a marketing plan?

166. Describe the process of strategic planning. How does this process help marketing managers?

167. Discuss how a firm's orientation is related to the development of its strategic plan.

168. How does a firm use a market opportunity to reach a particular target market?

169. Define the four product categories used in the Boston Consulting Group (BCG) product-portfolio analysis.

170. Discuss the different ways of organizing the marketing unit.

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Chap 02_20e Answer Key 1. False 2. True 3. True 4. True 5. True 6. True 7. False 8. True 9. True 10. True 11. True 12. False 13. False 14. True 15. True 16. False 17. False 18. False 19. True 20. True 21. False 22. False 23. False 24. False 25. True 26. True

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Chap 02_20e 27. False 28. True 29. False 30. True 31. True 32. False 33. False 34. True 35. False 36. True 37. False 38. True 39. False 40. True 41. True 42. True 43. True 44. False 45. False 46. e 47. a 48. b 49. a 50. c 51. a 52. b 53. e 54. c Copyright Cengage Learning. Powered by Cognero.

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Chap 02_20e 55. d 56. c 57. d 58. b 59. d 60. d 61. e 62. c 63. e 64. d 65. b 66. e 67. d 68. d 69. b 70. a 71. a 72. c 73. c 74. e 75. c 76. a 77. d 78. b 79. d 80. e 81. a 82. c Copyright Cengage Learning. Powered by Cognero.

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Chap 02_20e 83. d 84. d 85. c 86. b 87. d 88. e 89. d 90. a 91. e 92. a 93. c 94. a 95. a 96. c 97. d 98. b 99. c 100. d 101. d 102. b 103. a 104. c 105. b 106. b 107. a 108. a 109. c 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 02_20e 111. a 112. a 113. a 114. c 115. a 116. e 117. d 118. a 119. b 120. b 121. d 122. a 123. a 124. b 125. b 126. c 127. c 128. a 129. c 130. c 131. b 132. a 133. c 134. b 135. b 136. d 137. e

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Chap 02_20e 138. b 139. e 140. a 141. c 142. b 143. b 144. a 145. d 146. a 147. e 148. a 149. e 150. e 151. e 152. b 153. e 154. b 155. e 156. b 157. e 158. d 159. c 160. a

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Chap 02_20e 161. Corporate strategy determines the means for utilizing resources in the functional areas of marketing, production, finance, research and development, and human resources to achieve the organization’s goals. A corporate strategy outlines the scope of the business and such considerations as resource deployment, competitive advantages, and overall coordination of functional areas. On the other hand, a marketing strategy involves the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members. A marketing strategy articulates the best use of the company’s resources to accomplish its marketing objectives. Selecting an appropriate target market may be the most important decision a company makes in the strategic planning process and is a key to strategic success. The target market must be chosen before the organization can adapt its marketing mix to meet the customers’ needs and preferences. 162. A marketing strategy is the selection of a target market and the creation of a marketing mix that will satisfy the needs of target market members. A marketing strategy articulates the best use of the company’s resources to achieve its marketing objectives. A target market is a specific group of customers on whom an organization focuses its marketing efforts. When exploring possible target markets, marketing managers try to evaluate how entering them would affect the firm’s sales, costs, and profits. In addition, they should determine if satisfying those needs is consistent with the firm’s overall mission and objectives. Once a target market is selected, it is used as the basis for creating a marketing mix to satisfy the needs of that market. The marketing mix is composed of four marketing activities—product, pricing, distribution, and promotion—that a firm can control to meet the needs of customers within its target market. All marketing mix decisions should be consistent with the business-unit and corporate strategies. Also, marketing mix decisions should be flexible and permit the firm to alter the marketing mix in response to changes in market conditions, competition, and customer needs. At the marketing mix level, a firm can detail how it will achieve a competitive advantage. To gain an advantage a firm must do something better than its competitors. Ultimately, it is important for the firm to achieve a sustainable competitive advantage, one that the competition cannot copy in the foreseeable future. 163. Once an organization has assessed its resources and opportunities, it can begin to establish goals and strategies to leverage them. The goals of any organization should derive from its mission statement, a long-term view, or vision, of what the organization wants to become. A well-formulated mission statement gives an organization a clear purpose and direction, distinguishes it from competitors, provides direction for strategic planning, and fosters a focus on customers. An organization’s goals, which focus on desired results, guide the remainder of its planning efforts. 164. The principal means by which a marketer can gauge whether a marketing strategy has been effective in achieving objectives is by analyzing the actual performance of the marketing strategy. Sales analysis uses sales figures to evaluate a firm’s current performance. It is a common method of evaluation because sales data are readily available, at least in aggregate form, and can reflect the target market’s reactions to a marketing mix. If sales spike after a particular marketing mix is implemented, marketers can be reasonably certain that the marketing mix was effective at reaching the target audience. Information gleaned from sales data alone is not sufficient, however. To be useful, marketers must compare current sales data with forecasted sales, industry sales, specific competitors’ sales, and the costs incurred from marketing efforts to achieve the sales volume. Although sales analysis is critical for evaluating the performance of a marketing strategy, it provides only a partial picture. A marketing strategy that successfully generates sales may nevertheless be deemed ineffective if it is extremely costly. A firm must take into account the marketing costs associated with a strategy to gain a complete understanding of its effectiveness at achieving a desired sales level. Marketing cost analysis breaks down and classifies costs to determine which are associated with specific marketing efforts. Comparing costs of previous marketing activities with results allows a marketer to allocate the firm’s marketing resources better in the future. A company that understands and manages its costs appropriately has a competitive advantage.

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Chap 02_20e 165. A marketing plan is a written document that specifies the marketing activities to be performed to implement and evaluate the organization’s marketing strategies. The first component of the marketing plan is the executive summary, which provides an overview of the entire plan so that readers can quickly identify the key issues and their roles in the planning and implementation processes. The executive summary includes an introduction, an explanation of the major aspects of the plan, and a statement about costs. The next component of the marketing plan is the environmental analysis, which supplies information about the company’s current situation with respect to the marketing environment, the target market, and the firm’s current objectives and performance. The environmental analysis includes an assessment of all the environmental factors— competitive, economic, political, legal, regulatory, technological, and sociocultural—that can affect marketing activities. The analysis then examines the current needs of the organization’s target markets. In the final section of the environmental analysis, the company evaluates its marketing objectives and performance to ensure that objectives are consistent with the changing marketing environment. The next component of the marketing plan is the SWOT analysis (strengths, weaknesses, opportunities, and threats), which utilizes the information gathered in the environmental analysis. The marketing objectives section of the marketing plan states what the company wants to accomplish through marketing activities, using the SWOT analysis as a guide to where the firm stands in the market. The marketing strategies component outlines how the firm plans to achieve its marketing objectives and discusses the company’s target market selection(s) and marketing mix. The marketing implementation component of the plan outlines how marketing strategies will be executed. Finally, the performance evaluation establishes the standards for how results will be measured and evaluated, and what actions the company should take to reduce the differences between planned and actual performance. 166. Through the process of strategic planning, a company establishes an organizational mission and formulates goals, a corporate strategy, marketing objectives, and a marketing strategy. A market orientation should guide the process of strategic planning to ensure that a concern for customer satisfaction is an integral part of the entire company, leading to the development of successful marketing strategies and planning processes. The strategic planning process begins with the establishment or revision of an organization's mission and goals. The corporation and individual business units then develop strategies to achieve these goals. The company performs a detailed analysis of its strengths and weaknesses and identifies opportunities and threats within the external marketing environment. Next, each functional area of the organization (marketing, production, finance, human resources, etc.) establishes its own objectives and develops strategies to achieve them, which must support the organization’s overall goals and mission and should be focused on market orientation. 167. Through the process of strategic planning, a company establishes an organizational mission and formulates goals, a corporate strategy, marketing objectives, and a marketing strategy. A market orientation should guide the process of strategic planning to ensure that a concern for customer satisfaction is an integral part of the entire company, leading to the development of successful marketing strategies and planning processes.

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Chap 02_20e 168. Analysis of the marketing environment also includes identifying opportunities in the marketplace, which requires a solid understanding of the company’s industry. When the right combination of circumstances and timing permits an organization to take action to reach a particular target market, a market opportunity exists. The SWOT analysis is used to assess an organization’s strengths, weaknesses, opportunities, and threats. It is depicted as a four-cell matrix and shows how marketers must seek to convert weaknesses into strengths, threats into opportunities, and match internal strengths with external opportunities to develop competitive advantages. Strengths and weaknesses are internal factors that can influence an organization’s ability to satisfy target markets. Strengths refer to competitive advantages, or core competencies, that give the company an advantage over other firms in meeting the needs of its target markets. Weaknesses are limitations a company faces in developing or implementing a marketing strategy. 169. One of the most helpful tools for a marketer is the market growth/market share matrix, developed by the Boston Consulting Group (BCG). This approach is based on the philosophy that a product’s market growth rate and its market share are important considerations in determining marketing strategy. The BCG matrix enables a strategic planner to classify a company’s products into four basic types: stars, cash cows, dogs, and question marks. Stars are products with a dominant share of the market and good prospects for growth. However, they use more cash than they generate in order to finance growth, add capacity, and increase market share. Cash cows have a dominant share of the market, but low prospects for growth. They typically generate more cash than is required to maintain market share. Dogs have a subordinate share of the market and low prospects for growth. Dogs are often found in established markets. Question marks, sometimes called “problem children,” have a small share of a growing market and require a large amount of cash to build market share. 170. The structure and relationships of a marketing unit, including establishing lines of authority and communication that connect and coordinate individuals, strongly affect marketing activities. To organize a marketing unit, firms must first decide whether operations should be centralized or decentralized, a choice that directly affects marketing decision making and strategy. In a centralized organization, top-level managers delegate little authority to lower levels. In centralized organizations, marketing decisions are made at the top levels. However, centralized decision making may prove ineffective in firms that must respond quickly to fluctuations in customer demand. In these organizations, decentralized authority allows the company to adapt more rapidly to customer needs. In a decentralized organization, decision making authority is delegated as far down the chain of command as possible. How effectively a company’s marketing management can implement marketing strategies also depends on how the marketing unit is organized. Organizing marketing activities to align with the overall strategic marketing approach enhances organizational efficiency and performance. A marketing department should clearly outline the hierarchical relationships between personnel and who is responsible for performing certain activities and making decisions.

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Chap 03_20e Indicate whether the statement is true or false. 1. All members of an industry are bound to follow trade association guidelines. a. True b. False 2. A good example of a government regulatory group at the local level is the Better Business Bureau. a. True b. False 3. Monitoring the competitive environment guides marketers in developing competitive advantages. a. True b. False 4. The total amount of disposable income is affected by the amount of taxes consumers pay. a. True b. False 5. Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently. a. True b. False 6. Product competitors market products with similar features and benefits to the same customers at similar prices.

a. True b. False 7. During environmental scanning, managers must gather as much information as possible to ensure efficient analysis. a. True b. False 8. Credit increases current buying power at the expense of future buying power. a. True b. False 9. Fluctuations in the economy follow a general pattern known as the business cycle. It includes prosperity, recession, depression, and recovery. a. True b. False 10. Disposable income is used to pay taxes, spend, and save. a. True b. False

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Chap 03_20e 11. Because of strict boundaries regarding responsibilities of regulatory agencies, confusion and conflict regarding jurisdiction of marketing activities is rare. a. True b. False 12. A monopoly exists when a firm with many potential competitors attempts to develop a marketing strategy to differentiate its products. a. True b. False 13. M arketers can influence the political process through political action committees that solicit donations from individuals and then contributes those funds to candidates running for political office. a. True b. False 14. If political officials have positive feelings toward particular firms or industries, they are less likely to create or enforce laws and regulations that are unfavorable for business organizations. a. True b. False 15. Technological developments have a direct impact on creating and maintaining a marketing mix. a. True b. False 16. The strength of one's buying power depends partially on the state of the economy. a. True b. False 17. Many laws that directly influence marketing activities were enacted either to preserve a competitive atmosphere or to protect consumers. a. True b. False 18. Technology can help marketers become more productive. a. True b. False 19. State and local regulatory agencies usually do not establish and enforce regulations that conflict with the actions of national regulatory agencies. a. True b. False

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Chap 03_20e 20. The marketing environment consists of external forces that directly or indirectly influence an organization's acquisition of inputs and generation of outputs. a. True b. False 21. The number of firms that control the supply of a product may affect the strength of competition. a. True b. False 22. Using surveys to conduct marketing research is an example of environmental analysis. a. True b. False 23. Wealth enables consumers to gain buying power. a. True b. False 24. Firms always adopt and use new technology. a. True b. False 25. All marketers interpret laws and regulations conservatively and strictly to avoid violating a vaguely worded law. a. True b. False 26. Single people have quite different spending patterns than couples and families with children. They spend more heavily on convenience foods, restaurants, travel, entertainment, and recreation. a. True b. False 27. Political forces are beyond the control of marketers, and so they can only react to them. a. True b. False 28. If a person has buying power, he or she is influenced only by a product's absolute price. a. True b. False 29. Pure competition is a common competitive environment. a. True b. False 30. An increasingly diverse cultural base in the United States means that marketers face increasingly diverse consumer markets. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 31. Through technology assessment, managers try to foresee the effects of new products and processes on the firm's operations and on society. a. True b. False 32. The number of single men and women living alone is declining. a. True b. False 33. A recession is characterized by extremely high unemployment, very low wages, minimal total disposable income, and lack of consumer confidence in the economy. a. True b. False 34. The dynamics of technology refers to the broad nature of technology as it moves through society. a. True b. False 35. An individual can have a high income and very little wealth. a. True b. False 36. Wealth is an accumulation of past income, natural resources, and financial resources. a. True b. False 37. For a given level of buying power, the larger the family, the greater the willingness to spend. a. True b. False 38. An individual's after-tax income is called his or her discretionary income, which is used for spending and/or saving. a. True b. False 39. If groundbreaking products and processes can be protected through patents, a company is less likely to market them and make the benefits of its research available to competitors. a. True b. False 40. Environmental analysis helps managers identify potential threats and opportunities linked to environmental changes. a. True b. False

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Chap 03_20e 41. A factor that affects willingness to spend is general economic conditions. a. True b. False 42. During a recession, it is advisable for a firm to slash their marketing efforts to ensure survival until the economy improves. a. True b. False 43. Decreases in taxes lead to decreases in disposable income. a. True b. False 44. Fraud and antitrust violations are the most frequently sentenced organizational crimes. a. True b. False 45. The three major components of sociocultural forces are demographic and diversity characteristics, cultural values, and consumerism. a. True b. False 46. Although numerous regulatory forces arise from governmental sources, nongovernmental regulatory forces may also affect marketing decisions. a. True b. False 47. Political forces and legal and regulatory forces are the same thing. a. True b. False 48. Sociocultural values include cultural values, demographics, and the impact of technology on society. a. True b. False 49. Changes in cultural values have little effect on people's needs for products. a. True b. False 50. To achieve their objectives, consumer advocates write letters to companies, lobby government agencies, broadcast public service announcements, and boycott companies whose actions they deem irresponsible. a. True b. False

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Chap 03_20e 51. Technology affects the types of products offered to consumers. a. True b. False 52. The major forces that make up the consumerism movement are consumer organizations and business organizations. a. True b. False 53. The proportion of the U.S. population that will be over 65 years of age is expected to decline by the year 2060. a. True b. False 54. The Food and Drug Administration influences marketing activities the most. a. True b. False 55. Technological changes do not directly affect what, how, when, and where products are marketed. a. True b. False 56. The Sherman Antitrust Act, along with several other laws, is a procompetitive law because it was created to preserve competition. a. True b. False 57. Credit increases future buying power. a. True b. False 58. Brand competitors market products with similar features, benefits, and prices to the same customers. a. True b. False 59. Numerous self-regulatory programs have been created to stop or stall the development of laws and government regulatory groups that would regulate marketing practices. a. True b. False 60. The Federal Trade Commission would be the most likely regulatory agency to curb false advertising. a. True b. False

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Chap 03_20e 61. An oligopoly exists when a firm offers a product that has no close substitutes, making the firm the sole source of supply. a. True b. False Indicate the answer choice that best completes the statement or answers the question.

Scenario 3.3 Use the following to answer the questions.

The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their deceptive practices dated to 2000 where they had billed customers for products such as “Privacy Guard” or “Privacy Assist” without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about $268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the benefits were greater than existed. 62. Refer to Scenario 3.3. If the Consumer Financial Protection Bureau decides to contact the Federal Trade Commission (FTC) to investigate Bank of America and its practices regarding deceptive billing practices, and if the FTC believes that Bank of America has violated a law, the FTC would first a. issue a cease-and-desist order. b. order Bank of America to stop engaging in deceptive practices to avoid prosecution. c. order Bank of America to provide refunds to consumers. d. order Bank of America to pay up to $10,000 per day for violating the law. e. Order Bank of America to be divided into a number of small bank operations. 63. Y our company is planning to increase its political influencing activities in the next fiscal year in an attempt to shape upcoming key legislation in your favor. Which of the following steps should you consider to accomplish this goal? a. H ire a public relations firm to help create a more youthful image for your company. b. F orm your own Political Action Committee (PAC). c. D ecrease your contributions to the political campaigns of key legislators. d. C lose your company’s legislative affairs office in Washington D.C. e. C ancel your company’s membership in the U.S. Chamber of Commerce.

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Chap 03_20e 64. Scenario 3.1 Use the following to answer the question. Outdoor Sporting World (OSW), a national chain, has been doing business with Casper Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of OSW's financial director that the average cost per Casper Sports skateboard had substantially increased over that of the previous year. The financial director asked the marketing department if they knew what the Casper skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Casper skateboards were priced at $15 less in the competing store than at Outdoor. The financial director found that Casper Sports was selling a similar number of skateboards to one of OSW’s competitors for $10 less per skateboard. The attorney for Outdoor Sporting World immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. Suppose that a customer has a complaint against Casper Sports stores. He files a complaint with the Better Business Bureau. What action could the BBB take against Casper if the complaint was substantiated and Casper did not change the offending practice? a. Issue a cease-and-desist order b. Seek a $10,000 monetary penalty c. Issue a warning to consumers through the local newspaper d. Order OSW to make restitution e. Seek a $5,000 monetary penalty 65. T he following are some predictions from Smithsonian magazine regarding the future sociocultural dynamics in the world: 1. The U.S. population will expand by 100 million. 2. The portion of the population that is currently at least 65 years old is expected to increase from 13 percent to 20 percent by 2050 in the United States. 3. By 2050, the working age group of people between 15 and 64 years old is expected to grow by 42 percent in the United States, but decline by 10 percent in China, 25 percent in Europe, 30 percent in South Korea, and 40 percent in Japan. With respect to these predictions, which one of the following statements is true? a. A ll of these predictions refer to population demographic characteristics. b. B y 2050, the United States will have proportionately less workers in its population than Japan will have. c. I f these predictions come true, the average age of the populations of Japan and South Korea will be lower than the United States. d. I f these predictions come true, there will be less of a strain on environmental resources in the years to come. e. B ased on these predictions, it is expected that the average age of the population in the United States will be lower in 2050 than it is today.

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Chap 03_20e 66. In addition to the proliferation of new organic brands, many conventional marketers have introduced organic versions of their products, including Gatorade, Kraft Heinz, and even Kroger. These firms are responding to changes in a. federal law. b. cultural values. c. demographics. d. consumerism. e. technological forces. 67. T he Federal Reserve Bank just issued its economic report on the U.S. economy for the quarter just ended. The following are some of the key points mentioned in the report: 1. “Economic activity has continued to grow at a moderate pace since the last report.” 2. “Manufacturers report that business activity has picked up considerably in recent weeks.” 3. “Tourism activity has strengthened, no longer held back by harsh weather.” 4. “General merchandise retailers report that sales rebounded strongly in April and early May.” 5. “Retail contacts generally say that inventories are at satisfactory levels, that prices are mostly steady, and that the degree of discounting is little changed from a year ago.” Based on these economic forces, you can conclude a. t hat the economy is entering the depression stage of the business cycle. b. t hat the economy is in the prosperity stage of the business cycle and consumers’ buying power is declining. c. t hat the economy is in the recession stage of the business cycle and consumers’ buying power is increasing. d. t hat the economy is in the recession stage of the business cycle and consumers’ buying power is declining. e. t hat the economy is in the prosperity stage of the business cycle and consumers’ buying power is increasing. 68. Consumer confidence and willingness to spend begins to increase during periods of ____, and marketers must remain very flexible to make the necessary adjustments. a. depression b. prosperity c. recovery d. growth e. recession 69. Which of the following is the best example of utilizing technology to improve consumer relationships? a. Waiters recording orders on handheld computers b. Surveying customers to determine their needs c. Responding to changes in competitors' prices d. Introducing stringent package standards e. Requiring dolphin-safe tuna Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 70. B ased on data from the Federal Reserve Bank of St. Louis, the Civilian Labor Force Participation Rates for men and women in the United States were as follows from 1994 through 2014: Participation Rate (Percent of Group) 69.2 57.1

Demographic Group

Month

Men Women

May 2014

Men Women

May 2004

72.9 59.1

Men Women

May 1994

74.8 58.7

With respect to this data, which one of the following statements is true? a. The labor participation rate of men in the United States impacts the marketing environment, and it is increasing faster than the rate for women. b. T he labor participation rate for women impacts the marketing environment, and it has been less stable over the last 20 years than the rate for men. c. I n terms of proportions, fewer women were working in May 2004 compared to May 2014. d. T he labor participation rate is an economic force that impacts the marketing environment. e. T he labor participation rate is a political force that impacts the marketing environment. 71. Which of the following provides protection for and regulates brand names, brand marks, trade names, and trademarks? a. Sherman Antitrust Act b. Clayton Act c. Robinson–Patman Act d. Lanham Act e. Celler–Kefauver Act 72. Although marketing theory supports the contrary, it is more probable that marketing budgets will be cut during periods of economic a. recovery. b. prosperity. c. recession. d. inflation. e. expansion.

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Chap 03_20e 73. Scenario 3.2 Use the following to answer the question. Richards Homes, a mobile home manufacturer since 1934, introduced its new iHome. The iHome is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus addons known as “pods.” The base home is a one-bedroom, one-bath, 734-square-foot version at a price of around $80,000. There is also a 1,000-square-foot version for around $100,000. All versions may add on the additional one-room pods, which are shipped to your location and constructed on site. The homes offer galvanized metal roofing, corrugated steel siding, Volatile Organic Compounds-free paints, and a “butterfly” roof that collects rainwater. The iHome uses 30% less energy than a similar square-foot home and offers “green” characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, prefabricated design offers endless options for creating the customer’s home, and its engineered building system cuts down on construction waste. Due to the “green effects” of the iHome, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The iHome's reduction of energy use, renewable resources as materials, “pod” customization, reduction of construction waste, and tax abatement status is/are examples of reaction to which environmental forces? a. Political and sociocultural b. Political, sociocultural, economic c. Sociocultural and economic d. Political and economic e. Political, economic, sociocultural, and technological 74. The Procter & Gamble Company has recognized the significant increase in population diversity within the U.S. market. Which one of the following best illustrates the company's integration of this knowledge into its marketing strategy? a. Ads featuring nostalgic Americana b. Bonus coupons on Tide packages c. Ads featuring mixed-race families and dads doing laundry d. Ads in The New Yorker and Reader's Digest e. Ads aimed at children 75. The accumulation of past income, natural resources, and financial resources is known as a. income. b. collected income. c. credit. d. wealth. e. savings.

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Chap 03_20e 76. Despite the fact that the FDA has mandated that they are safe, many people still distrust genetically-modified foods. Some are choosing to express their dissatisfaction by protesting and writing letters to their state governments. These letters demand that genetically-modified food be labeled so shoppers can make informed choices. These activities are an example of ___________. a. d emographic shifts b. c onsumerism c. t he cultural diversity movement d. s elf-regulation e. legal violations 77. Dasani, SmartWater, Aquafina, Glaceau, Pure Life, and Fiji are examples of __________ competitors in the

beverage industry. a. brand b. product c. generic d. total budget e. category mangagement 78. The tobacco industry in the United States is dominated by three large companies. When any one of these companies changes its price on tobacco products, the other two companies quickly adjust their prices to match it. From these characteristics, the tobacco industry could best be described as a. price sensitive. b. opportunistic. c. monopolistic competition. d. an oligopoly. e. a monopoly. 79. Consumer protection legislation deals with all of the following legal concerns except a. consumer safety. b. sale of hazardous products. c. monopolistic practices. d. information disclosure. e. health claims on food packages.

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Chap 03_20e 80. Y our marketing team has started the analysis of your company’s marketing environment. Competition has been very intense in recent years in your industry, so you decide to place more emphasis on analyzing the competitive forces in your industry. You group your competitors into the four types that a firm normally faces. In general, which one of the four types of competitors do you think will be the most formidable for your company? a. Total budget competitors b. F eatures-oriented competitors c. B rand competitors d. G eneric competitors e. P roduct competitors 81. Your company is accepting proposals from a variety of consulting firms to assist in determining how the rapid changes in technology will impact your firm’s future operations and profitability. Which one of the following consulting firm proposals should you accept? a. Accept Firm A’s proposal to complete a technology evaluation. b. Accept Firm B’s proposal to complete a SWOT analysis. c. Accept Firm C’s proposal to implement an information technology change management process. d. Accept Firm D’s proposal to complete a technology assessment. e. Accept Firm E’s proposal to assess technological reach and dynamics. 82. Assuming that inflation is low, high buying power characterizes the ____ stage of the business cycle. a. prosperity b. depression c. recovery d. succession e. recession 83. In general, which of the following competitive structures is an organization least likely to operate? a. Monopoly b. Monopolistic competition c. Oligopoly d. Perfect competition e. Pure competition 84. Three primary methods of collecting information for environmental scanning are a. marketing research, company records, and advance orders. b. secondary sources, company records, and observation. c. executive knowledge, media, and marketing research. d. observation, secondary sources, and marketing research. e. company database, executive knowledge, and research.

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Chap 03_20e 85. What national self-regulatory organization screens ads? a. Federal Advertising Review Division b. National Advertising Review Board c. Federal Communications Commission d. Consumer Federation of America e. Better Business Bureau 86. Which of the following acts was enacted to prevent businesses from restraining trade and monopolizing markets? a. Sherman Antitrust Act b. Celler-Kefauver Act c. Federal Trade Commission Act d. Robinson–Patman Act e. Wheeler–Lea Act 87. According to the textbook, a manager's duties in an environmental analysis include a. checking information for accuracy, resolving inconsistencies, and assigning significance to the findings. b. observation and assessment. c. conducting research, assessment, and reporting. d. observation, market research, and fact finding. e. checking the company database, conducting research, and reporting. 88. Marketers who view political forces as being beyond their control are taking a(n) ____ response toward these forces. a. reactive b. aggressive c. proactive d. environmentally active e. counteractive

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Chap 03_20e 89. Scenario 3.2 Use the following to answer the questions. Richards Homes, a mobile home manufacturer since 1934, introduced its new iHome. The iHome is one of the first of its kind, designed as an updated, modern version of the modular home, offered as a base home plus addons known as “pods.” The base home is a one-bedroom, one-bath, 734-square-foot version at a price of around $80,000. There is also a 1,000-square-foot version for around $100,000. All versions may add on the additional one-room pods, which are shipped to your location and constructed on site. The homes offer galvanized metal roofing, corrugated steel siding, Volatile Organic Compounds-free paints, and a “butterfly” roof that collects rainwater. The iHome uses 30% less energy than a similar square-foot home and offers “green” characteristics of solar panels, tankless water heaters, and low-flow faucets. In addition, it comes with bamboo flooring, a renewable resource. The modular, prefabricated design offers endless options for creating the customer’s home, and its engineered building system cuts down on construction waste. Due to the “green effects” of the iHome, the state governments have given it a tax abatement for any sales taxes. Refer to Scenario 3.2. The income a consumer would use to purchase an iHome is considered ____. a. discretionary income b. buying power c. disposable income d. annual household income e. gross domestic income 90. According to your text, which of the following has been facilitated by the internet? a. Environmental analysis b. Environmental scanning c. Environmental reactivity d. Technological assessment e. Competitive analysis 91. Major Babineaux hired Green Acres, a local landscape firm, to plant trees and shrubs in his front yard. The landscape is beautiful when the company is done; however, in just a few days many of the plants begin to die. When Major complained to the manager of Green Acres, the manager says that Major must have done something to them that caused the plants to die, such as overwatering them. Green Acres doesn’t have any money-back guarantees. Major is angry that he can’t get a refund or replacement. At this time, Major's best course of action would be to contact the a. local Chamber of Commerce. b. Federal Trade Commission. c. Warren Commission. d. Better Business Bureau. e. Consumer Product Safety Commission.

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Chap 03_20e 92. More than half of the research of technology created is paid for by a. corporations. b. state and local governments. c. the federal government. d. large universities. e. private investors. 93. When a firm has many potential competitors and tries to develop a marketing strategy to differentiate its products from the competitors' products, a(n) ____ structure exists in the competitive environment. a. oligopoly b. monopoly c. pure competition d. oligopolistic competition e. monopolistic competition 94. To monitor changes in the marketing environment effectively, marketers must engage in a. environmental scanning and analysis. b. economic scanning and analysis. c. self-regulatory analysis. d. marketing research analysis. e. environmental monitoring. 95. A firm is trying to determine whether it would be advantageous to adopt a new computer system with advanced software. It is investigating how this computer system will improve its own operational efficiency. It is also examining trends in the industry to determine the impact that adopting this computer system might have on customers and society at large. The firm is engaging in _______________. a. m onopolistic competition b. e conomic forecasting c. s elf-regulation d. e nvironmental analysis e. t echnology assessment

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Chap 03_20e

Scenario 3.4 Use the following to answer the questions.

Bank of America is interested in helping people understand their money and how to build Better Money Habits™. It is working to connect customers, clients, employees, and communities to the tools, products, and education they need to help make their financial lives better. The Bank of America has partnered with Khan Academy to launch BetterMoneyHabits.com where free content is available to anyone via a self-paced learning experience to explain the complex concepts of financial matters. 96. Refer to Scenario 3.4. The partnership between Bank of America and Khan Academy to provide financial literacy is an attempt by the company to a. comply with the Consumer Product Safety Act. b. engage in self-regulatory actions. c. comply with the Sherman Antitrust Act. d. comply with the Nutrition Labeling and Education Act. e. comply with the Robinson-Patman Act. 97. Which of the following characteristics relates to the fact that technology acts as a catalyst to spur even faster development? a. Breadth b. Reach c. Dynamics d. Eco-friendly e. Self-sustaining 98. Which of the following terms refers to consumers' propensity to buy? a. Disposable income b. Discretionary income c. Buying power index d. Buying power e. Willingness to spend

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Chap 03_20e 99. Scenario 3.1 Use the following to answer the question. Outdoor Sporting World (OSW), a national chain, has been doing business with Casper Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of OSW's financial director that the average cost per Casper Sports skateboard had substantially increased over that of the previous year. The financial director asked the marketing department if they knew what the Casper skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Casper skateboards were priced at $15 less in the competing store than at OSW. The financial director found that Casper Sports was selling a similar number of skateboards to one of OSW’s competitors for $10 less per skateboard. The attorney for Outdoor Sporting World immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. A regular customer of Outdoor Sporting World feels that some of its advertisements are deceptive. He responded to an ad for skateboards on sale one hour after the store opened and found that none were left. Where should he file a complaint? a. Federal Advertising Commission b. National Advertising Review Board c. Consumer Product Safety Commission d. Better Business Bureau e. Office of Consumer Affairs 100. Emmis Communications is concerned about how the increasing use of smartphones will affect the future sales of its radio stations. The company decides to gather information about the changing trends in music access and delivery to prepare for this trend. Emmis Communications’ process is called a. environmental forces evaluation. b. environmental assessment. c. environmental scanning. d. environmental analysis. e. environmental monitoring. 101. The proliferation of online dating and dating apps best relates to which of the following? a. The growing importance of health and exercise b. The rise in consumerism c. The increasingly multicultural nature of U.S. society d. The aging of American consumers e. The rise in the number of single adults

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Chap 03_20e 102. The best approach for a company to take when monitoring its competitors is a. watching for increases and decreases in competitors' prices and matching them. b. analyzing all information that is readily available about competitors. c. sending employees to competitors' offices and factories to observe their actions. d. developing a system for gathering ongoing information about competitors. e. reading important business publications such as The Wall Street Journal. 103. The Children's Online Privacy Protection Act prohibits websites and Internet providers from a. selling products to children under the age of 18. b. seeking personal information from children under the age of 13. c. selling products to children under the age of 12. d. doing research about the buying habits of children under 15. e. selling products to children under the age of 15. 104. ____ competitors are the most significant to marketers because buyers see the different products of these firms as direct substitutes for each other. a. Oligopolic b. Total budget c. Generic d. Product e. Brand 105. The Electrolux Corporation produces light bulbs that are used in refrigerators. Currently, only three other companies produce bulbs used in the production of refrigerators, with Electrolux as the leader in market share. In this case, Electrolux Corporation participates in a. an oligopoly. b. a monopoly. c. involved in monopolistic competition. d. involved in perfect competition. e. involved in a perfect oligopoly. 106. American Office Supplies Wholesaler charges different prices to its various customers without any legal justification. This company is in violation of the a. Sherman Antitrust Act. b. Wheeler–Lea Act. c. Lanham Act. d. Federal Trade Commission Act. e. Robinson–Patman Act.

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Chap 03_20e 107. Barney has to decide whether to travel to Chicago by train or airplane. Traveling by train would take longer, giving him potentially less time to spend in Chicago. However, traveling by air would be much more expensive. The train as a form of transportation is what type of competitor to air travel? a. Monopolistic b. Product c. Brand d. Generic e. Total-budget 108. Procompetitive laws are those designed to a. preserve competition. b. protect the consumer. c. ensure product safety. d. reduce competition. e. limit business lobbying of government officials. 109. Most marketers operate in a competitive environment of either a. oligopoly or monopoly. b. oligopoly or monopolistic competition. c. oligopoly or pure competition. d. monopoly or pure competition. e. pure competition or monopolistic competition. 110. Miriam got a new job that pays extremely well. This is good because two years ago she was forced to go into bankruptcy when she couldn't repay her debts. She would like to purchase a used car so she can drive to work. However, she knows it will be hard to get the bank to provide her with a car loan at favorable interest rates due to her recent bankruptcy. She has therefore saved her money diligently so she will have enough to pay for the car outright. In this case, Miriam lacks a. legal counsel. b. credit. c. a willingness to barter. d. a willingness to buy. e. income. 111. Which of the following was created to increase accountability and transparency in the financial industry? a. Sherman Act b. Wheeler-Lea Act c. Celler-Kefauver Act d. Dodd-Frank Act e. Robinson-Patman Act

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Chap 03_20e 112. The 1990 Nutrition Labeling and Education Act directly prohibits a. exaggerated claims made by health and fitness products. b. putting the words "cholesterol-free" on any food package. c. putting nutritional information on most food products. d. exaggerated health claims on food packages. e. the use of any health claim on food packaging. 113. Textile companies historically face issues concerning the use of child labor in foreign countries and the various regulations created concerning this labor. The type of marketing environment forces executives for these companies are most likely to try to influence are ____ forces. a. economic b. competitive c. political and regulatory d. environmental e. sociocultural 114. In a period of economic recovery, the best marketing strategy for UPS would be characterized by which of the following features? a. Flexibility b. Aggressiveness c. Austerity d. Retrenchment e. Sustainability 115. The amount of money received through wages, rents, investments, pensions, and subsidies is called a. income. b. wealth. c. discretionary income. d. domestic gross income. e. credit.

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Chap 03_20e 116. A s input for a presentation that you are jointly authoring, one of your marketing analysts submitted the following summary of the characteristics of the four different types of market structures companies compete in: Competitive Structure Monopolistic Competition Monopoly Pure Competition Oligopoly

Number of Competitors Unlimited Few Many One

Market Barriers to Entry No Barriers Some Barriers Few Barriers Many Barriers

With respect to the classifications of number of competitors and barriers to entry, which one of the following statements is correct? a. T he monopolistic competition structure is properly classified. b. T he monopoly and oligopoly structures’ classifications should be reversed. c. T he monopoly structure is properly classified. d. T he oligopoly structure is properly classified. e. T he pure competition and oligopoly structures are properly classified. 117. The FTC can issue a cease-and-desist order, which is an injunction to a. report to the FTC immediately. b. stop doing whatever caused the complaint. c. appear before the courts. d. pay for damages caused by negligence of the firm. e. close down the firm until further notice. 118. Which category of income are marketers most interested in? a. Wealth b. Disposable income c. Discretionary income d. Total income e. Gross domestic income 119. When Snapple takes the information collected through research and attempts to assess and interpret what it means for its beverage marketing efforts, Snapple is engaged in environmental a. scanning. b. monitoring. c. management. d. assessment. e. analysis.

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Chap 03_20e 120. Marketers that attempt to influence and change the various environmental forces have a(n) ____ response to these forces. a. reactive b. inactive c. counteractive d. radioactive e. proactive 121. Which of the following industries is most commonly regulated by state regulatory agencies? a. Automobile manufacturers b. Cigarette producers c. Clothing manufacturers d. Television networks e. Utility companies

Scenario 3.3 Use the following to answer the questions.

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Chap 03_20e 124. A person’s willingness to spend is affected by future employment expectations, income levels, prices, general economic conditions, and a. product features. b. technology. c. advertising. d. family size. e. number of roommates. 125. Facebook is known for its successful products. It is the most popular social media platform in the world, and its photo sharing social service Instagram gives competitors Imgur and Flickr a run for their money. Facebook is also known for its strong lobbying efforts, having spent millions of dollars on lobbying. Facebook has most likely adopted a ____________ approach to environmental forces. a. proactive b. reactive c. economic d. sociocultural e. monopolistic 126. After several children became ill while playing with toys imported from outside the United States, medical researchers found several illegal chemicals, including lead in the paint. These toys were sold primarily through websites on the Internet. Which of the following agencies would most likely have jurisdiction over the problem with lead in the paint of children's toys? a. Consumer Product Safety Commission b. Children's Online Protection Act c. Food and Drug Administration d. Environmental Protection Agency e. National Advertising Review Board 127. The National Association of Realtors establishes rules for the use of its multiple listing services for properties and how realtors may use it, and it requires members to abide by a code of ethics and standards of practice. Which of the following is an advantage of industry self-regulation programs like those of the National Association of Realtors? a. Nonmember realtors must abide by its rules. b. Their establishment and implementation are rather expensive. c. Their guidelines tend to be rather strict. d. Their guidelines tend to be rather strict. e. Their guidelines and rules tend to be realistic and operational.

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Chap 03_20e 128. If all the gas stations in a city collaborated to determine what gas prices should be charged, they would be violating the a. Wheeler–Lea Act. b. Clayton Act. c. Robinson–Patman Act. d. Sherman Antitrust Act. e. Celler–Kefauver Act. 129. To meet federal gas mileage regulations, Ford has developed aluminum vehicle bodies that are light enough to help conserve fuel. What kind of response is this to environmental forces? a. Proactive b. Regulatory active c. Reactive d. Inactive e. Counteractive 130. After Staples gathers information related to its marketing environment, it attempts to define current environmental changes and predict future changes. This determines possible opportunities and threats facing the company. It illustrates the process that is called a. environmental scanning. b. survey of environment. c. marketing. d. environmental analysis. e. marketing information processing. 131. The type of competitive structure that exists in the case where there are almost no substitutes for a product is a(n) a. monopolistic competition. b. oligopoly. c. pure competition. d. monopoly. e. noncompetition. 132. Which of the following is an advantage that self-regulatory agencies such as the BBB and the NARB have over governmental laws and regulatory agencies? a. Firms must strictly abide by the rulings of self-regulatory agencies. b. Establishment and implementation are usually less expensive. c. They have better tools to enforce their rulings. d. Guidelines are often stricter and create greater compliance from firms. e. Money is very rarely an issue in enforcing decisions of self-regulatory agencies.

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Chap 03_20e 133. Many health-care companies are making adaptations to meet the needs of an aging population as the demand for medical services and products such as diabetes supplies increases. This change in marketing strategy is best explained by a change in a. demographics. b. cultural values. c. income levels. d. consumerism. e. diversity. 134. Wegmans Food Markets is revising its marketing plan for the upcoming quarter. Wegmans typically focuses on its wide variety of products and its high-quality customer service, having very few weekly “sales.” However, during the upcoming quarter, Wegmans plans to focus on price and value, and promote weekly “values” instead. Wegmans is most likely operating in which stage of the business cycle? a. inflation period. b. prosperity period. c. recession. d. depression. e. recovery period. 135. The two least common competitive structures are a. monopolies and oligopolies. b. pure competition and monopolies. c. monopolistic competition and monopolies. d. pure competition and no competition. e. oligopolies and pure competition. 136. RSC, Inc. has been a member of the Better Business Bureau for five years. In the past year, RSC has had a number of customer complaints that it has not addressed. In response, what can the BBB do? a. Institute a fine against the RSC b. File a lawsuit against RSC in a federal court c. Expel RSC from its local bureau and make local residents aware d. Force RSC to address the complaints e. File a lawsuit against RSC in a state court 137. The Ethan Allen furniture company collects information about a wide variety of competitive, economic, political, legal and regulatory, technological, and sociocultural forces that affect its marketing activities. This process is called a. environmental scanning. b. survey of environment. c. environmental monitoring. d. environmental analysis. e. marketing information processing.

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Chap 03_20e 138. Companies that market products with similar features, benefits, and prices to the same customer group are known as ____ competitors. a. generic b. product c. brand d. total budget e. monopolistic 139. Price discrimination is prohibited by the ____ Act. a. Sherman Antitrust b. Wheeler–Lea c. Robinson–Patman d. Celler–Kefauver e. Consumer Goods Pricing 140. Collecting information from secondary sources such as business, government, trade, and general-interest publications plays an important role in a. environmental analysis. b. competitive forces. c. environmental scanning. d. competitive analysis. e. environmental monitoring. 141. Scenario 3.1 Use the following to answer the question. Outdoor Sporting World (OSW), a national chain, has been doing business with Casper Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of OSW's financial director that the average cost per Casper Sports skateboard had substantially increased over that of the previous year. The financial director asked the marketing department if they knew what the Casper skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Casper skateboards were priced at $15 less in the competing store than at OSW. The financial director found that Casper Sports was selling a similar number of skateboards to one of OSW’s competitors for $10 less per skateboard. The attorney for Outdoor Sporting World immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. If the Federal Trade Commission believes that Casper Sports is acting in violation of the law, the first move for the FTC is to a. issue a cease-and-desist order. b. issue a complaint stating that the business is in violation of the law. c. seek a monetary penalty. d. issue negative publicity about the company. e. contact the sporting goods manufacturers association Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 142. The major source of cultural values is a. economic forces. b. changing demographics. c. health and nutrition. d. a work environment. e. the family. 143. Discretionary income is used for all of the following except a. movies. b. education. c. pets. d. furniture. e. food. 144. Paula’s Choice is a firm that specializes in high-quality cosmetics and skin-care products that do not use any ingredients that could be potentially harmful to humans. Founder Paula Begoun founded the brand when she tried to find skin-care and makeup products that contained ingredients that would not irritate the skin, but could not find many that were of high quality. After she founded Paula’s Choice, the firm did extensive research to find high-quality, nontoxic materials that could be used in cosmetics. Paula’s Choice's target market is consumers who want high-quality makeup that is gentle on the skin. This desire for ingredients that are healthy and nontoxic reflects changes in which type of issue in the sociocultural environment? a. Demographic characteristics b. Diversity c. Cultural values d. Technological e. Consumerism 145. Total buying power declines during periods of economic a. recovery. b. prosperity. c. recession. d. suppression. e. expansion. 146. San Francisco has banned toys in children’s fast-food meals because of the demand these toys might create among children for unhealthy fast food. What type of regulatory force is this? a. Social regulation b. Self-regulation c. State regulation d. City regulation e. Federal regulation

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Chap 03_20e 147. Marketers at Colgate-Palmolive have just finished up with a nationwide survey of their customers to determine the potential viability of a new product. Now the marketers must go over the data, tabulate the results, and form conclusions on whether the product idea should advance to the next level. What part of the environmental monitoring process is Colgate-Palmolive in at this stage? a. Environmental scanning b. Competitive analysis c. Reactive screening d. SWOT analysis e. Environmental analysis 148. Which of the following actions is illegal? a. Political officials influencing how much a government agency purchases and from whom b. Corporate contributions to candidates c. Corporate contributions to elected officials d. Political officials helping businesses secure foreign markets e. Paying political officials not to enforce a particular law 149. Marketers primarily focus their environmental analysis on ____ competitors. a. brand b. product c. regional d. generic e. primary 150. A firm wants to build a subsidiary in the Middle East. However, it is apprehensive because of protests in some Middle Eastern countries and the violence in Syria. It does not know if it should take the risk of expanding. Which type of barrier does this situation represent? a. e conomic b. c ompetitive c. l egal and regulatory d. p olitical e. s ociocultural

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Chap 03_20e 151. PepsiCo introduced the “Customizer,” a new freestanding soft drink dispenser where consumers can choose from over 120 different types of soft drinks and customize their drinks. Customizers would take the place of typical dispensers where there are only a few different types of soft drink brands available. To develop the new dispenser, PepsiCo collected information on the soft drink consumption habits of individuals in several different age groups, as well as information about new technologies for dispensing liquids from vending machines and the sales of its “fountain” syrup for national restaurant chains to use in their soft drink machines. PepsiCo’s collection of this information is an example of _____ while the assessment of its impact on the potential for the new “Customizer” is an example of a. strategic management; environmental scanning. b. an environmental force; environmental scanning. c. environmental analysis; environmental strategy. d. strategizing; environmental scanning. e. environmental scanning; environmental analysis. 152. ____ competitors provide very different products that satisfy the same basic customer need. a. Brand b. Generic c. Total budget d. Product e. Primary 153. M arketers live in a world of constant change, and their ability to adapt to the pace of change will dictate the degree to which their marketing strategies are successful. Moreover, the changes can come in any or all of the different parts of the marketing environment. Which one of the following statements is true? a. T he self-sustaining nature of technology relates to the fact that the products are increasingly being produced with environment-friendly components. b. T he negative effects of technology include concerns over privacy and intellectual property protection. c. C onsumers’ use of mobile devices to access the Internet has been declining over the last few years. d. T echnological innovations are created only by private companies. e. W e can expect the pace of technological change to slow down as more technology-oriented startups choose to go public and become more conservative with their business strategies. 154. Companies that compete for the same limited financial resources of the same customers are known as ____ competitors. a. oligopolic b. total budget c. generic d. product e. brand

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Chap 03_20e 155. Kristen was reviewing her bank statement for last month. She had paid her rent, her car payment, electric and phone bills, and made three trips to the grocery store. Kristen had also bought tickets to a Beyoncé concert and a new outfit to wear to the concert. The money spent on Kristen’s rent, car, electric, and phone bills was likely from her ____, while the money spent on the concert tickets and new clothes was from her _____. a. disposable income; savings b. gross income; disposable income c. disposable income; net income d. disposable income; discretionary income e. gross income; savings income 156. The Better Business Bureau is probably the best-known a. nongovernmental regulatory group. b. state-operated enforcement agency. c. national evaluator of advertisements. d. federal regulatory group. e. self-regulatory unit operating at the national level. 157. Garrison receives $50,000 in income. He paid $10,000 in taxes, $7,500 in rent and utilities, $5,000 on food, $2,000 in clothing, and $1,000 on a new couch. Based on these calculations, Garrison's discretionary income is a. $40,000. b. $28,000. c. $24,500. d. $35,500. e. $25,500. 158. CThe Strait Music Company traces its roots to 1963 when Dan Strait opened a piano store in Austin. The

company later added band and orchestra instruments. The company grew in size and number of locations over the years. Today, it is a leading retailer of all types of instruments for sale or rent, and it offers numerous related services. Assume that you are one of the brand managers for a line of products such as stringed instruments including guitars and violins. Which of the following would be most important to you in assisting you to forecast sales and plan inventory levels for this music store company? a. Consumers’ discretionary income b. Consumers’ wealth c. Consumers’ debt d. Consumers’ disposable income e. Consumers’ purchasing ability

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Chap 03_20e 159. Alex has a good-paying job. However, even though he has not received any official confirmation, Alex suspects that his job might be cut in the near future. Rumors in the grapevine hint that the company is going to go through massive lay-offs due to declining revenues. As a result, Alex has decided to forgo buying a house until he has a better idea of his job status. He has a lot of savings, but Alex knows he might need them if he becomes unemployed. In this case, Alex lacks a. a willingness to buy. b. credit. c. disposable income. d. discretionary income. e. buying power. 160. Technology is a. the application of scientific knowledge to build products that customers desire. b. the application of knowledge and tools to solve problems and perform tasks more efficiently. c. applied sciences. d. one of the weakest marketing environment forces. e. the result of research performed primarily by universities. 161. Which of the following statements about self-regulatory programs is false? a. Self-regulatory programs are usually less expensive than governmental regulatory programs. b. Self-regulatory programs' guidelines generally are more realistic and operational. c. Many nongovernmental self-regulatory programs have neither the tools nor the authority to enforce guidelines. d. Self-regulatory guidelines generally are stricter than governmental regulatory programs. e. When a trade association sets up industry guidelines, some firms that are in the industry but not in the trade association do not follow the guidelines.

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Chap 03_20e 162. Scenario 3.1 Use the following to answer the question. Outdoor Sporting World (OSW), a national chain, has been doing business with Casper Sports, a manufacturer of skateboards, for several years. Recently, it came to the attention of OSW's financial director that the average cost per Casper Sports skateboard had substantially increased over that of the previous year. The financial director asked the marketing department if they knew what the Casper skateboards cost at competing sporting goods stores, to see if they too were likely hit with a higher cost. The marketing department found that the Casper skateboards were priced at $15 less in the competing store than at OSW. The financial director found that Casper Sports was selling a similar number of skateboards to one of OSW’s competitors for $10 less per skateboard. The attorney for Outdoor Sporting World immediately filed a complaint with the Federal Trade Commission. Refer to Scenario 3.1. Suppose that the Casper Sports company was actually discriminating against Outdoor Sporting World with its price increase. Which of the following acts prohibits this type of business behavior? a. Sherman Antitrust b. Wheeler–Lea c. Robinson–Patman d. Celler–Kefauver e. Consumer Goods Pricing 163. When a firm continues to violate what the Better Business Bureau believes to be good business practices, what is one of the main actions the bureau will take? a. Lead a consumer boycott of the business. b. Sue the chief executive of the business. c. Impose fines on the owners/managers of the business. d. Support legal ordinances against the business. e. Warn consumers of the unfair practices. 164. Boeing is one of the world’s largest aerospace and defense companies, and it spent $17 million lobbying to pass legislation to protect its interest or to retaliate against its competitors. This best represents which of the following environmental forces? a. Political b. Legal and regulatory c. Competitive d. Economic e. Technological

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Chap 03_20e 165. A person's buying power is a function of a. disposable income. b. past income, natural resources, and financial resources. c. wages, rents, and investments. d. income, wealth, and credit. e. discretionary income. 166. Which of the following are the most frequently sentenced organizational crimes? a. False advertising and price discrimination b. Price discrimination and fraud c. Fraud and antitrust violations d. Price fixing and antitrust violations e. Fraud and price fixing

Scenario 3.3 Use the following to answer the questions.

The Consumer Financial Protection Bureau settled a claim with the Bank of America for deceiving customers and unfairly billing them for services such as credit monitoring and identity theft protection. Bank of America agreed to provide refunds to 2.9 million people and pay $45 million in fines for their illegal credit card practices. Their deceptive practices dated to 2000 where they had billed customers for products such as “Privacy Guard” or “Privacy Assist” without first obtaining authorization for the products. The $45 million in fines includes $25 million as a civil penalty that will be paid to the Office of the Comptroller of the Currency and $20 million to the Consumer Financial Protection Bureau. The Bureau also claims that Bank of America deceived about 1.4 million customers into making about $268 million in payments by, among other things, improperly telling them the first 30 days of coverage were free or the benefits were greater than existed. 167. Refer to Scenario 3.3. The Consumer Financial Protection Bureau is an example of a a. federal regulatory agency. b. state regulatory agency. c. self-regulatory group. d. trade organization. e. NARB. 168. Godfry’s is a medium-size specialty men's and women's clothing store in a geographic area with many other specialty stores, department stores, and discounters. It has established a reputation for offering high-quality, fashionable merchandise with quality service. Godfry’s competitive environment would best be characterized as a. a monopoly. b. an oligopoly. c. monopolistic competition. d. pure competition. e. perfect competition.

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Chap 03_20e 169. In today's marketing environment, competitors can take on many forms. For example, a Starbucks latte can be seen as a competitor to an issue of The New York Times. In this circumstance, these two products are described as ____ competitors. a. generic b. product c. total budget d. primary e. pure 170. Under the terms of the trade agreement CAFTA-DR, the state-run telephone system in Costa Rica was opened up for competition. Now four major companies dominate the telecommunications industry for mobile phones and Internet. The telecommunications industry in Costa Rica went from being a(n) ___________ to a(n) _______________. a. oligopoly; monopolistic competition b. monopoly; monopolistic competition c. monopoly; oligopoly d. monopolistic competition; oligopoly e. pure competition; oligopoly 171. People for the Ethical Treatment of Animals (PETA) has demonstrated against the sale of coats made of animal furs. PETA's efforts to change shoppers' attitudes most directly represents a ____ force for fur retailers. a. technological b. political c. sociocultural d. self-regulatory e. legal 172. Transformations Salon is part of the hair and personal care service industry located in a large city. In what type of competitive environment is Transformations Salon most likely operating? a. pure competition. b. a monopoly. c. monopolistic competition. d. oligopolistic competition. e. an oligopoly. 173. During which stage of the business cycle is unemployment low and total income relatively high? a. Repression b. Prosperity c. Recovery d. Recession e. Depression

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Chap 03_20e 174. Which of the following regulatory groups is a system of nongovernmental, independent, local regulatory agencies supported by local businesses? a. The Chamber of Commerce b. The National Advertising Review Board c. The National Advertising Division d. The Better Business Bureau e. American Marketing Association 175. Consumer confidence is at a low during periods of a. recession. b. prosperity. c. recovery. d. inflation. e. depression. 176. Yoshi needs to send the gift she made for her grandson’s birthday to him at college. In her neighborhood, she can choose from FedEx, UPS, or the U.S. Postal Service, but the only one within walking distance is UPS. The competitive structure of package delivery services is best described as a. pure competition. b. monopolistic competition. c. limited competition. d. a monopoly. e. an oligopoly. 177. Which of the following is NOT at the generic competitor level for Honda Pilot sport utility vehicle (SUV)? a. Ford Escape SUV b. Enterprise car rental c. Harley Davidson motorcycle d. Schwinn mountain bike e. Taxicab ride 178. The four major competitive structures are a. monopolies, oligopolies, oligopolistic monopolies, and pure competition. b. pure competition, heavy competition, moderate competition, and light competition. c. brand, product, total budget, and generic. d. oligopolies, monopolies, monopolistic competition, and pure competition. e. monopolies, limited competition, oligopolistic competition, and pure competition.

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Chap 03_20e 179. Why are marketers interested in consumers' levels of disposable income? a. It accurately predicts future buying power. b. It increases current buying power. c. It is what is left after taxes and savings to buy luxuries with. d. It is a ready source of buying power. e. It is essential for forecasting future business trends. 180. When using credit to make purchases, consumers are a. decreasing current buying power and increasing future buying power. b. increasing their present discretionary income to extend purchasing power. c. putting themselves at significant risk of financial disaster. d. forgoing the accumulation of wealth to increase current income. e. increasing current buying power at the expense of future buying power. 181. The strength of a person's "buying power" depends on economic conditions and a. level of income. b. size of resources that can be traded in an exchange. c. how much a consumer will buy. d. a consumer's consumption pattern. e. levels of median wealth. 182. What type of competitive structure exists when a firm produces a product that has no close substitutes? a. Monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Mixed competition 183. Technology assessment is a. measuring how much technology has been incorporated into an organization. b. trying to foresee the effects of new products and processes on the firm's operation and on society in general. c. assessing how much technology one wants to incorporate into a company in the future. d. judging how a firm's products affect society. e. weighing the cost of new technology to determine whether a firm can afford to use it. 184. What type of competitive structure exists when just a few sellers control a large portion of the supply of a product? a. Monopoly b. Oligopoly c. Monopolistic competition d. Mixed competition e. Pure competition Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 185. Which of the following companies would probably be most interested in tracking discretionary income levels? a. Kroger food stores b. BMW automobiles c. Pacific Gas & Electric d. Kellogg e. Florida Orange Growers 186. ____ competitors are those that compete in the same product class, but their products have different features, benefits, and prices. a. Service b. Generic c. Brand d. Product e. Price 187. Consumerism is a a. diverse group of individuals and organizations opposed to foreign producers that sell products in the United States that are much cheaper than those produced by U.S. manufacturers. b. social movement that is trying to encourage consumer satisfaction. c. social movement that is reorganizing the Council of Better Business Bureaus. d. diverse group of individuals and organizations attempting to protect the rights of consumers. e. social movement that provides consumers with means for expressing satisfaction and expressing their gratitude to producers. 188. Willingness to spend, which relates to a person’s _____, is likely to ____ if he or she is unsure how long they will be employed. a. expected satisfaction from a product; increase b. expected satisfaction from a product; decline c. economic conditions and personal resources; increase d. economic conditions and personal resources; decrease e. annual household income; decline 189. When marketers define their target market, they simultaneously establish a set of a. technologies. b. environmental forces. c. competitors. d. government regulations. e. sociocultural forces.

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Chap 03_20e 190. Which of the following agencies regulates marketing activities the most? a. Environmental Protection Agency b. Food and Drug Administration c. Federal Trade Commission d. Better Business Bureau e. National Advertising Review Board 191. Of all the federal regulatory units, the ____ most heavily influences marketing activities. a. Food and Drug Administration (FDA) b. Federal Communications Commission (FCC) c. Environmental Protection Agency (EPA) d. Federal Trade Commission (FTC) e. Federal Power Commission (FPC) 192. Companies delivering mixed concrete know that it cannot be shipped farther than 25 miles because the concrete might harden in the truck. King County Concrete Company is the only supplier of mixed concrete to customers within a 30-mile radius. King County Concrete is an example of which one of the following competitive structures? a. Monopoly b. Oligopoly c. Monopolistic competition d. Pure competition e. Monopsony 193. A lthough the monopoly is one of the four major market structures that theoretically exists in a free market capitalist system, the reality is there are very few true monopolies in the economy. This is the result of many federal laws and regulations that have been passed to limit the creation and power of monopolies. Which one of the following federal laws was passed to prevent the creation of monopolies in the economy? a. S herman Act of 1890 b. S ecurities Act of 1933 c. S arbanes–Oxley Act of 2002 d. W heeler–Lea Act of 1938 e. L anham Act of 1946

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Chap 03_20e 194. Although Blue Diamond engages in environmental scanning and analysis, the company is more likely to change its products and marketing strategies to adapt to environmental forces rather than trying to influence these forces when it comes to its nutmilk products. Blue Diamond has a(n) ____ approach to marketing environmental forces. a. inactive b. reactive c. proactive d. counteractive e. radioactive 195. What are the major forces that are referred to as sociocultural forces and how do they present marketers with both challenges and opportunities?

196. Why must marketers be aware of new developments in technology?

197. Explain how a period of recession might affect the marketing of a product.

198. Describe what is meant by a consumer's buying power. How might this affect a marketing strategy?

199. Explain the difference between procompetitive legislation and consumer protection laws.

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Chap 03_20e 200. Describe several ways in which federal agencies influence marketing activities.

201. Given a new brand of barbecue sauce for which to develop a marketing strategy, describe how you would conduct environmental scanning and analysis.

202. Contrast recession and depression.

203. Explain the differences between the competitive structures of a monopoly and an oligopoly.

204. What roles do the Better Business Bureau and the National Advertising Review Board play in self-regulation of business?

205. In what ways is the United States becoming an increasingly diverse nation in terms of culture?

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Chap 03_20e Answer Key 1. False 2. False 3. True 4. True 5. True 6. False 7. False 8. True 9. True 10. False 11. False 12. False 13. True 14. True 15. True 16. True 17. True 18. True 19. True 20. True 21. True 22. False 23. True 24. False 25. False 26. True

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Chap 03_20e 27. False 28. False 29. False 30. True 31. True 32. False 33. False 34. False 35. True 36. True 37. True 38. False 39. False 40. True 41. True 42. False 43. False 44. True 45. True 46. True 47. False 48. False 49. False 50. True 51. True 52. False 53. False 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 55. False 56. True 57. False 58. True 59. True 60. True 61. False 62. a 63. b 64. c 65. a 66. b 67. e 68. c 69. a 70. d 71. d 72. c 73. e 74. c 75. d 76. b 77. a 78. d 79. c 80. c 81. d 82. a Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 83. e 84. d 85. b 86. a 87. a 88. a 89. c 90. b 91. d 92. c 93. e 94. a 95. e 96. b 97. e 98. e 99. d 100. c 101. e 102. d 103. b 104. e 105. a 106. e 107. d 108. a 109. b 110. b Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 111. d 112. d 113. c 114. a 115. a 116. b 117. b 118. b 119. e 120. e 121. e 122. a 123. c 124. d 125. a 126. a 127. e 128. d 129. c 130. d 131. d 132. b 133. a 134. c 135. b 136. c 137. a

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Chap 03_20e 138. c 139. c 140. c 141. b 142. e 143. e 144. c 145. c 146. d 147. e 148. e 149. a 150. d 151. e 152. b 153. b 154. b 155. d 156. a 157. e 158. a 159. a 160. b 161. d 162. c 163. e 164. a 165. d Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 166. c 167. a 168. c 169. c 170. c 171. c 172. c 173. b 174. d 175. e 176. e 177. a 178. d 179. d 180. e 181. b 182. a 183. b 184. b 185. b 186. d 187. d 188. b 189. c 190. c 191. d 192. a 193. a Copyright Cengage Learning. Powered by Cognero.

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Chap 03_20e 194. b 195. S ociocultural forces are the influences in a society and its culture(s) that bring about changes in people’s attitudes, beliefs, norms, customs, and lifestyles. Profoundly affecting how people live, these forces help determine what, where, how, and when people buy products. Changes in a population’s demographic characteristics—age, gender, race, ethnicity, marital and parental status, income, and education—have a significant bearing on relationships and individual behavior. These shifts lead to changes in how people live and ultimately in their consumption of such products as food, clothing, housing, transportation, communication, recreation, education, and health services. Changes in cultural values have dramatically influenced people’s needs and desires for products. Although cultural values do not shift overnight, they do change at varying speeds. Marketers try to monitor these changes, knowing this information can equip them to predict changes in consumers’ needs for products, at least in the near future. Consumerism involves organized efforts by individuals, groups, and organizations to protect consumers’ rights. The movement’s major forces are individual consumer advocates, consumer organizations and other interest groups, consumer education, and consumer laws. To achieve their objectives, consumers and their advocates write letters or send e-mails to companies, lobby government agencies, broadcast public service announcements, and boycott companies whose activities they deem irresponsible. 196. Technology is the application of knowledge and tools to solve problems and perform tasks more efficiently. Marketers must be aware of new developments in technology, because it helps them to operate more efficiently and to provide an exciting array of products for consumers. 197. In times of recession or depression, when buying power decreases, many customers may become more price conscious and seek more basic, functional products. Some firms make the mistake of drastically reducing their marketing efforts during a recession, harming their ability to compete. During these times, a company should focus its efforts on determining precisely what functions buyers want and ensure that these functions are available in its product offerings. Promotional efforts should emphasize value and utility. 198. The strength of a person’s buying power depends on economic conditions and the size of the resources, money, goods, and services that can be traded in an exchange, that enable the individual to make purchases. Hence, it affects the marketing strategy. The major financial sources of buying power are income, credit, and wealth. 199. P rocompetitive laws are designed to preserve competition. Most of these laws were enacted to end various antitrade practices deemed unacceptable by society. Examples of illegal anticompetitive practices include stealing trade secrets or obtaining other confidential information from a competitor’s employees, trademark and copyright infringement, price fixing, false advertising, and deceptive selling methods such as “bait and switch” and false representation of products. Laws have also been created to prevent businesses from gaining an unfair advantage through bribery. In response to the law, companies have begun to strengthen their compliance programs related to bribery. Consumer protection legislation deals with consumer safety, such as the food and drug acts, and is designed to protect people from actual and potential physical harm caused by adulteration or mislabeling. Other laws prohibit the sale of various hazardous products, such as flammable fabrics and toys that may injure children. Others concern automobile safety. Congress has also passed several laws concerning information disclosure. Some require that information about specific products, such as textiles, furs, cigarettes, and automobiles, be provided on labels. Other laws focus on particular marketing activities: product development and testing, packaging, labeling, advertising, and consumer financing.

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Chap 03_20e 200. Federal regulatory agencies usually have the power to enforce specific laws, as well as some discretion in establishing operating rules and regulations to guide certain types of industry practices. Some of the federal laws that regulate and influence marketing activities are the Federal Trade Commission Act, Sherman Antitrust Act, Consumer Goods Pricing Act, Fair Packaging and Labeling Act, Consumer Product Safety Act, and so on. 201. Environmental scanning can be done by collecting information about the existing brands of barbecue sauce and surveying people about their attitude toward barbecue sauces. Scanning involves observation; secondary sources such as business, trade, government, and Internet sources; and marketing research. Environmental analysis is the process of assessing and interpreting the information gathered through environmental scanning to identify the potential threats and opportunities linked to environmental changes. Thus, once the information regarding barbecue sauces is obtained, it will be assessed and interpreted for any potential threats and opportunities through this process. 202. During a recession unemployment rises, while total buying power declines. Pessimism accompanying a recession often stifles both consumer and business spending. A prolonged recession may become a depression, a period in which unemployment is extremely high, wages are very low, total disposable income is at a minimum, and consumers lack confidence in the economy. 203. A monopoly exists when an organization offers a product that has no close substitutes, making that organization the sole source of supply. In reality, most monopolies surviving today are local utilities, which are heavily regulated by local, state, or federal agencies. An oligopoly exists when a few sellers control the supply of a large proportion of a product. Products facing oligopolistic competition may be homogeneous, such as aluminum, or differentiated, such as package delivery services. 204. The Better Business Bureau is a local regulatory agency supported by local businesses. When a firm continues to violate what the Better Business Bureau believes to be good business practices, the bureau warns consumers through local newspapers or broadcast media. If the offending organization is a Better Business Bureau member, it may be expelled from the local bureau. The National Advertising Review Board (NARB) is another self-regulatory entity that considers cases in which an advertiser challenges issues raised by the National Advertising Division (NAD) about an advertisement. Cases are reviewed by panels drawn from NARB members representing advertisers, agencies, and the public. 205. T he number of immigrants into the United States has steadily risen during the last 40 years. In the 1960s, 3.3 million people immigrated to the United States; in the 1970s, 4.4 million immigrated; in the 1980s, 7.3 million arrived; in the 1990s, the United States received 9.1 million immigrants; and in the 2000s, more than 8.3 million people have immigrated to the United States. In contrast to earlier immigrants, very few recent ones are of European origin. Another reason for the increasing cultural diversification of the United States is that most recent immigrants are relatively young, whereas U.S. citizens of European origin are growing older. These younger immigrants tend to have more children than their older counterparts, further shifting the population balance. By the turn of the 20th century, the U.S. population had shifted from one dominated by whites to one consisting largely of three racial and ethnic groups: whites, blacks, and Hispanics. The U.S. government projects that by the year 2060, approximately 119 million Hispanics, 59.7 million blacks, and 39 million Asians will call the United States home. Although the majority of the population still identify themselves as white, Hispanic and Asian ethnicities are expected to grow in the next 50 years, while white non-Hispanic ethnicities are estimated to decrease. Marketers recognize that these profound changes in the U.S. population bring unique problems and opportunities. But a diverse population means a more diverse customer base, and marketing practices must be modified—and diversified—to meet its changing needs. Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e Indicate whether the statement is true or false. 1. There are few costs associated with being socially responsible and satisfying society's demands. a. True b. False 2. Any time an activity causes managers or consumers to feel manipulated or cheated, a marketing ethics issue exists, regardless of the legality of that activity. a. True b. False 3. Once trust is lost in marketing relationships, it can take a lifetime to rebuild. a. True b. False 4. Employees, coworkers, or superiors do not influence the ethical decision-making process. a. True b. False 5. At the most basic level of marketing citizenship, marketers have an obligation to contribute funds to philanthropic causes. a. True b. False 6. People learn values and principles through socialization by family members, social groups, religion, and formal education. a. True b. False 7. Codes of conduct (ethics) are formalized rules and standards that describe what the company expects of its employees in terms of ethical behavior. a. True b. False 8. It is nearly impossible to balance the needs of all stakeholders so as to satisfy all of society's demands. a. True b. False 9. Manipulating a product's availability for purposes of exploitation and forcing intermediaries to behave in a specific manner are ethical issues in distribution. a. True b. False 10. Four dimensions of social responsibility are economic, legal, ethical, and philanthropic. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 11. If a person is rewarded for developing a deceptive advertisement, he or she probably will not engage in such behavior in the future. a. True b. False 12. It is not important to consistently enforce standards and impose penalties or punishment on those who violate codes of conduct. a. True b. False 13. Marketers' contributions of resources to community causes such as education, recreation, and others illustrate social responsibility on a community-relations level. a. True b. False 14. Companies should promote individuals prone to misconduct to management positions. a. True b. False 15. Analyzing stakeholder relationships is important for maximizing v alue for specific target markets. a. True b. False 16. A marketer's failure to inform customers about changes in the quality of its products does not constitute an ethical issue. a. True b. False 17. Employees who always do things in their own self-interest in spite of organizational policies or culture are often called "bad apples." a. True b. False 18. It is possible to improve ethical behavior in an organization by eliminating unethical persons and improving the organization's ethical standards. a. True b. False 19. Employees can easily determine what behavior is acceptable even in organizations that do not have ethics compliance programs and policies on conduct. a. True b. False

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Chap 04_20e 20. Naomi sees her coworkers take long lunch breaks. Despite this fact, her parents had always told her that it was important not to take advantage of others. As a result, she refuses to go past an hour lunch. In this case, the organizational culture is influencing Naomi's behavior. a. True b. False 21. An ethical issue is an identifiable problem, situation, or opportunity requiring an individual to choose from among several actions that must be evaluated as right or wrong. a. True b. False 22. Price fixing, predatory pricing, and failure to disclose the full price associated with a purchase are pricing activities that do not result in ethical issues. a. True b. False 23. Marketing ethics refers to principles and standards that define acceptable conduct in marketing. a. True b. False 24. A common reason for channel stuffing is to conceal declining demand or inflate financial statement earnings. a. True b. False 25. When marketing activities deviate from accepted standards, the exchange process can break down, resulting in customer dissatisfaction, lack of trust, and lawsuits. a. True b. False 26. Marketing ethics concerns the impact of an organization's decisions on society, whereas social responsibility relates to individual decisions. a. True b. False 27. A solution cannot be ethical if there are different viewpoints on the issue within the organization. a. True b. False 28. At the highest level of marketing citizenship, marketers have an obligation to abide by principles and standards that define acceptable conduct in marketing. a. True b. False

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Chap 04_20e 29. Marketing citizenship refers to an organization's obligation to maximize its positive impact and minimize its negative impact on society. a. True b. False 30. The right to be informed means that consumers should be treated fairly when they complain to marketers about their products. a. True b. False 31. The smaller the consequences associated with an issue, the more likely it will be recognized as an ethics issue and the more important it will be in making an ethical decision. a. True b. False 32. An organization's obligation to maximize its positive impact and minimize its negative impact on society is known as social accountability. a. True b. False 33. Cause-related marketing refers to the specific development, pricing, promotion, and distribution of products that do not harm the natural environment. a. True b. False 34. A bribe offered to benefit an organization is generally considered acceptable. a. True b. False 35. Three important factors that influence ethical decisions in marketing are individual factors, organizational factors, and opportunity. a. True b. False 36. Marketing ethics and social responsibility mean the same thing. a. True b. False 37. A strong code of conduct that is carefully thought out and detailed will not require many revisions in the history of the firm. a. True b. False 38. Pressures to substitute inferior materials to reduce costs may result in product-related issues. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 39. The more a person is exposed to unethical activity in the organizational environment, the more likely it is that he or she will behave unethically. a. True b. False 40. Under President Kennedy's consumer bill of rights, consumers must have access and opportunity to review all relevant information about a product before buying it. a. True b. False 41. There is no evidence that being socially responsible and ethical is worthwhile. a. True b. False 42. To resolve a social responsibility issue, it is helpful to check with concerned consumer groups and industry or specific company policy regarding the activity. a. True b. False 43. Top management sets the ethical tone for the entire organization. a. True b. False 44. If an ethical (or social responsibility) issue can withstand open discussion and result in agreements or limited debate, it is not really an ethical (or social responsibility) issue. a. True b. False 45. Social responsibility is an organization's obligation to maximize its positive impact and minimize its negative impact on society. a. True b. False 46. From its inception, Toms wanted to help those in developing countries. When Toms was developed, it adopted a one-for-one model in which it would donate one pair of shoes to a child in need for every pair of shoes it sold. This is an example of cause-related marketing. a. True b. False

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Chap 04_20e Indicate the answer choice that best completes the statement or answers the question. 47. Which of the following statements about codes of conduct is true? a. All publicly-traded companies have formal codes of conduct. b. Most large corporations have formal codes of conduct. c. Codes of conduct are unnecessary for small- and medium-sized companies. d. Approximately half of large companies have formal codes of conduct. e. Very few companies have formal codes of conduct, but most have informal codes. 48. Scenario 4.1 Use the following to answer the question. Hershey Foods was founded in the 19th century by Milton Hershey, who had a strong ethical value system: Always show integrity, be honest, and respect others. Hershey felt it was important to provide high-quality goods and services of real value at competitive prices that would provide an adequate return on investment. He also founded the Milton Hershey School, operating today as a cost-free, private home and school dedicated to helping children with social needs and limited resources. The company also focuses on environmental issues, such as reducing waste by 360,000 pounds annually by redesigning Hershey's Syrup caps. Hershey Foods has an ethics compliance program that includes a code of ethics and training, guidelines for handling legal and ethical issues, an 800 number for assistance with ethical issues, and support from supervisors and human resource managers in dealing with ethical issues. However, in the last few years, Hershey has been criticized by several advocacy groups concerning the sourcing of its chocolate from West Africa where many of the companies use child labor. While Hershey is the largest chocolate candy producer in America, it lags behind other major chocolate producers with regard to certifying its chocolate as child labor–free. Refer to Scenario 4.1. The fact that the Hershey company has recently reduced its waste by 360,000 pounds through a packaging redesign is evidence of its focus on a. a philanthropic culture. b. an ethical culture. c. social responsibility. d. the legal climate. e. the economic environment. 49. Which of the following statements about implementing an ethics and legal compliance program is false? a. It requires open communication. b. It requires consistent enforcement of standards from the code of conduct. c. It rarely needs to be revised. d. It requires taking reasonable steps in response to violations of standards. e. It helps create a buffer zone on issues that could trigger serious legal complications for the company.

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Chap 04_20e 50. Companies that are considered to be good corporate citizens and consider the diverse perspectives of different groups affected by their operations are said to have a ____ orientation. a. marketing b. sales c. production d. stakeholder e. citizen 51. In a meeting with key personnel, Intel's president speaks to the firm's managers about social responsibility in business today. He suggests that the key to being socially responsible is to a. watch profit impacts very carefully. b. maintain an updated code of ethics. c. monitor changes and trends in society's values. d. carefully interpret all new legislation. e. stay with present programs over the long run. 52. Nakia wants to buy a new couch, but there is only one place in her town that sells them, and she lives in an isolated area. Nakia most likely feels her consumer right to ____ has been violated. a. choose b. be heard c. safety d. recourse e. be informed 53. That marketers have an obligation to engage in fair competition and build proper customer relationships best relates to which of the following? a. Citizenship b. Ethical c. Legal d. Economic e. Philanthropic 54. B etty Vinson worked in accounting at WorldCom. When her bosses first approached her and asked her to make questionable accounting transactions, she balked. She knew from her training that these questionable transactions could be construed as misleading. At first, Betty Vinson held firm. But after being told by her bosses that it was the only way to save the firm's finances, she decided to comply. This is an example of a. h ow organizational variables influence ethical decision making. b. o pportunity factors that influence ethical decision making. c. h ow individual values affect a person's decisions. d. w hy individual values should be trusted above all else. e. e nvironmental factors that impact ethical decision making.

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Chap 04_20e 55. According to some environmentalists, what are the three types of products that all products should be reduced to? a. Durable goods, natural resources, and unsalables b. Nondurable goods, durable goods, and consumables c. Consumables, durable goods, and unsalables d. Environmental goods, recyclables, and salables e. Permanents, temporaries, and renewable resources 56. A _______________ orientation helps to redefine the marketers’ focus by encouraging them to broadly consider those entities most impacted by the marketers’ actions. Those entities include employees, suppliers, regulators, shareholders, customers, and the community. a. s hareholder value b. p rofit c. m arket d. s takeholder e. c ompliance 57. Opportunity provides a pressure that may determine ethical decisions in marketing. Opportunity is best thought of as a. unethical behavior found in top management. b. a favorable set of conditions that limit barriers or provide rewards. c. the principles or rules that individuals use to determine the way to behave. d. a person's relationship with others in the organization. e. a problem or situation requiring an individual to choose a course of action. 58. What is most likely to happen to organizational decision making if there are no ethics programs or standards? a. E mployees will depend entirely on their individual values to make organizational decisions. b. O rganizational decision making will be largely ineffective in causing change. c. M anagers will most likely take their cues from the rest of the employees in the organization. d. E mployees will generally make decisions based on observations of how their managers and coworkers behave. e. O rganizational decision making is more likely to be complex and time-consuming.

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Chap 04_20e 59. The American Heart Association has been using the campaign Go Red for Women to raise awareness and

education about heart attack symptoms in women. Several companies including Merry Maids have partnered with the American Heart Association and prominently display the logo on their product packaging. Merry Maids left each of their customers a donation box to fill with coins and dollars with the campaign slogan “Raise the Roof” to support the American Heart Association. In one month they raised over $100,000 in donations. Merry Maids’ “Raise the Roof” campaign illustrates a practice known as a. cause-related marketing b. sustainable marketing c. philanthropy marketing d. strategic philanthropy 60. Nick Clark is managing director for Southern Mutual Company, a financial services firm. Nick firmly believes

that dress and grooming are important elements in creating a positive first impression and provides training to his account managers regarding the dress code and grooming policy. Southern Mutual does not allow any facial hair for men and stresses that women should pull their hair back away from their face because research suggests they will be perceived negatively. The Southern Mutual Company dress and grooming policies are an example of the importance of ______ in influencing ethical decision making. a. corporate culture b. opportunity c. strong leadership d. personal values e. organizational relationships 61. The White Hat Corporation is committed to social responsibility. It is looking for a new shipping partner and has found LogiNext, one that seems to be perfect since it employs individuals with disabilities, contributes a portion of profit to the local school system, and allows its employees to work on flextime. White Hat is very interested in LogiNext’s attention to social responsibility. However, its pricing is almost 12% higher than other shippers White Hat is considering. The fact that White Hat's decision has to balance the company’s desire for social responsibility and investors' desires for profits is an example of a(n) _________ responsibility. a. ethical b. legal c. cost d. philanthropic e. economic

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Chap 04_20e 62. A potato chip company advertises that its newly launched product can lower cholesterol, although the company cannot provide evidence to substantiate this claim. This situation involves an ethical issue related to which element of the marketing mix? a. Product b. Pricing c. Promotion d. Distribution e. Production 63. McDonald's supports and funds Ronald McDonald houses for the families of terminally-ill children to stay in to be near their loved ones. McDonald's action demonstrates the fulfillment of ____ responsibility. a. legal b. society c. philanthropic d. economic e. ethical 64. A set of values, beliefs, goals, norms, and rituals shared by members of an organization is called a. organizational factors. b. corporate culture. c. codes of conduct. d. ethical environment. e. company ethos. 65. The four basic rights outlined in the Consumer Bill of Rights include the right to safety, the right to be heard, the right to a. inform, and the right to be chosen. b. consumer education, and the right to honesty. c. choose, and the right to be informed. d. redress, and the right to choose. e. honesty, and the right to redress. 66. Various stakeholders and ____ determine the acceptable standards of conduct involving ethics. a. the organization's ethical climate b. the federal government c. various self-regulating bodies d. governmental agencies e. the industry leader's ethics

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Chap 04_20e 67. Mollie, a new salesperson for Snook Foods, calls in an order for twice the amount of merchandise that El Rincon Market requested because she knows that it will increase her sales and will not be noticed by El Rincon Market. This is an example of how ____ influences ethical decision making. a. opportunity b. exposure c. a significant other d. a peer e. an external reward 68. The Federal Drug Administration (FDA) has established the following requirements relating to the ingredients labeling on food products: Labels must be placed on the product in a location most likely to be seen by the consumer. Labels must include quantity of and type of ingredients included in the food product. Labels must be printed in a specific font size Regarding these requirements, which one of the following statements is correct? a. This is an example of marketing ethics as determined by a government regulator. b. This is an example of marketing ethics as determined by a private-interest group. c. The primary objective of these requirements is to enhance competition in the marketplace. d. The primary objective of these requirements is to make food packaging educational. e. The primary objective of these requirements is to assist consumers with their recipes. 69. The effect that coworkers have on the ethical decision-making process depends on a person's exposure to ethical and unethical behavior. Which of the following statements about ethical decision making is true? a. The more a person is exposed to ethical activity in the organization, the more likely he or she will behave unethically. b. The more a person is exposed to unethical activity in the organization, the more likely he or she will behave unethically. c. The more a person is exposed to unethical activity in the organization, the less likely he or she will pay attention to that activity. d. The more a person is exposed to ethical activity in the organization, the less likely he or she will pay attention to that activity. e. Exposure to ethical and unethical activity has no effect on a person's decision-making process. 70. Three factors that influence the ethical decision-making process in marketing include a. individual factors, organizational culture, and peer influence. b. opportunity, personal moral philosophies, and situational variables. c. individual factors, organizational factors, and opportunity. d. social forces, laws, and organizational factors. e. peer influences, personal moral philosophies, and opportunity.

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Chap 04_20e 71. Instead of addressing the question ____, many environmentalists and marketers believe the question should be ____. a. "How can we reduce costs?"; "How can we keep prices low?" b. "Where should we dispose of waste?"; "How can we protect society?" c. "How can we make products better?"; "How can we reduce waste?" d. "How can environmentalism be profitable?"; "Where is the benefit of environmental efforts?" e. "What should we do with our waste?"; "How can we produce products without waste?" 72. Which of the following is NOT a dimension of social responsibility and marketing citizenship? a. Economic b. Ethical c. Legal d. Technological e. Philanthropic 73. Mango Tech has a program that offers consumers money back for their old Mango computers so that the materials used to make the computer can be retained within a closed system. Which of the primary environmental goals does Mango Tech's program address? a. Eliminate the concept of waste. b. Reinvent the concept of a product. c. Make environmentalism profitable. d. Make prices reflect the cost. e. Create fewer durable goods. 74. Ecover, a manufacturer of personal care and beauty products, has a focus on sustainability. It has developed eco-packaging, eliminated many potentially harmful chemicals from its products, and has improved its production systems to reduce waste. What major social responsibility issue is Ecover addressing? a. The natural environment b. Consumerism c. Marketing ethics d. Legal obligations e. Community relations 75. A recent business news publication ran an article titled, “Stumptown Brews Healthcare for Baristas." The article discussed recent initiatives implemented by the company that are proving to be very positive for the company and the baristas working in its coffee shops. This article demonstrates an example of a. cause-related marketing. b. a stakeholder orientation. c. strategic philanthropy. d. marketing citizenship. e. consumerism. Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 76. Honeybees are disappearing at an alarming rate, and since they pollinate about a third of all foods we eat, it is an important concern. That’s why General Mills launched a #BringBacktheBees campaign, which included removing Buzz the bee from packages of Honey Nut Cheerios to increase the awareness of the issue. In addition, it gave away packets of wildflower seeds so that Cheerios lovers could grow flowers for bees. This example illustrates the positive consequences of a. social responsibility. b. corporate benevolence. c. green marketing. d. ethical responsibility. e. economic responsibility. 77. If Glad expresses concern that its plastic bags and storage products are having too great an impact on the pollution of groundwater under landfills, this concern is directly related to the firm's a. social responsibility. b. marketing concept. c. legal responsibility. d. ethical responsibility. e. corporate benevolence. 78. The unethical practice of shipping surplus inventory to wholesalers and retailers at an excessive rate, typically before the end of a quarter, is called a. greenwashing. b. counterfeiting. c. channel stuffing. d. bait and switch. e. gouging. 79. All of the following are factors that influence the ethical decision-making process except a. opportunity. b. individual factors. c. organizational culture. d. organizational pressure. e. salary or wages. 80. The practice of linking a firm's product marketing to a particular social cause on an ongoing or short-term basis is known as a. economic responsibility. b. social responsibility. c. ethical marketing. d. cause-related marketing. e. corporate benevolence.

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Chap 04_20e 81. T he Board of Directors of a company is responsible for determining, articulating, and communicating the values and standards of the business, and for ensuring that the policies, procedures, and controls in place act to support, rather than hinder, ethical values throughout the business. Which one of the following corporate elements and characteristics can the Board of Directors influence the most to ensure that the organization has an ethical culture? a. I ndividual factors b. P ersonal values c. E mployee integrity d. I ndividual beliefs e. P rocedures and controls for oversight 82. Which one of the following statements about codes of conduct (ethics) is false? a. They are formalized rules and standards that describe what a company expects of its employees. b. They must be detailed enough to take into account many possible situations. c. They encourage ethical behavior by eliminating opportunities for unethical behavior because employees know what is expected of them. d. They help marketers deal with marketing issues by prescribing and limiting certain activities. e. Top management must provide leadership in implementing codes of ethics. 83. Utility company AES has been recognized for its excellent code of conduct. Its five core values include safety, integrity, agility, fun, and excellence, which provide a framework for its code and all business decisions. It has been named one of Ethisphere’s “World’s Most Ethical Companies.” However, AES executives know that a strong code of conduct by itself does not guarantee ethical conduct. Research indicates that the biggest determinant of ethical conduct (or misconduct) at AES likely stems from its _______________. a. corporate culture b. disciplinary procedures c. adoption of values d. extent of ethics training e. revision of its ethics code 84. Marketing ethics a. refers to laws and regulations that govern marketing. b. refers to principles and standards that define acceptable conduct in marketing. c. maximizes an organization's positive impact and minimizes its negative impact on society. d. is most important for advertising agencies. e. applies well-defined rules for appropriate marketing behavior.

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Chap 04_20e 85. Which of the following would be consistent with Grayson Manufacturing’s understanding of the "bad apple" concept of improving the ethical conduct of salespeople? a. Publishing ethical guidelines for salespeople b. Firing unethical salespeople c. Retraining unethical salespeople d. Using customers to review ethical guidelines e. Scrutinizing top management's conduct 86. At times, large retailers such as Tesco may be accused of coercion in dealing with intermediaries because of the amount of power and control these large companies have over many of their suppliers. This is most potentially a ____ -related ethical issue. a. promotion b. pricing c. culture d. product e. distribution 87. Comcast Cares is an event in which Comcast employees and their families get together to volunteer for different causes. The volunteers have donated more than 5 million hours of service that range from picking up trash to volunteering at senior centers. What type of social responsibility issue does Comcast Cares fall under? a. Ethical responsibilities b. Sustainability c. Community relations d. Consumerism e. Voluntary responsibilities 88. How would marketers most likely benefit from the consumer's right to be heard? a. Consumers will tell others about their bad experience with the company. b. The company can use the information to make its products better. c. They gain valuable information about their competitors. d. Consumers will drop their complaints if companies hear them out. e. More information about the products can be posted online. 89. Research suggests that a relationship exists between ______ and an organizational climate that supports marketing ethics and social responsibility. a. a stakeholder orientation b. a cost tradeoff c. profits d. reduced costs. e. satisfied shareholders.

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Chap 04_20e 90. While marketing ethics creates ___________, philanthropic activities create ______________. a. r eputational benefits; economic benefits b. community relations; consumer relationships c. t rust; goodwill d. g oodwill; trust e. t rust; higher profits 91. Angela works in the sales department of a consumer products firm with a strong code of conduct. During sales training, Angela and her coworkers were told about the importance of ethical selling, particularly transparency with the consumer. Indeed, over the next few months, Angela witnessed some of her coworkers who got caught bending the rules get reprimanded, and one even got fired. However, Angela realized that this pattern of discipline was inconsistent. Isaach, one of her coworkers, has been known to steer customers to higher priced products, exaggerate a product's capabilities, and even fail to divulge important safety information. Yet Isaach, the highest-performing salesperson, rarely got reprimanded. Angela noticed other people were beginning to follow Isaach’s lead because they recognized that if these behaviors secured more sales, they would sell more without facing the consequences for their misbehavior. Angela’s company appears to provide the __________ for unethical behavior despite its ethics code and training. a. peer pressure b. opportunity c. organizational values d. social factors e. exposure 92. ____ is (are) most likely to improve ethical behavior in a marketing organization. a. Hiring goal-directed employees b. Allowing employees to follow their own ethical standards c. Encouraging employees to identify ethical issues and to decide what is right d. Obeying the law and accepting all other behavior e. Eliminating unethical individuals and improving the organization's ethical standards 93. O ne of the most significant principles of business is that the primary objective of the executive management of a corporate entity is to engage in strategic actions that increase shareholder value. If we think of this objective in terms of the four dimensions of social responsibility, it would be part of the a. P hilanthropic dimension b. E thical dimension c. L egal dimension d. E conomic dimension e. M arketing dimension

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Chap 04_20e 94. As a media buyer for the Walker Agency, Rick knows that no one ever checks to see if his phone calls are business related or personal. With regard to ethical behavior, this situation relates most closely to a. exposure. b. individual factors. c. desire. d. opportunity. e. organizational factors. 95. Which of the following is a formal way of expressing corporate culture? a. W ork habits b. E xtracurricular activities c. G ossip d. M emos e. S tories 96. Which of the following is the best example of strategic philanthropy for Office Depot, the large office supply chain? a. Donating money to help fight illiteracy of both adults and children b. Having employees volunteer at a charity of their choice two hours a week c. Giving a portion of its profits in August to support charter schools d. Offering discounts to large corporations on their office supplies e. Providing low-income families with school supplies and computer training 97. Scenario 4.2 Use the following to answer the question. WhiteWave Foods, producer of brands such as Silk Soymilk, specializes in manufacturing innovative and nutritious food products. Silk Soymilk was first launched in 1996 and is committed to the health of its customers, as well as the health of the planet. At Silk, they have offset all of their energy consumption with wind power, preventing over 16,000 tons of greenhouse gases from entering the atmosphere each year. Silk Soymilk is made from a mixture of organic and natural, non-genetically-modified soybeans, reducing the amount of pesticides in the air, soil, and water. Since 2002 they have been sponsoring the FarmAid concert, whose mission is to keep family farmers on their land and ensure a safe, healthy food supply for all Americans. Refer to Scenario 4.2. The use of wind power to offset energy consumption by Silk Soymilk's parent company demonstrates its commitment to a. consumerism. b. ethical marketing. c. social responsibility. d. philanthropic strategy. e. environmental marketing.

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Chap 04_20e 98. The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders is called a. marketing citizenship. b. social responsibility. c. stakeholders. d. cause-related marketing. e. strategic philanthropy. 99. Actions that promote human health and welfare address the ____ dimension of the pyramid of social responsibility. a. philanthropic b. legal c. ethical d. economic e. social 100. M arketers resolve ethical issues based on their experiences and what they learn from others in the organization. The outcome of this learning process depends on _____________________, opportunity for unethical behavior, and exposure to others who behave ethically or unethically. a. t heir educational training b. t heir level in the organization c. t heir incentive plan d. t he strength of personal values e. t he monetary factors that influence ethical decision making 101. One way in which marketers can demonstrate social responsibility is through programs in sustainability. Which of the following is not included as a goal of sustainability? a. Long-term well-being of the natural environment b. Focusing primarily on the external environment of the company c. Considering individuals as part of the natural environment d. Adopting more eco-friendly business practices e. Improving technologies that protect the natural environment 102. Analisa understands that even small businesses like her local catering business have certain responsibilities to society. She knows that she must abide by the laws that apply to her business and try to make a profit. What are the other obligations Analisa should know about? a. Ethical and moral b. Economic and ethical c. Philanthropic and legal d. Environmental and ethical e. Ethical and philanthropic

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Chap 04_20e 103. Anika knows that her company has a formal code of conduct, but she does not see this code being equally and consistently applied to all employees. Anika believes that this sporadic enforcement of the formal code only enhances the ____ for committing unethical acts. a. opportunity b. culture c. individual factors d. compliance e. punishment 104. Warnings on television commercials for prescription drugs include a list of sometimes grotesque side effects that are possible when taking that particular drug. The consumer right to ____ most applies to these commercials. a. know b. safety c. redress d. choose e. be informed 105. Scenario 4.2 Use the following to answer the question. WhiteWave Foods, producer of brands such as Silk Soymilk, specializes in manufacturing innovative and nutritious food products. Silk Soymilk was first launched in 1996 and is committed to the health of its customers, as well as the health of the planet. At Silk, they have offset all of their energy consumption with wind power, preventing over 16,000 tons of greenhouse gases from entering the atmosphere each year. Silk Soymilk is made from a mixture of organic and natural, non-genetically-modified soybeans, reducing the amount of pesticides in the air, soil, and water. Since 2002 they have been sponsoring the FarmAid concert, whose mission is to keep family farmers on their land and ensure a safe, healthy food supply for all Americans. Refer to Scenario 4.2. Silk Soymilk's use of organic, non-genetically-modified soybeans in its product is an example of a. green marketing. b. social consciousness. c. ethical responsibility. d. cause-related marketing. e. corporate benevolence.

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Chap 04_20e 106. Scenario 4.2 Use the following to answer the question. WhiteWave Foods, producer of brands such as Silk Soymilk, specializes in manufacturing innovative and nutritious food products. Silk Soymilk was first launched in 1996 and is committed to the health of its customers, as well as the health of the planet. At Silk, they have offset all of their energy consumption with wind power, preventing over 16,000 tons of greenhouse gases from entering the atmosphere each year. Silk Soymilk is made from a mixture of organic and natural, non-genetically-modified soybeans, reducing the amount of pesticides in the air, soil, and water. Since 2002 they have been sponsoring the FarmAid concert, whose mission is to keep family farmers on their land and ensure a safe, healthy food supply for all Americans. Refer to Scenario 4.2. Silk Soymilk's sponsorship of the FarmAid concert is best thought of as an example of its a. cause-related marketing effort. b. ethical responsibility. c. green marketing strategy. d. philanthropic activities. e. environmental strategy. 107. Ford Motor has frequently extolled its efforts to reduce greenhouse gas emissions from its manufacturing and its products as well as the increased fuel efficiency of its vehicles. This is an example of a. community relations. b. cause-related marketing c. sustainability marketing. d. strategic philanthropy. e. consumerism. 108. The most basic principles of marketing ethics are _____________ to encourage marketers to conform to society's expectations for conduct. a. philanthropic responsibilities b. economic responsibilities c. universally accepted behaviors d. written as laws and regulations e. included in the marketing code of ethics 109. Socially responsible business practices have provided all of the following benefits except a. creating goodwill toward the organization. b. attracting employees. c. reducing marketing costs. d. generating publicity for the firm. e. positively impacting local communities.

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Chap 04_20e 110. At his new job, Kunal notices that everyone places high values on their families and each others' families, birthdays are always celebrated, and flexible schedules are permitted to facilitate family involvement as long as the work is still getting done. Everyone is very relaxed and friendly. Kunal has made several observations about the a. organizational structure. b. ethical climate. c. morale and performance programs. d. codes of conduct. e. corporate culture. 111. Farmers & Ranchers Insurance Company is a large insurance company in the United States and is

consistently recognized for its efforts to support disaster readiness, access to education and job readiness. It has earned numerous awards including Corporate Responsibility Index, Outstanding Corporate Partner, and Top 100 Employers. The Farmers & Ranchers Youth Success program influences students by partnering with organizations to reduce high school dropout rates and increase the number of students receiving high school diplomas. To be successful, Farmers & Ranchers must be able to recruit and hire talented employees who have met minimum expectations for educational achievement. Through its partnership with Youth Success, Farmers & Ranchers Insurance Company has adopted a __________ approach to social responsibility. a. strategic philanthropy b. cause-related marketing c. mission-central d. sustainable e. strategic marketing 112. The Coca-Cola Company says it will donate 1% of its prior year’s operating income annually to global initiatives that include empowering women, developing access to clean water, and education grants through the Coca-Cola Foundation. What social responsibility issue does this program address? a. Consumerism b. Marketing ethics c. Community relations d. The natural environment e. Promotion 113. Failure to maintain product quality and integrity in production may result in _____ if products are found to be defective. a. greenwashing b. bait and switch c. channel stuffing d. product recalls e. misleading advertising

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Chap 04_20e 114. A firm’s culture may be expressed informally through a. codes of conduct. b. dress codes. c. ceremonies. d. organizational stories. e. manuals. 115. T he way to deal with ethical issues is proactively a. r ight before the problem is made public. b. a fter the problem has received extensive media attention. c. i mmediately after the problem is discovered. d. w hen lawsuits are brought against the company. e. d uring the strategic planning process. 116. Because most ethical choices pertaining to marketing decisions are jointly made, an organization must ensure its ____ reflects the organization's values, beliefs, and norms. a. code of ethics b. code of conduct c. enforcement of ethical standards and screening techniques d. employee self-regulation and screening procedures e. organizational or corporate culture 117. Scenario 4.2 Use the following to answer the question. WhiteWave Foods, producer of brands such as Silk Soymilk, specializes in manufacturing innovative and nutritious food products. Silk Soymilk was first launched in 1996 and is committed to the health of its customers, as well as the health of the planet. At Silk, they have offset all of their energy consumption with wind power, preventing over 16,000 tons of greenhouse gases from entering the atmosphere each year. Silk Soymilk is made from a mixture of organic and natural, non-genetically-modified soybeans, reducing the amount of pesticides in the air, soil, and water. Since 2002 they have been sponsoring the FarmAid concert, whose mission is to keep family farmers on their land and ensure a safe, healthy food supply for all Americans. Refer to Scenario 4.2. Silk Soymilk's parent company, WhiteWave Foods, is currently operating at the ____ level of the social responsibility pyramid with its sponsorship of the FarmAid concert. a. economic b. philanthropic c. ethical d. legal e. cause-related

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Chap 04_20e 118. Which of the following statements is false? a. If an ethical or social responsibility issue can withstand open discussion that results in agreement or limited debate, an acceptable solution may exist. b. A company that supports both socially responsible decisions and adheres to a code of conduct is likely to have a positive impact on society. c. If other persons in the organization approve of an activity and it is legal and customary within the industry, chances are that the activity is acceptable from both an ethical and social responsibility perspective. d. Social responsibility and marketing ethics are interrelated. e. Social responsibility and marketing ethics are the same thing and can be used interchangeably. 119. Scenario 4.1 Use the following to answer the question. Hershey Foods was founded in the 19th century by Milton Hershey, who had a strong ethical value system: Always show integrity, be honest, and respect others. Hershey felt it was important to provide high-quality goods and services of real value at competitive prices that would provide an adequate return on investment. He also founded the Milton Hershey School, operating today as a cost-free, private home and school dedicated to helping children with social needs and limited resources. The company also focuses on environmental issues, such as reducing waste by 360,000 pounds annually by redesigning Hershey's Syrup caps. Hershey Foods has an ethics compliance program that includes a code of ethics and training, guidelines for handling legal and ethical issues, an 800 number for assistance with ethical issues, and support from supervisors and human resource managers in dealing with ethical issues. However, in the last few years, Hershey has been criticized by several advocacy groups concerning the sourcing of its chocolate from West Africa where many of the companies use child labor. While Hershey is the largest chocolate candy producer in America, it lags behind other major chocolate producers with regard to certifying its chocolate as child labor–free. Refer to Scenario 4.1. Milton Hershey contributed resources to the community to improve the overall quality of life for consumers, employees, and the community in general. This reflected his ____ responsibility. a. philanthropic b. ethical c. legal d. economic e. shareholder 120. What are two common distribution-related ethical issues? a. counterfeiting and channel stuffing b. coercing retailers and greenwashing c. manipulating a product's availability and withholding information d. counterfeiting and bait and switch e. manipulating a product's availability and price gouging

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Chap 04_20e 121. As far as prices are concerned, environmentalists believe prices should a. be based on the cost of materials used to manufacture the product. b. reflect the direct cost as well as the cost of air, water, and soil used. c. be determined by the supply and demand of products in the marketplace. d. include a large tax to defray the costs of environmental compliance. e. be based on the renewability of the resources used to make the product. 122. Any constituent who has a claim in some aspect of a company's products, operations, markets, industry, or outcomes is known as a(n) a. shareholder. b. customer. c. employee. d. manager. e. stakeholder. 123. According to the consumer bill of rights, the right to be informed means that a. consumers' interests will receive full and sympathetic consideration in the formulation of government policy. b. consumers should have access to a variety of goods and services at competitive prices. c. consumers should have access to and the opportunity to review all relevant information about a product before buying it. d. marketers have an obligation not to knowingly market a product that could harm consumers. e. consumers should be told when the quality of a product has changed only if it causes harm. 124. According to the consumer bill of rights, the idea that consumers' interests should receive full and sympathetic consideration in the formulation of government policy is known as the right to a. be heard. b. choose. c. be informed. d. safety. e. listen. 125. ________ is well known for crusading for consumer rights and his efforts, along with others’, have resulted in legislation requiring many features that make cars safer. a. Ralph Nader b. Upton Sinclair c. John F. Kennedy d. Abraham Maslow e. Adam Smith

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Chap 04_20e 126. Penny recently changed employers within the same industry. At her old company, employees routinely took home company pens, pencils, paperclips, and notepads, and they frequently made personal long-distance calls on company phones. Penny observes that employees do not engage in such practices at her new company. What Penny sees is best described as a difference in a. significant others. b. profit objectives. c. corporate culture. d. legal climate. e. corporate goals. 127. ____ are formalized rules and standards that describe what a company expects of its employees in terms of ethical behavior. a. Job descriptions b. Ethics clauses c. Behavior contracts d. Codes of conduct e. Ethics contracts 128. _ _______________ promote ethical behavior by reducing opportunities for unethical behavior; employees know what is expected of them and what kind of punishment follows if rules are violated. a. M ission statements b. C orporate objectives c. H uman resources policies d. C odes of conduct e. C ompensation plans 129. Lowe’s synergistic use of organizational core competencies and resources to address key stakeholders’ interests and achieve both social initiatives and its business goals is an example of a. strategic philanthropy. b. strategic ethics. c. cause-related marketing. d. strategic marketing. e. environmental philanthropy.

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Chap 04_20e 130. Emily Ross is an administrative assistant for Erik Boseman, who is brand manager for a consumer products

company. Erik works with a variety of suppliers and customers and is very busy. Erik has asked Emily to screen his calls to make sure that only those people with whom he is working are able to speak with him, advising her to say things like “I’m sorry, he’s in a meeting” or “He just stepped out of the office and won’t return until tomorrow.” Emily is growing increasingly concerned about these practices and dislikes lying to people who call. She feels that Erik is being dishonest, and she’d rather be more transparent and honest with people when they call rather than making up a story that isn’t true. Emily doesn’t want to compromise her own personal values to be an effective administrative assistant. Emily’s dilemma represents the ________ factor that influences the ethical decision-making process. a. individual b. organizational relationships c. opportunity d. competitive e. social responsibility 131. Consumerism is a. the efforts of independent individuals, groups, and organizations to protect the rights of consumers. b. President John F. Kennedy's consumer bill of rights. c. marketers' efforts to contribute to the satisfaction and growth of the communities in which they operate. d. the right to be informed. e. the specific development, pricing, promotion, and distribution of products that do not harm the environment. 132. A business that contributes resources to the community to improve the quality of life is taking on a(n) ____ responsibility. a. ethical b. legal c. cost d. philanthropic e. economic 133. Being ethically and socially concerned is consistent with meeting the demands of a. employees. b. shareholders. c. government regulators. d. stakeholders. e. executives.

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Chap 04_20e 134. What do environmentalists set as an objective for profitability? a. Companies should surpass the strictest environmental standards even if it negatively affects profitability. b. Companies will never be profitable if they comply with environmental standards, so taxpayers must subsidize all production. c. Profitability should not be a concern when addressing issues of environmental importance. d. Environmentalism should be made profitable, and companies attempting to protect the environment should not have to compete with those harming it in the marketplace. e. Companies will be more profitable if they work hard to protect the environment because consumers will reward their efforts through loyalty. 135. In response to organizational pressure to perform, Bao used a deceptive sales tactic to obtain a major sales contract. He was surprised that he wasn't punished for his behavior and even received a substantial bonus for securing the contract. Given the same opportunity in the future, Bao will most likely a. blow the whistle on his employer to a government agency. b. report his employer to the industry's trade association. c. express his discomfort with the situation to his supervisor. d. not use the similar sales tactic again. e. use the similar sales tactic again. 136. Ethical choices in business situations are most often made a. by top managers. b. by frontline employees. c. jointly in work groups and committees. d. in consultation with family, friends, and coworkers. e. individually. 137. For the Christmas season, a major toy retailer decided to donate to Angel Tree, an organization that provides gifts to the families of those who are incarcerated. The retailer claimed that it would donate 10 percent of the proceeds of all toys sold in the month of December to the Angel Tree organization. This is an example of ________________. a. e conomic responsibility b. c onsumerism c. e thical responsibility d. s trategic philanthropy e. c ause-related marketing

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Chap 04_20e 138. According to President Kennedy's consumer bill of rights, the right to choose means that a. consumers' interests will receive full and sympathetic consideration in the formulation of government policy. b. consumers should have access to a variety of products and services at competitive prices. c. consumers should have access to and the opportunity to review all relevant information about a product before buying it. d. marketers have an obligation not to knowingly market a product that could harm consumers. e. consumers should be able to buy products at prices they are willing to pay. 139. Pharmaceutical companies have at times been accused of acting unethically by taking advantage of customers in the area of a. promotion. b. pricing. c. distribution. d. product. e. manufacturing. 140. Which of the following is likely to result in the greatest decrease in ethical risks for an organization? a. A well-implemented ethics program and a strong corporate culture b. Allowing employees to follow their own ethical standards c. Encouraging employees to report misconduct when they observe it d. Obeying the law and accepting all other behavior e. Firing unethical individuals 141. Childhood friends Sheldon Fowler and Leonard Cooper began working together to create a line of cleaning

products that are beautifully designed, don’t smell like chemicals, and are attractive enough not to be hidden away in under the sink. Their company, Simple Simon, strives to source products that come from plants, never tests products on humans or animals and ensures that its products are safe for every surface, especially the Earth’s. Simple Simon was the first company to mass market a concentrated laundry detergent in the United States that provided consumers with the opportunity to reduce the amount of packaging and waste associated with the packaging. Simple Simon emphasizes the _________ issue of social responsibility as a strategy to connect with customers and generate sales. a. sustainability b. consumerism c. community relations d. greenwashing e. ethics

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Chap 04_20e 142. Codes of conduct are also frequently known as a. codes of values. b. codes of ethics. c. corporate culture. d. ethics compliance programs. e. moral codes. 143. During the 2010s, Nestlé was sharply criticized after it was discovered that some of its global suppliers and contractors were using child labor on their cocoa farms. Nestlé itself did not use child labor and had ethical policies that forbade the use of child labor. Why did consumers still hold Nestlé accountable? a. As the buyer, it had direct control over its global contractors. b. Nestlé paid the factories wages that were too low to employ adults. c. It is the most visible and powerful member of the supply chain. d. Its conduct violated the laws of the countries in which the factories were located. e. Nestlé lied outright about the child labor in its factories. 144. Product-related ethical issues arise when marketers a. provide consumers with inadequate information about how a product is priced. b. force channel intermediaries to behave in a specific manner. c. bribe salespeople to push one product over another. d. fail to disclose information to consumers about the risks associated with using a product. e. manufacture a product that is very similar to a competing product. 145. Which of the following statements best summarizes the perspective that most marketing managers have on unethical behavior? a. Most do not believe that unethical conduct will lead to success and refrain from taking unethical opportunities. b. They believe that unethical behavior is useful in the short run but detrimental in the long run. c. They feel that codes of conduct will eliminate any unethical behavior from occurring in their organizations. d. They believe that unethical behavior will be harmful in the short run but have little impact in the long run. e. Most do not see ethical or unethical behavior as a concern to their organization because the opportunities do not exist. 146. Product testing for reliability and quality helps to ensure a consumer's right to a. be heard. b. be informed. c. choose. d. performance. e. safety.

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Chap 04_20e 147. Distribution-related ethical issues arise when marketers a. do not provide intermediaries with enough information about how a product is priced. b. force channel intermediaries to behave in a specific manner. c. bribe salespeople to push one product over another. d. fail to disclose information to consumers about the risks associated with using a product. e. distribute a product that is very similar to a competing product. 148. Which of the following is NOT one of the four objectives that environmentalists believe companies should implement in order to sustain the natural environment? a. Eliminate the concept of waste b. Reinvent the concept of a product c. Force consumers to recycle products d. Make prices reflect the true cost of a product e. Make environmentalism profitable 149. An ethical issue is a. likely to arise when an employee's moral philosophy is consistent with the organization's expectations of the employee's behavior. b. an identifiable problem, situation, or opportunity requiring an individual to choose from among several actions that must be evaluated as right or wrong. c. most often found in personal selling situations. d. a problem where there is no clear solution and no positive outcomes. e. a right or wrong decision that could have serious consequences on a firm's profitability. 150. C ritics of the financial services industry, and Wall Street in particular, argue that a major cause of the financial crisis of 2008 was the flawed compensation and incentive structure that exists in the industry. They argue that this incentive structure encourages and often rewards unethical behavior by professionals in the industry. This is an example of a. t he individual factors that influence ethical decision making. b. t he organizational relationship factors that influence ethical decision making. c. t he opportunity factors that influence ethical decision making. d. t he environmental factors that influence ethical decision making. e. t he social factors that influence ethical decision making. 151. All companies have a responsibility to ____ so they can provide a return on investment to their owners and investors, create jobs for the community, and contribute goods and services to the economy. a. offer the lowest price b. be profitable c. obey their customers d. provide the largest selection possible e. pay employees more than minimum wage

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Chap 04_20e 152. In Europe, companies can voluntarily apply for a designation to indicate that their product is less harmful to the environment than competing products. This label is known as the a. Green Marketing Stamp. b. Eco-label. c. Forest Stewardship Seal. d. Better Product Project. e. Good Housekeeping Seal. 153. Who drafted the Consumer Bill of Rights? a. Bill Clinton b. John F. Kennedy c. Ralph Nader d. Ronald Reagan e. George W. Bush 154. According to the text, marketing ethics refers to principles and standards that define a. improper behavior in marketing. b. acceptable conduct in society. c. improper behavior in business. d. acceptable conduct in marketing. e. acceptable conduct in general. 155. A marketing ethics issue likely exists when a. company members disagree about a marketing decision. b. an activity does not benefit the organization but benefits the environment. c. an activity results in increased prices for the consumer. d. a consumer is dissatisfied with a marketing decision. e. an individual or organization must choose from among several actions that must be evaluated as right or wrong. 156. There will be significant ethical diversity in any one organization because of a. opportunity. b. relationship pressures. c. different levels of personal ethics. d. organizational factors. e. organizational culture.

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Chap 04_20e 157. DoneFast Inc. is a very profitable automobile repair shop. The company is well known for its speedy service and involvement in the community, but it fails to properly dispose of its used oil as outlined in environmental regulations. DoneFast is failing in its ____ responsibilities. a. legal b. ethical c. economic d. philanthropic e. strategic 158. Greenwashing is what type of marketing ethics issue? a. Q uality-related b. D istribution-related c. P roduct-related d. P rice-related e. P romotion-related 159. Companies that incorporate ethics and social responsibility into their strategic plans are likely to experience a. improved marketing performance. b. increased lawsuits. c. negative publicity. d. reduced costs. e. disappointed shareholders. 160. Banda Consulting is a small business that provides marketing consulting services such as advertising and

promotion, marketing research, and strategic planning to businesses and organizations and is managed by its CEO and president, Stacey Banda. Director of human resources, Katerina Grimes, screens applicants and recruits individuals who have high moral standards and personal ethics. She typically scans resumes for a prospective employee's involvement in community service activities or volunteer efforts. In addition, Katerina initiated the Banda Cares program as a company-wide platform to involve Banda Consulting employees in community activities, such as the local Boys & Girls Clubs of America chapter. The combination of effective screening for employees and the company’s commitment to the community through the Banda Cares program are concrete methods to uphold ethical decision-making practices within the firm. The company's activities relating to community service illustrate the role of _______ in determining employees’ ethical decisions in marketing, while the company’s program, Banda Cares, illustrates the role of _________ in ethical decision making. a. individual factors; organizational relationships b. individual factors; opportunity c. organizational relationships; opportunity d. opportunity; individual factors e. organizational relationships; individual factors

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Chap 04_20e 161. Ethical marketing decisions foster ______, which helps build long-term marketing relationships and is a key part of developing customer relationships. a. opportunities b. kindness c. trust d. profits e. sales 162. When a purchasing agent for AMD is offered a bribe by a silicon manufacturer salesperson, a. a promotion-related ethical issue has been created. b. the purchasing agent is free to accept the bribe without consequences. c. an ethical issue primarily related to the pricing of products exists. d. there is an ethical dilemma for the purchasing agent that is product related. e. no ethical issue exists under these circumstances. 163. STM Corporation is located in a small city that has limited economic growth at this time. Due to the condition of the local school system, STM contributed $1 million to repair and revive it, stating that STM believed in education for the community. This action would imply that STM is in which level of the pyramid of social responsibility? a. Ethical b. Legal c. Cost d. Philanthropic e. Economic 164. Home Depot recently issued a product recall for its Seasons ceiling fans, which are sold in the lighting and

ceiling fan section of the store. Evidently, the blades can detach from the unit, causing them to fall, which presents an impact hazard. Through its recall efforts, Home Depot is taking proactive steps to remove the ceiling fans from its stores as well as to assist customers who purchased the product in obtaining a repair kit. Where possible, Home Depot is contacting known purchasers of the ceiling fans directly. This is an example of a(n) ____________-related ethical issue. a. product b. price c. promotion d. distribution e. environment

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Chap 04_20e 165. Eva organized a boycott of a local restaurant because of the owner's obvious prejudicial treatment of Latinos. Eva's action would most likely be called a. lobbying. b. a public service announcement. c. the right to be informed. d. a social demonstration. e. consumerism. 166. Cummins, which manufactures automotive parts, has a Code of Business Conduct that centers around ten Statements of Ethical Principles that serve as the foundation for ethical conduct at Cummins. The code addresses numerous issues and is available in many languages. Employees must sign off on it every year. How does Cummins’ Code of Business Conduct promote ethical behavior? a. It mandates the hiring of only ethical employees. b. It allows employees to follow their own ethical standards. c. It encourages employees to identify ethical issues and to decide what is right. d. It details every situation employees might encounter. e. It reduces opportunities for unethical behavior by specifying what is expected of employees. 167. What is the major difference between social responsibility and marketing ethics? a. Marketing ethics varies by industry whereas social responsibility involves universal rules of conduct. b. There is legislation that deals with marketing ethics, but none for socially responsible practices. c. Marketing ethics is concerned with organizational practices, and social responsibility is concerned with individual behavior. d. There is no difference; they are synonymous terms. e. Social responsibility deals with the total effect of marketing decisions on society, whereas marketing ethics relates to individual and group evaluations in marketing situations. 168. Which of the following employees is most responsible for setting the ethical tone for the entire marketing organization? a. Marketing manager b. Marketing employee c. Product manager d. Chief executive officer e. Vice president of marketing research 169. Which of the following statements about social responsibility is correct? a. Social responsibility dimensions do not include philanthropic concerns. b. Social responsibility does not deal with the total effect of all marketing decisions on society. c. Social responsibility refers to a company's obligation to maximize its positive impact and minimize its negative impact on society. d. Social responsibility dimensions do not include economic concerns. e. Social responsibility refers to principles and standards that define acceptable conduct in marketing as determined by various stakeholders. Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 170. What are some ways to determine if an activity is ethical or socially responsible?

171. Define and describe the importance of social responsibility in marketing.

172. Define marketing citizenship and describe the impact of its dimensions on organizations.

173. Provide an overview of important social responsibility issues in marketing, and indicate their impact on marketing decisions.

174. Describe the factors that influence the ethical decision-making process and identify ways to improve ethical decisions in marketing.

175. How can a code of conduct encourage ethical behavior in an organization?

176. Differentiate between social responsibility and ethics in marketing.

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Chap 04_20e 177. Discuss some of the important ethical issues in marketing.

178. How does opportunity contribute to unethical decisions in marketing?

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Chap 04_20e Answer Key 1. False 2. True 3. True 4. False 5. False 6. True 7. True 8. True 9. True 10. True 11. False 12. False 13. True 14. False 15. True 16. False 17. True 18. True 19. False 20. False 21. True 22. False 23. True 24. True 25. True 26. False

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Chap 04_20e 27. False 28. False 29. False 30. False 31. False 32. False 33. False 34. False 35. True 36. False 37. False 38. True 39. True 40. True 41. False 42. True 43. True 44. False 45. True 46. False 47. b 48. c 49. c 50. d 51. c 52. a 53. d 54. a Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 55. c 56. d 57. b 58. d 59. a 60. a 61. e 62. c 63. c 64. b 65. c 66. a 67. a 68. a 69. b 70. c 71. e 72. d 73. b 74. a 75. b 76. a 77. a 78. c 79. e 80. d 81. e 82. b Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 83. a 84. b 85. b 86. e 87. c 88. b 89. a 90. c 91. b 92. e 93. d 94. d 95. d 96. e 97. c 98. a 99. a 100. d 101. b 102. e 103. a 104. e 105. a 106. d 107. c 108. d 109. c 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 111. a 112. c 113. d 114. d 115. e 116. e 117. b 118. e 119. a 120. a 121. b 122. e 123. c 124. a 125. a 126. c 127. d 128. d 129. a 130. a 131. a 132. d 133. d 134. d 135. e 136. c 137. e

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Chap 04_20e 138. b 139. b 140. a 141. a 142. b 143. c 144. d 145. a 146. e 147. b 148. c 149. b 150. c 151. b 152. b 153. b 154. d 155. e 156. c 157. a 158. e 159. a 160. a 161. c 162. a 163. d 164. a 165. e Copyright Cengage Learning. Powered by Cognero.

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Chap 04_20e 166. e 167. e 168. d 169. c 170. Although the concepts of marketing ethics and social responsibility are often used interchangeably, it is important to distinguish between them. Ethics relates to individual and group decisions—judgments about what is right or wrong in a particular decision-making situation—whereas social responsibility deals with the total effect of marketing decisions on society. 171. In marketing, social responsibility is defined as an organization’s obligation to maximize its positive impact and minimize its negative impact on society. Social responsibility thus deals with the total effect of all marketing decisions on society. In marketing, social responsibility includes the managerial processes needed to monitor, satisfy, and even exceed stakeholder expectations and needs. 172. The adoption of a strategic focus for fulfilling the economic, legal, ethical, and philanthropic social responsibilities expected by stakeholders is defined as marketing citizenship. The dimensions of marketing citizenship are as follows: Economic Dimension: At the most basic level, all companies have an economic responsibility to be profitable so that they can provide a return on investment to their owners and investors, create jobs for the community, and contribute goods and services to the economy. How organizations relate to stockholders, employees, competitors, customers, the community, and the natural environment affects the economy. Legal Dimension: Marketers are also expected to obey laws and regulations. The efforts of elected representatives and special-interest groups to promote responsible corporate behavior have resulted in laws and regulations designed to keep U.S. companies’ actions within the range of acceptable conduct. Ethical Dimension: Ethical marketing decisions foster trust, which helps to build longterm marketing relationships. Marketers should be aware of ethical standards for acceptable conduct from several viewpoints—company, industry, government, customers, special-interest groups, and society at large. Philanthropic Dimension: Philanthropic responsibilities, which go beyond marketing ethics, are not required of a company, but they promote human welfare or goodwill. More companies than ever are adopting a strategic approach to corporate philanthropy. 173. Two major categories of social responsibility issues are sustainability and consumerism. Sustainability: One of the more common ways marketers demonstrate social responsibility is through programs designed to protect and preserve the natural environment. This approach to the environment is to reduce, reuse, and recycle. Consumerism: Consumerism consists of organized efforts by individuals, groups, and organizations seeking to protect consumers’ rights. The movement’s major forces are individual consumer advocates, consumer organizations and other interest groups, consumer education, and consumer laws.

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Chap 04_20e 174. Individual factors, organizational relationships, and opportunity interact to determine ethical decisions in marketing. Most firms do not attempt to change an individual’s personal ethics but try to hire employees with good character. Therefore, shared ethical values and compliance standards are required to prevent deviation from desired ethical conduct. In the workplace, however, recent researchers have established that an organization’s culture often has more influence on marketing decisions than an individual’s own values. Ethical choices in marketing are most often made jointly, in work groups and committees, or in conversations and discussions with coworkers. Organizational culture is a set of values, beliefs, goals, norms, and rituals that members of an organization share. Another factor that may shape ethical decisions in marketing is opportunity—that is, conditions that limit barriers or provide rewards. A marketing employee who takes advantage of an opportunity to act unethically and is rewarded or suffers no penalty may repeat such acts as other opportunities arise. It is possible to improve ethical conduct in an organization by hiring ethical employees and eliminating unethical ones, and by improving the organization’s ethical standards. One way to approach improvement of an organization’s ethical standards is to use a “bad apple–bad barrel” analogy. To eliminate unethical conduct, an organization must rid itself of bad apples through screening techniques and enforcement of the firm’s ethical standards. Another way to improve ethics involves developing codes of conduct (also called codes of ethics) that consist of formalized rules and standards that describe what the company expects of its employees. Finally, if top management develops and enforces ethical and legal compliance programs to encourage ethical decision making, it becomes a force to help individuals make better decisions. 175. To improve ethics, many organizations have developed codes of conduct (also called codes of ethics) consisting of formalized rules and standards that describe what the company expects of its employees. Codes of conduct promote ethical behavior by reducing opportunities for unethical behavior; employees know both what is expected of them and what kind of punishment they face if they violate the rules. Such codes are important in preventing misconduct within the organization. It is also important that companies consistently enforce standards and impose penalties or punishment on those who violate codes of conduct. 176. Although the concepts of marketing ethics and social responsibility are often used interchangeably, it is important to distinguish between them. Ethics relates to individual and group decisions—judgments about what is right or wrong in a particular decision-making situation—whereas social responsibility deals with the total effect of marketing decisions on society. 177. Some of the important ethical issues in marketing are related to product, price, distribution, and promotion. Productrelated ethical issues include failure to disclose risks associated with a product, information about a product’s function, value, or use, and information about changes in the nature, quality, or size of a product. Distribution-related ethical issues include failure to live up to the rights and responsibilities associated with channel member roles, manipulation of product availability, and use of coercion to force other intermediaries to behave in a certain way. Promotion-related ethical issues include false or misleading advertising, use of manipulative or deceptive sales promotions, tactics, and publicity, and offering or accepting bribes in personal selling situations. Promotion-related ethical issues include price fixing, predatory pricing, and failing to disclose the full price of a purchase.

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Chap 04_20e 178. Opportunity refers to conditions that limit barriers or provide rewards. A marketing employee who takes advantage of an opportunity to act unethically and is rewarded or suffers no penalty may repeat those behaviors as other opportunities arise. Opportunity to engage in unethical conduct is often a better predictor of unethical activities than are personal values. Beyond rewards and the absence of punishment, other elements in the business environment may create opportunities. Professional codes of conduct and ethics-related corporate policy also influence opportunity by prescribing what behaviors are acceptable. The larger the rewards and the milder the punishment for unethical conduct, the greater is the likelihood that unethical behavior will occur.

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Chap 05_20e Indicate whether the statement is true or false. 1. Secondary data are data collected from inside the organization; primary data are those collected from outside the organization. a. True b. False 2. The key to locating and defining problems is to probe beneath the superficial symptoms. a. True b. False 3. The final step in the marketing research process is to assess the ethicality of the data collection phase. a. True b. False 4. In general, corporate executives prefer research reports that are short, clear, and simply expressed. a. True b. False 5. Marketing analytics can help marketers identify how to develop better-targeted marketing campaigns. a. True b. False 6. Marketing researchers should allow for continual evaluation of the data during the entire data collection period. a. True b. False 7. The purpose of marketing research is to inform an organization about customers' needs and desires, marketing opportunities for particular goods and services, and changing attitudes and purchase patterns of customers. a. True b. False 8. Telephone surveys allow an interviewer to gain rapport with respondents and to ask probing questions. a. True b. False 9. The second phase of international marketing research should involve a detailed search for and analysis of secondary data. a. True b. False 10. In quota sampling, all elements in a population have an equal chance of appearing in the sample. a. True b. False

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Chap 05_20e 11. The potential advantages of traditional mail surveys are quick response and lower cost than online surveys, but this advantage has yet to be achieved. a. True b. False 12. A database is a collection of information arranged for easy access and retrieval. a. True b. False 13. Results of a mail survey can be misleading if there is a high nonresponse rate. a. True b. False 14. One of the most overlooked sources of secondary data is the organization's own accounting records. a. True b. False 15. Exploratory research is concerned with identifying the characteristics of markets or categorizing market activities. a. True b. False 16. The technique of sampling in marketing research is the process of selecting representative units from a total population (a sample) and being able to project the characteristics of the total population from the sample considered. a. True b. False 17. Focus-group interviews are useful if the researcher is interested in observing group interaction. a. True b. False 18. Failing to conduct research can help companies maintain a competitive advantage. a. True b. False 19. Observation may be used in combination with interviewing. a. True b. False 20. In probability sampling, there is no way to calculate the likelihood that a specific element of the population being studied will be chosen. a. True b. False

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Chap 05_20e 21. The four fundamental survey methods used to obtain data in marketing research are telephone surveys, mail surveys, online surveys, and personal interviews. a. True b. False 22. Customer advisory groups are often used as a type of exploratory research. a. True b. False 23. If a research method measures what it is supposed to measure, it is said to be reliable. a. True b. False 24. The first step in launching a research study is problem or issue definition. The first sign of a problem is usually a departure from some normal function, such as a failure to attain objectives. a. True b. False 25. The main difference between marketing research and a marketing information system is that the MIS is an information-gathering process for specific situations whereas marketing research provides continuous data input. a. True b. False 26. A telephone survey is a good example of a completely random sample for the entire population. a. True b. False 27. Marketing research can be used to test a hypothesis. a. True b. False 28. A marketing information system provides an irregular and unstructured flow of information from internal sources within the organization. a. True b. False 29. The in-home (door-to-door) interview is an example of a focus-group interview. a. True b. False 30. The observation method of research systematically examines and records secondary data information about the physical conditions, events, and overt behavior of respondents. a. True b. False

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Chap 05_20e 31. Descriptive research can be used to better understand the characteristics of certain phenomena to solve a particular problem. a. True b. False 32. A research technique is said to be reliable if it produces almost identical results in successive repeated trials. a. True b. False 33. Customer advisory boards are small groups of actual customers who serve as sounding boards for new product ideas and offer insights into their feelings and attitudes toward a firm's products, promotion, pricing, and other elements of marketing strategy. a. True b. False 34. Crowdsourcing refers to the process of taking tasks usually performed by a marketer or researcher and outsourcing them to a crowd, or potential market, through an open call. a. True b. False 35. The first step in drawing conclusions from most research is to rank the data according to importance. a. True b. False 36. Three types of objective questions that can be designed for questionnaires are closed questions, linkage questions, and multiple-choice questions. a. True b. False 37. Stratified sampling may reduce some of the error that could occur in a simple random sample. a. True b. False 38. A hypothesis is a fact about the problem or topic under investigation. a. True b. False 39. An on-site computer interview is a variation of the shopping mall intercept interview. a. True b. False 40. The real value of marketing research is measured by improvements in a marketer’s ability to make decisions. a. True b. False

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Chap 05_20e 41. Statistical interpretation focuses on what is typical or what deviates from the average. a. True b. False 42. Experimental research is used to make tentative hypotheses more specific. a. True b. False 43. Survey and observation are considered secondary data collection techniques. a. True b. False 44. Data regarding attitudes toward a particular product are collected. To test a hypothesis, the data are used and then stored. If these data are used again in a future research study, they will be considered primary data. a. True b. False 45. The marketing research process—including data-gathering techniques—is the same throughout the world. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 46. One overlooked internal source of secondary marketing information discussed in the text is a. sales receipts. b. accounting records. c. interviews with salespeople. d. quality control data. e. consumer surveys. 47. Data that are observed or collected directly from respondents are called a. direct samples. b. secondary data. c. stratified data. d. primary data. e. firsthand information. 48. Anthony, a marketing manager for Uptown Fashion, a retail clothing store chain, wants to use observation methods to gather information about shopping behavior. Which of the following should Anthony know about observation methods of data collection? a. Observation uses secondary sources of data. b. Observation depends on mall interviews. c. Observation can tell Nathan what is being done, but not why. d. Observation focuses on open-ended questions. e. Observation works best for telephone surveys. Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 49. Corporate executives often prefer marketing research findings to be put into a report a. full of statistical analysis with details on methods employed by the researchers. b. examining the ethical implications of implementing results from the research report. c. that exposes no deficiencies or limitations of the research process. d. that is clear, short, and simply expressed. e. expressing the views and beliefs of top management about the research problem. 50. Which one of the following statements about marketing information technology is true? a. Big data refers to financial data that includes large dollar amounts. b. Marketing information systems typically include databases. c. The internet is a good source for qualitative data but not quantitative data. d. Social media is one type of decision support system. e. Big data refers to the large numerical figures that can be stored in a database. 51. Schlotzsky’s wants to collect data about employee satisfaction within its organization. It decides to survey a sample of 500 employees by having a computer program automatically pick which employees will be in the sample. If it uses the payroll database as the list of names to choose from, which type of sampling method is Schlotzsky’s using? a. Random sampling b. Sampling populations c. Stratified sampling d. Nonprobability sampling e. Quota sampling 52. Anh has been hired by a market research company to collect data about the drinking habits of 25- to 35-yearold urban professionals. Anh is to go to “happy hour” with a group of individuals and observe what type of alcoholic beverages they order, how often, and what brands. The data that Anh will obtain is ______ and she will use ______ in its collection. a. secondary; observation b. primary; personal interviews c. primary; ethnographic techniques d. secondary; ethnographic techniques e. primary; focus groups 53. Students from a marketing research class are involved in a project about the level of sleep, exercise, and stress that individuals experience. They have decided to collect data from three student-center areas on campus. When they analyze their data, they find the responses are very similar across the three areas. The students feel comfortable they have achieved which of the following with regard to their data? a. Reliability b. Causal relationships c. Validity d. Sampling accuracy e. Measurability Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 54. Suppose that marketers at Unilever are trying to determine whether the use of free samples of Axe body spray was the reason for a sales increase in a particular store. The type of research conducted to answer this question is a. exploratory. b. descriptive. c. experimental. d. informal. e. qualitative. 55. An item on the University Bookstore's survey asks respondents to tell the store, in their own words, what they like least about textbook shopping. This item would be an example of a(n) ____ question. a. open-ended b. dichotomous c. forced-sum-choice d. multiple-choice e. limited-choice 56. Company sales reports are often utilized as part of a company’s marketing research activities and can provide insight about which colors and sizes are preferred by customers. Scentsy, a manufacturer of candle products, often utilizes sales reports to identify which styles of wickless candles are most popular and what wax scents customers prefer for the electric candle warmers. This insight enables Scentsy to streamline its manufacturing process and develop a just-in-time system to match production to anticipated orders. What type of data does Scentsy utilize in this example? a. Internal primary b. Internal secondary c. External secondary d. External primary e. Internal observation 57. Juliette Draper is a marketing consultant for Third Eye Research Inc., and often recommends ______ focus groups, which are more convenient for participants and enable a company to gather data from large and geographically diverse groups in a less intensive manner than traditional focus-group interviews. a. social media b. conclusive c. streaming d. experimental e. online

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Chap 05_20e 58. The first phase of international marketing research recommended by experts should a. gather primary data using methods such as focus groups and telephone surveys to refine a firm’s understanding of specific customer needs and preferences. b. gather secondary data using methods such as focus groups and telephone surveys to refine a firm’s understanding of specific customer needs and preferences. c. hire a research firm with experience in the country of interest. d. involve a detailed search for and analysis of secondary data. e. involve a careful consideration of the firm’s code of conduct. 59. You are working with the data scientist from your sales department to develop a regression model for forecasting your company’s sales based on changes in the U.S. economy. Which of the following types of data do you need the most in order to enhance the accuracy of the model’s forecasts? a. Quantitative data about your company’s historical sales and U.S. economic performance statistics. b. Qualitative data about your company’s historical sales and U.S. economic performance statistics c. Qualitative data about the department’s sales force d. Quantitative data about your company’s historical sales only e. Qualitative data about your marketing environment 60. If a marketing researcher is interested in observing group interaction during an informal, unstructured, and openended data collection process, he or she should use a. a focus-group interview. b. an on-site computer interview. c. a shopping mall intercept interview. d. a telephone survey. e. crowdsourcing. 61. If the MU Bookstore wanted to understand the textbook and school supplies needs on the campus of the Midwestern University, the population of study would be a. the faculty and staff of the Midwestern University. b. all college-aged adults in the state of Iowa. c. all the people who live in Des Moines and surrounding areas. d. undergraduate students at the Midwestern University. e. all students, faculty, supporters, and staff of the Midwestern University. 62. In which type of sampling design is the final choice of respondents left up to the interviewer? a. Stratified b. Random c. Cluster d. Area e. Quota

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Chap 05_20e 63. The marketing department at Publix is using software to measure and interpret the effectiveness of a new promotional campaign it launched on sustainable seafood. It wants to evaluate the return on investment of the campaign and make changes to the campaign if needed. Which tool is Publix most likely using? a. Marketing analytics b. Statistical analysis c. Databases d. Marketing decision support system e. Single-source data 64. Jada works at a cosmetics firm. Her firm wants to conduct a survey to get feedback from respondents across the United States. The cosmetics firm does not want to spend a great deal of money, but it did authorize Jada to include a small incentive as a way to increase the survey response rate. The survey it plans to send out assures consumers that their answers will remain anonymous. What type of survey is the cosmetics firm most likely to use? a. In-home interview b. Telephone survey c. Observation d. Shopping mall survey e. Mail survey 65. Less randomness and more difficulty in obtaining a sample size are disadvantages of a. personal interview surveys. b. telephone surveys. c. mail surveys. d. social media. e. online experimentation. 66. CalAtlantic Group needs information about trends in housing starts and remodeling around the country. Since it will be difficult to collect _______ from the numerous locations, it decides to use _____ data from the U.S. Department of Commerce reports to get this information. a. descriptive; primary b. exploratory; secondary c. primary; exploratory d. descriptive; secondary e. primary; secondary 67. Which sampling design gives every member of the population an equal chance of appearing in the sample? a. Nonprobability b. Random c. Quota d. Stratified e. Poll

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Chap 05_20e 68. Scenario 5.2 Use the following to answer the questions. Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing. Refer to Scenario 5.2. Moki went to the university library and collected everything he could find on the kayaking and canoeing sports industries. He found a significant amount of information, but it didn’t seem to be in the format that he could actually use in his analysis. Moki realized that he could just use this preliminary data as a resource to help him design his plan for utilizing focus groups and possibly for designing a survey. The preliminary data is referred to as _____, while the data from focus groups and surveys is ______. a. primary data; secondary and observational b. secondary data; primary c. secondary data; observational d. exploratory data; primary e. primary data; descriptive 69. The two basic types of sampling that marketing researchers use are a. random and nonrandom. b. probability and nonprobability. c. stratified and quota. d. even and odd. e. planned and spontaneous. 70. Political candidates may use marketing research to a. provide reliable and valid results. b. develop a hypothesis about competing candidates. c. craft marketing mixes that maximize their resources. d. collect data from secondary sources and internal documents. e. understand the scope of issues their constituents consider important.

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Chap 05_20e 71. Scenario 5.2 Use the following to answer the questions. Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing. Refer to Scenario 5.2. Besides administering the questionnaire, Moki observed people who went kayaking and canoeing on the Salt River, making notes about their appearance and behavior. The type of data he collected is ____ data. a. indirect b. mechanical c. secondary d. primary e. direct 72. Which of the following is the least flexible survey method? a. Telephone surveys b. Focus-group interviews c. Personal interview surveys d. Mail surveys e. Observation 73. Dyson is known for product innovation and the creation of products that go beyond consumer expectations, such as the AirBlade hand dryer, AirMultiplier bladeless fan, and the Supersonic hair dryer. In order to develop and deliver products to consumers that are high in value and successful, the firm implements a variety of ________ activities in order to stay abreast of consumer trends and preferences and to determine the potential for success of new products. a. econometric analysis b. competitive intelligence c. marketing research d. crowdsourcing e. online survey 74. When researchers divide the population of interest in a study into groups and then arbitrarily choose participants from each group, they are using a. quota sampling. b. selective surveying. c. random sampling. d. stratified sampling. e. researcher samples.

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Chap 05_20e 75. Dillard’s wants to learn about its consumers' attitudes toward online purchases. There are numerous studies that are available about consumers and online buying, but Dillard’s believes its customers might be different from the usual online consumer profile, so it decides to conduct its own study. If Dillard’s were to use the available data about consumer attitudes, it would be using ___ data; however, if Dillard’s does its own study it would collect ______ data. a. descriptive; primary b. experimental; descriptive c. secondary; primary d. primary; secondary e. secondary; descriptive 76. Malia thinks she will be able to get the highest quality of responses concerning the product features most sought by consumers through personal interviews. She decides to conduct her interviews at ____ because this is a common location for personal interviews today. a. a shopping mall b. the respondent's home c. the interviewer's home d. the company's offices e. a city park 77. Your company is in the final stages of deciding whether to launch a new product that you have been testing for the last six months. While the CEO of your company is very optimistic about the potential for the product, he is a skeptic by nature. He has asked you to conduct one last round of marketing research that will give him greater confidence in the product’s prospects. Which of the following types of marketing research should you conduct to satisfy the CEO’s concerns? a. Descriptive research b. Conclusive research c. Focus group research d. Exploratory research e. Secondary research 78. The objective of sampling in marketing research is to a. obtain responses from as many people as possible. b. control independent variables that might influence research results. c. select representative units from a total population. d. ensure that measures in the study are reliable. e. provide data that can be used to test the hypotheses being investigated.

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Chap 05_20e 79. An informed guess or assumption about a certain problem or set of circumstances is known as a. a description of the situation. b. good research design. c. a hypothesis. d. a reliable guess. e. managerial intuition. 80. Strategic planning requires __________ to facilitate the process of assessing opportunities or threats from competitors. a. internet surveys b. marketing analytics c. international marketing d. marketing research e. consumer data 81. Research designed to verify insights through an objective procedure to help marketers make decisions is called ____ research. a. primary b. secondary c. exploratory d. conclusive e. hypothetical 82. An overall plan for obtaining the information needed to address a research problem or issue is called the a. research design. b. problem recognition. c. hypothesis. d. data collection method. e. sampling procedure. 83. Which of the following can be effective in increasing mail survey response rates and developing panels of respondents who are interviewed regularly? a. Premiums b. Samples c. Dichotomous questions d. Open-ended questions e. Crowdsourcing

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Chap 05_20e 84. In the past, personal selling has garnered a reputation as being too aggressive. You would like to test whether these perceptions have changed after the implementation of ethical principles for the personal selling industry. To start off your research, you would like to ask ten consumers in a group setting a set of questions about their views of personal selling. This is an example of a. conclusive research. b. observation. c. a customer advisory board. d. experimental research. e. a focus group. 85. The final step in the marketing research process is a. interpreting research findings. b. making sure the marketing research was conducted in an ethical manner. c. putting the results into a written document that is technical and written in formal language. d. reporting the research findings. e. deciding what the next research project should investigate. 86. Scenario 5.2 Use the following to answer the questions. Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing. Refer to Scenario 5.2. Before administering the questionnaire, Moki discovered through talking to other sports rental businesses that, although retired males made up a small percentage of the area's population, they often rented kayaks and canoes. In light of this, Moki decided to include a minimum of 25 percent retired males in his sample. The final choice of respondents was left up to the interviewers. This sampling method is known as ____ sampling. a. quota b. stratified c. random d. representative e. area

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Chap 05_20e 87. Third Eye Research, a marketing communications and strategy consulting firm, is assisting a client to understand the effects of promotional offers on consumer purchases. Its consultants propose the company consider offering three different versions of a coupon that would be mailed to purchasers. The value of the coupon would be manipulated, and the company could track the return of the coupon and how much money was spent by the purchaser. Third Eye suggests three different versions of the coupon: $1, $3, and $5. The client would select three groups of consumers to receive the coupon offer and a random process would be utilized to determine which coupon offer a consumer would receive. The research will provide important insights about consumer purchasing habits and which coupon offer would lead to the highest level of sales and coupon redemption. This is an example of ______________ research. a. experimental b. focus-group c. observation d. descriptive e. conclusive 88. _____ data yields information that can be communicated through numbers or metrics. a. Exploratory b. Qualitative c. Quantitative d. Conclusive e. Experimental 89. Which of the following uses tools and methods—including software to track, store, and analyze data—to measure and interpret the effectiveness of a firm’s marketing activities? a. Marketing information system b. Marketing database c. Customer relationship management d. U.S. Census databases e. Marketing analytics 90. High-volume data collected from social networks, RFID, retailer scanning, purchases, logistics, and production that marketers can use to discover unique insights and make more knowledgeable marketing decisions is best characterized as a. secondary data. b. sampling data. c. single-source data. d. big data. e. marketing analytics.

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Chap 05_20e 91. Which of the following is a probability sampling technique used to reduce errors within random sampling? a. Quota b. Stratified c. Nonprobability d. Cluster e. Snowball 92. Participants in ____ frequently get to see pictures, products, advertising samples, and diagrams. a. quota samples b. personal interview surveys c. mail surveys d. telephone surveys e. probability samples 93. A few months ago, Costco adopted a new brand of organic cheese. However, sales have been lower than expected. Costco decides to survey some of its customers at its stores to try and understand this issue. It set up demonstrations in several stores and asked consumers to try samples of its organic cheese product. It then asked them how they liked the cheese. The majority of respondents indicated they were very satisfied with the cheese's flavor. This occurred in trial after trial. Costco is confused. Satisfaction with the cheese is positive, yet sales continued to remain low. They ask you, a marketing consultant, why you think this is. You reply that while the tests had strong ___________, they did not have strong ____________. You recommend that Costco survey customers on their purchase intentions rather than their satisfaction with the product's taste. a. reliability; validity b. validity; reliability c. applicability; reliability d. compatibility; validity e. applicability; validity

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Chap 05_20e 94. Scenario 5.1 Use the following to answer the questions. Because of the development of optical scanners and cable television, marketing researchers can now test the effectiveness of advertising more precisely. Volunteers in a minimum of six cities are offered food discounts in return for allowing marketing research firms to monitor grocery purchases and send trial commercials to their homes through cable television. The research subjects shop only at stores equipped with UPC scanners, and their purchases are identified by a special card. Respondents are also told that some of the commercials they see on cable television may differ from those seen by their neighbors. Buying patterns are then compared. For example, Barbara’s Bakery tested a Shredded Wheat promotion using this system. Half of the 5,000 participating homes in one city saw a commercial announcing the promotion; the other half saw a commercial that did not mention the promotion. Barbara’s used scanner data to evaluate the promotion's success and offered the commercials nationwide. Refer to Scenario 5.1. When the researchers compared the average sales of Shredded Wheat for the group that saw the promotion with the average sales for the group that did not see the promotion, in which stage of the marketing research process were they? a. Defining and locating problems b. Reporting research findings c. Developing hypotheses d. Collecting data e. Interpreting research findings 95. The main focus of a marketing information system is on a. the coordination of external information sources. b. classifying data into the proper information categories. c. data storage and retrieval. d. the accurate maintenance of inventory levels. e. gathering information on competitive activity. 96. Designing research procedures that produce reliable marketing data means that a. others using the same procedure will get almost identical data. b. the procedure must give results that support the hypothesis. c. the procedure must not give results that contradict other research studies. d. the procedure may give results that contradict other research studies. e. sampling must be done in a completely random manner. 97. Which of the following is the most appropriate for qualitative research projects for a small targeted group? a. Telephone surveys b. Focus-group interviews c. Personal interview surveys d. Telephone depth interview e. Mail survey Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 98. A significant challenge for marketing researchers is finding a. secondary data. b. a sample that is representative of the desired population. c. primary data. d. qualified researchers. e. unbiased researchers. 99. Managers at BJ’s Wholesale Club believe that most of its sales are to small businesses rather than consumers, and that women are more likely to be making the purchasing decisions. This is an example of a(n) ____ that BJ’s could test through marketing research. a. descriptive sample b. hypothesis c. experimental question d. sampling error e. conceptual error 100. When working as a summer intern for a local retail store, Brianna was sent to the library to look up data on population forecasts for the city of Seattle. The population information she found would be considered a. primary data. b. secondary data. c. information data from syndicated research services. d. secondhand data. e. a primary database. 101. When marketing researchers consider sampling techniques, they are preparing to collect ____ data. a. census b. statistical c. internal secondary d. external secondary e. primary 102. If Kashi, the maker of Go Lean breakfast cereal, wants to know what percentage of customers examine product labels before making a product selection in the grocery store, it can best gain this information through a. focus groups. b. mail surveys. c. personal interviews. d. observation. e. mall intercepts.

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Chap 05_20e 103. Burke Marketing Research is concerned about using surveys to conduct a marketing research project because a. fewer people are willing to participate. b. primary data are so much cheaper and easier to gather. c. survey data collection is highly inaccurate. d. survey data do not provide in-depth responses. e. the survey method has been replaced by the internet. 104. Having recording biases and collecting only descriptive information are two of the primary drawbacks to a. statistical interpretation. b. mail surveys. c. observation. d. personal interviews. e. experimentation. 105. Which of the following types of research is helpful in reaching conclusions and provides quantitative information? a. Exploratory b. Conclusive c. Focus groups d. Crowdsourcing e. Hypothetical 106. In marketing research, a sample is best described as a. a small group that is a part of a larger group. b. all the elements, units, or individuals of interest to researchers for a specific study. c. a limited number of units chosen to represent the characteristics of a total population. d. a group that shares a common attribute within a population. e. a small portion of a product offered to customers to try a new product. 107. Which of the following survey methods has the potential to offer quick response at a lower cost than traditional mail and telephone surveys? a. Total population surveys b. In-home (door-to-door) interviews c. Focus-group interviews d. Personal interview surveys e. Online surveys 108. Which of the following issues is an ethical issue in marketing research? a. Using big data to sell products to consumers b. Rising cost of marketing research c. Confidentiality issues in marketing research d. Clogging consumers’ email and mailboxes with promotional materials e. Staffing the marketing research team appropriately Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 109. When more information is needed about a problem and a tentative hypothesis needs to be made more specific, marketers usually conduct ____ research. a. descriptive b. experimental c. exploratory d. analytical statistical e. conclusive 110. For demographic purposes, a mail survey sent out by the Nurse-Family Partnership asks each respondent to identify their race by choosing among a list of possibilities. This common type of question is called a(n) ____ question. a. dichotomous b. multiple-choice c. categorized d. open-ended e. optional response 111. When conducting marketing research internationally, primary data gathering will have a greater chance of success if the firm a. employs local researchers who understand how to approach potential respondents and can do so in their own languages. b. employs its own researchers who understand how the company prefers to conduct research. c. employs its own researchers who understand how to conduct marketing research ethically. d. employs nonprobability sampling. e. focuses on qualitative rather than quantitative data. 112. Problem location and definition is the first step toward finding a solution to a marketing problem or launching a research study. The first sign of a problem a. involves an informed guess or assumption about a certain set of circumstances. b. is usually accompanied by a cost/benefit analysis. c. most often comes in the form of customer complaints. d. is often mentioned in secondary data reports, such as trade journals. e. is typically a departure from some normal function, such as a failure to attain objectives. 113. Big data allows marketers to look at patterns of consumption behavior in order to a. improve survey response rates. b. obtain a positive return on investment. c. predict competitors’ behavior. d. predict consumers’ future buying behaviors. e. predict marketing environment changes.

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Chap 05_20e 114. A framework for gathering and managing information from sources both inside and outside an organization is referred to as a. marketing research agencies. b. a marketing information system. c. the marketing mix. d. a marketing research system. e. a secondary data system. 115. Which of the following is the least expensive survey method? a. Mail surveys b. Telephone surveys c. Telephone surveys d. Online surveys e. Focus group surveys 116. A survey question that requires a yes or no answer is called a a. qualifier. b. multiple-choice question. c. 50-50 question. d. dichotomous question. e. bimodal question. 117. FloorKing sells all types of floor coverings to contractors and other businesses. It keeps a collection of information about all of its clients that can be easily accessed on the company's computer system. This collection of information is called a a. marketing information system. b. database. c. management information system. d. single-source data. e. marketing decision support system. 118. Spectrum uses its sales reports broken down by geographic regions as part of its marketing research to determine which markets are most rapidly adopting fiber-optic internet connections. In this example, Spectrum is using a. internal sampling. b. internal primary data. c. external secondary data. d. external primary data. e. internal secondary data.

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Chap 05_20e 119. You are watching an episode of a new game show that tests contestants’ knowledge by giving them phrases they must respond to with a question. The following marketing-related phrase comes up in the bonus round of the game: “It’s an informed guess or assumption about a problem or set of circumstances. It is based on all the insight and knowledge available about the problem or circumstances from research studies and other sources.” What should the contestant’s response be? a. What is a conclusive research finding? b. What is a qualitative data point? c. What is a hypothesis? d. What is an objective statement? e. What is a plausible conclusion? 120. Marketing research is best defined as a. the systematic design, collection, interpretation, and reporting of information to help marketers solve specific marketing problems or take advantage of market opportunities. b. a framework for the day-to-day management and structuring of information gathered by marketers. c. the use of tools and methods to measure and interpret the effectiveness of a firm's marketing activities. d. the collecting of data from secondary sources and internal documents. e. an intuitive process for making decisions based on personal knowledge and experience to take advantage of market opportunities. 121. Pointing out any deficiencies and the possible reasons for them should be done in the ____ step of the marketing research process. a. interpreting research findings b. collecting data c. defining the issue or problem d. reporting research findings e. designing the research project 122. A valid study a. portrays the population being studied. b. results in a causal relationship between the independent and dependent variables. c. uses random sampling. d. verifies expected results. e. measures what it is supposed to.

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Chap 05_20e 123. Pace salsa believes that sales are increasing because consumers see salsa as a healthier alternative to more traditional dips and sauces. The company develops a research study to test this hypothesis. It designs an online survey and sends it to its customers to find out their reasons for purchasing salsa. Pace is engaging in _____________ research. a. exploratory b. descriptive c. conclusive d. experimental e. hypothesis 124. Which step in the marketing research process involves the use of data analysis and statistical techniques to help draw conclusions? a. Locating and defining problems or research issues b. Developing hypotheses c. Collecting data d. Interpreting research findings e. Reporting research findings 125. Martina had invested a significant amount of resources into advertising a new product. She used tools and methods to measure and interpret the effectiveness of the campaign on customer sales. Martina used ___________ to evaluate her firm's return on investment. She then made adjustments based on her findings. a. marketing analytics b. big data c. databases d. marketing decision support systems e. single-source data

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Chap 05_20e 126. Scenario 5.1 Use the following to answer the questions. Because of the development of optical scanners and cable television, marketing researchers can now test the effectiveness of advertising more precisely. Volunteers in a minimum of six cities are offered food discounts in return for allowing marketing research firms to monitor grocery purchases and send trial commercials to their homes through cable television. The research subjects shop only at stores equipped with UPC scanners, and their purchases are identified by a special card. Respondents are also told that some of the commercials they see on cable television may differ from those seen by their neighbors. Buying patterns are then compared. For example, Barbara’s Bakery tested a Shredded Wheat promotion using this system. Half of the 5,000 participating homes in one city saw a commercial announcing the promotion; the other half saw a commercial that did not mention the promotion. Barbara’s used scanner data to evaluate the promotion's success and offered the commercials nationwide. Refer to Scenario 5.1. Suppose that when selecting the 5,000 homes to participate in scanner studies in one city, the research firm first divided the city's population into upper-, middle-, and lower-class families, then took a probability sample within each group. This would be a(n) ____ sample. a. random b. stratified c. area d. quota e. population 127. Nancy knows her business has a problem because of an increasing number of consumer complaints received recently. She has decided how to make this problem a precise, researchable statement and should next move on to a. calculating reliability and validity. b. designing the research project. c. collecting data. d. interpreting research findings. e. taking corrective action. 128. Which of the following statements about conducting marketing research internationally is false? a. The marketing research process may need to be modified to allow for regional differences. b. A detailed search for and analysis of secondary data can help researchers gain a greater understanding of a particular marketing environment and pinpoint issues that must be taken into account in gathering primary research data. c. Primary data gathering may have a greater chance of success if the firm employs local researchers who better understand how to approach potential respondents and can do so in their own language. d. Specific differences among countries can have a profound influence in data gathering. e. Specific differences among countries have no effect on data gathering or the marketing research process.

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Chap 05_20e 129. In the process of conducting marketing research, marketers should allow for a. periodic review of data during the collection period. b. continual evaluation of the data during the entire collection period. c. no data review during collection; instead, they should wait for later interpretation of research findings. d. descriptive research to solve general problems. e. statistical analysis during the collection period. 130. Which of the following is most judgmental? a. Stratified sampling b. Random sampling c. Probability sampling d. Quota sampling e. Primary sampling 131. Which of the following is true about marketing research? a. Marketing research is unrelated to a company’s SWOT analysis. b. Marketing research can help develop marketing mixes that match customer needs. c. Marketing research no longer uses personal interviews as a survey method. d. Marketing research is being surpassed by marketing analytics. e. Marketing research facilities the process of assessing a company’s regulatory compliance. 132. Information from the U.S. Census Bureau is commonly used as ____ by a variety of agencies and organizations. a. external secondary data b. sampling systems c. primary data d. internal secondary data e. hypotheses 133. A firm has conducted market research and found that customer satisfaction with its product is quite high. Nonetheless, repurchase behavior is very low. The research design evidently has a problem with a. secondary data. b. reliability. c. validity. d. reporting findings. e. generalizability.

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Chap 05_20e 134. Johnson Appliances owner Justin Johnson feels that his organization has access to a great deal of information generated both inside and outside the firm, but much of this information is presently going to waste. Apparently, Justin needs to develop a a. marketing research focus. b. marketing knowledge bank. c. marketing information system. d. marketing strategy. e. data-gathering system. 135. ______ allow marketers to predict buying behavior fairly accurately on the basis of the responses from a representative portion of the population of interest. a. Dichotomous techniques b. Ethnographic techniques c. Observation techniques d. Population techniques e. Sampling techniques 136. Decreasing sales, increasing expenses, or decreasing profits a. are to be expected during the marketing research process. b. are examples of symptoms that point to larger problems. c. usually have no effect on the marketing research process. d. are important considerations in designing the research project. e. should be carefully considered before collecting data. 137. Matias has just finished collecting data about the texting habits of students during their lunch hour. He used both online surveys to ask the students about their texting behavior, as well as observational techniques in the cafeteria. What is the next step in the marketing research process for Matias to begin? a. Reporting research results b. Selecting the research method c. Interpreting research findings d. Designing the research project e. Refining the research issue 138. In reporting marketing research findings, the researcher should a. provide explanations in language that those who use the report to make decisions can understand. b. write the report in an extremely technical and statistical style. c. fit the problem to a favored statistical technique. d. not acknowledge any limitations associated with the study. e. give management the answers it wants.

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Chap 05_20e 139. Quota sampling is most commonly used in a. descriptive research. b. population research. c. surveys. d. collecting primary data. e. exploratory studies. 140. Secondary data cannot be obtained from a. trade journals. b. the government. c. international sources. d. surveys. e. computerized literature retrieval databases. 141. Marketing research is a process designed to gather information a. exclusively about a company's customers. b. from the company's database. c. not currently available to decision makers. d. about the needs and desires of employees. e. concerning the interpretation of the company's sales goals. 142. Although telephone surveys can be conducted very quickly, a major limitation is a. the ability to gain rapport with respondents. b. the difficulty in asking probing questions. c. that few companies prefer this survey method. d. that only a small portion of the population likes to participate in telephone surveys. e. the expense compared to in-home interviews. 143. ____ that are either accepted or rejected become the primary conclusions of a marketing research study. a. Descriptions b. Issues c. Primary data d. Samples e. Hypotheses 144. Made Eyewear wants to conduct a survey on consumers who wear glasses. It wants to give every person who wears glasses in the United States an equal chance of being chosen for the survey. First, though, it needs to separate those who wear glasses from those who do not. What type of sampling should Made Eyewear use? a. Random sampling b. Selective sampling c. Stratified sampling d. Nonprobability sampling e. Quota sampling Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 145. A study that is valid and reliable a. is called a marketing research study. b. measures what it is supposed to measure and produces almost identical results in repeated trials. c. is expensive to implement and complete. d. measures subtle differences in the population being studied and produces almost identical results in repeated trials. e. is difficult to produce without expert researchers. 146. The major disadvantage of a mail survey versus a telephone or personal survey is a. having to offer premiums. b. the failure of respondents to return the questionnaire. c. the elimination of interview bias. d. the lack of open-ended questions. e. the cost. 147. Research that is conducted to clarify the characteristics of certain phenomena to solve a particular problem is called ____ research. a. primary b. experimental c. descriptive d. secondary e. exploratory 148. Dmitri Miller is the owner of Richmond Retrofit Co., a company specializing in replacement windows, siding, and remodeling services. Dmitri is interested in determining the characteristics of individuals who would be most likely to need replacement windows and interested in remodeling services, such as siding, awnings, and sunroom additions. He would like to identify characteristics of potential consumers who would be most likely to spend the most and utilize his company’s services. This information will be quite helpful to Richmond Retrofit Co. as it makes design changes to the store, selects merchandise, creates advertising messages, and determines what type of remodeling services to add. Richmond Retrofit Co. would like to identify the customers based on factors such as gender, age, marital status, age of home, and discretionary income. What type of research would be most appropriate for Richmond Retrofit Co. to utilize? a. Exploratory b. Focus group c. Experimental d. Descriptive e. Conclusive

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Chap 05_20e 149. MasterCard provides credit cards to individuals who use their cards for purchases of meals, gifts, travel services (e.g., transportation, hotel), fuel, and more. MasterCard makes extensive use of purchase information to aid in management and marketing decisions as well as in its marketing efforts to enhance the number of businesses that accept payment by the MasterCard. MasterCard leverages its information about consumers by analyzing the charging history of credit card members, website traffic, and information gleaned through the use of “cookies” and monitoring of social media, such as Twitter, Facebook, Instagram, and Pinterest. MasterCard believes data provides significant insights. What type of information does MasterCard utilize? a. Big data b. Single-source data c. Marketing decision support system d. Experimental data e. Social data 150. Scenario 5.2 Use the following to answer the questions. Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing. Refer to Scenario 5.2. Moki decided to apply some of the things he had learned in his marketing research class to his business. The first thing he should do is to ___________ which will help him ______. a. develop a questionnaire; collect the necessary data b. identify a sample frame; contact the appropriate respondents c. define the problem to be researched; determine his data needs d. conduct store exit interviews; give him an idea of the problem e. collect secondary data; contact the appropriate respondents 151. The manager of Central Market is interested in asking consumers what they think about the store's new layout and expanded produce selection. If the manager would like to obtain a high response rate and have the study conducted as quickly as possible, which data collection method would you recommend? a. Mail survey b. Direct observation of consumers in the store c. Telephone survey d. Focus-group interview e. Shopping mall intercept interview

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Chap 05_20e 152. Primary data are best described as the a. first batch of data collected for a specific study. b. data that are necessary for a correct decision. c. data that are observed, recorded, or collected directly from subjects. d. data that are compiled for some purpose other than the study in question. e. data that are collected inside and outside the organization for some purpose other than the current investigation. 153. Honda Motor Company has received several awards for its designs, quality, and integration of technology in automobiles. Today’s automotive consumers are increasingly interested in purchasing vehicles that are technology enabled and offer the driver or passenger the ability to access his or her wireless provider’s network, use Bluetooth technology to place calls, play music, and utilize GPS technology on their vehicles’ smart screen. Prior to offering these add-ons or features to their line of automobiles, Honda utilizes ______ research by assembling a small group of target market customers throughout the world to discuss their needs and how they might utilize new product enhancements. Managers from Honda are present to view the group discussions and observe the interactions among group members as well as the group’s moderator. a. focus group b. conclusive c. survey d. experimental e. descriptive 154. Thomas has been a marketing manager at Albertson’s for several years. Recently Albertson’s adopted a new type of software that is able to collect information from a variety of sources and look for unique trends that would not normally be observable using other marketing research methods. The information revealed the surprising insight that a certain age group of people buys more organic food than others. Thomas was surprised at this revelation because he had thought just the opposite. This new system allowed Thomas to make use of _________ and interpret it to yield unique insights he could use in future marketing campaigns. a. databases b. single-source data c. secondary data d. big data e. experimental data 155. Because of a variety of cultural, geographic, regulatory, and social issues, international marketing can pose unique challenges for the marketer. Many of these challenges can be mitigated by an effective internationaloriented marketing research effort. International marketing research can help a company a. guarantee the success of their marketing strategies. b. avoid product formulation errors. c. improve a company’s labor relations in foreign markets. d. develop the most effective logistics systems. e. eliminate product manufacturing inefficiencies. Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 156. In ____ sampling, there is no way to calculate the likelihood that a specific element of the population being studied will be chosen. a. population b. random c. stratified d. probability e. nonprobability 157. Subscription services from firms such as IRI, which tracks consumer purchases, provide marketing researchers with a good source of ____ data. a. census b. statistical c. internal secondary d. external secondary e. primary 158. Which one of the following best characterizes a marketing information system (MIS)? a. An MIS is an orderly gathering of information that is not supplied through routine reporting systems such as sales reports and accounting data. b. An MIS provides a continuous flow of information about such things as distribution costs, prices, sales, and advertising expenses. c. An MIS is conducted on a special-project basis when needed. d. An MIS requires adjustments to its techniques to adapt to environmental circumstances and is in reality part of the accounting system. e. An MIS involves internal information collection about employees and customers. 159. A(n) ____ is a collection of information arranged for easy access and retrieval. a. database b. marketing information system c. marketing decision support system d. online information service e. e-mail system 160. Behavior Scan, a research company, provides information on household demographics, television viewing habits, and purchases tracked with Hotline cards. This is a. a marketing information system. b. a business software database. c. online information. d. U.S. Census data. e. single-source data.

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Chap 05_20e 161. Big Valley General Hospital has designed an upcoming research project for determining the best methods for improving patient care. The next step the organization must take in the marketing research process is a. interpreting research findings. a. interpreting research findings. b. collecting data. c. developing a testable hypothesis. d. sampling the population. e. reporting research findings. 162. While shopping at the mall over the weekend, you noticed a group of young women asking shoppers if they could spare five minutes to answer some questions about their shopping experience at the mall. Given your marketing experience, you immediately recognize that these young women were conducting a marketing research project. Which step in the five-step marketing research process were they in? a. Step 1 – Locating and defining the problem b. Step 2 – Designing the research project c. Step 3 – Collecting data d. Step 4 – Interpreting research findings e. Step 5 – Reporting research findings 163. A research method in which a number of people are exposed to an idea or concept and the interaction of the people is observed is called a(n) a. in-home interview. b. mail survey. c. focus-group interview. d. shopping mall intercept interview. e. chat room interview. 164. Research that allows marketers to make causal inferences about relationships is called a. variable research. b. relationality. c. exploratory research. d. linkage research. e. experimental research. 165. Standards by which to judge the reliability marketing research include the Marketing Association to promote ethical research. a. questionnaire construction b. single-source data c. analytic software d. sampling method e. code of conduct

developed by the American

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Chap 05_20e 166. Scenario 5.1 Use the following to answer the questions. Because of the development of optical scanners and cable television, marketing researchers can now test the effectiveness of advertising more precisely. Volunteers in a minimum of six cities are offered food discounts in return for allowing marketing research firms to monitor grocery purchases and send trial commercials to their homes through cable television. The research subjects shop only at stores equipped with UPC scanners, and their purchases are identified by a special card. Respondents are also told that some of the commercials they see on cable television may differ from those seen by their neighbors. Buying patterns are then compared. For example, Barbara’s Bakery tested a Shredded Wheat promotion using this system. Half of the 5,000 participating homes in one city saw a commercial announcing the promotion; the other half saw a commercial that did not mention the promotion. Barbara’s used scanner data to evaluate the promotion's success and offered the commercials nationwide. Refer to Scenario 5.1. The 5,000 households that allowed their group purchases to be scanned are a a. focus group. b. quota. c. sample. d. target market. e. population. 167. Daniel uses Microsoft Excel to determine how much the responses to his survey about household decision making for toilet paper vary. Daniel is in the ____ step of the marketing research process. a. interpreting research findings b. reporting research findings c. collecting data d. designing the research project e. developing a hypothesis 168. According to the text, ____ interpretation focuses on what is typical or what deviates from the average. a. statistical b. descriptive c. exploratory d. secondary e. primary 169. All the elements, individuals, or units of interest to researchers for a specific study are called the a. data set. b. sample. c. population. d. focus group. e. target market.

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Chap 05_20e 170. Compared to a mail survey, telephone surveys have a. lower response rates but higher validity. b. a slower response time, but less cost. c. a faster response time, but less cost. d. fewer expenses overall. e. higher response rates but higher costs. 171. Mondelez marketers want to know why sales of its new ruby chocolate product is soaring in one country but not in another. After extensive research, Mondelez marketers believe the answer lies in demographic and cultural differences among the populations. They conduct in-depth research that asks consumers in each country about their ages, occupations, eating habits, as well as how often they purchase its chocolate bars. They use statistical analysis and predictive tools to come up with strong conclusions. Although Mondelez researchers are fairly certain about their research, they realize that it is still limited in providing evidence to definitively link demographic and cultural differences to being the cause of why sales differ so significantly among the two countries. Mondelez has most likely conducted _________________ research. a. exploratory b. descriptive c. focus-group d. experimental e. observational 172. If Jenny Craig Weight Loss Center is interested in collecting information about Americans' perceptions of dieting programs, and the company believes that significant regional differences may exist, the best type of sampling would be a. random. b. quota. c. population. d. stratified. e. nonquota. 173. The major differences between exploratory and conclusive research are a. quantitative and qualitative. b. secondary and quantitative. c. reliability and validity. d. formalization and flexibility. e. hypothetical and qualitative.

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Chap 05_20e 174. You are being quizzed on your knowledge of marketing. A question on the quiz asks, "What is the ultimate goal of marketing research for a firm?" Which of the following is the best answer to this question? a. To improve organizational performance b. To develop new product ideas c. To improve customer relationships d. To heighten a firm's visibility e. To decrease the costs of marketing activities 175. Cameras, counting machines, and scanners are used most often in a. surveys. b. secondary data gathering. c. field settings. d. observation. e. experimentation. 176. Chrisjen Nagata and seven other people were paid to get together and discuss a new product idea proposed by Procter & Gamble. Researchers observed the interaction of the group. During the discussion, Chrisjen was annoyed that Sadavir, another participant, seemed to “hog” the discussion and didn’t give others a chance to speak. This is an example of a problem when using a. focus-group interviews. b. group surveys. c. personal interview surveys. d. sampling teams. e. group think. 177. Information provided by one firm on household demographics, consumer purchases, television viewing behavior, and responses to promotions is called ____ data. a. single-source b. census c. consumer demographic d. multi-point e. single-point 178. _____ data can be particularly helpful in building a general understanding of a foreign market, including economic, legal, cultural, and demographic issues, as well as in assessing the risks of doing business in that market and in forecasting demand. a. Observation b. Big c. Primary d. Secondary e. Focus group

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Chap 05_20e 179. Your company is seeking to hire a consultant to assist with completing a specialized marketing research project that is focused on tech-savvy, young consumers. One of the firms describes its state-of-the-art marketing research system as follows: “It’s a social intelligence system that provides insightful, actionable information about what people are saying about your brand. It integrates information from millions of sources and empowers you to, among other things, help your organization understand and even shape relevant conversations in the social media sphere.” Based on the description, which of the following is the best reason for hiring this company? a. This company is strong in the area of ethical marketing. b. This company is likely run by recent college graduates who will understand our target market better than other firms. c. This company’s expertise and information systems are a good fit for the project. d. This company is a socially responsible company. e. The CEO of this company has a close personal relationship with our marketing director. 180. Martin was given the task of conducting a research project for his firm and proceeds with the following steps: He asks questions to determine the research topic, conducts a telephone survey, writes a report describing the survey results, and gives that report to his boss. Which step of the marketing research process has Martin omitted? a. Collecting data b. Defining and locating problems c. Interpreting research d. Designing the research project e. Reporting research findings 181. If Little Caesars wants to determine the impact of different coupon offers on pizza unit sales, it needs to conduct a. exploratory research. b. hypothesis development. c. survey research. d. stratified sampling. e. experimental research. 182. Gabrielle Jackson is running for Congress from the Fifth District in her state. She is interested in knowing the intended choices of the voters. All the registered voters in her district would constitute the study's a. experiment. b. dependent variable. c. population. d. independent variable. e. sample.

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Chap 05_20e 183. Assume that Verizon is interested in studying the pricing expectations of its customers. If the study calls for selecting at random 100 people from each of three age groupings, ____ sampling is being used. a. random b. stratified c. quota d. area e. experimental 184. To maintain the control needed to obtain accurate information, marketers approach marketing research as a process. Which of the following steps of that process focuses on uncovering the nature and boundaries of the marketing situation to be studied? a. Locating and defining problems b. Designing the project c. Collecting data d. Interpreting findings e. Reporting findings 185. When Coca-Cola initiated a telephone survey to determine the effectiveness of a recent advertising campaign, one of the questions the interviewer asked was, "Have you ever heard of a cola made with zero-calorie, plantbased stevia?" This is an example of which of the following kinds of questions? a. Open-ended b. Dichotomous c. Multiple-choice d. Imperative e. Declarative 186. Scenario 5.2 Use the following to answer the questions. Moki Hunt recently purchased Swift Waters Adventures, a kayaking and canoeing rental business near the Salt River in Arizona. Swift Waters Adventures had been in operation for five years and was located in an ideal area. Even though the winters in the area can be cold, kayaking and canoeing activities are generally popular year-round. After two months of operation, it became clear why the previous owners had sold the business. While the business appeared to be ideally located, sales were extremely disappointing. Refer to Scenario 5.2. Moki developed a research design to aid his investigation. This design included a questionnaire that attempted to measure "outdoor activity preferences"; however, Moki's professor said that the questionnaire measured not "outdoor activity preferences" but something else. The professor was questioning the research design's a. reliability. b. significance. c. truthfulness. d. corroboration. e. validity. Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 187. Scenario 5.1 Use the following to answer the questions. Because of the development of optical scanners and cable television, marketing researchers can now test the effectiveness of advertising more precisely. Volunteers in a minimum of six cities are offered food discounts in return for allowing marketing research firms to monitor grocery purchases and send trial commercials to their homes through cable television.

The research subjects shop only at stores equipped with UPC scanners, and their purchases are identified by a special card. Respondents are also told that some of the commercials they see on cable television may differ from those seen by their neighbors. Buying patterns are then compared. For example, Barbara’s Bakery tested a Shredded Wheat promotion using this system. Half of the 5,000 participating homes in one city saw a commercial announcing the promotion; the other half saw a commercial that did not mention the promotion. Barbara’s used scanner data to evaluate the promotion's success and offered the commercials nationwide.

Refer to Scenario 5.1. Barbara’s testing of the Shredded Wheat promotion is an example of a. the collection of secondary data used in a descriptive study. b. information feedback used in an exploratory study. c. the collection of secondary data used in an exploratory study. d. the collection of primary data used in a descriptive study. e. the defining and locating problems through an observational technique. 188. All of the following are steps in the marketing research process except a. collecting data. b. interpreting research findings. c. designing the research project. d. reporting research findings. e. understanding your customer. 189. Why would a personal interview be favored over a mail or telephone survey?

190. Why is ethics an important consideration in marketing research?

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Chap 05_20e 191. What pitfalls should a marketing researcher avoid in preparing a report for a company executive? Why?

192. Compare reliability and validity. Why are they important considerations in marketing research?

193. Compare the advantages and disadvantages of the two types of collecting a sample.

194. Why is it essential that a questionnaire be carefully designed and prepared? What problems can arise when a survey has not been well thought out?

195. Compare and contrast the response rates of the four basic survey methods. Are there methods to increase any of these response rates?

196. Discuss the role of the marketing information system in helping marketing managers make better decisions.

197. How can companies use information technology as a competitive advantage?

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Chap 05_20e 198. Explain the conditions that would favor an exploratory study over a conclusive study.

199. How does marketing research differ when conducted in other countries?

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Chap 05_20e Answer Key 1. False 2. True 3. False 4. True 5. True 6. True 7. True 8. True 9. False 10. False 11. False 12. True 13. True 14. True 15. False 16. True 17. True 18. False 19. True 20. False 21. True 22. True 23. False 24. True 25. False 26. False

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Chap 05_20e 27. True 28. False 29. False 30. False 31. True 32. True 33. True 34. True 35. False 36. False 37. True 38. False 39. True 40. True 41. True 42. False 43. False 44. False 45. False 46. b 47. d 48. c 49. d 50. b 51. a 52. c 53. a 54. c Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 55. a 56. b 57. e 58. d 59. a 60. a 61. e 62. e 63. a 64. e 65. d 66. e 67. b 68. b 69. b 70. e 71. d 72. d 73. c 74. a 75. c 76. a 77. b 78. c 79. c 80. d 81. d 82. a Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 83. a 84. e 85. d 86. a 87. a 88. c 89. e 90. d 91. b 92. b 93. a 94. e 95. c 96. a 97. d 98. b 99. b 100. b 101. e 102. d 103. a 104. c 105. b 106. c 107. e 108. c 109. c 110. b Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 111. a 112. e 113. d 114. b 115. d 116. d 117. b 118. e 119. c 120. a 121. d 122. e 123. a 124. d 125. a 126. b 127. b 128. e 129. b 130. d 131. b 132. a 133. c 134. c 135. e 136. b 137. c

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Chap 05_20e 138. a 139. e 140. d 141. c 142. d 143. e 144. c 145. b 146. b 147. c 148. d 149. a 150. c 151. c 152. c 153. a 154. d 155. b 156. e 157. d 158. b 159. a 160. e 161. b 162. c 163. c 164. e 165. e Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 166. c 167. a 168. a 169. c 170. e 171. b 172. d 173. d 174. a 175. d 176. a 177. a 178. d 179. c 180. c 181. e 182. c 183. b 184. a 185. b 186. e 187. d 188. e 189. In a personal interview survey, participants respond to questions face to face. Various audiovisual aids—pictures, products, diagrams, or prerecorded advertising copy—can be incorporated into a personal interview. Rapport gained through direct interaction usually permits more in-depth interviewing, including probes, follow-up questions, or psychological tests. In addition, because personal interviews can be longer than other survey types, they may yield more information. Respondents can be selected more carefully, and reasons for nonresponse can be explored. One such research technique is the in-home (door-to-door) interview. The in-home interview offers a clear advantage when thoroughness of self-disclosure and elimination of group influence are important. In an in-depth interview of 45 to 90 minutes, respondents can be probed to reveal their true motivations, feelings, behaviors, and aspirations. Copyright Cengage Learning. Powered by Cognero.

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Chap 05_20e 190. Marketing managers and other professionals increasingly rely on marketing research, marketing information systems, and new technologies to make better decisions. Therefore, it is essential that professional standards be established by which to judge the reliability of marketing research. Such standards are necessary because of the ethical and legal issues that can develop in gathering marketing research data. For example, many consumers are wary of how their personal information collected by marketers will be used, especially whether it will be sold to third parties. It is important that marketers remain ethical at all times, to retain consumer and stakeholder trust and a positive reputation. To provide standards and guidelines, organizations such as the Marketing Research Association have developed codes of conduct and guidelines that promote ethical marketing research. 191. The final step in the marketing research process is to report the research findings. Before preparing the report, the marketer must objectively analyze the findings to determine whether the research is as complete as it can be and how well the data answer the research question and support or negate the hypothesis. Most research will not have answered the research question completely. Thus, the researcher must point out deficiencies and their causes in the report. While writing, researchers must keep the report’s audience in mind and ensure that findings are relevant to the firm. They should also determine before writing how much detail and supporting data to include. Research is not useful unless it supports the organization’s overall strategy and objectives. If an outside research agency was contracted, it is important that it fully understand the client’s business. Those responsible for preparing the report must facilitate adjusting the findings to the environment, as it can change over time. The report must be helpful to marketers and managers on an ongoing basis. 192. In designing research, marketing researchers must ensure that research techniques are both reliable and valid. A research technique has reliability if it produces almost identical results in repeated trials. To have validity, the research method must measure what it is supposed to measure, not something else. This means that not all reliable research findings are valid. For example, although a group of customers may express the same level of satisfaction based on a rating scale, as individuals they may not exhibit the same repurchase behavior because of different personal characteristics. If the purpose of rating satisfaction was to estimate potential repurchase behavior, this result may cause the researcher to question the validity of the satisfaction scale. A study to measure the effect of advertising on sales is valid if advertising can be isolated from other factors and from variables that affect sales. Research projects should be replicable as well; otherwise it is impossible to establish reliability. 193. There are two basic types of sampling: probability sampling and nonprobability sampling. With probability sampling, every element in the population being studied has a known chance of being selected for study. Random sampling is a form of probability sampling. When marketers employ random sampling, all the units in a population have an equal chance of appearing in the sample. Another type of probability sampling is stratified sampling, in which the population of interest is divided into groups according to a common attribute, and a random sample is then chosen within each subgroup. A stratified sample may reduce some of the error that is a risk of a completely random sample, ensuring that a group is not accidentally overrepresented. By segmenting a population into groups, the researcher makes sure that each segment receives its proportionate share of sample units and helps investigators avoid including too many or too few sample units from each subgroup. Samples are usually stratified when researchers believe there may be variations among different types of respondents. The second type of sampling, nonprobability sampling, is more subjective than probability sampling because there is no way to calculate the probability that a specific element of the population being studied will be chosen. Quota sampling, for example, is highly judgmental because the final choice of participants is left to the researchers. In quota sampling, researchers divide the population into groups and then arbitrarily choose participants from each segment. In quota sampling, researchers impose some controls—usually limited to two or three variables, such as age, gender, or race—over the selection of participants to ensure that representative categories of respondents are included.

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Chap 05_20e 194. A carefully constructed questionnaire is essential to the success of any survey. Questions must be clear, easy to understand, and directed toward a specific objective, meaning they must be designed to elicit information that meets the study’s data requirements. Defining the objective of a questionnaire before construction will provide a guide to the substance of the questions and ensure that they yield useful information that contributes to the research project. The most important rule in composing questions is to maintain impartiality. The questions are usually of three kinds: open-ended, dichotomous, and multiple-choice. Open-ended questions should be used carefully, as it is very difficult to code the responses in such a way as to easily analyze the data later. Problems may develop in the analysis of dichotomous or multiple-choice questions when responses for one outcome outnumber others. For example, a dichotomous question that asks respondents to choose between “buy” or “not buy” might require additional sampling from the disproportionately smaller group if there were not enough responses to analyze. Researchers must also be very careful about questions that a respondent might consider too personal or that might require an admission of activities that other people are likely to condemn. Researchers must word questions carefully so as not to offend respondents. 195. The four basic survey methods include mail surveys, telephone surveys, online surveys, and personal interview surveys. A mail survey is less expensive than a telephone or personal interview survey as long as the response rate is high enough to produce reliable results. A major disadvantage of this method is the possibility of a low response rate. One method of improving response rates involves attaching a brief personal message on a Post-it note to the survey packet. Premiums or incentives that encourage respondents to return questionnaires have been effective in developing panels of respondents who are interviewed regularly by mail. A telephone survey has some advantages over a mail survey. The rate of response is higher because it takes less effort to answer the telephone and talk than to fill out and return a questionnaire. If enough interviewers are available, a telephone survey can be conducted very quickly. However, only a small proportion of the population likes to participate in telephone surveys or interviews. This can significantly limit participation and distort representation. Many households are excluded from telephone directories by choice (unlisted numbers) or because the residents moved after the directory was published. Potential respondents often use telephone answering machines, voice mail, or caller ID to screen or block calls; additionally, millions have signed up for “Do Not Call Lists.” Moreover, an increasing number of Americans are giving up their fixed telephone lines in favor of cellular or wireless phones. These issues have serious implications for the use of telephone samples in conducting surveys or interviews. In an online survey, questionnaires can be transmitted to respondents either through e-mail or through a website. Marketing researchers often send these surveys to online panel samples purchased from professional brokers or put together by the company. The potential advantages of online surveys are quick response and lower cost than traditional mail, telephone, and personal interview surveys if the response rate is adequate. Marketers can use digital media forums such as chat rooms, blogs, newsgroups, social networks, and research communities to identify trends in interests and consumption patterns. In a personal interview survey, participants respond to questions face to face. Respondents can be selected more carefully, and reasons for nonresponse can be explored. Today, many personal interviews are conducted in shopping malls. Shopping mall intercept interviews involve interviewing a percentage of individuals who pass by an “intercept” point in a mall. Like any face-to-face interviewing method, mall intercept interviewing has many advantages. 196. A marketing information system (MIS) is a framework for the day-to-day management and structuring of information gathered regularly from sources both inside and outside the organization. As such, an MIS provides a continuous flow of information about prices, advertising expenditures, sales, competition, and distribution expenses and can be an important asset for developing effective marketing strategies. The main focuses of an MIS are on data storage and retrieval, as well as on computer capabilities and management’s information requirements. MIS can help with producing regular sales reports by product or market categories, data on inventory levels, and records of salespeople’s activities, which can all help in marketing decision making.

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Chap 05_20e 197. Technology and the internet have made the information required for marketing decisions more accessible than ever. Marketers can easily track customer buying behavior, obtain detailed demographic profiles, and anticipate what buyers want—making it possible to fine-tune marketing mixes to satisfy customers. Information technology permits for easy internal research and quick information gathering to help marketers better understand and satisfy customers. CRM has been enhanced by the ability to integrate and access data from all customer contacts. Many firms use marketing information systems, CRM technologies, and cloud computing to network technologies and organize the marketing data available to them. Improvements in information technology have made it possible for firms to develop databases that are vastly enhanced in their speed and storage capacity to guide strategic planning and improve customer service. 198. Conclusive research is designed to verify insights through an objective procedure to help marketers make decisions. It is used in the final stages of decision making, when the marketer has narrowed his or her decision down to a few alternatives. When marketers need more information about a problem or want to make a tentative hypothesis more specific, they conduct exploratory research. The main purpose of exploratory research is to better understand a problem or situation and/or to help identify additional data needs or decision alternatives. Exploratory research can help marketers better understand how consumers view a topic or a product, which can assist a firm as it develops better products and more targeted marketing mixes. 199. Sociocultural, economic, political, legal, and technological forces vary in different regions of the world. These variations create challenges for the organizations that are attempting to understand foreign customers through marketing research. While the marketing research process is generally the same around the world, some regional differences exist. To make certain that firms are sufficiently aware of global and regional differences, many companies retain a research firm, or at least a researcher, with experience in the country of interest. Most of the largest marketing research firms derive a significant share of their revenues from research conducted outside the United States. For example, the Nielsen Company, the largest marketing research firm in the world, is a U.S. company but has a market presence in over 100 different countries.

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Chap 06_20e Indicate whether the statement is true or false. 1. Coca-Cola would be able to use a customer forecasting survey to forecast future sales effectively. a. True b. False 2. Sellers of farm produce would be likely to use an undifferentiated targeting strategy. a. True b. False 3. The first step of the target market selection process is identifying the appropriate targeting strategy; the last step is evaluating relevant market segments. a. True b. False 4. A company sales forecast is the amount of a product that a company expects to sell during a specific time period at a specified level of marketing activities. a. True b. False 5. Lifestyle analysis focuses on people's activities, interests, and opinions. a. True b. False 6. The ways in which customers use a particular product may be a basis for segmenting the market. a. True b. False 7. When selecting the specific target market, the firm must consider the possibility that the requirements of some market segments are at odds with the firm's overall objectives. a. True b. False 8. A marketer can use regression analysis techniques to predict the sales of new products. a. True b. False 9. In developing a company sales forecast, the forecasting methods are limited to surveys and correlation methods. a. True b. False 10. If a company spends twice as much as any of its competitors on marketing efforts, and if each dollar spent is more efficient in generating sales, the firm’s sales potential will be low relative to competitors’ sales potential. a. True b. False

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Chap 06_20e 11. The magnitude of industry-wide marketing activities has a direct impact on the company’s sales potential. a. True b. False 12. The types of surveys used to forecast sales are customer, executive, and competitor surveys. a. True b. False 13. Psychographic variables are aggregate population characteristics such as the distribution of age and gender, fertility rates, migration patterns, and mortality rates. a. True b. False 14. Through market tests, a forecaster gains data regarding consumers' intended purchases. a. True b. False 15. The size of the market potential places limits on the size of the company sales potential. a. True b. False 16. In a customer forecasting survey, a marketer would question customers about the types and quantities of products they intend to buy during a specific time period. a. True b. False 17. An undifferentiated targeting strategy does not target a single market with one marketing mix. a. True b. False 18. The concentrated targeting strategy is one in which an organization directs its marketing efforts toward a single market segment through one marketing mix. a. True b. False 19. A firm ordinarily uses the same sales forecasting method for determining short-range and long-range sales forecasts. a. True b. False 20. Sales forecasts are always long-range in nature. a. True b. False

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Chap 06_20e 21. Market segment profiles help a marketer determine which segments are most attractive relative to a firm's strengths, weaknesses, objectives, and resources. a. True b. False 22. Lena is an award-winning fiction writer. She works out of her apartment. She recently purchased a new desk in which to store her manuscripts and for use when typing up stories for publication. Lena is part of the business market for the desk manufacturer. a. True b. False 23. Lifestyle is a product-related variable. a. True b. False 24. A market segment profile describes the similarities among potential customers within a segment and explains the differences among people across market segments. a. True b. False 25. There are only two basic strategies for selecting target markets: the undifferentiated targeting strategy and the concentrated targeting strategy. a. True b. False 26. Demographic characteristics are commonly used to segment a market because they are closely related to consumers' product needs and purchasing behavior. a. True b. False 27. A market segment profile provides customers with an understanding of how a business can use its capabilities. a. True b. False 28. One way marketers can segment business markets is according to their geographic location. a. True b. False 29. Trend analysis is a sales forecasting technique that focuses on aggregate sales data over a period of many years to determine general trends in annual sales. a. True b. False 30. The sum of firms' marketing efforts equals industry marketing efforts. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 31. The two general approaches to measuring company sales potential are the breakdown and the buildup approach. a. True b. False 32. The four requirements of a market are that the individuals in the market must have a need for the product and the ability, willingness, and authority to buy it. a. True b. False 33. A segmentation variable is used to group smaller markets into one larger market. a. True b. False 34. A market segment profile may cover such aspects as demographic characteristics, geographic factors, product benefits sought, lifestyles, brand preferences, and usage rates. a. True b. False 35. Marketers use market segment profiles to assess whether customers will buy their products. a. True b. False 36. The executive judgment method of sales forecasting is very accurate in predicting future sales. a. True b. False 37. One condition for effective segmentation is that at least one segment must have substantial profit potential. a. True b. False 38. A company sometimes defines a total market as its target market. a. True b. False 39. Only one variable can be used to segment a market. a. True b. False 40. Company sales potential is the maximum percentage of market potential that an individual firm within an industry can expect to obtain for a specific product. a. True b. False

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Chap 06_20e 41. The information yielded by market segment profiles usually is not very useful later in the marketing process. a. True b. False 42. Segmentation variables are characteristics of individuals, groups, or organizations in a total market. a. True b. False 43. When a firm's management is making the final selection of specific target markets to enter, it should consider whether the organization has the financial resources, managerial skills, expertise, and facilities needed to effectively compete in the selected segments. a. True b. False 44. When evaluating relevant market segments, cost estimates are important to determine if an organization entering a particular segment can operate at costs equal to or below those of competitors. a. True b. False 45. Consideration of the firm's overall objectives usually does not influence the final selection of a target market segment. a. True b. False 46. A differentiated targeting strategy is when the organization targets two or more markets by developing a single marketing mix. a. True b. False 47. Family life cycle is a psychological dimension used for segmenting markets. a. True b. False 48. The term market density refers to the number of potential customers per unit of land area, such as per square mile. a. True b. False 49. Products can be part of only the business or consumer market, depending on their end use. a. True b. False 50. One problem with using personality traits for segmentation purposes is that they are difficult to measure accurately. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 51. A competitive assessment may reveal that a market segment that initially seemed attractive may not be worth pursuing. a. True b. False 52. Surveys are sometimes used to forecast sales. a. True b. False 53. In the breakdown approach, the marketing manager measures company sales potential by estimating how much of a product a potential buyer in a specific geographic area will purchase in a given period, multiplying the estimate by the number of potential buyers, and adding the totals of all the geographic areas considered. a. True b. False 54. A market is a group of people who, as individuals, have needs for products in a product class and have the ability, willingness, and authority to purchase such products. a. True b. False 55. If market segmentation analysis shows customer needs to be homogeneous, the firm’s management should decide to use the differentiated approach. a. True b. False 56. Motives can be used to segment markets. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 57. The Sound Emporium is a music superstore selling instruments, sound equipment, lighting, as well as DJ, band, and orchestra products. The Sound Emporium plans to continue its growth across the country by opening 5 to 10 new stores each year. The Sound Emporium has recognized that it has several market segments, including professional musicians, DJ businesses, and consumers who purchase instruments for school band and orchestra. The company has developed a detailed description of these various customer segments. These detailed descriptions include information such as demographic characteristics—age, income, and education level—as well as an individual’s preferences regarding what brands of instruments they purchase, how frequently they visit the store to make a purchase, how much time they spend in the store, and the percent of time they select The Sound Emporium to make a purchase. What step in the target market selection process has The Sound Emporium completed by describing their target market customers? a. Step 4: Evaluate Relevant Market Segments b. Step 2: Determine Which Segmentation Variables to Use c. Step 3: Develop Market Segment Profiles d. Step 5: Select Specific Target Markets e. Step 1: Identify the Appropriate Targeting Strategy Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 58. The forecasting techniques that assume past sales patterns will continue into the future are all variations of a. regression analysis. b. random factor analysis. c. seasonal analysis. d. time series analysis. e. past sales forecasting surveys. 59. A targeting strategy in which an organization targets a single market segment using one marketing mix is called a(n) ____ strategy. a. selective b. focused c. differentiated d. concentrated e. undifferentiated 60. The problem with using an undifferentiated strategy to market a “universal car” is that a. car buyers have homogeneous needs. b. car buyers have heterogeneous needs. c. the technology to produce a universal car does not yet exist. d. car buyers cannot be segmented. e. other car makers are already using an undifferentiated strategy. 61. Population density and city size are ____ variables used for market segmentation. a. geographic b. demographic c. psychographic d. environmental e. geodemographic 62. If White Mountain Group saw all sugar customers as pretty much alike and thus offered only one marketing mix, it would be using the ____ strategy. a. directed b. undifferentiated c. segmented d. differentiated e. product-use 63. Which of the following variables would most likely be used to segment a business market? a. An attitude of the company's CEO b. The geographic location of the company c. The lifestyle of the company's buying agent d. Net income generated by the company e. Common opinions of the company's employees Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 64. Characteristics of individuals, groups, or organizations that are used for dividing a total market into smaller homogeneous groups are called ____ variables. a. marketing b. classification c. segmentation d. stratification e. division 65. Publix is attempting to forecast sales for a new ice cream cake. To come up with an accurate forecast, Publix places the product in Atlanta supermarkets for a period of four months. In this instance, Publix is using which forecasting method? a. Time series analysis b. Market test c. Executive judgment d. Regression analysis e. Survey 66. Which of the following is NOT one of the major categories of consumer market segmentation variables? a. Demographic characteristics b. Geographic variables c. Psychographic dimensions d. Situational variables e. Behavioristic characteristics 67. The sales forecast differs from the company sales potential in that it focuses on a. the maximum percentage share of a market that an individual firm within an industry can expect to capture for a specific product. b. the minimum percentage share of a market that an individual firm within an industry can expect to capture for a specific product. c. what actual sales will be at a certain level of company marketing effort. d. what executives believe sales will be at a certain level of company marketing effort. e. what competitors’ sales will be at a certain level of company marketing effort. 68. Age, rate of product use, location, and gender are all examples of common a. demographic variables. b. geographic characteristics. c. targeting strategies. d. psychographic variables. e. segmentation variables.

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Chap 06_20e 69. If Woody's Inc., a producer of home siding, decking, and other wood products, focused its marketing efforts to home construction companies only, it would be using a(n) ____ strategy. If it sold the same products to both construction companies and DIY retailers such as Home Depot, it would be using a(n) ____ strategy. a. undifferentiated; undifferentiated b. undifferentiated; differentiated c. differentiated; multisegmented d. concentrated; differentiated e. concentrated; concentrated 70. A disadvantage of the concentrated targeting strategy is that a. the firm's financial condition is tied to a single and specialized marketing mix. b. large sales volumes cannot be generated. c. production costs may be higher than with other strategies. d. marketing personnel may become dissatisfied with the limited opportunities provided by this approach. e. marketing costs are often higher than for other strategies. 71. Shondra's team is analyzing target markets for the company's new product idea. Her group is currently considering the different factors it should adopt to divide the market. A major part of this decision involves the customers' needs for, uses of, or behavior toward the product. At which stage of the target market selection process are Shondra and her team currently? a. Step 1: Identify the appropriate targeting strategy b. Step 2: Determine which segmentation variables to use c. Step 3: Develop market segment profiles d. Step 4: Evaluate relevant market segments e. Step 5: Select specific target markets 72. Bentley targets a very exclusive high-income market. Toyota, on the other hand, targets economy markets (Yaris), the environmentally-conscious market (Prius), and the higher-income market (Lexus). Bentley has adopted a ___________ targeting strategy. Toyota has adopted a ______________ targeting strategy. a. differentiated; differentiated b. undifferentiated; differentiated c. undifferentiated; concentrated d. concentrated; undifferentiated e. concentrated; differentiated 73. Which of these statements is NOT true about business markets? a. The purchase may be made to resell the item. b. The purchase is always made by more than one individual. c. The purchase may be made to use in general daily operations. d. The purchase may be made to use in production of another product. e. They can also be referred to as organizational markets.

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Chap 06_20e 74. Benjamin Moore Company provides paint and supplies to businesses and individuals through its network of company-owned retail outlets. Benjamin Moore employs outside sales representatives who make personal calls with prospects and customers in order to gain insight about their needs and persuade them to utilize Benjamin Moore for their painting projects. Typically, a Benjamin Moore sales representative will focus his or her efforts on specific customers such as hospital facility managers, apartment complex managers, painting contractors, or education institution facility managers. Benjamin Moore is utilizing the ______ variable for segmenting business markets. a. customer size b. type of organization c. geographic location d. product use e. number of employees 75. Which of the following products is most likely to be marketed using an undifferentiated approach? a. Bicycle b. Computer c. Notebook d. Table salt e. Oscillating fan 76. Any group of people who, as individuals or as organizations, have needs for products in a product class and who have the ability, willingness, and authority to buy such products is a(n) a. business market. b. market. c. undifferentiated market. d. segmented market. e. market variable. 77. After an organization has determined which of the many segmentation variables it will use, the next step in the target market selection process is a. evaluating each of the relevant market segments. b. selecting the specific target markets. c. reviewing the appropriate marketing strategy. d. analyzing the interaction between segmentation variables. e. developing market segment profiles. 78. The psychographic variable that includes numerous characteristics related to people's activities, interests, and opinion is a. motive. b. social class. c. personality. d. stage of family life cycle. e. lifestyle. Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 79. Several conditions must exist for market segmentation to be successful. These conditions include all of the following except a. the total market should be divided so that segments can be compared on sales potential, costs, and profits. b. customers' needs for the product must be homogeneous. c. the company must be able to reach the chosen segment with a particular marketing mix. d. segments must be identifiable and divisible. e. at least one segment must have enough profit potential to justify developing and maintaining a special marketing mix for that segment. 80. The maximum percentage of market potential that an individual firm can expect to obtain for a specific product is the a. sales forecast. b. market potential. c. company sales potential. d. company sales objective. e. market share goal. 81. Which of the following is the biggest drawback to using psychographic variables? a. They are very costly to collect. b. They are difficult to measure. c. They give poor information about consumer needs. d. They do not reflect socioeconomic characteristics of consumers. e. The resulting segments are difficult to be reached. 82. The process of dividing a total market into market groups because people within each group have relatively similar product needs is called a. segmentation. b. diversification. c. target marketing. d. concentration. e. customization. 83. After a firm has identified an appropriate targeting strategy, the next step in the target market selection process is a. determining the demographic variables of the target market. b. developing market segment profiles. c. determining which segmentation variables to use. d. selecting specific target markets. e. evaluating relevant market segments.

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Chap 06_20e 84. In order for the marketer to achieve effective market segmentation, which of the following conditions must exist? a. The segments must be small enough to manage effectively. b. It must be possible to do a regression analysis on potential segments. c. Consumers’ needs for the product must be homogeneous. d. The firm must be able to sell effectively to the chosen segment with a specific sales price. e. The segment must have enough profit potential to justify the development of a separate marketing mix for the segment. 85. With its Venus razor, Gillette was the first marketer to offer a five-blade razor specifically designed for women. This is an example of market segmentation using ____ variables. a. demographic b. psychographic c. geographic d. behavioristic e. product-us 86. Graff's markets its exclusive jewelry and gifts to high-income individuals interested in high-quality products and a well-known brand name. It uses the same marketing mix to reach this market. Graff's uses a(n) ____ strategy. a. undifferentiated b. differentiated targeting c. exclusive targeting d. heterogeneous e. concentrated targeting 87. The marketing manager for Schick razors is attempting to determine a sales estimate for the line of products that allows men to maintain their facial hair using a traditional razor or an electric razor. The marketing manager estimates that Schick has a strong level of loyalty and brand name appeal and will garner 20% of the overall market. This amount is known as the _______. In addition, the marketing manager believes the total sales for the category will be $30 million annually for razors and razor blades for men. This is known as the ______________. a. company sales potential; market potential b. market share; category sale c. industry share; company forecast d. demand; supply e. company sales forecast; market potential

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Chap 06_20e 88. Generally speaking, individuals who are unemployed would NOT be considered a target market for lawn care services because a. they would not desire such products. b. they would not be willing to purchase such products. c. they would not have the ability to purchase such products. d. such markets are narrowly defined geographically. e. they would not be authorized to purchase such products. 89. Kettle Brand is currently conducting market segmentation studies. For several segments, it has completed competitive assessments and cost estimates. The next major step it must take is to a. determine which segmentation variables to use. b. develop market segment profiles. c. identify the appropriate targeting strategy. d. select specific target markets. e. develop sales forecasts. 90. Which of the following sales forecasting techniques would generally be most suitable for estimating sales of a new product? a. Executive judgment b. Customer surveys c. Time series analysis d. Market tests e. Regression methods 91. Coors may choose to segment its market based on heavy, moderate, and light drinkers of its alcoholic beverages. This is an example of market segmentation based on a. behavioristic variables. b. benefits. c. lifestyles. d. psychographic variables. e. demographic variables. 92. Alex works for a manufacturer of sports equipment and is currently developing a company sales forecast for golf clubs. While reviewing data, he discovered a pattern in sales volume over the past ten years that peaked during two months of each year. Alex likely used which sales forecasting technique? a. The Delphi technique b. Executive judgment c. Time series analysis d. Market tests e. Regression analysis

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Chap 06_20e 93. When a company has its sales forecasts prepared by management consultants, economists, or college professors, it is using a(n) a. expert forecasting survey. b. Delphi technique. c. random factor analysis. d. external judgment survey. e. market test. 94. Estimating the cost of entering a market and focusing on a specific target segment is important because a. cost estimates are crucial to estimating sales potential accurately. b. higher costs will keep other potential competitors from entering that particular segment. c. customers are more likely to be attracted to marketers that invest heavily in the target segment. d. the organization's marketers need to know if they can reach the segment at costs equal to or below competitors' costs. e. higher cost generally ensures long-term success. 95. When a firm designs a single marketing mix and directs it at an entire market for a particular product, the company is using a(n) ____ strategy. a. concentrated targeting b. differentiated c. heterogeneous market d. undifferentiated e. single mix 96. Phillips calculates that the total number of light bulbs sold to consumers in the next year by all light bulb producers is 1 billion, given anticipated marketing efforts by the firms involved. This figure represents the industry's a. sales potential. b. market potential. c. target growth rate. d. sales forecast. e. sales objective. 97. The purpose of market segmentation is to a. differentiate products. b. divide a total market to enable a marketer to develop a more precise marketing mix. c. reduce the overall cost of marketing activities. d. identify a single marketing mix that will be satisfactory for the general market. e. meet the needs of homogeneous markets.

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Chap 06_20e 98. If Progresso were to offer single-serving packages of soup, it would be using segmentation based on a. income. b. age. c. preferences. d. geographic considerations. e. family life cycle. 99. Micromarketing is a. focusing precise marketing efforts on very small geographic markets. b. developing a very specific marketing mix that will effectively meet the needs of only a small segment of the market. c. marketing efforts that are tightly controlled by high-level executives in the organization. d. a way to segment the market to meet the needs of individuals with the same motives and personality attributes. e. creating advertising that is so specific to a certain type of individual that few people outside that micromarket will respond to the message. 100. Malik has just become the new marketing analyst for a company that produces vinyl siding for homes. In an effort to forecast his firm's sales for the coming year, he needs to find where the greatest opportunities are for selling his product. Malik looks at the sales for the last five years and calculates a growth trend. He then collects data from a combination of other factors, such as population density, family size, home ownership, and per capita income. Finally, Malik looks at the correlation between the sales trend data and the various combinations of demographic data. Malik is employing the ____ forecasting method for the sales growth trend and the ________ method for the correlation. a. time series analysis; regression analysis b. executive judgment; regression analysis c. market tests; regression analysis d. regression analysis; time series analysis e. market tests; time series analysis 101. Comcast uses a segmentation strategy for its cable TV packages based on market characteristics such as age, gender, or income. Which of the following category of segmentation variables is Comcast using? a. Demographic b. Geographic c. Psychographic d. Product-related e. Behavioristic

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Chap 06_20e 102. What is the main problem with using a market test as a forecasting tool? a. Difficult to interpret b. Expensive c. Inaccurate d. Unacceptable to consumers e. Overused 103. Most markets for products are made up of individuals or groups with diverse needs for products and are called ____ markets. a. undifferentiated b. concentrated c. homogeneous d. differentiated e. heterogeneous 104. When markets are comprised of people with differing product needs, the marketing manager should use a(n) ____ strategy. a. concentrated or differentiated targeting b. market-intensive c. integrated d. product-oriented e. undifferentiated 105. A business advantage of the concentrated targeting strategy for any company is that it a. requires less market research and information. b. requires less intensive analysis of customers' characteristics and needs. c. allows a firm to utilize all of its production capacity. d. maintains the firm's flexibility in moving into other market segments. e. allows a firm to develop a special marketing mix for a single market segment. 106. Many marketers are concerned about the number of potential customers within a certain area of land because of the different requirements to serve dissimilar areas. What is this segmentation variable called? a. Micromarketing b. Population c. Market density d. MSA e. PMSA

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Chap 06_20e 107. Bose is a leading audio brand founded in 1964 by Amar Bose. Bose has become a favorite brand among consumers who enjoy listening to music. It is also somewhat of a status brand. The company markets a variety of products including headphones, earphones, speakers, and accessories. The product managers for the Bose product groups are involved in the sales forecast processes for their products, which is important to ensuring strong support for retailers and customers as well as to achieve sales objectives. The product managers hire experts who create initial forecasts, submit them to the company for averaging, and have the results returned to them so they can make individual refined forecasts. The procedure may be repeated several times until the experts who are working independently reach a consensus. The process typically results in a very reliable sales forecast. What type of sales forecasting method do the product managers of Bose use? a. Expert forecasting survey b. Trend analysis c. Delphi technique d. Executive judgment e. Customer survey 108. Which of the following requires hiring professionals to create initial forecasts, submit them to the company for averaging, and then use those results to make individual refined forecasts? a. Expert forecasting survey b. Customer forecasting survey c. Sales force forecasting survey d. Delphi technique e. Professional judgment 109. Which of the following forecasting methods is least dependent on historical sales data? a. Regression analysis b. Trend analysis c. Time series analysis d. Cycle analysis e. A market test 110. A marketer that targets customers based on marital status and the presence and age of children is using a. behavioristic segmentation. b. lifestyle variables. c. psychographic variables. d. family life cycle. e. phase of life segmentation.

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Chap 06_20e 111. If a large proportion of customers in a total market have similar product needs and the company has the resources to develop a marketing mix to satisfy them, which targeting strategy would be effective? a. Segmented strategy b. Concentrated strategy c. Undifferentiated strategy d. Differentiated strategy e. Positioning strategy 112. You are shopping for a laptop or tablet to use for taking notes, research, and studying. In this case, you belong to a(n) a. concentrated market. b. business market. c. B2B market. d. industrial market. e. consumer market. 113. The sales forecasting method that consists of making a product available to buyers in one or more locations and measuring purchase response is a. a market test. b. regression analysis. c. trend analysis. d. a survey. e. the Delphi technique. 114. Gwyn loves to look at real estate listings for mansions in her city and often fantasizes about buying and living in one. As a teacher, however, Gwyn is not part of the market for expensive real estate because she a. lacks the willingness to purchase such products. b. lacks the authority to purchase such products. c. lacks the ability to purchase such products. d. is a business. e. is not part of the right demographic set. 115. Variables such as geographic location, type of organization, customer size, and type of product usage are used to segment ____ markets. a. consumer b. business c. government d. international e. institutional

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Chap 06_20e 116. Jim is developing a market forecast. After reviewing years of sales, he noticed there seems to be a clear association between past sales and households with children. The more families with children locate to the area, the more sales seem to increase. Jim believes he can use this relationship and the information he has on households in the area to predict future sales. This is an example of what type of forecasting method? a. Delphi technique b. Executive judgment c. Time series analysis d. Regression analysis e. Market test 117. To find a target market, a firm can use one of these targeting strategies. a. Total market strategy and the undifferentiated strategy b. Product differentiation strategy and the customer differentiation strategy c. Demographic strategy and the psychographic strategy d. Socioeconomic strategy and the psychological strategy e. Undifferentiated strategy, the concentrated strategy, and the differentiated strategy 118. The amount of product a company expects to sell during a specific period at a specified level of marketing activity is called the a. company sales potential. b. revenue estimate. c. company sales prediction. d. market potential. e. sales forecast. 119. Which of the following is NOT a characteristic of a consumer market? a. It consists of purchasers who intend to consume or benefit from the purchased products. b. They do not buy products for the main purpose of making a profit. c. They are sometimes referred to as B2C markets. d. Their purchasing decisions are always made by only one individual. e. They may buy the product, but not use it themselves. 120. If your firm uses a(n) __________ targeting strategy, you can expect to need __________ production processes to support the strategy. a. concentrated; more b. differentiated; more c. undifferentiated; similar d. differentiated; less e. undifferentiated; more

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Chap 06_20e 121. Segmentation variables for consumer markets are usually grouped into four categories: a. demographic, geographic, religion, and income. b. geopolitical, income, behavioristic, and psychographic. c. attitudes, lifestyles, behaviors, and gender. d. geographic, demographic, psychographic, and attitudes. e. demographic, geographic, psychographic, and behavioristic. 122. When a business has a relatively small number of customers, a preferred method of forecasting is a. regression analysis. b. trend analysis. c. the Delphi technique. d. a market test. e. a customer forecasting survey. 123. Positive Trends Co segments its diet pills based on those who have morning cravings, those who tend to overeat near the end of the day, those who need all day long appetite suppression, and those who want appetite control and more energy. This is an example of market segmentation based on variables of a. demographics. b. lifestyles. c. psychographics. d. behavioristic. e. personality characteristics. 124. Scenario 6.2 Use the following to answer the questions. GE Transportation produces locomotive engines for sale in countries around the world. After looking at the total market for locomotive engines, the company found that various rail lines wanted different types of engines. Major rail lines in the U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a cleaner, greener locomotive engine. Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country. GE Transportation is currently manufacturing its GE 4400 for heavy freight, its Hybrid Eco-Engine, and its Dash 9, suited for shortline transport. Refer to Scenario 6.2. GE Transportation is most likely using a(n) ______ targeting strategy, segmenting by ________ variables. a. undifferentiated; benefit expectations b. differentiated; end use c. differentiated; volume usage d. concentrated; volume usage e. concentrated; geographic location

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Chap 06_20e 125. When the needs of individual consumers in a target market for a specific product are similar, and the organization can satisfy most customers with a single marketing mix, the best approach to use may be the ____ strategy. a. undifferentiated b. differentiated c. segmented d. concentrated e. heterogeneous 126. Which of the following statements about the undifferentiated targeting strategy is false? a. The undifferentiated targeting strategy should be used when the needs of individual customers are similar. b. The undifferentiated targeting strategy uses one promotional program aimed at everyone in the target market. c. The undifferentiated targeting strategy is good for use with staple items, such as sugar and salt. d. The undifferentiated targeting strategy uses multiple distribution systems to best reach individuals in the target market. e. The opposite of the undifferentiated targeting strategy is the differentiated targeting strategy. 127. Monarch Mountain Coffee is a shop in a small Idaho town with a very loyal following. It has become well known in the town as well as in many of the towns surrounding it. Consumers seem to love the homey, local feel of Monarch Mountain. As a result, Monarch Mountain Coffee would like to open a new store in one of the towns close by. It has identified a region it thinks could be profitable. It has many loyal customers who live in that town. However, the town is also home to a Starbucks store. The town is growing, and Monarch Mountain has heard rumors that a Dunkin' Donuts may open. The owner is currently evaluating the relevant market segments in the area. He has the following questions he wants to answer: 1. Do we have enough of a loyal following as a local shop that we can attract customers away from Starbucks? 2. With the town growing as fast as it is, will other coffee shops decide to locate there? The owner is conducting a _____________ to evaluate relevant market segments. a. sales estimate b. SWOT analysis c. cost estimate d. competitive assessment e. market segmentation strategy 128. When a forecaster analyzes monthly sales figures for a three- to five-year period to ascertain whether sales fluctuate in a consistent, periodic manner, he or she is using a. regression analysis. b. executive judgment. c. seasonal analysis. d. cycle analysis. e. random factor analysis.

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Chap 06_20e 129. Systems such as Claritas and PRIZM provide companies with lifestyle and demographic information about neighborhoods throughout the United States. This information is used to aid a. behavioristic segmentation. b. geodemographic segmentation. c. market density analysis. d. demographic segmentation. e. geographic segmentation. 130. Family life cycle is most typically based on a. income. b. geographic location. c. marital status and age of children. d. occupation. e. buying power. 131. Which of the following is an example of benefit segmentation? a. A cigarette manufacturer separates the market into heavy users who smoke at least one pack a day, moderate users who smoke less than a pack, and the occasional user who smokes cigarettes or cigars only for special occasions. b. Colgate-Palmolive markets three types of toothpaste: toothpaste with fluoride to strengthen tooth enamel, toothpaste with whitening properties, and toothpaste for sensitive gums. c. REI has one line of bikes geared toward active bicyclists who bike everywhere and a line geared toward those who bicycle simply for recreational purposes. d. Lego has certain lines of Legos geared toward children and other lines targeted toward adult collectors. e. Michelin develops a more durable type of tire for the Southwestern market due to the impact hotter climate conditions can have on tires. 132. The first step in the target market selection process is a. determining which segmentation variables to use. b. selecting specific target markets. c. identifying an appropriate targeting strategy. d. evaluating relevant market segments. e. developing market segment profiles. 133. Cube Company sells small refrigerators. It usually sells these refrigerators to hotels and offices. However, sometimes its customers choose to buy their refrigerators because they do not have a lot of room for a full-size refrigerator in their houses and apartments. Its primary market is a(n) _____________ market, but it also sells to a(n) _____________ market. a. consumer; business b. industrial; target c. business; industrial d. business; demographic e. business; consumer Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 134. Relying on executive judgment for forecasting may be adequate when a. levels of marketing efforts put forth by competitors vary considerably. b. recent events give the executive specific impressions of product demand. c. product demand is erratic. d. the executive conducts surveys. e. the executive has considerable experience and product demand is relatively stable. 135. The final step in the target market selection process is a. implementing the appropriate marketing mix for the target market. b. evaluating relative market segments. c. eliminating market segments that are cost prohibitive. d. selecting specific target markets. e. revising the final segmentation variables based on target selection. 136. The merchandise available at various Target stores—even ones separated by just a few miles—varies somewhat with products chosen to appeal to the customers drawn to each store. Targets in suburban areas are likely to a carry wider and deeper mix of toys, children’s apparel, and groceries, while those near colleges are more likely to focus on a small selection of adult clothing, apartment essentials, and beauty products. Target is practicing a. behavioristic segmenting. b. psychographic segmenting. c. profiling. d. macromarketing. e. micromarketing. 137. Rockabye Baby is a boutique that sells luxury baby items. It is located in Los Angeles. The owner has been highly successful over the years and has decided to open another store in San Diego. However, sales at this store have been low. The owner asked a marketing consultant for advice about what went wrong. The consultant says the location is not ideal for the market. The owner located his store in a high-income area, but most of the people in the area are singles or retired couples. Instead, the owner should have used ____________ to identify an area of the city with higher-income neighborhoods characterized by couples who want only the best for their newborn babies. a. demographic segmentation b. behavioristic segmentation c. benefit segmentation d. geodemographic segmentation e. family life cycle

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Chap 06_20e 138. Scenario 6.1 Use the following to answer the questions. Lil Angels Kids Spa offers various treatments designed to appeal to the younger customer. Treatment options include manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party package. Currently, Lil Angels offers its services only to girls under the age of 14. Originally begun in Delaware, Lil Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to 17. The company realizes that some changes may be needed. For example, management wants to find out if the older girls will be interested in their birthday party and tea party services. Refer to Scenario 6.1. Which of the following best describes Lil Angels' current approach to the market? a. It is segmenting the market according to demographic variables. b. It is segmenting the market according to product-related variables. c. It has chosen a segment that is not identifiable and divisible. d. Its market is impossible to reach because of legal constraints. e. It is not segmenting the market but is attempting to reach everyone with the product. 139. Chrysler is producing a new seven-passenger SUV with all-wheel drive. Which of the following would be the best variables for segmenting the market for this new model? a. Gender and age b. Geographic location and family life cycle c. Income and geographic location d. Family life cycle and gender e. Geographic location and gender 140. Which of the following is an example of a behavioristic segmentation variable? a. Family size b. Climate c. Age d. Usage rate e. Personality characteristics 141. The primary advantage of a concentrated targeting strategy is a. it meets the needs of a wide range of consumers. b. it allows a firm to specialize to meet specific customer needs. c. it is more flexible than any other approach. d. it is the least risky targeting approach. e. its customers are the most willing to repurchase the same brands.

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Chap 06_20e 142. Market segment profiles are used to describe _____________ members of a market segment, and to explain ______________members in separate market segments. a. differences between; similarities among b. differences between; differences between c. similarities among; similarities among d. preferences among; preferences among e. similarities among; differences between 143. Which of the following products is most likely to have its market segment based on age? a. Nike shoes b. Lipton Iced Tea c. Bic pens d. Legos e. Carpet 144. Although it may seem logical to target higher-income consumers, many marketers choose to target lowerincome segments because a. higher-income consumers are harder to reach. b. higher-income consumers require more company resources. c. higher-income consumers represent a much larger population globally. d. lower-income consumers require fewer company resources. e. lower-income consumers represent a much larger population globally. 145. Peet’s Coffee will spend $500,000 marketing its newest latte drink. It expects to sell 1 million of these lattes over the next year. These 1 million lattes are a _____________ for Peet’s Coffee. a. sales forecast b. regression analysis c. breakdown approach d. cycle analysis e. buildup approach 146. The most important reason that a firm might use a sales force forecasting survey to determine its sales forecast is a. salespeople are generally optimistic about the future and will provide excellent forecast targets. b. most salespeople tend to have a pessimistic outlook, which is more likely to result in an achievable sales forecast. c. this tends to be the fastest way to determine a good sales forecast for the upcoming period. d. the averaging and other statistical techniques applied to these forecasts result in extremely accurate numbers. e. the sales staff is closer to the actual customers on a regular basis than anyone else in the organization.

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Chap 06_20e 147. Howard Cooper of Owens Corning Fiberglass talks to David Weekley, a homebuilder, to find out how much fiberglass insulation he intends to use in building homes during the next year. Howard then multiplies that number by the total number of builders in the territory. He is using a ____ approach to measure sales potential. a. multivariable b. use of product c. breakdown d. regression e. buildup 148. Through marketing newsprint to newspaper publishers and glass manufacturers that use it in packing, International Paper segments its market based on a. customer size. b. psychographics. c. demographics. d. product use. e. geographic location. 149. Demographic variables such as income and occupation, as well as how people spend their time and the importance of things in their surroundings, are all factors considered in ____ segmentation. a. psychographic b. social class c. lifestyle d. personality e. family life cycle 150. There are generally __________ steps in the target market selection process. The second step is ______________. a. five; determine which segmentation variables to use b. five; select specific target markets c. five; develop market segment profiles d. four; identify the appropriate targeting strategy e. four; determine which segmentation variables to use 151. Procter & Gamble markets Cheer detergent to young singles and couples and Dreft detergent to new parents. Procter & Gamble is using a(n) ____ targeting strategy for laundry detergents. a. multiuse b. differentiated c. stratified d. undifferentiated e. concentrated

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Chap 06_20e 152. Nucor provides steel for a variety of uses to its various customers. Customers have different needs for the steel, and thus Nucor has to prepare the raw steel differently depending on how customers will use it in their production processes. The primary business segmentation variable in this example is a. geographic location. b. customer size. c. product use. d. customer importance. e. organization classification. 153. ____________ is a useful sales forecasting method as long as a precise relationship between past sales figures and one or more variables can be established. Without these relationships, this method is useless in forecasting future sales. a. Trend analysis b. Random factor analysis c. Delphi technique d. Cycle analysis e. Regression analysis 154. The undifferentiated targeting strategy for finding a target market will likely NOT be successful if a. product positioning is needed. b. the firm defines the total market as its target market. c. people within the market have heterogeneous needs. d. people within the market have homogeneous needs. e. the firm is capable of developing a single marketing mix that satisfies all people's needs. 155. The marketer uses segmentation variables to divide a market into segments. All of the following statements are true about segmentation variables except: a. The variables should be related to the customer’s needs relative to the product being marketed. b. The variables must be measurable. c. The variables should be based primarily on demographic characteristics. d. The variables should be related to the customer’s behavior relative to the product being marketed. e. The variables should be related to the customer’s uses of the product being marketed.

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Chap 06_20e 156. Marketing managers have several choices in selecting a targeting strategy. Kristina Olivera is a marketing manager with Garrison Brothers Distillery, a craft bourbon distiller in Texas, and knows that there are many different types of bourbon drinkers. However, she concentrates her marketing on the enthusiast or high-involved bourbon drinker who often enjoys a bourbon beverage before or after dinner, reads magazines to keep up with the craft bourbon industry, and is a member of their e-mail list and subscriber to the company’s blog. Kristina knows that this segment of bourbon drinkers will consume more bourbon, be more likely to engage in positive word-of-mouth about the brand, and will also be more likely to purchase accessories such as glassware or Tshirts. Kristina is most likely utilizing the _____ targeting strategy, employing just one marketing mix and focusing on one target market segment. a. differentiated b. undifferentiated c. homogeneous d. concentrated e. focused target 157. The sales prediction technique based on the correlation between sales and other factors such as population density, per capita income, or family size is a. executive judgment. b. time series analysis. c. regression analysis. d. a market test. e. an expert survey. 158. Which of the following statements about market segment profiles is true? a. They can be used to calculate a lifetime value for each customer in a segment. b. They are used to describe differences among people in different market segments. c. They can only deal with demographic characteristics. d. They provide marketers with a cost estimate for serving potential customer groups. e. They cannot be used to describe similarities among potential customers. 159. Eighteen-year-old students do not form a market for alcoholic beverages because they a. lack sufficient buying power to form a market. b. lack the authority to purchase this type of product. c. do not want to purchase this type of product. d. do not have sufficient experience with this type of product. e. lack the money to purchase this type of product. 160. A forecasting method that predicts sales based on relationships between past sales and other variables is called a. regression analysis. b. customer forecasting surveys. c. the Delphi technique. d. random factor analysis. e. time series analysis. Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 161. The buildup approach measure of sales potential a. starts with broad estimates of general economic activity. b. ends with an estimate of a single firm's sales of a specific product. c. starts with forecasts about demand for a specific product within a relatively small area. d. does not use sales estimates. e. is seldom employed by industrial firms. 162. Individuals, groups, or organizations with one or more similar characteristics that cause them to have similar product needs are classified as a. market segments. b. heterogeneous markets. c. concentrated markets. d. demographic segments. e. strategic segments. 163. Animal Crackers is a home-based business that sells high-quality children's clothing at premium prices using inhome parties. These in-home parties typically cater to families with small children and middle- to upper-middleclass income. Animal Crackers is using ____ variables to segment its market. a. demographic b. psychographic c. sociographic d. behavioristic e. geographic 164. Scenario 6.1 Use the following to answer the questions. Lil Angels Kids Spa offers various treatments designed to appeal to the younger customer. Treatment options include manicures, pedicures, facials, tea parties, and dress up photos. Parents can even purchase a birthday party package. Currently, Lil Angels offers its services only to girls under the age of 14. Originally begun in Delaware, Lil Angels is considering opening its spa/salons in other parts of the country and is planning to expand its offerings to girls aged 14 to 17. The company realizes that some changes may be needed. For example, management wants to find out if the older girls will be interested in their birthday party and tea party services. Refer to Scenario 6.1. Lil Angels Kids Spa is currently using a(n)____ targeting strategy. a. undifferentiated b. exclusive c. concentrated d. differentiated e. selective

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Chap 06_20e 165. In your regular goods and services consumption activities, you purchase products for resale and for use in your daily operations. You also purchase products that you will use to produce other products. Based on this information, which of the following best describes the type of market you are part of? a. B2C market b. Business market c. Consumer market d. Institutional market e. Reseller market 166. ____ describe the similarities among potential customers within a market segment and explain the differences among people in different market segments. a. Market segmentation variables b. Market segment profiles c. Segmentation grids d. Market differentiation indexes e. Market concentrations 167. When using personality characteristics as a market segmentation variable, marketers generally a. conduct personality assessments of their potential target market to determine which personality characteristics they possess. b. use research developed by clinical psychologists to determine which personality characteristics consumers using their products are most likely to have. c. use generic characteristics that all members of the population have. d. use a positively viewed characteristic they assume much of their target market has or would like to have. e. conduct a series of focus groups to determine both the positive and negative characteristics members of their target market are perceived to have. 168. You have just been promoted to vice president of marketing for your firm. Unlike your predecessor, you believe the firm can increase its sales in a market by focusing on more than one segment of the market. You recognize that doing so means your firm will incur higher production costs. Based on this information, which of the following targeting strategies are you advocating? a. A concentrated targeting strategy b. An undifferentiated targeting strategy c. A broad-based targeting strategy d. A differentiated targeting strategy e. A heterogeneous targeting strategy 169. Which of the following is NOT a factor cited in the text that affects the strategy for selecting a target market? a. Target market characteristics b. Product attributes c. Organizational resources d. Organizational objectives e. Organizational structure Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 170. Scenario 6.2 Use the following to answer the questions. GE Transportation produces locomotive engines for sale in countries around the world. After looking at the total market for locomotive engines, the company found that various rail lines wanted different types of engines. Major rail lines in the U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a cleaner, greener locomotive engine. Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country. GE Transportation is currently manufacturing its GE 4400 for heavy freight, its Hybrid Eco-Engine, and its Dash 9, suited for shortline transport. Refer to Scenario 6.2. Researchers at GE Transportation estimate that 1,000 rail lines throughout the world will purchase some kind of locomotive engine next year. That number represents the a. company sales potential. b. breakdown approach. c. market potential. d. buildup approach. e. company sales forecast. 171. When evaluating market segments, assessment of competitors is important because a. it is difficult to segment a market when it has multiple competitors. b. an absence of competitors usually creates difficulties in accurately measuring segment sales potential. c. sales estimates may cause a segment to appear to be lucrative, but there may be several competitors that together have a large share of that segment. d. a competitive analysis may lead to confusion as to who are the key competitors. e. competition is generally not a major problem as long as a marketer is aware of it. 172. If Ben & Jerry’s calculates that it could sell up to 25% of all ice cream cones sold in the United States, this percentage would represent the ice cream marketer's a. target growth rate. b. sales forecast. c. sales objective. d. company sales potential. e. market potential. 173. US Foods, a food services and facilities management company, distributes food to restaurants, health-care facilities, hotels, and schools, among other businesses. What type of targeting strategy would it most likely adopt? a. Differentiated b. Concentrated c. Multifaceted d. Undifferentiated e. Cluster

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Chap 06_20e 174. The total volume of a product, for all firms in an industry, that would be purchased by specific customer groups within a specified time period at a given level of industry-wide marketing activity, is the a. competitor sales potential. b. sales objective. c. forecasted sales. d. company sales potential. e. market potential. 175. Volkswagen markets its Atlas SUV to large families, its CC to those wanting a sports coupe, and its Jetta to young singles. What targeting approach is Volkswagen using? a. Concentrated b. Strategic c. Differentiated d. Undifferentiated e. Multisegmented 176. Marketers use a variety of characteristics to segment markets that they are interested in pursuing. When segmenting consumer markets, demographic variables are normally used. All of the following are demographic characteristics used by marketers to segment markets except a. age. b. social class. c. family size. d. usage rate. e. marital status. 177. Which of the following is NOT a requirement or characteristic of a market? a. The ability to purchase a product b. A large number of people or organizations c. The authority to buy a product d. The willingness to use buying power e. The need for a specific product in a specific product category 178. Amos works as a manager in the marketing department of a pharmaceutical firm. The time has come to develop sales forecasts for the next year. This year the company wants to increase the reliability of the sales forecast. Amos was asked to participate in this process because of his extensive market knowledge. He joins a group of other experts in the area. Individuals in Amos’s group all submit their own forecasts. These forecasts are then averaged, and the results are given back to the group so they can refine them. The intent is to reach a consensus by working separately on these forecasts. What type of forecasting technique is this? a. Regression analysis b. Random factor analysis c. Delphi technique d. Executive judgment e. Time series analysis Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 179. Scenario 6.2 Use the following to answer the questions. GE Transportation produces locomotive engines for sale in countries around the world. After looking at the total market for locomotive engines, the company found that various rail lines wanted different types of engines. Major rail lines in the U.S. and South America wanted engines to haul heavy freight. Rail lines in Sweden and Germany were interested in a cleaner, greener locomotive engine. Rail lines operated by several Eastern European countries wanted locomotive engines for running short distances between cities in their own country. GE Transportation is currently manufacturing its GE 4400 for heavy freight, its Hybrid Eco-Engine, and its Dash 9, suited for shortline transport. Refer to Scenario 6.2. Suppose that GE Transportation decided to produce only locomotive engines for rail lines in the United States. The segmentation variable then would be a. geographic location. b. type of organization. c. market density. d. product use. e. customer size. 180. The manager at a local recreational vehicle store, Recreational Outfitters, believes the next two years will be difficult because of an economic recession. Using this forecast, he determines the effect on the industry's market potential and then estimates how his company's potential sales will look based on this outlook. This manager is using a ____ approach to estimating sales potential. a. breakdown b. recessionary c. buildup d. pyramid e. dimensional 181. Mei is on the marketing team for a Gulf Coast drywall company. Her team is working to determine whether Hurricane Harvey had an effect on the firm’s erratic sales last year. What method would you recommend Mei’s team use to understand the situation? a. Regression analysis b. Cycle analysis c. Delphi technique d. Seasonal analysis e. Random factor analysis 182. Intuition and expediency are primary characteristics of which of the following sales forecasting methods? a. Surveys b. Executive judgment c. Cycle analysis d. Market tests e. Industry indicators Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 183. Method is a company producing products that limit the amount of negative impact on the environment. Its product line includes dishwashing liquid, cleaners, hand soap, and laundry detergent, to name a few. Method is exploring offering a line of environmentally friendly clothing, mostly T-shirts, shorts, and long pants for both men and women. Its research indicates that they should use psychographic segmentation in their marketing strategy. Which group of segmentation variables will Method likely be using? a. Geographic location b. Age, sex, and socioeconomic characteristics c. Social class variables d. Personality characteristics, motives, and lifestyles e. Family life cycle, social class, and religion 184. Sheldon is a marketing consultant recently retained by a small but fast-growing chain of boutique clothing stores. Sheldon is recommending the retailer shift to a differentiated strategy based on demographic variables because these are a. less controversial. b. commonly used. c. difficult to measure. d. visibly apparent. e. often closely linked to customers’ needs. 185. Common problems in failing companies are improper planning and unrealistic a. sales forecasts. b. company sales potential. c. segmentation. d. Delphi techniques. e. regression analyses. 186. Which of the following is the division of a market according to end results that consumers want from the product? a. Geodemographic segmentation b. Market density c. Benefit segmentation d. Concentrated segmentation e. Differentiated segmentation

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Chap 06_20e 187. Taco Bell has been very inventive in partnering with companies such as Frito-Lay to create new menu items. Recently Taco Bell developed the Nacho Cheese Doritos Locos Tacos, a Taco Supreme® made with premium seasoned beef, crisp lettuce, diced juicy red ripe tomatoes, real cheddar cheese, and topped with cool reducedfat sour cream, in a shell made from Nacho Cheese Doritos® Chips. Prior to the partnership and roll-out of the product throughout the Taco Bell system, a ________was conducted where several “test” stores carried the products for a limited time and Taco Bell and Frito-Lay could measure the actual sales to gauge the strength of the brand and opportunity for success. a. market test b. market analysis c. sales forecast d. company sales prediction e. regression analysis. 188. The forecasting method that utilizes a firm's historical sales data to find patterns in the firm's sales volume over time is a. the regression method. b. customer forecasting. c. a market test. d. sales force forecasting. e. time series analysis. 189. Jennifer’s Creations is a small New York City bakery that markets gluten-free cookies, muffins, breads, and more to people who have celiac disease. The firm is also launching a mail-order business to reach gluten-free customers outside of New York City. Jennifer’s Creations is using a(n) a. differentiated strategy. b. mass-market strategy. c. undifferentiated strategy. d. end-use strategy. e. concentrated strategy. 190. Why would a company use the undifferentiated strategy? a. The needs of individual consumers are dissimilar, and distinctive marketing mixes are required to satisfy them. b. The undifferentiated strategy is the one strategy that provides maximum satisfaction to the whole market. c. The needs of individual consumers in the target market for a specific product are similar, so the organization can satisfy most customers with a single marketing mix. d. The undifferentiated strategy is expensive to implement but tends to produce the most sales. e. The market is made up of individuals or organizations with diverse need for products in a specific product class.

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Chap 06_20e 191. A furniture maker with excess production capacity may find a differentiated strategy advantageous because the sale of products to additional segments can a. cost more. b. require more materials and employees. c. help to absorb excess capacity. d. generate a large sales volume from the first segment. e. cost less. 192. When selecting specific target markets, a firm should a. revert to an undifferentiated approach if the market is deemed heterogeneous. b. choose the segments most in line with the firm's objectives and long-term growth. c. choose all segments that are determined to be profitable for the organization. d. choose the minimum number of segments necessary to achieve company sales potential. e. pick the segments with the best sales forecasts for the upcoming period of time. 193. Gotham Home Decor sells expensive custom-made draperies, bedding, and accessories through sales representatives who are also interior designers. It also has another, slightly less expensive line that it sells through stores such as Nordstrom’s and Saks Fifth Avenue. Gotham Home Decor is most likely using a(n) ____ targeting strategy. a. differentiated b. undifferentiated c. concentrated d. homogeneous e. heterogeneous 194. Describe the variables used to segment business markets, and provide at least one example of each.

195. What are the conditions under which an undifferentiated targeting strategy is effective? Why are these conditions essential?

196. Discuss the advantages and disadvantages of using executive judgment in forecasting company sales.

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Chap 06_20e 197. What are the major steps of the target market selection process?

198. Discuss the differences between the breakdown and buildup approaches to measuring company sales potential. What are the similarities between these two approaches?

199. Differentiate between sales forecasts and company sales potential. Why is it important for a marketer to be able to forecast sales?

200. Why do marketers rely heavily on demographic characteristics when segmenting consumer markets?

201. Why is it important for marketers to assess competitors before entering a market segment?

202. Describe the three areas marketers should examine when they evaluate relevant market segments.

203. Identify the four major categories of segmentation of variables for consumer products, and give three examples of each.

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Chap 06_20e 204. Compare and contrast the concentrated and differentiated targeting strategies of market segmentation.

205. Why is it important for marketers to estimate sales potential for the entire industry as well as for the individual company?

206. Why would a firm survey its sales force to forecast company sales? Why would a firm choose an expert forecasting survey instead?

207. How do business markets differ from consumer markets?

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Chap 06_20e Answer Key 1. False 2. True 3. False 4. True 5. True 6. True 7. True 8. False 9. False 10. False 11. False 12. False 13. False 14. False 15. True 16. True 17. False 18. True 19. False 20. False 21. True 22. True 23. False 24. True 25. False 26. True

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Chap 06_20e 27. False 28. True 29. True 30. True 31. True 32. True 33. False 34. True 35. False 36. False 37. True 38. True 39. False 40. True 41. False 42. True 43. True 44. True 45. False 46. False 47. False 48. True 49. False 50. True 51. True 52. True 53. False 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 55. False 56. True 57. c 58. d 59. d 60. b 61. a 62. b 63. b 64. c 65. b 66. d 67. c 68. e 69. d 70. a 71. b 72. e 73. b 74. b 75. d 76. b 77. e 78. e 79. b 80. c 81. b 82. a Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 83. c 84. e 85. a 86. e 87. a 88. c 89. d 90. d 91. a 92. c 93. a 94. d 95. d 96. b 97. b 98. e 99. a 100. a 101. a 102. b 103. e 104. a 105. e 106. c 107. c 108. d 109. e 110. d Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 111. c 112. e 113. a 114. c 115. b 116. d 117. e 118. e 119. d 120. b 121. e 122. e 123. d 124. b 125. a 126. d 127. d 128. d 129. b 130. c 131. b 132. c 133. e 134. e 135. d 136. a 137. d

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Chap 06_20e 138. a 139. b 140. d 141. b 142. e 143. d 144. e 145. a 146. e 147. e 148. d 149. c 150. a 151. b 152. c 153. e 154. c 155. c 156. d 157. c 158. b 159. b 160. a 161. c 162. a 163. a 164. c 165. b Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 166. b 167. d 168. d 169. e 170. c 171. c 172. d 173. a 174. e 175. c 176. d 177. b 178. c 179. a 180. a 181. e 182. b 183. d 184. e 185. a 186. c 187. a 188. e 189. e 190. c 191. c 192. b 193. a Copyright Cengage Learning. Powered by Cognero.

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Chap 06_20e 194. Like consumer markets, business markets are frequently segmented for marketing purposes. Marketers segment business markets according to geographic location, type of organization, size of organization, and product use. Geographic segmentation may be especially appropriate for producers seeking to reach industries concentrated in certain locations, such as furniture and textile producers concentrated in the Southeast. A company sometimes segments a market by types of organization within that market because they often require different product features, distribution systems, price structures, and selling strategies. An organization’s size may affect its purchasing procedures and the types and quantities of products it needs. Size can thus be an effective variable for segmenting a business market. To reach a segment of a specific size, marketers may have to adjust one or more marketing mix ingredients. Because the needs of large and small buyers tend to be distinct, marketers frequently use different marketing practices to reach target customer groups. Certain products, particularly basic raw materials such as steel, petroleum, plastics, and lumber, can be used numerous ways in the production of goods. These variations will affect the types and amounts of products purchased, as well as the purchasing method. 195. The undifferentiated targeting strategy is effective under two conditions. First, a large proportion of customers in a total market must have similar needs for the product, a situation termed a homogeneous market. A marketer using a single marketing mix for a total market of customers with a variety of needs would find that the marketing mix satisfies very few people. For example, marketers would have little success using an undifferentiated strategy to sell a “universal car” because different customers have varying needs. Second, the organization must have the resources to develop a single marketing mix that satisfies customers’ needs in a large portion of a total market and the managerial skills to maintain it. 196. Executive judgment is the intuition of one or more executives. This is an unscientific but expedient and inexpensive approach to sales forecasting. It is not a very accurate method, but executive judgment may work reasonably well when product demand is relatively stable and the forecaster has years of market-related experience. However, because intuition is heavily influenced by recent experience, the forecast may weight recent sales booms or slumps excessively. Another drawback to intuition is that the forecaster has only past experience as a guide for deciding where to go in the future. 197. Although marketers may employ several methods for target market selection, they generally follow a five-step process. These steps include: Step 1: Identifying the appropriate targeting strategy Step 2: Determining which segmentation variables to use Step 3: Developing market segment profiles Step 4: Evaluating relevant market segments Step 5: Selecting specific target markets 198. The two general approaches that measure company sales potential are breakdown and buildup. In the breakdown approach, the marketing manager first develops a general economic forecast for a specific time period. Next, the manager estimates market potential based on this forecast. The manager derives the company’s sales potential from the forecast and an estimate of market potential. In the buildup approach, the marketing manager begins by estimating how much of a product a potential buyer in a specific geographic area, such as a sales territory, will purchase in a given period. The manager then multiplies that amount by the total number of potential buyers in that area. The manager performs the same calculation for each geographic area in which the firm sells products and then adds the totals to calculate market potential. To determine company sales potential, the manager must estimate, based on planned levels of company marketing activities, the proportion of the total market potential the company can reasonably attain.

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Chap 06_20e 199. After a company selects a target market or markets, it must develop a sales forecast—the amount of a product the company expects to sell during a specific period at a specified level of marketing activity. The sales forecast differs from the company sales potential in that it concentrates on what actual sales will be at a certain level of company marketing effort. The company sales potential assesses what sales are possible at various levels of marketing activities, assuming certain environmental conditions exist. Businesses use the sales forecast for planning, organizing, implementing, and controlling activities. The success of numerous activities depends on the forecast’s accuracy. Common problems in failing companies are improper planning and lack of realistic sales forecasts. For example, overly ambitious sales forecasts can lead to overbuying, overinvestment, and higher costs that can weaken a firm’s strength and position. 200. Demographers study aggregate population characteristics such as the distribution of age and gender, fertility rates, migration patterns, and mortality rates. Demographic characteristics that marketers commonly use include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class. Marketers segment markets by demographic characteristics because they are often closely linked to customers’ needs and purchasing behaviors and can be readily measured. 201. Besides obtaining sales estimates, it is crucial to assess competitors that are already operating in the segments being considered. A market segment that initially seems attractive based on sales estimates may turn out to be much less so after a competitive assessment. Such an assessment should ask several questions about competitors: How many exist? What are their strengths and weaknesses? Do several competitors already have major market shares and together dominate the segment? Can our company create a marketing mix to compete effectively against competitors’ marketing mixes? Is it likely that new competitors will enter this segment? If so, how will they affect our firm’s ability to compete successfully? Answers to such questions are important for proper assessment of the competition in potential market segments. 202. After analyzing the market segment profiles, a marketer should be able to narrow his or her focus to several promising segments that warrant further analysis. Marketers should examine sales estimates, competition, and estimated costs associated with each of these segments. Potential sales for a market segment can be measured along several dimensions, including product level, geographic area, time, and level of competition. Besides obtaining sales estimates, it is crucial to assess competitors that are already operating in the segments being considered. A market segment that initially seems attractive based on sales estimates may turn out to be much less so after a competitive assessment. To fulfill the needs of a target segment, an organization must develop and maintain a marketing mix that precisely meets the wants and needs of that segment, which can be expensive. 203. A marketer that uses segmentation to reach a consumer market can choose one or several variables. Segmentation variables can be grouped into four major categories: demographic, geographic, psychographic, and behavioristic. Demographic characteristics that marketers commonly use include age, gender, race, ethnicity, income, education, occupation, family size, family life cycle, religion, and social class. Age is a common variable for segmentation purposes. Markets may be divided using geographic variables because differences in location, climate, and terrain will influence consumers’ needs. City size can be an important segmentation variable. A classic example is Walmart, which initially was located only in small towns and even today can be found in towns where other large retailers stay away. Marketers sometimes use psychographic variables, such as personality characteristics, motives, and lifestyles, to segment markets. Personality characteristics can be a useful means of segmentation. When appealing to a personality characteristic, a marketer almost always selects one that many people view positively. Firms can divide a market according to consumer behavior toward a product, which commonly involves an aspect of consumers’ product use.

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Chap 06_20e 204. When an organization directs its marketing efforts toward a single market segment using one marketing mix, it is employing a concentrated targeting strategy. The chief advantage of the concentrated strategy is that it allows a firm to specialize. The firm analyzes the characteristics and needs of a distinct customer group and then focuses all its energies on satisfying that group’s needs. If the group is big enough, a firm may generate a large sales volume by reaching a single segment. Concentrating on a single segment can also permit a firm with limited resources to compete with larger organizations that have overlooked smaller market segments. Specialization, however, means that a company allocates all its resources on one target segment, which can be hazardous. If a company’s sales depend on a single segment and the segment’s demand for the product declines, the company’s financial health also deteriorates. With a differentiated targeting strategy, an organization directs its marketing efforts at two or more segments by developing a marketing mix for each segment. A benefit of a differentiated approach is that a firm may increase sales in the aggregate market because its marketing mixes are aimed at more customers. For this reason, a company with excess production capacity may find a differentiated strategy advantageous because the sale of products to additional segments may absorb excess capacity. Differentiated strategy, however, often demands more production processes, materials, and people because the different ingredients in each marketing mix will vary. Thus, production costs may be higher than with a concentrated strategy. 205. The competitive level specifies whether sales are being estimated for a single firm or for an entire industry. Market potential is the total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity. A segment’s market potential is affected by economic, sociocultural, and other environmental forces. The specific level of marketing effort will vary from one firm to another, and each firm’s marketing activities together add up to the industry-wide marketing effort total. A marketing manager must also estimate whether and to what extent industry marketing efforts will change over time. Company sales potential is the maximum percentage share of a market that an individual firm within an industry can expect to capture for a specific product. Several factors influence company sales potential for a market segment. First, the market potential places absolute limits on the size of the company’s sales potential—a firm cannot exceed the market potential. Second, the magnitude of industry-wide marketing activities has an indirect but definite impact on the company’s sales potential. Third, the intensity and effectiveness of a company’s marketing activities relative to competitors’ activities affect the size of the company’s sales potential. 206. In a sales force forecasting survey, the firm’s salespeople estimate anticipated sales in their territories for a specified period. A marketer may survey sales staff for several reasons, the most important being that the sales staff is the company personnel closest to customers on a daily basis. They therefore have firsthand knowledge about customers’ product needs. Moreover, when sales representatives assist in developing the forecast, they are invested in the process and are more likely to work toward its achievement. When a company wants an expert forecasting survey, it hires professionals to help prepare the sales forecast. These experts are usually economists, management consultants, advertising executives, college professors, or other individuals outside the firm with experience in a specific market. Drawing on this experience and their analyses of available information about the company and the market, experts prepare and present forecasts or answer questions. Using experts is a quick way to get information and is relatively inexpensive.

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Chap 06_20e 207. Markets fall into one of two categories: consumer markets and business markets. These categories are based on the characteristics of the individuals and groups that make up a specific market and the purposes for which they buy products. A consumer market consists of purchasers and household members who intend to consume or benefit from the purchased products and do not buy products to make a profit. Consumer markets are sometimes also referred to as business-to-consumer (B2C) markets. Each of us belongs to numerous consumer markets for all the purchases we make in categories such as housing, food, clothing, vehicles, personal services, appliances, furniture, recreational equipment, and so on. A business market consists of individuals or groups that purchase a specific kind of product for one of three purposes: resale, direct use in producing other products, or use in general daily operations. For instance, a producer that buys electrical wire to use in the production of lamps is part of a business market for electrical wire. Some products can be part of the business or consumer market, depending on their end use. For instance, if you purchase a chair for your home, that chair is part of the consumer market. However, if an office manager purchases the same chair for use in a business office, it is part of the business market. Business markets may be called business-to-business (B2B), industrial, or organizational markets and can be subclassified into producer, reseller, government, and institutional markets.

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Chap 07_20e Indicate whether the statement is true or false. 1. A marketer's use of framing can make a product characteristic seem more important to a consumer and can facilitate its recall from memory. a. True b. False 2. Marketers can control the perception of potential buyers. a. True b. False 3. During the evaluation of alternatives stage of the consumer buying decision process, the buyer selects the seller from whom he or she will purchase the product. a. True b. False 4. Consumer socialization is the process through which a person acquires the knowledge and skills to function as a consumer. a. True b. False 5. Situational influences can be classified into five different categories including physical surroundings, social surroundings, personality, purchase reason, and time perspective. a. True b. False 6. One's personality is a set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situations. a. True b. False 7. If a person's interest in the product category is ongoing and long term, it is referred to as situational involvement. a. True b. False 8. Information inputs that reach perceptual awareness are received in an organized form. a. True b. False 9. Situational influences generally have the greatest influence during the initial stage of the consumer buying decision process. a. True b. False

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Chap 07_20e 10. Extended problem solving is used when unfamiliar, expensive, or infrequently purchased products are bought. a. True b. False 11. Social surroundings during the purchase decision do not include the presence of a salesperson. a. True b. False 12. A person receives information inputs through the senses. a. True b. False 13. The criteria used to group people into classes are basically the same in all societies. a. True b. False 14. An attitude scale is useful in helping to measure the intensity of feelings toward an object. a. True b. False 15. Jay was flying to Greece for vacation when he realized he forgot his sunglasses. He purchased some at an airport shop even though they were more expensive than she would normally have paid. Jay was influenced by situational influences. a. True b. False 16. Not all the behavioral patterns and values attributed to specific subcultures apply to every member of that specific subculture. a. True b. False 17. Lilly is looking for new sneakers but cannot find her favorite brand. She then notices another brand of shoes that she has never purchased and has no experience with. She remembers she heard the name of the brand in a commercial yesterday. Because she remembers the name from the commercial, Lilly is more likely to ascribe value to that pair of sneakers. a. True b. False 18. A role consists of a set of actions and activities that a person in a particular position is expected to perform. a. True b. False 19. The actual act of purchase is the second stage of the consumer buying decision process. a. True b. False

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Chap 07_20e 20. When buying frequently purchased, low-cost items, a consumer uses extensive decision making. a. True b. False 21. People determine their own lifestyles, but marketers can shape them. a. True b. False 22. If an information input is useful in satisfying a person's current needs, it is more likely to reach perceptual awareness. a. True b. False 23. Psychological influences operate within individuals to determine, in part, their behavior as consumers. a. True b. False 24. A person's self-concept may affect whether the person buys a product in a particular product category, but it has little impact on brand selection. a. True b. False 25. Situational influences would likely not affect a high school senior searching for a college or university to attend. a. True b. False 26. A person may perform more than one role related to making buying decisions. a. True b. False 27. A social class is a closed aggregate of individuals with similar social ranking. a. True b. False 28. When a product is a conspicuous one, reference-group influence is more likely to affect the brand decision. a. True b. False 29. Changes in culture do not affect product development. a. True b. False 30. Motivation can affect the direction and intensity of behavior. a. True b. False

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Chap 07_20e 31. An information input is less likely to reach perceptual awareness if it is related to an event that the person is anticipating. a. True b. False 32. Involvement that is temporary and results from a specific set of circumstances is called situational involvement. a. True b. False 33. Consumers' buying decisions are not affected by other people. a. True b. False 34. All consumer buying decisions include all five stages of the buying decision process. a. True b. False 35. The values, needs, interests, shopping patterns, and buying habits of various subcultures must be considered if a business wants to succeed. a. True b. False 36. Motivation is intensely interconnected with emotion. a. True b. False 37. Gloria has returned a dress because when she tried it on at home, she decided she did not like the way it fit. This is an example of consumer misbehavior. a. True b. False 38. The evaluative criteria are objective but not subjective product characteristics that are important to a specific buyer when purchasing a product. a. True b. False 39. Learning refers to the inner driving forces or reasons behind a person’s actions and behaviors. a. True b. False 40. In an attempt to draw attention to its brand, a marketer may capitalize on figure-ground by using incomplete images, sounds, or statements in advertisements. a. True b. False

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Chap 07_20e 41. Involvement level is one factor that affects a consumer's selection of a type of decision-making process. a. True b. False 42. Product availability plays a major role in the purchase stage. If the highest-ranked product is unavailable, the consumer will most likely purchase the brand ranked second. a. True b. False 43. Once initiated, the consumer buying decision process always leads to a purchase. a. True b. False 44. A consumer may receive a marketer's information and perceive it differently from the way the marketer intended. a. True b. False 45. Time dimensions on the buying decision include how long it may take to become knowledgeable about a product. a. True b. False 46. Perception is a process in which an individual selects, organizes, and interprets information received through the sense organs. a. True b. False 47. Family influences are not directly related to purchasing decisions. a. True b. False 48. Ads for beauty products often suggest that purchasing these products will bring love, helping to fulfill one's social needs. a. True b. False 49. Problem recognition speed can vary from quite rapid to very slow. a. True b. False 50. Gaining information from others online about an unknown product can increase the risk of trying the product. a. True b. False

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Chap 07_20e 51. The terms of sale (price, delivery, credit arrangements) are negotiated during the evaluation of alternatives stage of the consumer decision-making process. a. True b. False 52. The values, knowledge, beliefs, customs, objects, and concepts of a society affect how people make purchasing decisions. a. True b. False 53. Learning associated with purchase behavior is not particularly affected by consequences. a. True b. False 54. Marketers must consider the different nationalities represented within the Hispanic and Asian-American subcultures because of the unique culture, history, and buying patterns of each ethnic group. a. True b. False 55. Limited decision making is used when purchasing frequently bought, low-cost items needing very little decision effort. a. True b. False 56. A consumer belongs to only one subculture. a. True b. False 57. Although marketers may attempt to influence what a consumer learns, their attempts are seldom fully successful. a. True b. False 58. By giving out free samples, marketers help customers learn about their products by helping them gain experience with them, which makes customers feel more comfortable. a. True b. False 59. Esteem needs are the highest level in Maslow's hierarchy of needs. a. True b. False 60. There are situational influences that cannot be controlled. a. True b. False

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Chap 07_20e 61. An information search, once completed, should identify for the buyer the one brand that he or she views as the best alternative. a. True b. False 62. The phenomenon of selective exposure is associated with perception. a. True b. False 63. Consumer fraud is any behavior that violates the norms of society. a. True b. False 64. The time that a buyer has to make a purchase decision is a situational influence. a. True b. False 65. An attitude consists of one's evaluation of his or her feelings and behavioral tendencies toward an object or idea. a. True b. False 66. Dissatisfaction may occur shortly after a purchase; this is called cognitive dissatisfaction. a. True b. False 67. When evaluating the alternatives, the buyer rates and eventually ranks the brands in the consideration set. a. True b. False 68. Consumers' purchasing decisions and brand decisions may be influenced strongly by reference groups. a. True b. False 69. At a single point in time, a person's motives are all of equal strength. a. True b. False 70. An opinion leader is likely to be most influential when consumers have high product involvement and high product knowledge. a. True b. False

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Chap 07_20e 71. The choice of a seller may actually affect the final product selection during the purchase stage of the consumer buying decision process. a. True b. False 72. Expecting ethical business behavior reflects our culture. a. True b. False 73. A reference group acts as a point of comparison and as a source of information for an individual. a. True b. False 74. In Maslow's hierarchy of needs, the most fundamental need is safety. a. True b. False 75. Marketers may try to change consumers' attitudes toward a product if they feel that a significant number of consumers have strong negative attitudes toward it. a. True b. False 76. Selective exposure means that a person remembers inputs that support his or her personal feelings and beliefs while forgetting those that do not. a. True b. False 77. Just as attitudes are learned, they can be changed. a. True b. False 78. High involvement products tend to be those that are expensive and visible to others. a. True b. False 79. Social classes are referred to as open aggregates of individuals because people can move into and out of them. a. True b. False 80. When a buyer receives information that is inconsistent with his or her beliefs, the buyer may distort the information to bring it more in line with those beliefs. a. True b. False

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Chap 07_20e 81. Buying behavior refers to the decision processes and actions of people involved in buying and using products. a. True b. False 82. Alex is getting ready for her wedding. She is obsessed with buying the perfect wedding dress. Her involvement with the dress is an example of enduring involvement. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 83. As Danielle walks to classes, she selects, organizes, and interprets the sensations she is receiving through her sense organs. Danielle is experiencing the process of a. exposure. b. motivation. c. learning. d. attitude formation. e. perception. 84. Forever 21 is developing a program to get to know its customers. Which of the following is NOT a reason why Forever 21 needs to understand consumer buying behavior? a. Customers' reactions to marketing strategy can affect the firm's success. b. All customers are the same when it comes to buying behavior. c. A firm should create a marketing mix that satisfies customers. d. It helps the marketer predict how consumers will respond to marketing strategies. e. The marketing concept stresses that a firm should know its customers. 85. Xavier loves Chipotle Mexican Grill. He loves the food and views it as being socially responsible. The other day he read in the paper that several people got sick from E. coli from Chipotle Mexican Grill restaurants. The article also detailed safety measures Chipotle was instituting to prevent this from happening again. Xavier would expect nothing less from Chipotle. He feels confident that Chipotle will institute highly effective safety measures. This is most likely an example of a. information analysis. b. selective retention. c. perceptual selection. d. selective perception. e. selective distortion.

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Chap 07_20e 86. Manny has just been hired as a product manager for a major technology firm. Currently, he is making purchases for his new apartment and upcoming job. His purchase of _____ would most likely be done through extended decision making, while his purchase of ____ would be made through limited decision-making behavior. a. a new suit; a sofa b. a toaster; bed sheets c. coffee maker; flat screen TV d. flat screen TV; bath towels e. coffee maker; groceries 87. The most significant factor influencing a buyer’s level of involvement is a. cognitive dissonance. b. social media. c. product attributes. d. price. e. risk. 88. The attitude toward the object model (known as the Fishbein model) consists of which three elements? a. Intentions, beliefs about product attributes, and what others think b. Beliefs about product attributes, the strength of beliefs, and the evaluation of beliefs c. Perception, motivation, and beliefs about product attributes d. Selecting, organizing, and interpreting information inputs e. Safety, social, and self-actualization 89. Daniel is a football enthusiast. He watches all the big games, collects football memorabilia, and knows everything there is to know about football history. His best friend Charles is not a football fan. However, he does enjoy watching the Super Bowl every year because of all the excitement. He even finds that he gets really into the game. Usually the Super Bowl is the only football game Charles watches, but he still looks forward to it every year. Daniel has a(n) ____________ involvement with football, whereas Charles has more of a(n) _____________involvement. a. enduring; situational b. enduring; dynamic c. dynamic; situational d. situational; dynamic e. psychological; situational 90. When organizing perceptual inputs, people tend to mentally fill in missing elements in a pattern or statement. This principle is called a. interpretation. b. figure-ground. c. distortion. d. closure. e. framing.

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Chap 07_20e 91. A consumer's buying decisions are affected in part by the people around him or her. Such people and the forces they exert on an individual buyer are called a. situational influences. b. social influences. c. roles. d. personality influences. e. cultural influences. 92. Hannah, a working mother, has recognized the need for some sort of slow cooker so that she can spend less time preparing meals and more time with her family after work. She uses Google to research slow cookers online and learns that Consumer Reports ranks the Instant Pot the highest. Hanna’s use of the Internet is a. an internal search. b. an external search. c. routinized response behavior. d. framing. e. evoked dissonance. 93. Market researchers for a local bakery determined that Jewish people consume 63% of the portion of bagels sold in New York City. This is an example of ____ influence on consumer buying decision processes. a. demographic b. situational c. subcultural d. role e. social class 94. All of the following are marketer-dominated sources of information except a. salespeople. b. advertising. c. package labeling. d. friends. e. displays.

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Chap 07_20e 95. Cas is an account manager for the music production company, C3, and has always been an avid musician and music enthusiast. Cas is responsible for working with one of its major clients, State Farm Insurance, which is a major sponsor of various music festivals such as the Coachella Valley Music and Arts Festival, Bonnaroo, Lollapalooza, and Austin City Limits. In his free time, Cas plays guitar in a band and enjoys performing at open mic nights or the occasional gig. His job and his hobbies mesh so well that he doesn’t even feel like work is “work”—it’s more recreation to Cas since he enjoys the music industry so much. Cas’s passion for music and his view of himself as a musician influences his purchasing choices of products and brands. Cas’s ________ influences his purchasing decisions as he seeks to purchase items that reflect or enhance his persona. a. reference groups b. roles c. consumer socialization d. self-concept e. digital influences 96. Sarah is going to the store to buy milk and cereal. She will most likely use ____ in her consumer decisionmaking process. a. routinized response behavior b. limited decision making c. extended decision making d. high-involvement decision making e. situational decision making 97. Benedict is in the market for a new car. He believes that lately there have been more car ads than usual on TV. The need Benedict has is most likely driving which of the following phenomena? a. Perception b. Selective exposure c. Selective distortion d. Cognitive dissonance e. Selective retention

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Chap 07_20e 98. Scenario 7.1 Use the following to answer the questions. Consumers use information from many sources when making purchasing decisions, including information from friends and family members. One of the most dissatisfying consumer experiences is with auto repair. Since she has experienced a problem starting her car when the weather is cold, Kayla has asked several of her friends and family members where they have their cars repaired. Kayla has heard that Skola's Auto Repair has reasonable prices, but it can be difficult to get an appointment. Steve, one of Kayla’s friends, had a very poor experience with Skola's. However, once he complained to them, they fixed the situation and now he prefers their auto repair shop over others. Refer to Scenario 7.1. A dissatisfied Skola's Auto Repair customer told a friend about his experience. The friend has been a long-time Skola's customer and the next day, didn't remember what he was told. This is an example of a. perceptive perception. b. selective exposure. c. selective distortion. d. receptive exposure. e. selective retention. 99. Jordan is a purchasing manager of computer and software equipment for his company, which employs about 350 individuals. He subscribes to PC Magazine and several other trade publications that review computer hardware and software. In addition, Jordan is an active user of online forums and often reads reviews that other purchasing managers post about different computer models. Jordan spends about 1–2 hours each week reviewing information through these sources before making purchasing decisions. What stage of the consumer decision process is Jordan most likely in? a. Information search b. Problem recognition c. Evaluation of alternatives d. Purchase e. Postpurchase 100. Which of the following is NOT a physical surroundings factor influencing buying decisions? a. Weather b. Scents c. Lighting d. Sounds e. Time

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Chap 07_20e 101. In the consumer buying decision process, the information search stage a. yields a group of brands that a buyer views as possible alternatives. b. involves a buyer becoming aware of the need for a product. c. is not necessary when the buyer is involved in extensive decision making. d. occurs immediately after evaluation of alternatives. e. is lengthy for routine response buying behavior. 102. Bianca is looking for a Mother’s Day gift for her mom and wants to purchase some type of perfume or cologne. She knows that her mom currently wears a perfume made by Christian Dior called Miss Dior. When she arrives at the perfume counter, she notices that Christian Dior has several new scents available and a variety of gift boxes that also include powder and body lotion. Bianca is trying to decide what to purchase—whether to try a new fragrance or not. Bianca is willing to spend time trying the different scents, but since the gift boxes only cost $75, there’s not a lot of risk involved. What type of consumer decision will this purchase most likely be for Bianca? a. Routinized response behavior b. Extended decision making c. Limited decision making d. Typical decision making e. Impulse buying 103. The three most widely recognized types of consumer decision making are a. limited problem solving, extended problem solving, and routinized response behavior. b. extended problem solving, enduring problem solving, and situational decision making. c. planned problem solving, impulse buying, and limited decision making. d. internal problem solving, external problem solving, situational behavior. e. responsive behavior, planned behavior, and impulsive decision making. 104. Jack recently purchased a Ford F-150 truck and has owned it for about a week. Earlier in the day, he received a call from Nick, the sales representative who sold him the truck. Nick called to check to see whether Jack had any questions or problems with the truck and if he had learned how to navigate all the bells and whistles. Nick also reminded Jack about how Ford is highly regarded as one of the best automobile brands and that the Ford truck is the #1 truck brand in the United States. What phenomenon is Nick trying to prevent by contacting his customer? a. Cognitive dissonance b. Postpurchase negative word-of-mouth c. Consumer disengagement d. Purchasing effect e. Framing

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Chap 07_20e 105. Consumers tend to remember information inputs that support their feelings and beliefs and forget inputs that do not. This is known as selective a. exposure. b. distortion. c. retention. d. information. e. interpretation. 106. After doing considerable shopping, Pax has just decided what brand and type of athletic shoes to buy and where he's going to buy them. In what stage of the consumer buying decision process is Pax? a. Problem recognition b. Information search c. Evaluation of alternatives d. Purchase e. Postpurchase evaluation 107. While shopping at a local grocery store, Cameron sees a display of his favorite brand of energy drink. He buys some to take home for the weekend. This purchase process would be described as a. routinized response behavior. b. extended decision making. c. limited decision making. d. situational perception. e. enduring involvement. 108. The three major categories of influences on the consumer buying decision process are a. situational influences, demographic influences, and psychological influences. b. social influences, situational influences, and marketer-dominated influences. c. demographic influences, situational influences, and marketer-dominated influences. d. situational influences, social influences, and psychological influences. e. marketer-dominated influences, psychological influences, and person-specific influences. 109. Purposeful actions to take advantage of or harm others during a transaction is best described as a. shoplifting. b. consumer piracy. c. consumer fraud. d. organized retail crime. e. abusive shopping.

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Chap 07_20e 110. An attitude is a. an internal trait that makes a person unique. b. a set of actions that a person in a particular position is supposed to perform. c. a competence in performing activities. d. a person's behavior caused by information and experience. e. one's evaluation, feelings, and behavioral tendencies toward an object or idea. 111. Having used both Secret and Dove deodorants, Annette feels that Secret is a good product and the one that best meets her needs. She has formed a(n) ____ about Secret. a. motivation b. perceptual interpretation c. cognition d. attitude e. self-concept 112. Harrison and Harriet’s family is trying to decide where to go for vacation this year. Harriet wants to go to Universal Park & Resort because she’s the only one in her class who has not been. Harrison wants to go to Alaska so that he can see bears and orcas. Although their parents listen to their desires, they ultimately choose a less expensive destination. In this case, Harrison and Harriet are performing the family role of a. user. b. buyer. c. decider. d. gatekeeper. e. influencer. 113. During the evaluation of alternatives stage of the consumer buying decision process, framing most likely influences the decision process of ____ buyers. a. younger b. older c. wealthier d. experienced e. inexperienced

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Chap 07_20e 114. Lena is completing her senior year of college and is living in an apartment with three friends. Her family has a subscription to HBO Go, and Lisa is able to use the log-on ID and password while she’s at college. Lena does not have cable TV or satellite TV as she typically streams shows or movies that are available online for free or through HBO Go. Several of Lena’s friends don’t have a subscription to Hulu, so Lena has given them her logon ID and password so they can watch their shows. She doesn’t mind sharing the HBO Go subscription with her friends—what could it hurt? She has heard that the entertainment industry and HBO Go are upset over people sharing their subscription to the streaming services in this way. Lena’s sharing of her family’s HBO Go subscription is an example of. a. digital stealing b. consumer misbehavior c. consumer copying d. illegal sharing e. streaming piracy 115. Jhumpa is questioning whether she has made the right decision about purchasing a new HP laptop after she sees a friend with a new Dell. Jhumpa’s doubt whether she made the right decision occurs during the ___________ of the buying decision process. a. cognitive dissonance phase b. purchase phase c. evaluation of alternatives phase d. information search phase e. postpurchase evaluation phase 116. Felix and Alison have been married for a year and are starting to establish their decision-making styles as a couple. Alison enjoys shopping and likes to browse the grocery store aisles rather than using a list. While this is time consuming, she always discovers some cool product and usually makes some unplanned purchases. Felix appreciates Alison’s efforts and tries to reciprocate by taking care of any purchases for their car or to maintain their home such as getting the oil changed, buying tools, or lawn mowing equipment. Alison’s purchases of all of the grocery items can be described as _______ decision making, while Felix’s purchases for the car or home maintenance items are called ______decision making. a. wife-dominant; husband-dominant b. wife-determined; autonomic c. wife-driven; cooperative d. wife-dominant; mutual e. autonomic; autocratic 117. A culture can be divided into subcultures according to a. personality characteristics of individuals in that culture. b. motivations that members of that cultural group have for their behavior. c. geographic regions or human characteristics, such as age or ethnic background. d. income levels. e. information to which consumers allow themselves to be exposed.

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Chap 07_20e 118. The three major types of reference groups are a. membership, aspirational, and advocacy. b. advocacy, avoidance, and approach. c. aspirational, dissociative, and membership. d. actual, implied, and desired. e. family, peer group, and media. 119. When shopping for detergent, Dylan looks at Arm & Hammer, Gain, Method, and Cheer and chooses the one that is on sale. These four brands make up his ____ set. a. alternate b. purchase c. consideration d. problem e. imposed 120. Courtney is a market research analyst for a global consulting firm. She will be traveling to Frankfort next month to present her research to a meeting of company executives from around the world. This presentation could be instrumental in the company’s decision of whether she should be promoted at the end of this year. Courtney has been thinking about the trip, which will be the first time she has been out of the country. She has decided to retire her old college luggage for a more professional-looking version and has begun to evaluate various brands. Courtney is most likely facing _____ for this particular purchase. a. enduring involvement b. perceptual involvement c. internal retention d. situational involvement e. selective retention 121. Tara went to a five-star restaurant that had great reviews. The atmosphere was wonderful and she enjoyed the company of her friends and her boyfriend, Rhys. However, at the table next to them sat a family with five kids. The kids were very loud and often ran around. Tara, who is not fond of kids, was very annoyed. When she left the restaurant, she remarked to her friend that she didn't see what all the hype over the restaurant was about. Tara was most likely influenced by a. social surroundings. b. reason for purchase. c. psychical surroundings. d. internal pressure. e. social stratification.

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Chap 07_20e 122. Which of the following products would probably require extended decision making before a purchase? a. Products purchased frequently b. Products to be purchased in the future c. Products that are purchased routinely d. Expensive products e. Products purchased as a result of social influences 123. Problem recognition occurs when a consumer a. searches for information to resolve a problem. b. becomes aware that there is a difference between a desired state and an actual condition. c. recognizes a need and evaluates information to resolve a problem. d. evaluates her or his purchase. e. is exposed to a television advertisement desired state and an actual condition. 124. Purchasers who buy products for personal or household use and not for business purposes are called the a. ultimate consumers. b. end-use consumption group. c. business market. d. household purchasing group. e. organizational market. 125. Hereditary characteristics combined with personal experiences that together make an individual unique form one's a. self-concept. b. attitudes. c. lifestyle. d. personality. e. role. 126. Marylyn now feels that her teeth are not white enough after seeing advertisements for whitening toothpaste. Marketers promote these brands based on ____ needs, appealing to sex appeal. a. physiological b. esteem c. self-actualization d. psychological e. social

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Chap 07_20e 127. Advertisers often use ____ to boost consumers’ information retention and recall, which may facilitate the information search stage. a. perception b. framing c. repetition d. distortion e. inputs 128. Helena is frustrated that her vacuum cleaner doesn’t do a good job of picking up dog hair. After noticing her college roommate talk about her new Roomba vacuum on Facebook and recently seeing a celebrity’s Instagram photograph of his dog riding a Roomba, Helena heads to Amazon to read reviews about the Roomba robot vacuum cleaner. Which social influence is most predominate for Helena at this point in her decision process? a. Digital b. Personality c. Family d. Social class e. Reference group 129. Shortly after moving into their new home, Elizabeth and Philip Jennings purchase and install smoke detectors and an alarm system. The Jennings are concerned about fulfilling their need for a. survival. b. safety. c. self-actualization. d. esteem. e. belonging. 130. Many aspects of consumer buying decisions are affected by the individual's level of involvement. Level of involvement is a. the importance and intensity of interest in a product in a particular situation. b. the buyer's perception, motives, and abilities. c. the amount of external search that an individual puts into the decision-making process. d. the particular circumstance or environment in which consumers find themselves. e. a combination of an individual's demographic factors. 131. In shopping for a new laptop computer for her master’s degree program, Jolene has narrowed the alternatives to four brands. She is considering Dell, Lenovo, Acer, and HP. These four brands make up Jolene’s a. awareness set. b. consideration set. c. framing set. d. external search. e. alternative set.

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Chap 07_20e 132. Children often achieve ____ by observing parents and older siblings in purchase situations and then through their own purchase experiences. a. consumer socialization b. personality c. role identification d. social class e. attitude formation 133. When a new variety of Envirokids whole-grain breakfast cereals is first introduced, consumers will most likely engage in ____ when deciding whether or not to purchase this new product. a. extended decision making b. limited decision making c. situational decision making d. routinized response behavior e. automatic processing behavior 134. Which of the following is an example of consumer misbehavior? a. Giving a product a poor rating b. Filing a consumer complaint c. Failing to complete a customer survey form d. Returning purchases e. Shoplifting 135. Henry’s little brother Christopher joined the Boy Scouts recently. Henry notices that in addition to wearing the Boy Scout uniform, Christopher has been better about keeping his everyday clothes neat and clean, has been searching online for camping gear, and has become interested in “green” products. Henry believes that the Boy Scouts are now a reference group for Christopher because he a. has taken on many of the values, attitudes, or behaviors of group members. b. became a formal member of the group. c. became familiar with the group's activities. d. looked for information from members of the group regarding buying decisions. e. cannot control his involvement with the group. 136. Our society uses many factors, including occupation, educational level, income, wealth, religion, race, ethnic group, and possessions, to group people into a. family types. b. geographic regions. c. reference groups. d. social classes. e. attitudinal segments.

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Chap 07_20e 137. Ainsley is a prosecuting attorney for the city of Boise. She is also vice president for the local parent/teacher organization and a coach for her daughter’s soccer team. The actions and activities associated with each of these positions constitute Ainsley’s a. personality. b. roles. c. motives. d. beliefs. e. lifestyle. 138. As Gillian has become more knowledgeable about health, obesity, and quality ingredients, her attitude toward soft drinks and fast food have become less favorable, while her attitude toward healthier brands like Panera and bubbly sparkling water has improved. This best relates to the _______ component of attitude. a. cognitive b. behavioral c. emotional d. affective e. social 139. Scenario 7.2 Use the following to answer the questions. Both the Toyota Sienna and the Dodge Grand Caravan were very popular choices for family vans. Toyota noticed that the majority of its customers were families with 3 or more children, and so they developed commercials that featured larger families. They also produced commercials that featured Hispanic-looking actors and for some markets, in Spanish. Isabel Desario and her husband were currently shopping for a van for their family. As Isabel listened to a television commercial about the Dodge Grand Caravan, she noticed that the Dodge cost about $27,000 and had gas mileage of about 17 mpg. She recalled an earlier ad for the Toyota Sienna, which also cost about $27,000, but had gas mileage of about 21 mpg. She also liked the way the family was portrayed in the Toyota ad, showing the children in the back seats having plenty of room, watching the DVD players, and having their own sound controls. When she spoke to Gabe, her husband, about how much she liked the Toyota van, he replied that its gas mileage was too low at only 16 mpg. Since Isabel didn't agree with that number, he produced a magazine ad that supported his claim of the 16 mpg for the Toyota. Isabel couldn't believe that she had made such an error in hearing what the gas mileage was for the Toyota and the Dodge. Refer to Scenario 7.2. The fact that Isabel had remembered the gas mileage of the Toyota Sienna incorrectly is most likely an example of a. selective expression. b. selective retention. c. perceptual extension. d. perceptual bias. e. selective distortion.

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Chap 07_20e 140. When Liv goes to the first class of her Operations Management course, she finds out that in addition to the textbook she already purchased, she also needs a specific type of calculator. With regards to the calculator, at which stage of the consumer buying decision process is Liv? a. Purchase b. Evaluation of alternatives c. Problem recognition d. Information search e. Prepurchase evaluation 141. Which of the following statements regarding social class is true? a. A social class is a closed aggregate of people with similar social ranking. b. The criteria used to group people into social classes do not vary from one culture to another. c. A social class is an open aggregate of people with similar social ranking. d. A social class is a ranking of people by other members of society into positions of social respect. e. A social class is an open aggregate of people with different social rankings. 142. An open aggregate of people with similar social ranking is referred to as a a. reference group. b. social class. c. role. d. caste. e. subculture. 143. Madison goes to Kmart to purchase school supplies for her two children. As she is approaching the checkout counter, she sees a vase she just has to have and buys it immediately. Madison's purchase of the vase is an example of a. limited decision making. b. impulse buying. c. routinized response behavior. d. addictive consumption. e. situational involvement.

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Chap 07_20e 144. Sophie wants to buy a new car. She turns to her friend who is a car enthusiast for his recommendation. He tells her Honda is by far the best brand. Sophie goes to a Honda dealership. She notices a Honda Civic that is at a reasonable price point. However, she likes the fact that the Honda Accord is a mid-sized car, but it is more expensive. Sonya tries to remember what her friend told her but is having trouble. She starts weighing the benefits of both vehicles in an attempt to make her final decision. The fact that Sophie sought advice from her friend is an example of _________________. Her attempt to weigh the benefits of the vehicles against one another is _______________. a. problem recognition; evaluation of alternatives b. external information search; internal information search c. internal information search; problem recognition d. external information search; evaluation of alternatives e. pre-purchase evaluation; selective exposure 145. Which of the following consumer decision-making processes will probably be used in purchasing toothpaste? a. Extended decision making b. Routinized response behavior c. Intensive decision making d. Limited decision making e. Impulse buying 146. Georgia has been a loyal customer of Apple for years. She likes to own the latest products and looks forward to announcements about product releases. She owns an Apple phone, iPad, and MacBook and hopes to purchase the new model phone when it’s released in the fall. Georgia was talking to one of her friends about Apple and was surprised to learn that Apple was involved in some workforce-related issues at an overseas plant. Her friend was telling her that Apple paid very low wages and people were required to work long hours. Tierra reasoned that this issue must be related to a third-party manufacturer since Apple would never treat their employees this way. She dismisses the incidence and explained to her friend that it must have been an honest mistake. What type of process is Georgia utilizing with regard to the information about Apple? a. Selective exposure b. Selective distortion c. Selective retention d. Selective perception e. Selective interpretation 147. Julia plans to buy a new swimsuit for her spring break cruise. She has not seen this year's styles and thus will do some comparison shopping before making a purchase decision. Julia is engaging in a. routinized response behavior. b. extended decision making. c. limited decision making. d. impulse buying. e. intensive decision making.

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Chap 07_20e 148. Emily is buying furniture for her apartment for the first time. She is spending considerable time and effort comparing the products that different stores offer. Which type of decision-making process is she using? a. Selective b. Intensive c. Extended d. Limited e. Routinized 149. The primary psychological influences on consumer behavior are a. perception, motivation, learning, attitudes, personality, and lifestyles. b. attitudes, perception, retention, exposure, roles, and lifestyles. c. attitudes, perception, social class, culture, and learning. d. perception, motivation, reference groups, social class, and personality. e. lifestyles, personality, perception, motivation, attitudes, and culture. 150. The consumer buying decision process involves _______ stages. The first stage is ____________, and the last stage is _____________. a. five; evaluation of alternatives; postpurchase evaluation b. five; information search; purchase c. six; problem recognition; purchase d. five; problem recognition; postpurchase evaluation e. six; evaluation of alternatives; purchase 151. Which one of the following is most likely to be a product for which both the purchasing decision and the brand decision are strongly influenced by reference groups? a. Canned peaches b. Instant coffee c. Jeans d. Furniture e. Soap 152. Dalip Singh makes an appointment to visit with a new dermatologist in town because of a recent bad sunburn. When he arrives at the dermatologist's office, Dalip notices a foul odor in the air, worn floor coverings, cluttered rooms that have paint peeling from the walls, and poor lighting. However, the other patients in the waiting room were talking about how much they liked the doctor. While Dalip viewed the dermatologist as competent, he decided not to visit him again even though the dermatologist recommended a follow-up. Which situational influences are most likely to have affected Dalip’s decision? a. Social surroundings b. Momentary mood c. Antecedent states d. Purchase reasons e. Physical surroundings

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Chap 07_20e 153. Scenario 7.2 Use the following to answer the questions. Both the Toyota Sienna and the Dodge Grand Caravan were very popular choices for family vans. Toyota noticed that the majority of its customers were families with 3 or more children, and so they developed commercials that featured larger families. They also produced commercials that featured Hispanic-looking actors and for some markets, in Spanish. Isabel Desario and her husband were currently shopping for a van for their family. As Isabel listened to a television commercial about the Dodge Grand Caravan, she noticed that the Dodge cost about $27,000 and had gas mileage of about 17 mpg. She recalled an earlier ad for the Toyota Sienna, which also cost about $27,000, but had gas mileage of about 21 mpg. She also liked the way the family was portrayed in the Toyota ad, showing the children in the back seats having plenty of room, watching the DVD players, and having their own sound controls. When she spoke to Gabe, her husband, about how much she liked the Toyota van, he replied that its gas mileage was too low at only 16 mpg. Since Isabel didn't agree with that number, he produced a magazine ad that supported his claim of the 16 mpg for the Toyota. Isabel couldn't believe that she had made such an error in hearing what the gas mileage was for the Toyota and the Dodge. Refer to Scenario 7.2. Toyota's production of commercials that featured Hispanic actors and the Spanish language is an example of marketing to a. cultural self-concepts. b. social classes. c. subcultures. d. reference groups. e. digital influences. 154. Cognitive dissonance is most likely to occur during which part of the decision-making process? a. Purchase b. Information search c. Postpurchase evaluation d. Evaluation of alternatives e. Problem recognition 155. Marketers help consumers learn through free samples, sometimes coupled with coupons, to reduce purchase risk, through a practice called a. framing. b. advertising. c. shaping. d. perceptual mapping. e. closure.

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Chap 07_20e 156. Stephen is a marketing research consultant and specializes in qualitative research. He’s a member of the Qualitative Research Association and enjoys attending regional and national meetings where he can meet other consultants and participate in workshops to improve his skills. Stephen always finds one to two new books to purchase from the trade show and truly enjoys the chance to expand his knowledge base through these learning opportunities. He knows that this new knowledge will improve his capabilities to deliver the type of consultation his clients might desire and will enable him to effectively compete for work. Stephen’s attendance at these national meetings and his book purchases are motivated by his need of _______, one of Maslow’s hierarchy of needs. a. self-actualization b. physiological c. social d. esteem e. safety 157. Extended decision making is the type of consumer decision-making process that a. involves no conscious planning but rather a powerful and persistent urge to buy something. b. is the most complex decision-making behavior, which comes into play when a purchase involves unfamiliar, expensive, or infrequently bought products. c. requires a moderate amount of time for information gathering and search. d. is the creation and maintenance of a collection of products that satisfy a person's needs and wants. e. requires very little search-and-decision effort and is practiced when buying low-cost and frequently purchased products. 158. For which of the following products would a consumer most likely use limited decision making? a. Detergent b. Toothpaste c. Automobile d. Hair dryer e. Washing machine 159. Thoughts about who is around when the product is purchased relate to which of the following situational influences? a. Buyer’s mood and condition b. Time perspective c. Reason for purchase d. Physical surroundings e. Social surroundings

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Chap 07_20e 160. A major determining factor in deciding which type of decision-making process should be used depends on the individual's intensity of interest in a product and the importance of the product for that person. This is known as an individual's a. motivational structure. b. routinized response behavior. c. level of involvement. d. cognitive dissonance. e. evaluative criteria. 161. Suhail is shopping for a new suit to wear to an important interview. He really wants to impress his prospective employer and is shopping at many stores to find the right outfit. Suhail is using which type of consumer decisionmaking process? a. Routinized response behavior b. Habitual response c. Limited decision making d. Extended decision making e. Intensive decision making 162. The results of many studies have been inconclusive regarding the association between buyer behavior and a. personality. b. perception. c. motives. d. social class. e. learning. 163. An attitude scale measures the a. strength of a buyer's need for a product. b. buyer's level of information about a product. c. amount of experience the buyer has had with the product. d. intensity of a buyer's feelings toward a certain object. e. intensity of a buyer's desire for the product. 164. What stage of the consumer buying decision process comes after problem recognition? a. Postpurchase b. Purchase c. Evaluation of alternatives d. Evaluation of the problem e. Information search

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Chap 07_20e 165. Grace recently visited a Starbucks store and wanted to purchase its $79.95 Teavana ice tea maker. She has never bought a Teavana product before, but she knows it is owned by Starbucks. Grace views Starbucks very positively and loves their drinks. Grace will most likely use ______________ when determining whether to purchase the ice tea maker. a. impulse buying b. extended decision making c. limited decision making d. routinized response behavior e. routine decision making 166. According to Maslow’s hierarchy of needs, human beings have five levels of needs they are constantly seeking to satisfy. The need for love and affection is an example of one of humans’ _________________ needs. a. emotional b. safety c. social d. familial e. self-actualization 167. Experience has shown you that your customers’ buying decisions can be significantly affected by situational influences. You are analyzing past sales activities to better understand how these factors affect sales. Which of the following statements is true about situational influences on the consumer’s buying decision process? a. Situational influences are relevant only in the purchase stage of the consumer buying decision process. b. Time is not a factor that contributes to situational influences on the consumer’s buying decision process. c. If the consumer is fatigued, this could potentially be a situational influence on her buying decision process. d. The day of the week does not have a situational influence on the consumer’s buying decision process. e. Location is not a factor that contributes to situational influences on the consumer’s buying decision process. 168. In your market research into the buying behavior of a target market, you have confirmed that members of the group do in fact exhibit varying levels of involvement when buying certain products. For example, you confirmed the group has a __________ level of involvement when they are purchasing cars and clothing. When they are shopping for groceries, they exhibit a __________ level of involvement. a. high; low b. low; high c. high; enduring d. enduring; high e. low; enduring

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Chap 07_20e 169. You commute a long distance to get to work every day, and the cost of gasoline is putting a strain on your personal finances. You realize that you need to look at buying a new car that gets better gas mileage, or that doesn’t run on gasoline at all. In terms of the traditional consumer buying decision process, you are currently in the ___________ stage, and you are about to enter the ___________ stage. a. problem recognition; purchase b. evaluation of alternatives; information search c. evaluation of alternatives; purchase d. problem recognition; information search e. information search; purchase 170. The five major stages of the consumer buying decision process, in order, are a. information search, establishment of product criteria, evaluation of alternatives, purchase, and postpurchase evaluation. b. problem recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation. c. problem recognition, information search, evaluation of alternatives, postpurchase evaluation, and purchase. d. information search, evaluation of alternatives, purchase, trial adoption period, and postpurchase evaluation. e. problem recognition, purchase, evaluation of alternatives, postpurchase evaluation, and rebuy. 171. Selective exposure refers to a. targeting only certain parts of the total market. b. admitting only certain inputs into consciousness. c. the circumstances or conditions that exist when a consumer is making a purchase decision. d. the process of selecting, organizing, and interpreting information inputs to produce meaning. e. remembering inputs that support personal feelings and beliefs and forgetting those that do not.

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Chap 07_20e 172. Scenario 7.2 Use the following to answer the questions. Both the Toyota Sienna and the Dodge Grand Caravan were very popular choices for family vans. Toyota noticed that the majority of its customers were families with 3 or more children, and so they developed commercials that featured larger families. They also produced commercials that featured Hispanic-looking actors and for some markets, in Spanish. Isabel Desario and her husband were currently shopping for a van for their family. As Isabel listened to television commercial about the Dodge Grand Caravan, she noticed that the Dodge cost about $27,000 and had gas mileage of about 17 mpg. She recalled an earlier ad for the Toyota Sienna, which also cost about $27,000, but had gas mileage of about 21 mpg. She also liked the way the family was portrayed in the Toyota ad, showing the children in the back seats having plenty of room, watching the DVD players, and having their own sound controls. When she spoke to Gabe, her husband, about how much she liked the Toyota van, he replied that its gas mileage was too low at only 16 mpg. Since Isabel didn't agree with that number, he produced a magazine ad that supported his claim of the 16 mpg for the Toyota. Isabel couldn't believe that she had made such an error in hearing what the gas mileage was for the Toyota and the Dodge. Refer to Scenario 7.2. Since Isabel and Gabe were using gas mileage as one of their evaluative criteria, they are most likely in the ____ phase of the consumer buying process. a. problem recognition b. external search c. evaluation of alternatives d. purchase e. postpurchase 173. Which of the following components of attitude includes an individual’s feelings and emotions toward the object or idea? a. Cognitive b. Behavioral c. Affective d. Perceptual e. Psychological 174. Maslow's hierarchy of needs refers to the five levels of needs that humans seek to satisfy, from most to least basic to survival. These needs, in order from most to least basic to survival are a. psychological, physiological, safety, social, and esteem. b. physiological, safety, esteem, social, and self-actualization. c. physiological, psychological, safety, social, and esteem. d. physiological, safety, social, esteem, self-actualization. e. physiological, esteem, safety, self-actualization, and psychological.

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Chap 07_20e 175. An opinion leader is likely to be most effective under all of the following conditions except when the a. follower has high product involvement. b. follower has low product knowledge. c. follower has values and attitudes similar to the opinion leader. d. product details are numerous and complicated. e. follower has attitudes and values that are different from those of the opinion leader. 176. Which of the following statements about how a consumer organizes inputs that reach awareness is most accurate? a. Inputs are organized by individuals to produce meaning, and this organizational process is usually a slow one. b. Organization of information inputs is not always needed to produce meaning. c. Inputs that reach awareness are organized and interpreted in much the same way by all consumers. d. Because a person interprets information in terms of what is familiar, only one interpretation of organized inputs is possible. e. Inputs that reach awareness are organized to produce meaning, and this meaning is interpreted in light of what is familiar to the individual. 177. Sarah is an interior decorator who frequents antique shops and estate sales to find items for her clients’ homes and offices. She has developed a keen eye for antique rugs in particular. Currently, she is assessing a small Persian rug for a client’s hallway. For Sarah, a small antique rug will likely have a _______ because she does not need to engage in extended decision making for a product she has purchased before. a. routinized level of involvement b. limited level of involvement c. retained level of involvement d. higher level of involvement e. lower level of involvement 178. Digital influences, such as online review sites and social networks, allow shoppers to reduce their _______ by gaining information from others. a. upfront costs b. social status c. risk of buying a socially unacceptable product d. risk in trying an unknown product e. shopping effort 179. People's needs to grow, develop, and achieve their full potential are referred to by Maslow as ____ needs. a. ego b. esteem c. self-actualization d. social e. safety

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Chap 07_20e 180. Marketers can influence consumers’ evaluations by describing alternatives to products and their attributes in a certain manner, a practice known as a. selective distortion. b. selective retention. c. selective exposure. d. bracketing. e. framing. 181. Retail chains try to design their store environments and layouts so as to make shopping as enjoyable and easy as possible and thereby encourage consumers to linger and make purchases. This most relates to a. product involvement level. b. physical surroundings. c. social surroundings. d. purchase reason. e. buyer's mood. 182. After purchasing a product, postpurchase evaluation may result in cognitive dissonance. Cognitive dissonance is a. the congruence between external and internal searches for product information. b. a function of the manner in which the manufacturer of the product describes its attributes. c. dissatisfaction with the purchase. d. the establishment of criteria for comparing products. e. doubts that occur because the buyer questions whether the decision to purchase the product was right. 183. A group of brands that a consumer views as alternatives for possible purchase is called a(n) a. consideration set. b. awareness set. c. alternative set. d. evaluative group. e. framing set. 184. Kira is interested in joining Alpha Gamma Delta’s sorority. She begins to shop at Delphine's, a local store where the Alphas buy their clothes. She also asks her family for a new car because all the sorority members have new cars. In these instances, Kira is most influenced by a. personality. b. a reference group. c. selective exposure. d. situational influences. e. digital influences.

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Chap 07_20e 185. Luke and Hayley are searching for a health club to join. This purchase will likely be affected by ____ involvement. a. low b. internal c. enduring d. evoked e. perceived 186. Although most buying decisions can be categorized on the basis of product cost, search and time effort, and brand preference, we sometimes buy things with no conscious planning, prompted by a powerful urge to buy something now. This is best described as a. extended decision making. b. limited decision making. c. routinized decision making. d. impulse buying. e. selective buying. 187. Perception is a three-step process that involves a. motivation, personality, and attitudes. b. classifying, recording, and eliminating information received through the senses. c. collecting, eliminating, and organizing information inputs. d. selecting, organizing, and interpreting information inputs. e. anticipating, classifying, and discarding information inputs. 188. Within the information search step of the consumer buying decision process, what two primary aspects exist? a. Consideration sets and evoked sets b. Personal information and nonpersonal information c. Selective retention and selective distortion d. Internal search and external search e. Company-produced information and internal information 189. After purchasing a new Infiniti, Phil sees a Lexus pass by on the street and wonders if he made the right choice. Phil is experiencing a. problem recognition. b. cognitive dissonance. c. internal search. d. alternative evaluation. e. framing.

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Chap 07_20e 190. Joann and Rachel are searching for an apartment. They will most likely engage in which one of the following forms of decision making? a. Intensive response behavior b. Limited decision making c. Impulse buying d. Routinized response behavior e. Extended decision making 191. Mitchell’s smartphone is two years old and he would like to have a new one. This time, he wants to make sure that it has a longer battery charge and better geographic coverage since he is traveling three days a week for his new job. Mitchell is most likely to use _____ for this purchase. a. routinized response behavior b. limited decision-making behavior c. extended response behavior d. intensive decision-making behavior e. extended decision-making behavior 192. Assignment of meaning to organized information inputs is called a. motivation. b. redefinition. c. learning. d. interpretation. e. selection. 193. What consumer research method is a means of measuring consumer attitudes by gauging the intensity of individuals’ reactions to adjectives, phrases, or sentences about an object? a. Projective specification b. Patronage clarification c. Cognitive scale d. Attitude scale e. Perceptual scale 194. Psychological influences are internal factors that impact a consumer’s buying decision process. More specifically, ___________ is one type of psychological influence wherein the consumer has a tendency to twist or change information received to fit their own personal feelings or beliefs. a. perceptive dissonance b. selective retention c. creative distortion d. distorted reality e. selective distortion

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Chap 07_20e 195. The inner driving forces or reasons behind buyers' actions and behaviors are called a. motivation. b. lifestyles. c. perceptions. d. attitudes. e. traits. 196. In the consumer buying decision process, a buyer will search his or her memory for information about products that might solve the problem they have identified in the a. internal search. b. external search. c. evoked search. d. purchase phase. e. postpurchase phase. 197. Routinized response behavior is what a consumer does when a. purchasing an unfamiliar product. b. buying frequently purchased, low-cost items that need little search effort. c. an information search is extensive and may involve consulting with friends and family. d. buying products that require a moderate amount of time for information gathering and deliberation. e. he or she enters the problem recognition stage of the consumer buying decision process. 198. According to Maslow's hierarchy of needs, a. individuals simultaneously try to satisfy all five levels of needs. b. self-actualization needs are the most important needs to be met for most individuals. c. individuals first address needs at the top of the pyramid and then move down to the lower level needs. d. levels of needs are different for everyone, and we all try to satisfy them in a different order. e. individuals first satisfy the most basic needs and then try to fulfill needs at the next level up. 199. When Chaz realizes his liquor cabinet supply was devastated by last weekend's party, he first retrieves information from his memory about what types of liquor he and his friends like most and then asks the clerk at the liquor store what she would recommend. Chaz started with a(n) ____ search and then progressed to a(n) ____ search. a. consideration; evaluative b. focused; broad c. internal; external d. routinized; extended e. self; inclusive

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Chap 07_20e 200. During which stage of the consumer buying decision process does a consumer decide from which seller he or she will buy the product? a. Evaluation of alternatives b. Information search c. Source selection d. Purchase e. Problem recognition 201. Cognitive, affective, and behavioral are the three major components of a. self-concept. b. motivation. c. lifestyles. d. consumer socialization. e. attitudes. 202. Scenario 7.1 Use the following to answer the questions. Consumers use information from many sources when making purchasing decisions, including information from friends and family members. One of the most dissatisfying consumer experiences is with auto repair. Since she has experienced a problem starting her car when the weather is cold, Kayla has asked several of her friends and family members where they have their cars repaired. Kayla has heard that Skola's Auto Repair has reasonable prices, but it can be difficult to get an appointment. Steve, one of Kayla’s friends, had a very poor experience with Skola's. However, once he complained to them, they fixed the situation and now he prefers their auto repair shop over others. Refer to Scenario 7.1. Positive feelings generated by satisfaction with Skola's response will become part of Steve's a. consideration set. b. motivation. c. selective retention. d. response. e. attitude. 203. Changing people's attitudes toward a firm and its marketing program is a. simple when advertisements are used. b. impossible, even if the firm uses advertisements. c. potentially a long, expensive, and difficult task that may require extensive promotional campaigns. d. unnecessary, since consumer attitudes are of little importance. e. rarely attempted through the use of marketing practice.

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Chap 07_20e 204. The forces that other people exert on one's buying behavior are called social influences. These come from reference groups and opinion leaders, digital influences, social classes, culture and subcultures, roles, and a. ethnic heritage. b. personality. c. attitudes. d. perception. e. family. 205. Stan spends most of his free time participating in extreme sports and traveling to exotic locations with a group of close friends who share his interests and opinions about most things. This is a description of Stan’s a. self-concept. b. lifestyle. c. personality. d. attitudes. e. role. 206. Evaluative criteria for brands within the consideration set are both a. selective and expansive. b. objective and subjective. c. internal and external. d. extended and routinized. e. perceptive and selective. 207. Scenario 7.1 Use the following to answer the questions. Consumers use information from many sources when making purchasing decisions, including information from friends and family members. One of the most dissatisfying consumer experiences is with auto repair. Since she has experienced a problem starting her car when the weather is cold, Kayla has asked several of her friends and family members where they have their cars repaired. Kayla has heard that Skola's Auto Repair has reasonable prices, but it can be difficult to get an appointment. Steve, one of Kayla’s friends, had a very poor experience with Skola's. However, once he complained to them, they fixed the situation and now he prefers their auto repair shop over others. Refer to Scenario 7.1. The type of decision making that Kayla is using to select an auto repair shop would be a. intensive decision making. b. extended decision making. c. routinized response behavior. d. selective decision making. e. limited decision making.

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Chap 07_20e 208. Credit card companies maintain staffs of professionals whose primary responsibility is to monitor the activity on cardholders’ accounts to spot potential fraudulent purchases or stolen cards. These staffs are employed to prevent which of the following? a. Consumer purchase complaints b. Consumer misbehavior c. Consumer misinformation d. Consumer purchase remorse e. Consumer purchase excess 209. Which of the following buying situations is most consistent with routinized response behavior? a. Ian buying his first pair of basketball shoes b. Molly buying a new set of tires for her car c. Aaron buying a new fishing rod and reel d. Stephanie buying bottled water e. Bryan buying a new software program 210. In the process of perception, individuals receive sensations through sight, sound, taste, smell, and hearing. These sensations are called a. selective inputs. b. olfactory receptors. c. information inputs. d. perceptual motives. e. psychological influences. 211. After certain inputs have been selected to reach an individual's awareness, the next step in the perceptual process is perceptual a. organization. b. attention. c. retention. d. interpretation. e. redefinition. 212. Ming went to Costco to shop for a party she was hosting on the weekend. She knew that she could buy larger quantities of food items than she normally did, and they would also be much less expensive. She checked everything off her list and proceeded to the checkout lines. Passing a display of fresh flowers, she thought, “Wouldn’t those be nice for the party?” She selected one of the bouquets and placed it in her cart. Ming has most likely engaged in ______ when selecting the food for her party, and ____ when selecting the flowers. a. extended decision making; impulse buying b. routinized decision making; impulse buying c. extended decision making; compulsive response behavior d. limited decision making; cognitive dissonance e. limited decision making; routinized response behavior

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Chap 07_20e 213. Digital influences have largely replaced a. word-of-mouth referrals from neighbors, coworkers, and friends. b. advertising. c. brick-and-mortar store sales. d. personal selling. e. learning. 214. The five categories of situational influences are a. product involvement level, physical surroundings, social surroundings, time perspective, and purchase reason. b. antecedent states, physical surroundings, social surroundings, time perspective, and space dimensions. c. social surroundings, physical surroundings, time pressures, purchase reason, and lifestyles. d. purchase reason, time perspective, social surroundings, physical surroundings, and buyer's momentary mood. e. store atmosphere, location, aromas, sounds, and lighting. 215. Cecelia reads through her e-mails containing advertisements for sweaters from Zara, purses from Michael Kors, and athletic shoes from Foot Locker. Later while at the mall, she remembers only the shoe ad, thanks to the recent tear in her own Pumas. Cecelia has engaged in selective a. distortion. b. exposure. c. analysis. d. retention. e. organization. 216. When a consumer purchases products occasionally or needs information about an unfamiliar brand in a familiar product category, he or she will most likely engage in a. enduring purchase behavior. b. routinized response behavior. c. extended decision making. d. impulse searching. e. limited decision making. 217. The development of a person's self-concept is a function of a. learning. b. psychological and social factors. c. reference groups and opinion leaders. d. roles and family influences. e. subcultures.

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Chap 07_20e 218. What is Maslow's hierarchy of needs? How does it apply to the consumer buying decision process?

219. Why is it important for marketers to recognize the stages that a consumer goes through in making a purchase decision?

220. In what ways can buyers' moods affect the consumer buying decision process?

221. Define consumer misbehavior and discuss three types of consumer misbehavior described in the text.

222. In what ways does an individual's personality affect his or her buying behavior?

223. Discuss how reference groups and opinion leaders influence purchase behavior.

224. Compare and contrast the three major ethnic subcultures in the United States.

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Chap 07_20e 225. How does an individual's social class influence the products he or she buys?

226. Discuss how perceptual processes may influence the consumer buying decision process.

227. How does the level of involvement affect the type of consumer decision-making process that a person uses?

228. Compare and contrast the three major influences on the consumer’s decision-making processes.

229. Why are consumer attitudes an important issue for marketers to study? Can attitudes be changed easily by marketers? Explain.

230. Identify and describe the five major categories of situational influences.

231. Why is it important for marketers to understand the cultural and subcultural influences that may affect the consumer buying decision process?

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Chap 07_20e 232. Discuss cognitive dissonance as it relates to postpurchase evaluation and describe how marketers can reduce cognitive dissonance in a consumer who has just purchased an expensive product.

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Chap 07_20e Answer Key 1. True 2. False 3. False 4. True 5. False 6. True 7. False 8. False 9. False 10. True 11. False 12. True 13. False 14. True 15. True 16. True 17. True 18. True 19. False 20. False 21. False 22. True 23. True 24. False 25. False 26. True

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Chap 07_20e 27. False 28. True 29. False 30. True 31. False 32. True 33. False 34. False 35. True 36. True 37. False 38. False 39. False 40. False 41. True 42. True 43. False 44. True 45. True 46. True 47. False 48. True 49. True 50. False 51. False 52. True 53. False 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 07_20e 55. False 56. False 57. True 58. True 59. False 60. True 61. False 62. True 63. False 64. True 65. True 66. False 67. True 68. True 69. False 70. False 71. True 72. True 73. True 74. False 75. True 76. False 77. True 78. True 79. True 80. True 81. True 82. False Copyright Cengage Learning. Powered by Cognero.

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Chap 07_20e 83. e 84. b 85. b 86. d 87. e 88. b 89. a 90. d 91. b 92. b 93. c 94. d 95. d 96. a 97. b 98. e 99. a 100. e 101. a 102. c 103. a 104. a 105. c 106. d 107. a 108. d 109. c 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 07_20e 111. d 112. e 113. e 114. b 115. e 116. a 117. c 118. c 119. c 120. d 121. a 122. d 123. b 124. a 125. d 126. a 127. c 128. a 129. b 130. a 131. b 132. a 133. b 134. e 135. a 136. d 137. b

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Chap 07_20e 138. a 139. e 140. c 141. c 142. b 143. b 144. d 145. b 146. b 147. c 148. c 149. a 150. d 151. c 152. e 153. c 154. c 155. c 156. a 157. b 158. d 159. e 160. c 161. d 162. a 163. d 164. e 165. c Copyright Cengage Learning. Powered by Cognero.

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Chap 07_20e 166. c 167. c 168. a 169. d 170. b 171. b 172. c 173. c 174. d 175. e 176. e 177. e 178. d 179. c 180. e 181. b 182. e 183. a 184. b 185. c 186. d 187. d 188. d 189. b 190. e 191. b 192. d 193. d Copyright Cengage Learning. Powered by Cognero.

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Chap 07_20e 194. e 195. a 196. a 197. b 198. e 199. c 200. d 201. e 202. e 203. c 204. e 205. b 206. b 207. e 208. b 209. d 210. c 211. a 212. e 213. a 214. d 215. d 216. e 217. b 218. Abraham Maslow, an American psychologist, conceived a theory of motivation based on a hierarchy of needs. According to Maslow, humans seek to satisfy five levels of needs, from most to least basic to survival. This pyramid is known as Maslow’s hierarchy of needs. The five levels in Maslow’s hierarchy of needs are physiological needs, safety needs, social needs, esteem needs, and self-actualization needs.

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Chap 07_20e 219. It is important for marketers to understand the buying behavior of consumers for several reasons. First, customers’ overall opinions and attitudes toward a firm’s products have a great impact on the firm’s success. Second, the marketing concept stresses that a firm should create a marketing mix that meets customers’ needs. To find out what satisfies consumers, marketers must examine the main influences on what, where, when, and how they buy. Third, by gaining a deeper understanding of the factors that affect buying behavior, marketers are better positioned to predict how consumers will respond to marketing strategies. 220. The buyer’s moods like anger, anxiety, or contentment, or conditions like fatigue, illness, or having cash on hand can affect the consumer buying decision process. Such moods or conditions are momentary and occur immediately before the situation where a buying decision will be made. They can affect a person’s ability and desire to search for or receive information, or seek and evaluate alternatives. Moods can also significantly influence a consumer’s postpurchase evaluation. If a person is happy immediately after purchase, he may be more likely to attribute the mood to the product and will judge it favorably. 221. Consumer misbehavior is behavior that violates generally accepted norms of a particular society. Shoplifting is one of the most obvious misconduct areas. Consumer fraud includes purposeful action to take advantage of and/or damage others during a transaction. Piracy is copying computer software, video games, movies, or music without paying the producer for them. 222. Personality is a set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situations. An individual’s personality is a unique combination of hereditary characteristics and personal experiences. Personalities typically are described as having one or more characteristics, such as compulsiveness, ambition, gregariousness, dogmatism, authoritarianism, introversion, extroversion, and competitiveness. The weak association between personality and buying behavior can be the result of unreliable measures to study the link between the two, rather than a true lack of a relationship. 223. A reference group is a group, either large or small, with which a person identifies so strongly that he or she adopts the values, attitudes, and behavior of group members. Reference groups can affect whether a person does or does not buy a product at all, buys a type of product within a product category, or buys a specific brand. The extent to which a reference group affects a purchase decision depends on the product’s conspicuousness and on the individual’s susceptibility to reference group influence. An opinion leader is a member of an informal group who provides information about a specific topic, such as smartphones, to other group members seeking information. An opinion leader is likely to be most influential when consumers have high product involvement but low product knowledge, when they share the opinion leader’s values and attitudes, and when the product details are numerous or complicated. 224. U.S. marketers focus on three major ethnic subcultures: African American, Hispanic, and Asian American. African American consumers are more likely to shop online and interact with brands via social media. Younger African Americans have become trendsetters for all young American consumers regardless of race or ethnicity. Hispanics represent a large and powerful subculture, and are an attractive consumer group for marketers. When considering the buying behavior of Hispanics (or any ethnic or racial subculture, for that matter), marketers must keep in mind that this subculture is really composed of many diverse cultures coming from a huge geographic region that encompasses nearly two dozen nationalities. Though they represent a smaller proportion of the overall population, Asian Americans are the fastest-growing demographic and tend to identify strongly with their culture of origin. As a group, Asian Americans appear to be underserved relative to other subcultures.

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Chap 07_20e 225. A social class is an open aggregate of people with similar social rank. To some degree, individuals within social classes develop and assume common behavioral patterns. They may have similar attitudes, values, language patterns, and possessions. Because people most frequently interact with others within their own social class, people are more likely to be influenced by others within their own class than by those in other classes. Social class also influences people’s spending, saving, and credit practices. It can determine the type, quality, and quantity of products a person buys and uses. Behaviors within a social class can influence others as well. Most common is the "trickle-down" effect, in which members of lower classes attempt to emulate members of higher social classes, such as purchasing desirable automobiles, large homes, even selecting certain names for their children. Social class also affects an individual’s shopping patterns and types of stores patronized. 226. A consumer's perceptual process may influence the consumer buying decision process in many ways. First, a consumer's perceptual process may operate such that a seller's information never reaches the target. For example, a buyer may entirely block out and not notice an advertisement in a magazine. Second, a buyer may receive information but perceive it differently than was intended, as occurs in selective distortion. For instance, when a toothpaste producer advertises that "35% of the people who use this toothpaste have fewer cavities," a customer could infer that 65% of users have more cavities. Third, a buyer who perceives information inputs to be inconsistent with prior beliefs is likely to forget the information quickly, as is the case with selective retention. 227. A major determinant of the type of decision-making process employed depends on the customer’s level of involvement. High-importance issues, such as health care, are also associated with high levels of involvement. Lowinvolvement products are much less expensive and have less associated social risk, such as grocery or drugstore items. A person’s interest in a product or product category that is ongoing and long term is referred to as enduring involvement. Most consumers have an enduring involvement with only a very few activities or items—these are the product categories in which they have the most interest. Many consumers, for instance, have an enduring involvement with Apple products, a brand that inspires loyalty and trust. In contrast, situational involvement is temporary and dynamic and results from a particular set of circumstances, such as the sudden need to buy a new bathroom faucet after the current one starts leaking and will not stop. 228. The consumer buying decision process can be affected by numerous influences, which are categorized as situational, psychological, and social. Situational influences result from circumstances, time, and location that affect the consumer buying decision process. Situational factors can influence the buyer during any stage of the consumer buying decision process and may cause the individual to shorten, lengthen, or terminate the process. Situational factors can be classified into five categories: physical surroundings, social surroundings, time perspective, reason for purchase, and the buyer’s momentary mood and condition. Psychological influences partly determine people’s general behavior and thus influence their behavior as consumers. Primary psychological influences on consumer behavior are perception, motives, learning, attitudes, personality and self-concept, and lifestyles. Even though these psychological factors operate internally, they are affected strongly by external social forces. Forces that other people exert on buying behavior are called social influences. They are divided into six major groups: roles, family, reference groups and opinion leaders, digital influences, social classes, and culture and subcultures.

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Chap 07_20e 229. Consumer attitudes toward a company and its products greatly influence success or failure of the firm’s marketing strategy. When consumers have strong, negative attitudes toward one or more aspects of a firm’s marketing practices, they may not only stop using its products but also urge relatives and friends to do likewise. Because attitudes play an important part in determining consumer behavior, marketers should regularly measure consumer attitudes toward prices, package designs, brand names, advertisements, salespeople, repair services, store locations, features of existing or proposed products, and social responsibility efforts. When marketers determine that a significant number of consumers have negative attitudes toward an aspect of a marketing mix, they may try to change those attitudes. This task is generally lengthy, expensive, and difficult and can require extensive promotional efforts. To alter responses so that more consumers purchase a certain brand, a firm might launch an informationfocused campaign to change the cognitive component of a consumer’s attitude, or a persuasive (emotional) campaign to influence the affective component. Distributing free samples might help change the behavioral component. 230. Situational factors can be classified into five categories: physical surroundings, social surroundings, time perspective, reason for purchase, and the buyer’s momentary mood and condition. Physical surroundings include location, store atmosphere, scents, sounds, lighting, weather, and other factors in the physical environment in which the decisionmaking process occurs. Social surroundings include characteristics and interactions of others who are present during a purchase decision, such as friends, relatives, salespeople, and other customers. The time dimension influences the buying decision process in several ways. It takes varying amounts of time to progress through the steps of the buying decision process, including learning about, searching for, purchasing, and using a product. Time also plays a role when consumers consider the frequency of product use, the length of time required to use it, and the overall product life. The reason for the purchase involves what the product purchase should accomplish and for whom. The buyer’s moods like anger, anxiety, or contentment or conditions like fatigue, illness, or having cash on hand may also affect the consumer buying decision process. Such moods or conditions are momentary and occur immediately before the situation where a buying decision will be made. 231. Culture is the accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment and passes on to future generations. Culture permeates most things that a person does and the objects he interacts with, from the style of buildings in his town, to the education he receives, to the laws governing his country. Culture also includes society-specific core values and the degree of acceptability of a wide range of behaviors. Culture influences buying behavior because it saturates our daily lives. Our culture determines what we wear and eat and where we reside and travel. Culture also influences how we buy and use products and the satisfaction we derive from them. A subculture is a group of individuals whose characteristics, values, and behavioral patterns are similar within the group and different from those of people in the surrounding culture. Within subcultures, greater similarities exist in people’s attitudes, values, and actions than within the broader culture. Relative to other subcultures, individuals in one subculture may have stronger preferences for specific types of clothing, furniture, food, or consumer electronics. Subcultures can play a significant role in how people respond to advertisements, particularly when pressured to make a snap judgment. 232. Cognitive dissonance in marketing refers to the doubts in the buyer’s mind about whether purchasing the product was the right decision. Marketers sometimes attempt to reduce cognitive dissonance by having salespeople call or e-mail recent customers to make sure they are satisfied with their new purchases. Salespeople may send recent buyers results of studies demonstrating that other consumers are very satisfied with the brand.

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Chap 08_20e Indicate whether the statement is true or false. 1. There is little or no difference between wholesalers' customers and retailers' customers. a. True b. False 2. If a business product exceeds specifications, so much the better; the customer can then be assured of obtaining a minimum level of acceptability. a. True b. False 3. In the long run, business demand becomes totally unrelated to consumer demand. a. True b. False 4. In some cases, the types of services offered by a supplier may constitute a competitive advantage over suppliers of similar products. a. True b. False 5. The term business markets refers only to producer markets. a. True b. False 6. The North American Industry Classification System includes all three NAFTA partners. a. True b. False 7. The four categories of consumer markets are producer, reseller, government, and institutional. a. True b. False 8. Vendor analysis is a formal, systematic evaluation of current and potential vendors that focuses on a variety of dimensions including price, product quality, delivery service, product availability, and overall company reliability. a. True b. False 9. Private B2B exchanges connect member firms through a secure system that permits all the organizations to share significant information as well as facilitate exchanges. a. True b. False 10. Price is of concern to a business marketer primarily because of its psychological impact on purchasing agents. a. True b. False

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Chap 08_20e 11. After locating potential customers using industrial classification systems such as NAICS, the next step for the business marketer is to make the purchase. a. True b. False 12. Interpersonal dynamics are easy to observe and simple for the marketer to assess. a. True b. False 13. Wholesalers sell primarily to ultimate consumers. a. True b. False 14. Sometimes initial demand for a business product will drop following a price cut if buyers believe that further price reductions are forthcoming. a. True b. False 15. On-time delivery is crucial to a business customer, since a late delivery may hold up a production line or cause the firm to lose sales. a. True b. False 16. The owner of a trucking business, who buys diesel fuel from the nearby service station for the company trucks, is a part of a business market. a. True b. False 17. Industrial classification systems allow marketers to divide business customers into groups based mainly on the types of goods and services provided. a. True b. False 18. NAICS provides little information about service industries and high-tech products. a. True b. False 19. Business customers generally seek to obtain detailed information about a product before purchasing it. a. True b. False 20. When the major component of an item experiences a price increase, the demand for the item may become more elastic. a. True b. False

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Chap 08_20e 21. Orders placed by business customers are usually smaller and more numerous than consumer sales. a. True b. False 22. Ultimate consumers are generally more rational than business customers. a. True b. False 23. In the buying decision process, one of the activities included in the search for products and suppliers is examining various online and print publications. a. True b. False 24. Feedback acquired during the fifth stage of the business buying decision process is kept on file but not used as a reference for future business purchase decisions. a. True b. False 25. Specific details regarding terms, credit arrangements, and technical assistance are worked out during the product specification stage of the buying decision process. a. True b. False 26. In industries in which price changes occur frequently, demand fluctuations have practically been eliminated since buyers have become used to these changes and have learned to ignore them. a. True b. False 27. Business purchasing agents may indirectly contribute to the satisfaction of their own personal needs by helping their firms achieve organizational objectives. a. True b. False 28. Government markets, although complicated in their requirements, can be very lucrative. a. True b. False 29. Reseller markets consist of intermediaries that buy finished goods and resell them for profit. a. True b. False 30. A new-task purchase is one in which the business makes an initial purchase of a new item. a. True b. False

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Chap 08_20e 31. The five-stage business buying decision process is used primarily for routine, straight rebuy purchases. a. True b. False 32. It is customary for contracts for raw materials and components to be negotiated semiannually. a. True b. False 33. Grocery stores and supermarkets are a part of producer markets. a. True b. False 34. When purchasing products, business customers are especially concerned about quality, service, price, and supplier relationships. a. True b. False 35. The increase in government purchases has resulted partly from the increase in the number of services provided by the government. a. True b. False 36. Marketers should post informative content on digital sites describing how their products can solve customers' problems or address their needs. a. True b. False 37. Business customers are forced to satisfy personal goals in pursuits that lie outside their jobs. a. True b. False 38. Industrial demand derives from consumer demand. a. True b. False 39. All companies, no matter what their size or market position, maintain only one buying center. a. True b. False 40. Reciprocal arrangements are legal as long as they do not threaten competition. a. True b. False 41. An example of a business market would be farmers. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 42. To obtain the names of specific potential customers, the business marketer is well advised to employ the services of a commercial data company, since this is both cheaper and faster than any other method. a. True b. False 43. Online B2B auctions are especially popular for selling new products. a. True b. False 44. One very important consideration for business purchases is the type of packaging used. a. True b. False 45. Value analysis examines quality, design, and materials as well as current and potential vendors. a. True b. False 46. Of the three types of business purchases, the straight rebuy purchase usually requires the most information. a. True b. False 47. The demand for many business products is inelastic at the industry level. a. True b. False 48. Retailers purchase products and resell them to final consumers. a. True b. False 49. Harvard University is an institutional market. a. True b. False 50. Raw materials are especially affected by joint demand. a. True b. False 51. Inspection refers to a purchasing method in which a representative unit is taken from a lot and evaluated, and the buying decision is based on the conclusions. a. True b. False 52. A fall in consumer demand for a product is likely to result in increased buying from suppliers as consumer goods producers replenish depleted inventories and gear up for the next surge in consumer demand. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 53. Industrial classification systems are best used in conjunction with other types of data to determine exactly how many and which customers a marketer can reach. a. True b. False 54. The factors that influence business buying behavior are the same as those that influence consumer buying behavior. a. True b. False 55. Buyers in producer markets purchase either raw materials, semifinished products, or finished products. a. True b. False 56. The fourth stage in the business buying decision process is that of searching for products and suppliers. a. True b. False 57. For business products, the concept of inelasticity of demand applies equally to industry demand for the product and to demand for an individual supplier. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 58. What must the government do when it wants to buy a standard product? a. It uses a negotiated contract and selects only a few firms. b. It inspects products from eligible bidders and chooses the best in quality. c. It sends out a detailed description of the product to qualified bidders. d. It awards the contract to larger businesses because they provide better services. e. It usually chooses a past supplier that it knows is reliable. 59. To estimate the purchase potential of business customers or groups of customers, a marketer must find a relationship between ________ and a variable available in industrial classification data, such as the number of employees. a. product use b. the size of potential customers’ purchases c. the size of the segment’s geographic area d. the types of business purchases e. product specifications

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Chap 08_20e 60. The group of people within a business who are involved in making business buying decisions is referred to as a. the new-task team. b. negotiators. c. purchasing agents. d. deciders. e. the buying center. 61. The three purposes for which individuals or groups can use products in order for it to be considered a business market are a. use in daily operations, end consumption, and resale. b. direct use in producing other products, company travel, and end consumption. c. resale, use in daily operations, and direct use in producing other products. d. governmental, institutional, and reseller purposes. e. making other products, selling to other businesses, making component parts. 62. Through FedBid, Inc., government agencies invite businesses to bid to supply the specified good or service in competition with each other, with the lowest bidder winning the right to sell the product. This is an example of a a. reverse auction. b. traditional auction. c. two-way auction. d. private B2B exchange. e. competitive auction. 63. Seattle Grace Hospital administrators decide to redo its kitchen with new flooring, cabinets, counters, and appliances. The hospital compiles a description of the project and then asks sellers to submit bids. After determining the most attractive bids, the hospital will then work with two or three companies to determine which will get the contract. This is an example of using ____ for a purchase decision. a. sampling b. negotiation c. inspection d. elimination e. description 64. An organization that decides to buy all of a certain part from the same company is using a. single-supplier purchasing. b. multiple sourcing. c. same vendor analysis. d. straight rebuy. e. sole sourcing.

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Chap 08_20e 65. Management at More Hands Maid Service is concerned that it maintains a high level of service for its business accounts. How should the firm monitor the level of service these customers receive? a. Develop a code of service. b. Set service objectives. c. Formally survey customers. d. Specify service uniformity. e. Stress truthfulness with employees. 66. During the search for products and evaluation of possible suppliers stage of the business buying decision process, marketers sometimes use ____ analysis to examine the quality, design, materials, and possibly item reduction in order to acquire the product in the most cost-effective way. a. cost b. value c. profit d. strategic e. vendor 67. When the city of Portland buys iPads for its restaurant inspectors to use during their visits, the purchase from Apple would be considered a. a regulatory sale. b. a reseller purchase. c. a government purchase. d. a producer purchase. e. an institutional sale. 68. _______________ are online marketplaces where buyers and sellers from around the world can exchange information, goods, services, ideas, and payments. a. Dealer websites b. B2B e-commerce sites c. Online auction sites d. Contracting sites e. B2C e-commerce sites

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Chap 08_20e 69. Lance’s Lawn & Lot is a small business that provides landscaping and lawn-mowing services in the spring and summer. Lance’s usually contracts with customers on an annual basis, with the terms set out at the beginning of the season. This year, the area experienced a significant amount of rain, causing the grass to grow more quickly. Lance’s was required to cut the grass every time it grew 2 inches, and no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract. One of Lance’s major expenses is gasoline, which the company must buy no matter the price. Gasoline is characterized by _________ demand. a. elastic b. inelastic c. derived d. joint e. targeted 70. Which method of business buying is necessary when products are highly homogeneous and examination of each item is NOT feasible? a. Negotiation b. Sampling c. Description d. Inspection e. Homogeneous selection 71. Thanks to the role of the internet in the business buying decision process, interactions with a sales representative now a. cost less than in the past. b. cost more than in the past. c. occur much later in the process than in the past. d. occur much earlier in the process than in the past. e. rarely occur in the process. 72. Within the buying center, ____ are technical personnel who develop product specifications and evaluate alternatives, while _____ actually choose the products. a. users; buyers b. influencers; deciders c. gatekeepers; deciders d. influencers; buyers e. deciders; buyers

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Chap 08_20e 73. Golden State Wines has national distribution agreements with wineries across the United States such as Mason and Robert Mondavi in Napa Valley, California. Golden State Wines receives its inventory from its winery suppliers and makes the wine available to customers—restaurants, bars, hotels, etc., through its sales representatives and extensive catalog. What type of business market does Golden State Wines represent? a. Reseller b. Institution c. Government d. Producer e. Retailer 74. Which of the following is most likely to be used to purchase commodities or raw materials? a. Negotiation b. Inspection c. Reciprocity d. Description e. Sampling 75. Scenario 8.1 Use the following to answer the questions. Samsung is entering the home appliance market with its new French Door Refrigerator. In designing the production facility, it has a need for various pieces of equipment, including the perpetual assembly belt drive, quasi-assembly pods, and finishing stations. The purchasing agent for the appliance division is inquiring about who will be needed for input on the purchasing decision. Samsung has already contacted several producers of the quasi-assembly pods, and has begun negotiations with their sales representatives. Refer to Scenario 8.1. There are many factors that would influence Samsung's business buying decisions. Which one of the following would NOT? a. Environmental b. Organizational c. Interpersonal d. Demographic e. Individual

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Chap 08_20e 76. AAs the new sales representative for Parkland Electronics, Angelique is responsible for calling on hospital management and selling electronic hospital equipment such as blood pressure cuffs, scales, and heart monitors. Angelique knows that she needs to be friendly with the administrative assistants in the management offices in order to make sure that Parkland’s information brochures and new product diagrams actually get to the management staff. In this situation, Angelique is exhibiting her knowledge that administrative assistants are often ________ in the buying decision process. a. users b. gatekeepers c. influencers d. buyers e. controllers 77. Which of the following factors can generate considerable uncertainty in buying decisions? a. Individual b. Psychological c. Organizational d. Interpersonal e. Environmental 78. Oleg owns an ice cream and frozen treat restaurant and is considering adding new menu items. He recently met with the representative of a yogurt company who is trying to convince Oleg to add the frozen yogurt to his menu. Oleg has never offered a yogurt product in the restaurant and has concentrated on ice cream items. The yogurt product would not need a different freezer or dispensing unit, so the investment would be similar to changing flavors of ice cream. However, because he’s never offered yogurt, he’s unsure what the market response will be and how much profit he can achieve with the frozen yogurt. What type of purchasing decision does this represent for Oleg? a. Modified rebuy b. Straight rebuy c. New-task purchase d. Contracted purchase e. Limited new-task purchase 79. What is a primary difference between business and consumer buyers? a. Consumer buyers require more product information than business buyers. b. Business purchases are made by one individual whereas families make consumer purchases together. c. Repeat sales are more common with consumer buyers than business buyers. d. Consumers primarily buy inexpensive items; businesses only buy expensive items. e. Business buyers generally place larger orders than consumer buyers.

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Chap 08_20e 80. Which method of business buying is most likely to be used when the products being purchased are standardized based on certain characteristics? a. Homogeneous selection b. Inspection c. Description d. Sampling e. Negotiation 81. The second stage in the business buying decision process is to a. search for products and suppliers. b. select the most appropriate product. c. develop product specifications. d. evaluate product and supplier performance. e. recognize the problem. 82. Scenario 8.2 Use the following to answer the questions. Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and 4-wheel ATVs. It also sells its products to independent repair centers, dealers, and other wholesalers in the Northeast and Southern states. Precision Brake has done research on the demand for lawn tractors and found that most manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research also shows that most of the dealers who sell directly to individual consumers are in the Midwestern states, while dealers who sell to small business landscaping companies tend to be located in the Northeastern states. Company executives are considering expansion of its distribution to markets in the Midwest. Refer to Scenario 8.2. Last year, Precision Brake's sales to the manufacturers of lawn tractors declined, partially due to the fact that more consumers were hiring small landscaping businesses to cut their grass. This decline in sales for Precision Brake is an example of a. product scarcity. b. joint demand. c. derived demand. d. reciprocal demand. e. inelastic demand. 83. Kia Motors purchases upholstery for the interiors of its vehicles from various suppliers. This upholstery must have a set of necessary characteristics, standards of quality, and other information that is expressed by Kia Motors. This set is called a. descriptions. b. product features. c. criterion. d. purchase requests. e. specifications.

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Chap 08_20e 84. Which of the following is true with respect to buyers in business markets? a. Business buyers always act rationally when making purchases for their company. b. Business customers tend to be less informed about the products they purchase than consumer buyers. c. Business customers demand detailed information about a product's functional features and technical specifications. d. Business customers are no different than buyers in consumer markets. e. Business customers tend to buy products from their friends and contacts with business suppliers. 85. Inelastic demand in business markets refers to a situation where a. demand for a given product fluctuates very little over time. b. price increases or decreases will not significantly change demand for a given product. c. demand for a given product fluctuates significantly over time. d. demand for one product depends heavily on the demand for another product. e. supply for a given product cannot keep pace with the demand for it. 86. Sabika is the purchasing manager for the local public school system. Recently, the school received a large grant to make technology-related purchases to enable students to have better access to computers and utilize the Internet. Sabika is working with the teachers, and they recently developed product specifications that are necessary or required for tablet or laptop computers. What is the next stage in the purchase decision process for Sabika and the teachers? a. Search and evaluate possible products and suppliers b. Problem recognition c. Select product/supplier and order products d. Evaluate product and supplier performance e. Develop product specifications to solve the problem 87. Business customers today turn first to _____ to search for information and find sources for their product needs. a. B2B auction sites b. vendor sales representatives c. competitors d. the NAICS e. the internet 88. Examining quality, design, materials, and item reduction to acquire a product in the most cost-effective way falls under which stage of the business buying decision process? a. Searching for and evaluating potential products and suppliers b. Development of product specifications c. Selecting the product to be purchased and the supplier d. Evaluating the supplier's and product's performance by comparing it with specifications e. Problem recognition

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Chap 08_20e 89. Scenario 8.1 Use the following to answer the questions. Samsung is entering the home appliance market with its new French Door Refrigerator. In designing the production facility, it has a need for various pieces of equipment, including the perpetual assembly belt drive, quasi-assembly pods, and finishing stations. The purchasing agent for the appliance division is inquiring about who will be needed for input on the purchasing decision. Samsung has already contacted several producers of the quasi-assembly pods, and has begun negotiations with their sales representatives. Refer to Scenario 8.1. Which of the following groups should Samsung NOT include in its buying center for the new equipment? a. Purchasing agents at Samsung b. Eventual users within Samsung c. Potential future Samsung customers d. Gatekeepers within Samsung e. Senior managers at Samsung 90. Scenario 8.1 Use the following to answer the questions. Samsung is entering the home appliance market with its new French Door Refrigerator. In designing the production facility, it has a need for various pieces of equipment, including the perpetual assembly belt drive, quasi-assembly pods, and finishing stations. The purchasing agent for the appliance division is inquiring about who will be needed for input on the purchasing decision. Samsung has already contacted several producers of the quasi-assembly pods, and has begun negotiations with their sales representatives. Refer to Scenario 8.1. What type of business purchase is Samsung undertaking? a. Modified rebuy b. Straight rebuy c. New-task d. Straight purchase e. New rebuy 91. When a business is making its initial purchase of an item to be used to perform a new job, it is known as a ____ purchase. a. straight rebuy b. reciprocal c. delayed d. new-task e. modified rebuy

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Chap 08_20e 92. The United States Air Force purchases uniforms from a single supplier. For the last 25 years, the trousers purchased from this supplier have not changed and have been bought every six months, in multiple sizes. This example is called a a. new-product purchase. b. repetitive purchase. c. straight rebuy. d. modified rebuy. e. standard order. 93. Which of the following is NOT an organizational factor influencing the business buying decision process? a. The company’s objectives b. The company’s resources c. The size and composition of the company’s buying center d. The company’s purchasing policies e. The personal characteristics of participants in the buying center 94. In placing a tire order with Goodyear, River City Industrial Supply finds that the truck tires it is ordering have increased $37.50 in price since the last order. River City proceeds with the order, confident that it can pass on the price increase to future customers. This is an example of business products having ____ demand. a. derived b. inelastic c. joint d. fluctuating e. higher 95. When charitable organizations such as the American Cancer Society, Second Harvest Food Bank, and the Red Cross make purchases for goods and services to use in their daily operations, they would be considered to be _______ buyers. a. corporate b. government c. institutional d. producer e. reseller 96. All of the following describe the demand for business products except a. elastic. b. derived. c. joint. d. inelastic. e. fluctuating.

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Chap 08_20e 97. A representative from Maine Root stops by at a local fast-food restaurant once a month to inquire how much soft drink syrup the store will need. The restaurant's orders are an example of which type of business purchase? a. New-task b. Modified rebuy c. Straight rebuy d. Bid e. Negotiated 98. Francis is the purchasing manager at Buddy’s Auto Body and places orders for routine products such as office supplies and items needed for service and repair of vehicles. He typically purchases tools from the Snap-on dealer and orders a variety of nuts, bolts, and hardware from Grainger. He really likes purchasing from Grainger because he can utilize its website where he has an intranet portal to easily place orders and receive a company discount. Grainger makes it easy and convenient as well by providing a list of previously purchased items that Francis can select and simply click “reorder.” What type of purchase process does Francis use when buying these items from Grainger? a. Straight rebuy b. Modified rebuy c. New-task purchase d. Contracted purchase e. Curvilinear rebuy 99. Demand for business products is characterized as derived. From what is the demand derived? a. Industrial demand b. Modified demand c. Demand for consumer products d. Future product demand e. The business cycle 100. Glenda works in the buying center at a personal protection safety equipment firm. Whenever she needs a certain product, she always orders from Christian. Although other suppliers might be less expensive, Glenda has worked with Christian before and trusts him completely to deliver all supplies to the exact specifications. She values this trust and would rather work with Christian than having to take a chance on another supplier who might be less expensive. Which factors are influencing the business buying decision process? a. Reciprocity b. Environmental c. Organizational d. Interpersonal e. Economic

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Chap 08_20e 101. Which of the following is true about characteristics of business buying? a. Discussions and negotiations associated with business purchases can require considerable marketing time and selling effort. b. Suppliers may prefer to sell to customers who place small orders. c. Orders by business customers tend to be smaller than individual consumer sales. d. The contract regarding terms of sale of raw materials and component parts is likely to be a short-term agreement. e. Business purchasing decisions are typically made by one person. 102. A friend of yours starts his own business. He would like to expand his client base to include the government, but he believes his small business would be ignored. Based on your knowledge from the text, you tell him a. that he's absolutely right, the government doesn't deal with small businesses. b. although the government will deal with small businesses, he will never make a profit off a government contract. c. that any government, federal, state, or local would laugh at the size of his business. d. the government rarely considers new suppliers when making purchasing decisions. e. the government buys products from all sizes of business, but there is some red tape. 103. Your firm manufactures motorcycles for the consumer market. You purchase raw materials to build the motorcycles from a variety of suppliers in the U.S. and abroad. The volume of your raw materials purchases is a function of the customer demand for your firm’s motorcycles. Which of the following best describes the type of demand your firm has for these raw materials? a. Forecasted demand b. Elastic demand c. Customer-driven demand d. Joint demand e. Derived demand 104. The Quick Cash Pawn Company is a regional business that owns several pawn stores in Tennessee. The owners of Quick Cash have recently purchased a new software system designed to better track their inventory. Now that they have had the system for a couple of months, they have decided to upgrade to a newer version. The original purchase is an example of a(an) ________, while the current purchase will be a(an) _____. a. new task; modified rebuy b. new task; continued new-task c. contractual; modified rebuy d. new task; straight rebuy e. negotiated task; modified rebuy

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Chap 08_20e 105. The third stage in the business buying decision process is to a. evaluate product specifications to solve the problem. b. evaluate products relative to specifications. c. select and order the most appropriate product. d. evaluate product and supplier performance. e. search for products and suppliers. 106. Which type of business market tends to have the most complex buying procedures? a. Reseller b. Institutional c. Retailer d. Government e. Producer 107. Which of the following statements about reseller markets is false? a. Resellers are concerned with the level of demand for the product. b. Resellers are not concerned with how much space the product takes up as long as it has a high price. c. Resellers want producers to be able to supply adequate quantities of the product. d. Resellers are concerned with the availability of technical and promotional assistance from the producer. e. Resellers are concerned with the markup percentage they can get on the product. 108. Individual influencing factors refer to a. relationships among those in the firm's buying center. b. uncontrollable environmental forces. c. the power an individual controls in the buying center. d. personal characteristics of individuals in the buying center. e. activities of suppliers. 109. Inelastic demand simply means that a. buyers will not make a new-task purchase. b. buyers will not make a modified rebuy purchase. c. a price increase or decrease will not significantly change the demand for an item. d. when price goes up, demand goes down. e. when supply is reduced, the price will increase. 110. Which of the following would be considered an institutional buyer? a. Walmart b. The Environmental Protection Agency c. Apple Inc. d. The United Way e. City of Greenville

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Chap 08_20e 111. Many suppliers and their customers invest time and resources to build and maintain mutually beneficial relationships which are often called a. partnerships. b. co-ops. c. monopolies. d. reciprocity. e. alliances. 112. Quality Tools, Inc., purchases air hammers, wrenches, and other hardware items from a variety of manufacturers and sells them to hardware stores at a price that includes a profit for Quality Tools, Inc. The company would be part of what type of business market? a. Reseller b. Producer c. Consumer d. Government e. Institutional 113. Businesses follow a defined buying decision process in order to ensure the goods and services they purchase will meet their organization’s needs. The process has multiple stages, and in one of the stages the business will evaluate each component of potential purchase. This includes evaluating the quality, design, materials and any other relevant aspect of the purchase. This evaluation takes place in which of the following stages of the business buying decision process? a. First stage – The business recognizes a problem or need exists b. Second stage – Product specifications are developed c. Third stage – Search for potential products d. Fourth stage – Product for purchase is selected e. Fifth stage – Product quality and supplier performance is evaluated 114. When Bahama Breeze Ceiling Fans buys electrical wire for use in producing its ceiling fans, Bahama Breeze is part of what type of market for electrical wire? a. Resale b. Wholesale c. Customer d. Consumer e. Producer

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Chap 08_20e 115. When marketing to business customers, marketers have to understand the key characteristics of the business customer, and alter their marketing mix accordingly. For example, a business customer views _________ as the amount of investment necessary to obtain a desired level of return or savings. Moreover, the business customer demands ______________ before buying to be sure their needs are being met with the product. a. price; good service b. product; price discounts c. place; product samples d. distribution; product guarantees e. price; detailed information 116. Scott works at an auto dealer. His company pays the internet site AutoWurld.com to act as a neutral third party that provides access to an unlimited amount of vehicle listings and sales transactions. Melvin is in charge of monitoring this site to look for deals. His firm pays $395 a month for access. AutoWurld.com is an example of a(n) a. private B2B auction site. b. private B2C e-commerce site. c. private B2B e-commerce site. d. independent B2C e-commerce site. e. independent B2B e-commerce site. 117. Marketing to businesses employs all the same concepts as marketing to consumers except a. defining target markets. b. buying methods. c. developing effective marketing mixes. d. meeting the needs of customers. e. understanding buying behavior. 118. Marketers aiming at business customers, rather than at ultimate consumers, a. do not need to select target markets. b. have an enormous amount of information available concerning potential customers. c. have more difficulty in determining where their customers are located. d. are restricted in the types of promotion they can use. e. have more difficulty in estimating customers' purchase potentials. 119. ____ analysis is a systematic evaluation of current and potential suppliers that focuses on many dimensions including price, product quality, delivery service, product dependability, and overall company reliability. a. Value b. Vendor c. Buying center d. Strategic e. Cost

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Chap 08_20e 120. AMD buys silicone, which is used in its chip-making process. AMD produces microchips for use within a wide variety of products for other firms, such as Motorola, LG, and Samsung. AMD is a buyer in a(n) ____ market. a. producer b. government c. reseller d. construction e. institutional 121. When buying materials to use in manufacturing mattresses, the purchasing agent for Casper Sleep considers a variety of factors. Which one of the following is least likely to concern this buyer? a. Does the quality of the goods meet company specifications? b. Does the supplier consistently deliver on time? c. Does the supplier also sell to my competitors? d. Does the supplier offer the services required? e. Does the price meet company budget requirements? 122. St. Agatha's Orthodox Church brews fresh coffee for its attendees as part of its hospitality ministry every Sunday. St. Agatha’s is a(n) ________ market for coffee sellers. a. producer b. consumer c. government d. reseller e. institutional 123. Chris works at a large electronics firm. He needs a new type of software and sends in a purchasing request. The request gets approved. Jared works as a purchasing agent and is in charge of selecting the suppliers and negotiating the terms of purchase. However, before he does so he consults with Shana, an engineer who works in IT and is highly familiar with the latest software. In this case, Chris is the ___________, Jared is the _______________, and Shana is the _____________. a. decider; influencer; gatekeeper b. user; buyer; influencer c. influencer; buyer; user d. user; decider; gatekeeper e. decider; gatekeeper; influencer

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Chap 08_20e 124. Simonton Windows manufactures standard sizes as well as custom-sized windows in a variety of finishes and sells the windows through distributors across the globe. Simonton Windows’ manufacturing plants utilize just-intime processes to receive delivery of raw materials such as aluminum and glass, and component parts such as weather stripping and window locks or fasteners. What category or type of business market best represents Simonton Windows? a. Producer b. Reseller c. Government d. Institutional e. Wholesaler 125. Resellers are business intermediaries that buy finished goods and resell them for a profit. Their business model dictates that they consider several factors when deciding which products to buy. Which of the following is a factor the reseller considers when making purchase decisions? a. The sales tax that must be charged on the product b. The number of substitutes for the product c. The availability of financing programs for purchasing the product d. How the product fits within the product mix of the reseller’s other products e. The perishability of the product 126. Scenario 8.2 Use the following to answer the questions. Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and 4-wheel ATVs. It also sells its products to independent repair centers, dealers, and other wholesalers in Northeast and Southern states. Precision Brake has done research on the demand for lawn tractors and found that most manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research also shows that most of the dealers who sell directly to individual consumers are in the Midwestern states, while dealers who sell to small business landscaping companies tend to be located in the Northeastern states. Company executives are considering expansion of its distribution to markets in the Midwest. Refer to Scenario 8.2. When Precision Brake's sales team calls on tractor manufacturing companies, the meetings typically include the engineers who design the tractors. In this situation, the engineers would most likely be considered to be ____, part of the buying center. a. gatekeepers b. influencers c. users d. buyers e. controllers

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Chap 08_20e 127. A business customer evaluates the characteristics and quality of the products being considered to determine whether they a. meet specifications. b. require negotiation. c. exceed specifications. d. are totally defect-free. e. produce a good sample. 128. Aderholt Distribution Company has purchased 15 forklifts over the past two years. As it plans to place its next order for another five machines, management wonders if additional features may be needed in order to handle changes in the product lines it carries. For Aderholt, these new forklifts represent a ____ purchase. a. new-task b. reciprocal rebuy c. straight rebuy d. repetitive order e. modified rebuy 129. Individuals and business organizations that buy finished goods and resell them to make a profit without changing the physical characteristics of the product are classified as ____ markets. a. consumer b. institutional c. producer d. government e. reseller 130. Business markets are typically divided into four categories. These categories are a. retailers, wholesalers, services, and nonprofit firms. b. producer, manufacturer, reseller, and government. c. producer, reseller, government, and institutional. d. manufacturer, wholesaler, retailer, and services. e. reseller, retailer, government, and institutional. 131. Amos’s Produce Stand buys produce from area farmers, marks the merchandise up to a price that includes some profit, and then sells the fruit and vegetables to the people in and around Plum Creek. Amos’s would be classified as part of a ____ market. a. consumer b. producer c. government d. reseller e. wholesaler

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Chap 08_20e 132. A marketer who starts selling to the business market, after having spent most of his career selling directly to consumers, will quickly come to realize that business customers are more demanding. Business customers place a high value on which of the following aspects of a buying relationship? a. The geographical location of the selling firm b. The long-term business strategy of the selling firm c. The size of the selling firm d. The mix of services offered by the selling firm e. The packaging of the product 133. In business markets, individuals or groups purchase products for one of three purposes. These purposes are a. resale, wholesale, and direct use. b. wholesale, direct use, and use in producing other products. c. resale, wholesale, and use in producing other products. d. resale, direct use in producing other products, and use in daily business operations. e. use in daily business operations, wholesale, and resale. 134. All of the following are important concerns of business customers except a. achieving a specific level of quality in the products offered to target markets. b. obtaining a level of quality that meets specifications. c. obtaining products that exceed specifications to ensure the best possible product performance. d. obtaining products for which the quality level is consistent. e. supporting customers with services they expect. 135. Michelin is a manufacturer and marketer of tires for new passenger cars. In recent years, the company's business has declined because of the overall decrease in consumer demand for new cars. In this case, the demand for Michelin's tire products is said to be ____ because it depends on the demand for new cars. a. nonexpansive b. stable c. derived d. expandable e. contrived 136. Because retailers have to be concerned with product selection, price, and space, they often evaluate products on the basis of a. their markup. b. sales per square foot of selling area. c. how many of the product they can fit in a certain amount of space. d. profit per dollar of selling price. e. the reliability of the supplier.

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Chap 08_20e 137. Scenario 8.2 Use the following to answer the questions. Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and 4-wheel ATVs. It also sells its products to independent repair centers, dealers, and other wholesalers in Northeast and Southern states. Precision Brake has done research on the demand for lawn tractors and found that most manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research also shows that most of the dealers who sell directly to individual consumers are in the Midwestern states, while dealers who sell to small business landscaping companies tend to be located in the Northeastern states. Company executives are considering expansion of its distribution to markets in the Midwest. Refer to Scenario 8.2. When Precision Brake sells to the individual dealers, they would be considered which of the following business types? a. Producer b. Reseller c. Government d. Institutional e. Covert 138. Which of the following organizational members plays a major role in vendor selection for straight rebuy purchases? a. Gatekeepers b. Deciders c. Influencers d. Users e. Buyers 139. Capitol Supply's sales and sales force have continued to expand. Now, the firm plans to add a fleet of company cars as part of its sales compensation package. For Capitol Supply, these vehicles would represent a ____ purchase. a. modified rebuy b. straight rebuy c. new-task d. reevaluated e. reciprocal rebuy

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Chap 08_20e 140. Scenario 8.1 Use the following to answer the questions. Samsung is entering the home appliance market with its new French Door Refrigerator. In designing the production facility, it has a need for various pieces of equipment, including the perpetual assembly belt drive, quasi-assembly pods, and finishing stations. The purchasing agent for the appliance division is inquiring about who will be needed for input on the purchasing decision. Samsung has already contacted several producers of the quasi-assembly pods, and has begun negotiations with their sales representatives. Refer to Scenario 8.1. What was the first step of the buying decision process that Samsung went through when looking for the quasi-assembly pods? a. Searching for products and suppliers b. Selecting and ordering the most appropriate product c. Recognizing the problem or need d. Establishing product specifications e. Evaluating the product relative to specifications 141. Philip Beeman of Beeman Construction is planning to buy a piece of used earth-moving equipment. He would most likely base his purchase decision on ____ of the alternative machines. a. descriptions b. inspections c. a sampling d. specifications e. reputations 142. Henry Jennings of Jennings Pest Control buys equipment from Total Tools because Total Tools hires him to spray its warehouse for insects periodically. This practice is an example of a. cost-benefit trading. b. cooperative selling. c. reciprocity. d. supplier agreements. e. modified rebuy purchase. 143. ______ is(are) an essential consideration for business customers because it influences operating costs and costs of goods sold. a. Services b. Personal selling c. Distribution d. Price e. Product specifications

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Chap 08_20e 144. What is one of the benefits of industry classification systems like NAICS? a. They are the only type of data needed for industry segmentation. b. They can be applied to the whole world no matter which system is used. c. They make it easy for business marketers to identify potential customers. d. They allow for the classification of industries without any repetition. e. They provide a consistent means of categorizing industries. 145. Product specifications are best described as a. necessary characteristics and level of quality. b. descriptions of a product. c. numbers of quality inspections required. d. comparisons to similar products. e. defective product return policies. 146. Even when reciprocal buying arrangements are legal, they can lead to a. higher prices. b. lower prices. c. improved sales. d. antitrust charges. e. less-than-optimal purchases. 147. Stan owns a small landscaping business called GreenScapes. When buying a new pickup truck for his landscaping business, Stan negotiated with Capitol Dodge, a dealer, with the agreement that GreenScapes would be the service company Capitol Dodge used for all of its landscaping needs. This is an example of a. a new task purchase. b. a straight rebuy. c. a modified rebuy. d. reciprocity. e. exclusive dealing. 148. When purchasing large amounts of light bulbs, which purchase method would an organization most likely use? a. Description b. Inspection c. New-task purchase d. Sampling e. Multiple sourcing

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Chap 08_20e 149. Cynthia is considering the purchase of a new printer for her real estate office. She is considering a printer that doesn't have as many functions but is available at a considerably lower price than her current printer. She is engaged in ____ analysis. a. vendor b. downsizing c. strategic d. value e. profit 150. Wegmans recently placed an order with the Applegate Corporation for hotdogs. The typical weekly order is for 10 cases; however, since the upcoming weekend includes a holiday, this time Wegmans is ordering 100 cases of hotdogs. Wegmans orders this product on a regular basis. What type of purchase does this week’s purchase represent? a. New-task b. Repetitive c. Reciprocal d. Straight rebuy e. Modified rebuy 151. Which of the following entities is part of the buying center? a. Retailers b. Users c. Vendors d. Distributors e. Wholesalers 152. The Alzheimer’s Association is a national nonprofit organization serving individuals who suffer from Alzheimer’s or dementia and their families as well as providing funding to support research. The Alzheimer’s Association has chapters or affiliate organizations across the country to better serve each local market area. Each Alzheimer’s Association chapter is responsible for making purchases for their office furniture, computers, printers, and other business services the organization needs, such as telephone or Internet. The Alzheimer’s Association is a(n)_______ type of business market. a. institutional b. government c. reseller d. producer e. retailer

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Chap 08_20e 153. ____ buy products from manufacturers and then resell the products to other firms in the distribution system. a. Retailers b. Producers c. Distributors d. Warehouses e. Wholesalers 154. Which of the following is NOT an example of a producer market member? a. Buyers of raw materials b. Buyers of semifinished items used to make other products c. Buyers of finished items used to make other products d. Buyers of services used for their operations of their organizations e. Buyers of finished products that intend to resell them for a profit 155. You recently raised your prices on the products you sell to your business customers. To your surprise, these customers did not change the amount of units they purchase from you. It was as if the price increase did not matter to these customers. Which of the following types of business demand most accurately describes this situation? a. Constant demand b. Inelastic demand c. Joint demand d. Elastic demand e. Derived demand 156. Most business purchases can be classified as belonging to one of three types: a. delinquent, repetitive, or delivered. b. repetitive, new-task, or modified rebuy. c. modified rebuy, new-task, or straight rebuy. d. delinquent, new-task, or reciprocal. e. rebuy, reciprocal, or delayed. 157. Duke Auto Supply sells car and truck parts, as well as tire replacement and installation services. As Duke places its order for truck tires with Firestone, it must also place an order for valve stems and balancing weights for the tires. Such business products are characterized as having ____ demand. a. derived b. inelastic c. joint d. fluctuating e. higher

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Chap 08_20e 158. What are the four major factors that influence business buying decisions? a. Environmental, organizational, interpersonal, and individual b. Environmental, organizational, psychological, and individual c. Environmental, psychological, individual, and technological d. Technological, organizational, environmental, and interpersonal e. Environmental, organizational, technological, and individual 159. When business customers purchase products to be used directly or indirectly in the production of consumer goods and services, that demand for business products is a. joint. b. economically stable. c. derived. d. inelastic. e. more fluctuating. 160. A representative product taken from a lot or batch, evaluated, and purchased refers to a. homogeneous selection. b. description. c. trust. d. negotiated inspection. e. sampling. 161. Most business buying decisions are made by a. one person. b. a team of purchasing agents. c. a firm's buying center. d. inventory control personnel. e. the sales force. 162. After deciding to order replacement parts for aging machinery, the buyer for a construction company examines catalogs and trade publications looking for these parts. The buyer is at which stage in the business buying decision process? a. Problem recognition b. Product specification c. Product-supplier search and evaluation d. Product-supplier selection e. Product-supplier post-evaluation

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Chap 08_20e 163. Which of the following statements about business buying is false? a. Business marketers prefer not to sell to customers who place small orders. b. Business marketers must often sell their products in large quantities to make profits. c. Most business purchases are made by committee. d. Business purchases are usually made on the basis of contracts. e. Orders in business markets tend to be smaller than those placed in consumer markets. 164. Institutional markets are a. intermediaries who resell goods to make a profit. b. federal and state government units. c. state or local government units. d. consumers who buy products for their own use. e. organizations that seek nonbusiness goals. 165. The Environmental Protection Agency (EPA) was established on December 2, 1970, to consolidate in one agency a variety of federal research, monitoring, standard-setting, and enforcement activities to ensure environmental protection for residents of the United States. Since its inception, EPA has been working for a cleaner, healthier environment for the American people and is responsible for providing inspection services and cleanup efforts in the case of contamination or hazards. The EPA is a(n) _____ type of business market. a. government b. reseller c. producer d. institutional e. wholesaler 166. You are manager of a clothing manufacturing firm that has operations in different countries. Your Indonesian manufacturing facility is dedicated solely to producing elementary school uniforms for the U.S. market. Most of your product output is sold to a larger school uniform company in the U.S. called School Uniforms, Inc. School Uniforms, Inc. has major contracts with school districts like the Los Angeles Unified School District. In this scenario, the Los Angeles Unified School District is part of which of the following business markets? a. Reseller market b. Government market c. Institutional market d. Distributor market e. Wholesaler market

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Chap 08_20e 167. Aaron of WP International, a major marketer of word-processing software, calls the administrative assistant of Kimberly, director of purchasing for MMK, Inc. He sets up an appointment to discuss an upcoming purchase of software. The administrative assistant plays the role of ____ in this purchase decision. a. gatekeeper b. buyer c. decider d. buying center captain e. order giver 168. What are the two ways governments make purchases? a. Cash or credit b. Contacting previous suppliers and bids c. Bids and negotiated contracts d. Lottery system and contract negotiations e. Request for new purchases and recurring orders 169. Which of the following organizational members frequently initiates the purchase process? a. Deciders b. Gatekeepers c. Buyers d. Users e. Influencers 170. Elizabeth is an account executive for a financial services firm that specializes in employee benefits services. She is meeting with the owner of a small business that has grown to the level where it needs to provide extended employee benefits. Elizabeth is happy to help the small business owner and is excited about the opportunity to gain another customer. The company owner has purchased other insurance services such as property and casualty for the business, but has never purchased a group insurance plan and anticipates that it will take a considerable amount of time in the purchase process since this represents a significant decision for the company and its employees. What type of business purchase does this represent? a. New-task b. Straight rebuy c. Modified rebuy d. Contracted purchase e. Limited modified buy 171. Individuals and business organizations that purchase products for the purpose of making a profit either by using the products to produce other products or by using them in their operations are classified as ____ markets. a. consumer b. institutional c. producer d. government e. reseller Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 172. Demand for a business product is ____ when two or more items are used in combination to produce a product. a. inelastic b. joint c. fluctuating d. derived e. partnered 173. Retailers like Staples and PetSmart are considered to be members of which business market? a. Reseller b. Customer c. Producer d. Institutional e. Government 174. The stages of the business buying decision process, in order, are a. recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance. b. recognizing the problem, searching for products and evaluating possible suppliers, selecting suppliers and products, establishing product specifications, and evaluating performance. c. recognizing the problem, selecting suppliers and products, evaluating performance, establishing product specifications, and searching for substitute products. d. establishing product specifications, recognizing the problem, searching for products, evaluating possible products and suppliers, selecting suppliers and products, and evaluating performance. e. establishing product specifications, searching for products, selecting suppliers and products, evaluating performance, recognizing the problem, and evaluating possible products and suppliers. 175. The NAICS classification is based on a. production activities. b. customer size. c. country of origin. d. marketing activities. e. number of employees.

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Chap 08_20e 176. Scenario 8.2 Use the following to answer the questions. Precision Brake Company is a supplier of brake components to the manufacturers of lawn tractors and 4-wheel ATVs. It also sells its products to independent repair centers, dealers, and other wholesalers in Northeast and Southern states. Precision Brake has done research on the demand for lawn tractors and found that most manufacturers are in the states of Kentucky, Tennessee, and Alabama. Research also shows that most of the dealers who sell directly to individual consumers are in the Midwestern states, while dealers who sell to small business landscaping companies tend to be located in the Northeastern states. Company executives are considering expansion of its distribution to markets in the Midwest. Refer to Scenario 8.2. Given the type of business market in which Precision Brake is currently operating, which group would it be least likely to sell to? a. Producers b. Governments c. Retailers d. Consumers e. Institutions 177. Discuss how interpersonal factors influence the business buying decision process.

178. Compare and contrast the consumer buying decision process and the business buying decision process.

179. In what ways can an industrial classification system be used by business marketers to analyze target markets?

180. What are the major advantages of the North American Industry Classification System (NAICS)?

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Chap 08_20e 181. In what ways do environmental factors affect the business buying decision process?

182. Compare and contrast the three major types of purchases made by business customers.

183. Demand for business products can be characterized in four ways; describe these four characteristics and compare and contrast their attributes.

184. How do individual factors affect the business buying decision process?

185. Discuss the differences between business and consumer transactions.

186. What factors affect the purchase method that business customers choose?

187. Explain how purchase decisions for business products may be influenced by persons in a buying center.

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Chap 08_20e 188. Describe the various stages of the business buying decision process.

189. What are some of the major concerns of business customers in making purchase decisions?

190. How has the internet facilitated the organizational buying process?

191. What are the four major types of business markets, and what are the characteristics of each?

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Chap 08_20e Answer Key 1. False 2. False 3. False 4. True 5. False 6. True 7. False 8. True 9. True 10. False 11. False 12. False 13. False 14. True 15. True 16. True 17. True 18. False 19. True 20. True 21. False 22. False 23. True 24. False 25. False 26. False

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Chap 08_20e 27. True 28. True 29. True 30. True 31. False 32. False 33. False 34. True 35. True 36. True 37. False 38. True 39. False 40. True 41. True 42. False 43. False 44. False 45. False 46. False 47. True 48. True 49. True 50. True 51. False 52. False 53. True 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 55. True 56. False 57. False 58. c 59. b 60. e 61. c 62. a 63. b 64. e 65. c 66. b 67. c 68. b 69. b 70. b 71. d 72. b 73. a 74. d 75. d 76. b 77. e 78. a 79. e 80. c 81. c 82. c Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 83. e 84. c 85. b 86. a 87. e 88. a 89. c 90. c 91. d 92. c 93. e 94. b 95. c 96. a 97. c 98. a 99. c 100. d 101. a 102. e 103. e 104. a 105. e 106. d 107. b 108. d 109. c 110. d Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 111. a 112. a 113. c 114. e 115. e 116. e 117. b 118. b 119. b 120. a 121. c 122. e 123. b 124. a 125. d 126. b 127. a 128. e 129. e 130. c 131. d 132. d 133. d 134. c 135. c 136. b 137. b

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Chap 08_20e 138. e 139. c 140. c 141. b 142. c 143. d 144. e 145. a 146. e 147. d 148. d 149. d 150. e 151. b 152. a 153. e 154. e 155. b 156. c 157. c 158. a 159. c 160. e 161. c 162. c 163. e 164. e 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 166. c 167. a 168. c 169. d 170. a 171. c 172. b 173. a 174. a 175. a 176. d 177. Interpersonal factors are the relationships among people in the buying center. Trust is crucial in collaborative partnerships. This is especially true when customized products are involved—the buyer may not see the product until it is finished and must trust that the producer is creating it to specifications. Trust and clear communication ensure that all parties are satisfied with the outcome, however interpersonal dynamics and varying communication abilities within the buying center may complicate processes.

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Chap 08_20e 178. The consumer buying decision process includes five stages: problem recognition, information search, evaluation of alternatives, purchase, and postpurchase evaluation. First, this process can be affected by numerous influences, which are categorized as situational, psychological, and social. Second, the actual act of purchasing is usually not the first stage of the process. Third, not all decision processes lead to a purchase—individuals can end the process at any stage. Finally, not all consumer decisions include all five stages. Like consumers, businesses follow a buying decision process. In the first stage, one or more individuals recognize that a problem or need exists. Problem recognition may arise under a variety of circumstances—for instance, when machines malfunction or a firm modifies an existing product or introduces a new one. It may be individuals in the buying center or other individuals in the firm who initially recognize that a problem exists. The second stage of the process, development of product specifications, requires that buying center participants assess the problem or need and determine what is necessary to resolve or satisfy it. During this stage, users and influencers, such as engineers, provide information and advice for developing product specifications. By assessing and describing needs, the organization should be able to establish product specifications. Searching for and evaluating potential products and suppliers is the third stage in the decision process. Search activities may involve looking in company files and trade directories, contacting suppliers for information, soliciting proposals from known vendors, and examining various online and print publications. The results of deliberations and assessments in the third stage are used during the fourth stage of the process to select the product to be purchased and the supplier. In some cases, the buyer selects and uses several suppliers, a process known as multiple sourcing. Firms with federal government contracts are generally required to have several sources for an item to ensure a steady supply. At times, only one supplier is selected, a situation called sole sourcing. During the fifth stage, the product’s performance is evaluated by comparing it with specifications. Sometimes the product meets the specifications, but its performance fails to adequately solve the problem or satisfy the need recognized in the first stage. In that case, product specifications must be adjusted. The supplier’s performance is also evaluated during this stage. If supplier performance is inadequate, the business purchaser seeks corrective action from the supplier or searches for a new one. Results of the evaluation become useful feedback in future business purchase decisions. This business buying decision process is used in its entirety primarily for new-task purchases. Several stages, but not necessarily all, are used for modified rebuy and straight rebuy situations. 179. Business marketers have a considerable amount of information available for use in planning marketing strategies. Much of this information is based on an industrial classification system, which categorizes businesses into major industry groups, industry subgroups, and detailed industry categories. The North American Industry Classification System (NAICS) is used by the United States, Canada, and Mexico. It provides marketers with information needed to identify business customer groups. Marketers can best utilize this data in conjunction with other information. After identifying target industries, a marketer can obtain the names and locations of potential customers by using government and commercial data sources. 180. The NAICS classification is based on production activities. NAICS is similar to the International Standard Industrial Classification (ISIC) system used in Europe and many other parts of the world. NAICS divides industrial activity into 20 sectors. NAICS contains 1,170 industry classifications. NAICS is comprehensive and up to date, and it provides considerably more information about service industries and high-tech products. 181. Environmental factors include competitive and economic factors, political forces, legal and regulatory forces, technological changes, and sociocultural issues. These factors can generate considerable uncertainty for an organization, including in buying decisions. Changes in one or more environmental forces, such as new government regulations or increased competition, can create opportunities and threats that affect purchasing decisions.

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Chap 08_20e 182. Most business purchases are one of three types: new-task, straight rebuy, or modified rebuy. Each type is subject to different influences and thus requires business marketers to modify their selling approaches accordingly. For a newtask purchase, an organization makes an initial purchase of an item to be used to perform a new job or solve a new problem. A new-task purchase may require development of product and vendor specifications and procedures for future product purchases. A straight rebuy purchase occurs when buyers purchase the same products routinely under approximately the same terms of sale. Buyers require little information for routine purchase decisions and tend to use familiar suppliers that have provided satisfactory service and products in the past. For a modified rebuy purchase, a new-task purchase is altered after two or three orders, or requirements associated with a straight rebuy purchase are modified. A business buyer might seek faster delivery, lower prices, or a different quality level of product specifications. 183. Demand for business products (also called industrial demand) can be characterized as (1) derived, (2) inelastic, (3) joint, or (4) fluctuating. Because business customers, especially producers, buy products for direct or indirect use in the production of goods and services to satisfy consumers’ needs, the demand for business products derives from the demand for consumer products—it is therefore called derived demand. In the long run, no demand for business products is totally unrelated to the demand for consumer products. The derived nature of demand is usually multilevel in that business marketers at different levels are affected by a change in consumer demand for a product. With inelastic demand, a price increase or decrease does not significantly alter demand for a business product. A product has inelastic demand when the buyer is not sensitive to price or when there are no ready substitutes. Because many business products are more specialized than consumer products, buyers will continue to make purchases even as the price goes up. Certain business products, especially raw materials and components, are subject to joint demand. Joint demand occurs when two or more items are used in combination to produce a product. Understanding the effects of joint demand is particularly important for a marketer that sells multiple jointly demanded items. Such a marketer realizes that when a customer begins purchasing one of the jointly demanded items, a good opportunity exists to sell related products. Because the demand for business products is derived from consumer demand, it is subject to dramatic fluctuations. In general, when consumer products are in high demand, producers buy large quantities of raw materials and components to ensure that they meet long-run production requirements. These producers may expand production capacity to meet demands as well, which entails acquiring new equipment and machinery, more workers, and more raw materials and component parts. Conversely, a decline in demand for certain consumer goods reduces demand for business products used to produce those goods. 184. Individual factors are the personal characteristics of participants in the buying center, such as age, education level, personality, and tenure and position in the organization. Let us consider a 55-year-old manager who has been in the organization for 25 years. This manager is likely to have a greater influence and power over buying center decisions than a 30-year-old employed at the firm for only two years. The influence of various factors, such as age and tenure, on the buying decision process depends on the buying situation, the type of product, and the type of purchase (newtask, modified rebuy, or straight rebuy). Employees' negotiating styles will vary as well. To be effective, marketers must know customers well enough to be aware of these individual factors and their potential effects on purchase decisions. 185. Transactions that involve business customers differ from consumer transactions in several ways. Business transactions tend to be larger and negotiations occur less frequently, though they are often lengthy. They may involve more than one person or department in the purchasing organization. They may also involve reciprocity, an arrangement in which two organizations agree to buy from each other. Business customers are usually better informed than ultimate consumers and are more likely to seek information about a product’s features and technical specifications. Copyright Cengage Learning. Powered by Cognero.

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Chap 08_20e 186. Although no two business buyers do their jobs the same way, most use one or more of the following purchase methods: description, inspection, sampling, and negotiation. The most straightforward is description. When products are standardized and graded according to certain characteristics such as size, shape, weight, and color, a business buyer may be able to purchase simply by describing or specifying quantity, grade, and other attributes. Certain products, such as industrial equipment, used vehicles, and buildings, have unique characteristics and may vary with regard to condition. Depending on how they were used and for how long, two products may be in very different conditions, even if they look identical on paper. Consequently, business buyers of such products should base purchase decisions on inspection. Sampling entails evaluating a portion of the product on the assumption that its characteristics represent the entire lot. This method is appropriate when the product is homogeneous—for instance, grain—and examining the entire lot is not physically or economically feasible. Some purchases by businesses are based on negotiated contracts. In certain instances, buyers describe exactly what they need and ask sellers to submit bids. They then negotiate with the suppliers that submit the most attractive bids. This approach is generally used for very large or expensive purchases, such as commercial vehicles. This is frequently how government departments conduct business. A buyer and seller might negotiate a contract that specifies a base price and provides for the payment of additional costs and fees. These contracts are most commonly used for one-time projects such as buildings, capital equipment, and special projects. 187. Relatively few purchase decisions are made by a single person. Often they are made through a buying center. The buying center is the group of people within the organization who makes business purchase decisions. They include users, influencers, buyers, deciders, and gatekeepers. One person may perform several roles within the buying center, and participants share goals and risks associated with their decisions. Users are the organizational members who will actually use the product. They frequently initiate the purchase process and/or generate purchase specifications. Influencers are often technical personnel, such as engineers, who help develop product specifications and evaluate alternatives. Buyers select suppliers and negotiate terms of purchase. They may also be involved in developing specifications. Finally, gatekeepers, such as secretaries and technical personnel, control the flow of information to and among the different roles in the buying center. 188. In the first stage of the business buying decision process, one or more individuals recognize that a problem or need exists. The second stage of the process, development of product specifications, requires that buying center participants assess the problem or need and determine what is necessary to resolve or satisfy it. During this stage, users and influencers, such as engineers, provide information and advice for developing product specifications. Searching for and evaluating potential products and suppliers is the third stage in the decision process. The results of deliberations and assessments in the third stage are used during the fourth stage of the process to select the product to be purchased and the supplier. In some cases, the buyer selects and uses several suppliers, a process known as multiple sourcing. During the fifth stage, the product’s performance is evaluated by comparing it with specifications. Sometimes the product meets the specifications, but its performance fails to adequately solve the problem or satisfy the need recognized in the first stage.

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Chap 08_20e 189. When making purchasing decisions, business customers take into account a variety of factors. Among their chief considerations are price, product quality, service, and supplier relationships. Price is an essential consideration for business customers because it influences operating costs and costs of goods sold, which affects selling price, profit margin, and ultimately the ability to compete. Most business customers try to maintain a specific level of quality in the products they buy. To achieve this goal, most firms establish standards (usually stated as a percentage of defects allowed) for these products and buy them on the basis of a set of expressed characteristics, commonly called specifications. Typical services business customers desire from suppliers are market information, inventory maintenance, on-time delivery, and repair services. Business buyers may need technical product information, data regarding demand, information about general economic conditions, or supply and delivery information. Maintaining adequate inventory is critical to quality, customer service, customer satisfaction, and managing inventory costs and distribution efficiency. Furthermore, on-time delivery is crucial to ensuring that products are available as needed. Reliable on-time delivery saves business customers money because it enables them to carry only the inventory needed at any given time. Customer expectations about quality of service have increased and broadened over time. Using traditional service quality standards based only on traditional manufacturing and accounting systems is not sufficient. Finally, business customers are concerned about the costs of developing and maintaining relationships with their suppliers. By building trust with a particular supplier, buyers can reduce their search efforts and uncertainty about prices. 190. Whereas in the past, an organization seeking a type of product might contact product suppliers, speak with someone on the sales force, and request a catalog or brochure, business customers today first turn to the internet to search for information and find sources. The internet has become a major channel in organizational buying. The internet allows buyers to research potential solutions through its vast resources, and interactions with a sales representative now may occur much later in the process than in the past. Increasingly, business are turning to B2B e-commerce sites, which serve as online marketplaces where buyers and sellers around the world can exchange information, goods, services, ideas, or payments. 191. The four categories of business markets are producer, reseller, government, and institutional markets. Individuals and business organizations that purchase products for the purpose of making a profit by using them to produce other products or using them in their operations are classified as producer markets. Reseller markets consist of intermediaries, such as wholesalers and retailers, which buy finished goods and resell them for a profit. Aside from making minor alterations, resellers do not change the physical characteristics of the products they handle. Federal, state, county, and local governments make up government markets. These markets spend billions of dollars annually for a wide range of goods and services, ranging from office supplies and health-care services to vehicles, heavy equipment, and weapons, to support their internal operations and provide citizens with such products as highways, education, energy, and national defense. Organizations with charitable, educational, community, or other nonbusiness goals constitute institutional markets. Members of institutional markets include churches, some hospitals, fraternities and sororities, charitable organizations, and private colleges.

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Chap 09_20e Indicate whether the statement is true or false. 1. Cultural relativism is the unconscious reference to one's own cultural values, experiences, and knowledge when traveling in other countries. a. True b. False 2. NAFTA simplifies country-of-origin rules, hindering Japan's use of Mexico as a staging ground for further penetration into U.S. markets. a. True b. False 3. Under a licensing arrangement, the licensee pays commissions or royalties on sales or supplies used in manufacturing. a. True b. False 4. A positive balance of trade is considered good because it means that U.S. dollars are supporting foreign economies at the expense of U.S. companies and workers. a. True b. False 5. A multinational enterprise is a firm that has operations or subsidiaries located in many countries. a. True b. False 6. An accounting firm contracts with a local janitorial services company for janitorial services twice a week. The accounting firm is outsourcing for its janitorial service needs. a. True b. False 7. Media allocation, retail outlets, and price are among the easiest marketing mix variables to standardize. a. True b. False 8. U.S. marketers may engage in bribery to compete with foreign firms. a. True b. False 9. Firms that use an international division structure are often organized domestically on the basis of functions or product divisions, whereas the international division is organized on the basis of geography. a. True b. False

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Chap 09_20e 10. The study of the cultural environment is unnecessary in the foreign market because foreign consumers will accept anything that American marketers have to sell. a. True b. False 11. The joint venture approach has little appeal to industries involved in extraction of natural resources. a. True b. False 12. Globalization of marketing involves developing marketing strategies as though the entire world (or major regions of it) were a single entity. a. True b. False 13. Customers who travel the globe expect to be able to buy the same product in most of the world's more than 200 countries. a. True b. False 14. Opportunities for international marketers are limited to industrial nations with the highest incomes. a. True b. False 15. It is impossible for a subsidiary to develop a local identity because it seldom employs personnel from the country within which it operates. a. True b. False 16. From a cultural perspective, countries that are members of the European Union tend to act as a single entity. a. True b. False 17. Importing is the sale of products to foreign markets. a. True b. False 18. Despite the benefits of digital technology, it may actually be increasing the divide between skilled wealthy workers and the rest of the labor force. a. True b. False 19. Firms with internationally integrated structures are the least likely to engage in direct ownership activities internationally. a. True b. False

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Chap 09_20e 20. GATT was based on negotiations between member countries to reduce worldwide tariffs and increase international trade. a. True b. False 21. In determining the size of the market for consumer products, the international marketer will probably be very interested in per capita GDP figures. a. True b. False 22. The World Trade Organization was an important outcome of the unification of Europe. a. True b. False 23. ASEAN faces obstacles in becoming a unified trade bloc because of conflicts among members. a. True b. False 24. Franchising is an arrangement whereby a franchisee grants a franchisor the right to market its product, using its name, logo, methods of operation, advertising, products, and other elements of the franchising company's business, in return for a financial commitment and an agreement to conduct business in accordance with the franchisee's standard of operations. a. True b. False 25. A trading company provides a link between buyers and sellers in different countries. a. True b. False 26. The geographic area structure is well suited to firms with a high degree of diversification. a. True b. False 27. Today many firms are more interested in building marketing strategies around similarities that exist among countries than customizing around their differences. a. True b. False 28. The job of the export agent is to bring together buyers and sellers from different countries. a. True b. False 29. When products are introduced from one nation into another, acceptance is more likely if the two cultures are different. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 30. A quota is the suspension, by a government, of trade in a particular product. a. True b. False 31. NAFTA eventually eliminates all tariffs on goods produced and traded between the United States, Mexico, and Brazil. a. True b. False 32. Customs and taboos are culture-bound and should be taken into consideration when products are marketed in a foreign environment. a. True b. False 33. Domestic marketing involves marketing strategies aimed at markets within the home country. a. True b. False 34. Limited exporting may not occur if a firm makes little or no effort to obtain foreign sales. a. True b. False 35. During the early stages of international development, most firms make few, if any, adjustments to their organizational structure to accommodate international sales. a. True b. False 36. International marketing is defined as marketing activities performed across national boundaries. a. True b. False 37. Cultural differences do not affect marketing negotiations and decision-making behavior. a. True b. False 38. Brand name, product characteristics, packaging, and media allocation are among the easiest marketing mix variables to standardize around the world. a. True b. False 39. Two-thirds of the world's total purchasing power is outside the United States. a. True b. False

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Chap 09_20e 40. An embargo occurs when a government suspends trade with a particular country. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 41. LG Electronics sells several different product lines around the world through home appliance and electronics stores. LG appliances and electronics have been historically made in Korea, where the company is headquartered. Recently, LG has been investigating the possibility of buying land and building a production plant in Texas, in the United States. LG is now operating as a(an) ______; however, if the plant is built in Texas, it will be operating as a(an) ______. a. exporter; strategic alliance b. limited exporter; national marketer c. limited exporter; international proprietorship d. exporter; multinational enterprise e. exporter; global franchise 42. When Amway entered China, it opened up retail locations for the first time. Amway is a direct selling firm. This means that it sells almost exclusively through independent consultants. However, in China restrictions on direct selling required significant modifications in how consumers obtain these products. On the other hand, Amway has been able to sell many of its signature products to the Chinese market with little to no modification. In China, Amway was forced to ______________ the distribution variable and ___________ its product variable. a. globalize; globalize b. customize; globalize c. localize; globalize d. globalize; customize e. internationalize; customize 43. The Foreign Corrupt Practices Act of 1977 makes it illegal for U.S. firms to a. attempt to make large payments or bribes to influence policy decisions of foreign governments. b. offer foreign businesses any type of incentive for purchasing their company's products and services. c. change their ethical standards when dealing with foreign firms. d. give even small tips or gifts in countries where such gifts are customary business practices. e. introduce any type of corruption into foreign businesses that have higher ethical standards than those of the U.S. firm.

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Chap 09_20e 44. Scenario 9.2 Use the following to answer the questions. KFC opened its first franchised restaurant outside of North America in England in 1964. Now more than a billion KFC chicken dinners are sold annually in more than 125 countries and territories around the world. KFC has established its own processing plants in these countries to ensure the quality of its chickens and other food items. In the U.S., the menu at KFC is usually the same in all restaurants, with only a very few additional items available in different regions. However, when KFC first franchised into Asian countries, it added many unusual local delicacies to the menu--items such as fried octopus and squid. Additionally, the franchised stores in Asian countries display cooked food in "plates" near windows at the front of the store. This is a tradition for many restaurants in these countries--to offer the customer passing by a preliminary view of their product. Refer to Scenario 9.2. KFC's establishment of international production/processing facilities is an example of a. direct ownership. b. franchising. c. strategic alliance. d. outsourcing. e. a trading company. 45. Old Navy is currently expanding its stores into Canada and Mexico. This expansion is being facilitated by the a. European Union. b. North American Free Trade Agreement. c. Pacific Rim Unification Act. d. International Retail Alliance Association. e. Latin American Free Trade Association. 46. General Motors has entered into an alliance with Louis Vuitton, a maker of clothing and one of the most successful fashion houses in the world. Louis Vuitton is headquartered in France. GM will use Louis Vuitton designs and color traditions in its production of special edition models of the company’s Cadillac SUVs and sedans. The Louis Vuitton elements will appear in the interior and body paint color. This alliance would most likely be classified as a. a strategic alliance. b. a joint venture. c. a global direct ownership. d. a multinational enterprise. e. contract manufacturing.

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Chap 09_20e 47. Honda is a multinational company. In most countries in which it operates, Honda opens facilities that give it total control over manufacturing and other processes. However, in China Honda must partner with domestic companies due to legal and regulatory constraints. In these cases, Honda owns part of the company, while the domestic firm owns the other part. In most countries, Honda engages in ____________, but in China it engages in _______________. a. direct ownership; strategic alliances b. strategic alliances; joint ventures c. exporting; joint ventures d. direct ownership; joint ventures e. exporting; strategic alliances 48. The General Agreement on Tariffs and Trade was initially implemented to do which of the following? a. Promote free trade among members by eliminating trade barriers and educating individuals, companies, and governments about trade rules across the world b. Provide loans to countries to build up their infrastructure and increase economic opportunities c. Merge the United States, Canada, and Mexico into a single market d. Reduce worldwide tariffs and increase international trade e. Prevent the dumping of products into developing countries 49. Traditionally, most firms entered international markets a. globally. b. incrementally. c. accidentally. d. domestically. e. quickly. 50. The Alphabet Corporation, best known for its Google search engine, is a prime example of a multinational enterprise. With this in mind, which of the following would most accurately characterize Alphabet's operations? a. It follows a strategy of market globalization. b. It has operations or subsidiaries in many different countries. c. It places most of its emphasis on profits generated in foreign countries. d. It would not expect its foreign operations to share the same goals as the parent firm. e. It does not concern itself with differences in markets around the world.

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Chap 09_20e 51. The United States has one of the highest gross domestic products (GDP) in the world at $19 trillion. In comparison, the small country of Luxembourg has a GDP of $60 billion. Despite its lower GDP, Luxembourg has one of the highest GDP per capita at over $111,000. In contrast, U.S. GDP per capita is $59,500. This likely means which of the following? a. Individuals in the United States are more likely to earn higher incomes than individual consumers in Luxembourg. b. The standard of living in the United States far surpasses the standard of living in Luxembourg. c. Individual consumers in Luxembourg have higher outputs in terms of goods and services than individuals in the United States. d. Luxembourg has a higher market value in total output in terms of good and services than the United States. e. Individual consumers in the United States have higher outputs in terms of goods and services than individuals in Luxembourg. 52. Wrangler markets its denim jeans in many countries and develops its marketing strategy as if the world were a single market. This approach to selling a standardized product in all countries represents which type of international marketing? a. Exporting b. Accidental exporting c. Limited exporting d. Licensing e. Globalization of markets 53. Lack of coordination between domestic and international operations is commonly the most significant flaw in the a. geographic area structure. b. global matrix structure. c. international division structure. d. internationally integrated structure. e. export department structure. 54. What is the primary distinction between a joint venture and a strategic alliance in international marketing? a. Strategic alliances are only formed between companies from well-developed countries whereas joint ventures are between companies from economically-diverse countries. b. A joint venture involves only two companies whereas a strategic alliance is formed between three or more companies. c. A joint venture is defined in scope, while a strategic alliance is typically represented by an agreement to work together. d. A joint venture is formed between companies with dissimilar product offerings while a strategic alliance is formed between companies with similar product offerings. e. A joint venture is simply a financial investment in a foreign firm while a strategic alliance involves more than just financial support.

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Chap 09_20e 55. A large farming cooperative that focuses on the production of fruits and vegetables uses a business that sells the farmers' products in foreign countries and also provides consulting, insurance, legal assistance, and warehousing to the cooperative. This business would most likely be called a(n) a. trading company. b. export specialist. c. contract wholesaler. d. licensor. e. strategic partner. 56. In considering the viability of potential international markets for Maine Root beverages, Maine Root is advised to take into account _______, which provides insight into market potential. a. per capita gross domestic product b. gross domestic product c. the quantity of exports d. the quantity of imports e. total consumer income 57. ____________________ involves developing and performing marketing activities across national boundaries. a. Regional marketing b. Globalized marketing c. World marketing d. Customized marketing e. International marketing 58. If Kyrgyzstan levied a duty on all goods purchased from the United States and other countries outside its borders that were brought into Kyrgyzstan, its businesses and citizens would be paying a(n) a. embargo. b. import tariff. c. travelers' tax. d. export tax. e. foreign duty.

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Chap 09_20e 59. Scenario 9.1 Use the following to answer the questions. Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America." Refer to Scenario 9.1. If Harley-Davidson were to suddenly find its inventory building up in Japan, it might reduce inventory by selling the bikes at below cost prices. This practice is known as a. price skimming. b. market penetration. c. dumping. d. differential pricing. e. inventory compensation. 60. Firms that have operations or subsidiaries located in many countries are referred to as a. multinational enterprises. b. strategic alliances. c. joint ventures. d. international marketers. e. export alliances. 61. Scenario 9.2 Use the following to answer the questions. KFC opened its first franchised restaurant outside of North America in England in 1964. Now more than a billion KFC chicken dinners are sold annually in 125 countries and territories around the world. KFC has established its own processing plants in these countries to ensure the quality of its chickens and other food items. In the U.S., the menu at KFC is usually the same in all restaurants, with only a very few additional items available in different regions. However, when KFC first franchised into Asian countries, it added many unusual local delicacies to the menu—items such as fried octopus and squid. Additionally, the franchised stores in Asian countries display cooked food in "plates" near windows at the front of the store. This is a tradition for many restaurants in these countries—to offer the customer passing by a preliminary view of their product. Refer to Scenario 9.2. Which of the following alliances will KFC most likely utilize to guide its business transactions in Japan and China? a. WTO b. MERCOSUR c. FTAA d. NAFTA e. APEC Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 62. The agreement between the United States, Canada, and Mexico that merges these three countries into one marketplace is called a. EU. b. MERCOSUR. c. APEC. d. NAFTA. e. GATT. 63. The unification of Europe through the European Union (EU) a. produced the largest single market in the world. b. calls for greater customization of products and attention to regulations and restrictions of European countries. c. means that members of the EU have become more heterogeneous in their needs and wants. d. required the countries to be segmented into many different markets. e. permits virtually free trade among the member nations of the EU. 64. The extent of Jaimie's participation in global business is selling the batteries it manufactures to companies in Spain. In this case, Jaimie is a(n) a. trading company. b. importer. c. exporter. d. franchisor. e. contract manufacturer. 65. Mercedes Benz announced it was ending a partnership with Tesla. A few years earlier, Mercedes Benz had partnered with Tesla and agreed to use its vehicle batteries on some of its vehicles. The hope was that the firms could use their combined knowledge in electric vehicle technology to develop better products in this area. Eventually, Mercedes Benz began to focus more on hydrogen cell technology, and the partnership dissolved. This partnership between the two firms was most likely a(n) a. franchise agreement. b. strategic alliance. c. export department. d. joint venture. e. trading company. 66. The feasibility and degree of globalization is determined by the a. degree of commitment by local managers. b. degree of similarity among the various environmental and market conditions. c. degree of adoption of Western culture. d. laws of the nation. e. culture of the nation.

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Chap 09_20e 67. A trading company acts like a ______, taking on much of the responsibility of finding markets while facilitating all marketing aspects of a transaction. a. retailer b. wholesaler c. franchisor d. offshorer e. direct marketer 68. The gross domestic product is a. a measure of the profit made by all firms in a nation. b. the average annual earnings per person in a nation. c. a measure of the types of products produced by a nation. d. an overall measure of a nation's economic standing. e. a ratio of domestic products to products produced in foreign countries. 69. Scenario 9.2 Use the following to answer the questions. KFC opened its first franchised restaurant outside of North America in England in 1964. Now more than a billion KFC chicken dinners are sold annually in 125 countries and territories around the world. KFC has established its own processing plants in these countries to ensure the quality of its chickens and other food items. In the U.S., the menu at KFC is usually the same in all restaurants, with only a very few additional items available in different regions. However, when KFC first franchised into Asian countries, it added many unusual local delicacies to the menu—items such as fried octopus and squid. Additionally, the franchised stores in Asian countries display cooked food in "plates" near windows at the front of the store. This is a tradition for many restaurants in these countries—to offer the customer passing by a preliminary view of their product. Refer to Scenario 9.2. Suppose that KFC's parent company experienced difficulty in opening its restaurants in China unless KFC was willing to pay the government a "bribe.” If KFC were to resort to paying this bribe in China saying that "it's different doing business there," this would be an example of a. a licensing arrangement. b. the self-reference criterion. c. cultural relativism. d. balance of trade issues. e. exchange controls.

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Chap 09_20e 70. H&M has opened stores in Beijing and Shanghai and hopes to capitalize on China’s growing consumer economy because the potential of China’s consumer market is so vast that it is almost impossible to measure. H&M and other global retailing giants operating in China are beneficiaries of the _____, which was established in 1989 to promote open trade and economic and technical cooperation among member nations. In addition, they are allowed to participate in a wide range of organizational activities and have become increasingly competitive regarding global business. a. EU b. APEC c. NAFTA d. ASEAN e. MERCOSUR 71. Thailand wants to increase its trade and economic integration with Cambodia. Which trading alliance will be the most useful in achieving this goal? a. APEC b. WTO c. ASEAN d. GATT e. MERCOSUR 72. Which of the following is used to help maintain a more favorable balance of trade by a country? a. Limiting imports b. Limiting exports c. Establishing exchange controls d. Increasing gross domestic product e. Changing political systems 73. In Singapore, the price of imported Scotch is $30 per glass as opposed to Scotch from Singapore, which is $3. Which of the following do you think accounts for the difference in price? a. Exchange control b. Balance of trade c. Import tariff d. Embargo e. Export tariff 74. The trade alliance that includes Brazil, Argentina, Chile, and other countries is known as a. OPEC. b. APEC. c. MERCOSUR. d. NAFTA. e. the Common Market.

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Chap 09_20e 75. When a glove manufacturer in Korea is allowed to sell only a certain number of plastic gloves to Japan, that firm is facing a(n) a. tariff. b. embargo. c. restrictive product law. d. quota. e. balance of trade restriction. 76. ____ can force businesspeople to buy and sell foreign products through a central agency, such as a central bank. a. Embargoes b. Export tariffs c. Quotas d. Import tariffs e. Exchange controls 77. Sometimes business partnerships are formed between traditional rivals competing for market share in the same product class. These partnerships are known as a. trading companies. b. contract manufacturers. c. joint ventures. d. strategic alliances. e. licenses. 78. A major disadvantage of this type of international organizational structure is that employees tend to belong to two divisions and report to two managers in different hierarchies of the firm. This structure is known as a(n) _____________. a. global matrix b. international division c. export department d. product division e. geographic area 79. Many marketers claim that ____ will become the world's largest market. a. Japan b. the United States c. China d. Thailand e. India

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Chap 09_20e 80. Which of the following lists the levels of involvement in global marketing from the lowest to the highest? a. Regional marketing, multinational marketing, limited exporting, domestic marketing, globalized marketing b. Limited exporting, domestic marketing, globalized marketing, multinational marketing, regional marketing c. Globalized marketing, multinational marketing, regional marketing, limited exporting, domestic marketing d. Domestic marketing, globalized marketing, regional marketing, multinational marketing, limited exporting e. Domestic marketing, limited exporting, multinational marketing, regional marketing, globalized marketing 81. The forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful ____ a critical part of a successful international marketing strategy. a. political analysis b. regulatory analysis c. social audit d. environmental analysis e. marketing analysis 82. When the makers of Rock Star, an energy drink, decided to go international with their marketing effort, they adopted a global approach. With which of the following factors did Rock Star most likely experience difficulty as the firm applied a global strategy for marketing? a. Branding b. Product characteristics c. Packaging d. Labeling e. Advertising 83. _____________ are companies that were started with the knowledge and resources to compete in a global marketplace. They are usually small technology companies that quickly establish themselves in international markets. They reach a point where as much as ________ % of their sales come from locations outside the United States. a. Multinationals; 80 b. International enterprises; 60 c. Global techs; 50 d. Global tigers; 75 e. Born globals; 70

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Chap 09_20e 84. General Motors Company recently announced plans to build a new production facility in Mexico and will be able to take advantage of reduced production costs related to wage rates in the local area. GM will sell the vehicles in Mexico and will also export the Chevrolet Cruze model the plant produces around the world. The finished products costs will be based on the Mexican peso, which fluctuates but is generally considered to be weaker than the U.S. dollar or euro. This will provide General Motors with a price advantage in the export market. This is an example of the _______ force that affects international marketing activities. a. sociocultural b. competitive c. economic d. political, legal, and regulatory e. technological 85. XYZ Logistics was engaging in limited transportation of agricultural products overseas. However, it recently made the decision that it wanted to increase the exporting of products to Canada, Mexico, Argentina, Brazil, and other countries. To do this it created a new subunit of its marketing division that would specifically focus on these activities. XYZ Logistics has adopted a(n) __________ structure. a. export department b. trading company c. international division d. internationally integrated division e. geographic 86. If a certain country considered handshakes in business transactions to be taboo and preferred to use nodding, this would be an example of differences in ____ forces. a. sociocultural b. political c. sales d. ethical e. regulatory 87. Dogwood Industries has operations in more than 30 foreign countries. The headquarters in Atlanta controls the entire organization while offering subsidiaries the freedom necessary to achieve success in local markets. Dogwood Industries is an example of a(n) a. strategic alliance. b. joint venture. c. export-driven corporation. d. multinational enterprise. e. trading company.

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Chap 09_20e 88. The practice of contracting with an organization to perform some or all business functions in a country other than the country in which the product will be sold is known as a. licensing. b. contract manufacturing. c. outsourcing. d. offshore outsourcing. e. offshoring. 89. Which of the following is often used to raise revenue for a country and/or to protect domestic products? a. Quota b. Warning label c. Embargo d. Import tariff e. Exchange control 90. Which of the following is moving a business process that was previously carried out at the local factory to a foreign country, regardless of whether the production accomplished in the foreign country is performed by the local company or a third party? a. Outsourcing b. Licensing c. Franchising d. Contract manufacturing e. Offshoring 91. When a firm's products sell in foreign countries with little or no effort to obtain foreign sales, the firm is engaging in a. international marketing. b. global marketing. c. limited exporting. d. product licensing. e. unplanned exporting. 92. Government restrictions on the amount of a particular country's currency that can be bought or sold are known as a. embargoes. b. quotas. c. exchange controls. d. import controls. e. balance of trade controls.

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Chap 09_20e 93. Because firms have different resources and core competencies, their international marketing strategies will also be different. Nevertheless, any firm seeking to be successful in international markets must establish the right organizational structure for its core competencies and resources. Which of the following is a valid international organizational structure? a. Geographic area structure b. Non-domestic structure c. Domicile structure d. Sales department structure e. Overseas operations structure 94. When products are introduced into one nation from another, acceptance is far more likely a. if prices are set very low. b. when bribes are paid to local officials to aid distribution. c. if there are similarities between the two cultures. d. if packaging is adjusted to match local preferences. e. when retailers are given incentives to push the products. 95. Bill Henderson is an account representative from the United States for an automotive parts supplier and is meeting with a client team in Japan. This is Bill’s first trip to Japan, and unfortunately, he wasn’t able to review any information about “doing business in Japan” before he left the States. His first meeting with representatives from the prospective client’s firm is a dinner, and he is immediately surprised at the formality of the event. All of his counterparts are dressed business suits, and everyone is addressing him as Mr. Henderson. In addition, the members of the client team seem to be waiting on their supervisor to make the first move, and Bill is beginning to realize that age and seniority are very important to the team members. Bill is growing a little concerned that he may not be successful on this trip because he feels like a fish out of water. Which environmental force has the sales representative encountered? a. Sociocultural b. Economic c. Technological d. Competitive e. Ethical 96. The role of an export agent is to a. bring buyers and sellers from different countries together and collect a commission for arranging sales. b. purchase products from different companies and sell them to foreign countries. c. help a firm to make direct investments in foreign countries. d. contact domestic firms about the opportunities available in exporting. e. arrange for licensing agreements between domestic and foreign firms.

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Chap 09_20e 97. When the Dutch company Shell purchases crude oil from Texas, it is engaging in a. licensing. b. importing. c. free trade. d. exporting. e. dumping. 98. One of the effects of NAFTA is the simplification of country-of-origin rules. This will likely hinder the international trade activities of a. Canada. b. Japan. c. Brazil. d. Cuba. e. Panama. 99. A ___________ links buyers and sellers in different countries, but it has no manufacturing capability. Its most important function is ___________ to products and moving them from the domestic country to the foreign country. a. joint venture; adding customizations b. foreign subsidiary; taking title c. trading company; adding value d. foreign subsidiary; adding value e. trading company; taking title 100. Scenario 9.2 Use the following to answer the questions. KFC opened its first franchised restaurant outside of North America in England in 1964. Now more than a billion KFC chicken dinners are sold annually in 125 countries and territories around the world. KFC has established its own processing plants in these countries to ensure the quality of its chickens and other food items. In the U.S., the menu at KFC is usually the same in all restaurants, with only a very few additional items available in different regions. However, when KFC first franchised into Asian countries, it added many unusual local delicacies to the menu—items such as fried octopus and squid. Additionally, the franchised stores in Asian countries display cooked food in "plates" near windows at the front of the store. This is a tradition for many restaurants in these countries—to offer the customer passing by a preliminary view of their product. Refer to Scenario 9.2. The practice of offering fried octopus and squid at Asian KFCs is best described as a. a strategy of standardization. b. a strategy of globalization. c. a strategy of some customization. d. competitive advantage. e. internationalizing the franchise.

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Chap 09_20e 101. Within the European Union, the use of a common currency frees companies that sell products among European countries from the complexities of a. exchange rates. b. exchange controls. c. import tariffs. d. international laws. e. translation. 102. Nuhitzu believes it has the technological expertise to produce communication systems that will be leaders around the globe. Boston Electronics is widely regarded as having excellent management systems and superior marketing programs. To utilize these strengths, the two firms might form a(n) ____ to work together on a worldwide basis. a. licensing agreement b. export trading company c. joint agreement d. strategic alliance e. multinational enterprise 103. If Caterpillar wished to reach the market in Malaysia but was leery of a direct investment in the country, it might provide a Malaysian operation with the knowledge to produce and market its products in exchange for a commission. This type of arrangement is called a. a joint venture. b. exporting. c. a strategic alliance. d. licensing. e. contract manufacturing. 104. Moreau Moteurs is a family-owned car dealership with two locations in central France. The car dealership markets BMWs and Mini Coopers and provides servicing. Recently, Moreau Moteurs has been affected by the economic climate in the ________, which has suffered recently due to a weakening of the currency and the poor financial conditions of several member countries including Portugal, Italy, Greece, and Spain— affectionately known as the PIGS of the Common Market. a. European Union b. Northern European Commonwealth c. Southern Hemisphere d. United Kingdom e. NAFTA

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Chap 09_20e 105. If H&M relies on hiring a foreign textile manufacturer to produce a designated amount of clothing for its stores, it is using a. exporting. b. franchising. c. contract manufacturing. d. a joint venture. e. licensing. 106. If a newly formed country wanted to increase its international trade and reduce worldwide tariffs, it would most likely try to become a part of a. NAFTA. b. WTO. c. MERCOSUR. d. APEC. e. EU. 107. Developing and performing marketing activities across national boundaries is called a. customized marketing. b. globalized marketing. c. world marketing. d. international marketing. e. regional marketing. 108. Massjuice specializes in all kinds of medical products manufactured in Argentina. The firm assists global companies with importing and exporting. It also provides consulting assistance and strategic help on international trade. Massjuice is most likely a(n) a. export department. b. importer. c. multinational corporation. d. strategic alliance. e. trading company. 109. Counterfeit luxury goods are a major problem in some Asian countries. Women that purchase counterfeit bags feel a thrill when they are able to fool others into believing they own a luxury brand. However, the major reason for the deception is that people in those cultures place high value on luxury brands. By showing off the brand, these women are demonstrating that they can afford the best. The emphasis and value placed on status is an example of a(n) _________________. a. economic force b. sociocultural force c. political, legal, and regulatory force d. competitive force e. social responsibility force

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Chap 09_20e 110. Swiss-based Toblerone has taken a global approach to marketing its chocolate products. Which of the following is most easily standardized? a. Product b. Promotion c. Distribution d. Advertising e. Price 111. Marketers of computer software, music, and books are particularly affected by cultural differences in a. socioeconomic status of citizens. b. advances in technology. c. differences in cross-cultural exchange behavior. d. ethical codes of conduct for businesses. e. standards regarding intellectual property. 112. When U.S. dollars are supporting foreign economies at the expense of domestic companies and workers, a(n) ________ is likely to exist. a. minimum price level b. import tariff c. positive balance of trade d. negative balance of trade e. exchange control 113. Malcolm, a corporate buyer, is meeting with Riku, a sales representative from a high-tech firm based in Osaka, Japan to try to arrange a sale. Malcolm is surprised when Riku presents him with an elegantly wrapped bottle of expensive Japanese whiskey. Such gifts are the norm in Japanese culture in business negotiations, but Malcolm worries that accepting the gift could be interpreted as a bribe. This misunderstanding is the result of _____ differences. a. political and legal b. sociocultural c. ethical d. economic e. competitive 114. A special form of licensing in which one company grants another company the right to market its product and name in accordance with its standards in exchange for a financial commitment is called a. a joint venture. b. contract manufacturing. c. direct licensing. d. franchising. e. a strategic alliance.

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Chap 09_20e 115. Starbucks operates thousands of stores throughout the U.S. as well as 62 other countries. Which of the following describes Starbucks’ level of commitment to international marketing? a. Licensing b. Direct ownership c. Exporting d. A trading company e. A joint venture 116. The Southern Common Market (MERCOSUR) includes a. countries from southern Africa. b. both India and Indonesia. c. Australia and New Zealand. d. countries in South America. e. southern China and India. 117. The global technology company Motorola received negative publicity related to allegations that its workforce at a ________ plant in China was overworking the employees who worked as many as 15 hours a day in poor factory conditions. Motorola and other companies that participate in China’s manufacturing industry have hired inspectors to ensure the contracted agreements are being followed and worker safety and rights are protected. a. contract manufacturing b. trading company’s c. licensing d. direct ownership e. franchising 118. At the heart of the ____ are agreements that provide legal ground rules for international commerce and trade policy. a. United Nations b. GATT c. MERCOSUR d. WTO e. APEC 119. Which of the following differs from other international trade alliances in its commitment to facilitating business and its practice of allowing the business/private sector to participate in a wide range of its activities? a. NAFTA b. MERCOSUR c. APEC d. OPEC e. The Common Market

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Chap 09_20e 120. The ____ is the difference in value between a nation's exports and its imports. a. net trade value b. export/import ratio c. gross domestic product d. balance of payments e. balance of trade 121. Select the true statement. a. Legislation regulating marketing in many foreign countries is being eased. b. A government's attitude toward cooperation with importers has little impact on marketing to that country. c. Refusing to give payoffs and bribes in some foreign countries may put a marketer at a competitive disadvantage. d. Bribes and payoffs are considered unethical in all countries and cultures. e. Bribes and payoffs are supported by U.S. trade policies under certain conditions. 122. ______________ was established in 1967 and promotes trade and economic integration among member nations in Southeast Asia. a. APEC b. ASEAN c. MERCOSUR d. WTO e. GATT 123. According to your text, ____ are small technology-based firms operating in international markets almost immediately after their establishment and realizing as much as 70% of their sales outside the domestic home market. a. "natural globals" b. "multinational corporations" c. "born globals" d. "born multinationals" e. "multinational enterprises" 124. The degree to which a firm is able to "think globally, act locally" affects the success of the firm's _________________ strategy as it goes international. a. localization b. customization c. globalization d. nationalization e. culturalization

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Chap 09_20e 125. Which of the following describes a company hiring a foreign firm to produce a designated volume of its product to specification? a. Licensing b. Contract manufacturing c. Exporting d. Importing e. Direct investment 126. Franchising offers all the following benefits for franchisors except a. franchise agreements require a certain standard of behavior from franchisees, which helps protect the franchise name. b. franchisors can retain control of their name while increasing global penetration of their products. c. the franchisee's revenue stream is fairly consistent because franchisors pay fixed fees and royalties. d. the franchisor's revenue stream is fairly consistent because franchisees pay fixed fees and royalties. e. franchisors do not have to put up a large capital investment. 127. ____ refers to the idea that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures. a. The self-reference criterion b. Global ethics c. Economic relativism d. Cultural relativism e. Moral relativism 128. Which one of the following is likely to concentrate human resources into one unit and serve as the central point for all information flow related to international operations? a. Internationally integrated structures b. International division structures c. Export departments d. Product division structures e. Global matrix structures 129. The University of North Carolina and the University of Illinois at Urbana-Champaign both offer online MBA programs that are available to students around the world. This is an example of a. globalization. b. customization. c. licensing. d. nationalization. e. regionalization.

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Chap 09_20e 130. Sociocultural forces in international markets keep marketers busy trying to understand local preferences, tastes, customs, and idioms. The marketer’s failure to understand these forces almost certainly leads to failures in the marketing strategies used. Which one of the following statements about the sociocultural forces in international markets is true? a. Cultural differences do not affect marketing negotiations and decision-making behavior. b. Buyers’ perceptions of other countries do not influence product adoption and use. c. Cultural differences do not have significant effects on marketing activities. d. Transferring marketing logos, trademarks, and symbols is usually an easy process when entering international markets. e. Product acceptance in an international market is more likely if similarities exist between buyer and seller cultures. 131. Stark BioChem is a producer of chemical products aimed at increasing agricultural yield per acre. Stark BioChem’s management believes that several of the firm's products could have sizable markets in other countries; however, it is costly to obtain market research to confirm this. If Stark BioChem wanted to temporarily “try out” these international markets with a minimal level of commitment and cost, it should use a. contract manufacturing. b. exporting. c. joint ventures. d. licensing. e. subsidiaries. 132. Scenario 9.3 Use the following to answer the questions. The United States believes China is selling its steel products in the U.S. at unfairly low prices. For many years, domestic steelmakers have complained, saying that they cannot compete against the influx of Chinese steel entering the market. China denies that it is engaging in such behavior. However, the United States has announced that imports of Chinese steel products will now be more expensive—in some cases, by as much as 265%. American steelmakers believe this is the only way they will be able to compete against Chinese steel imports. Refer to Scenario 9.3. According to the United States, what practice are Chinese steel importers engaging in that provides them with an unfair advantage? a. Dumping b. Quotas c. Direct ownership d. Exchange controls e. Cultural relativism

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Chap 09_20e 133. The ______________ of marketing suggests that firms should adopt marketing strategies as though the entire world was one single marketplace. These firms would then market ___________ products using the same marketing mix everywhere in the world. a. internationalization; customized b. globalization; customized c. flexibility; standardized d. globalization; standardized e. international vision; custom 134. The purchase of products from a foreign source is called a. exporting. b. dumping. c. importing. d. licensing. e. venturing. 135. Most European countries use a common currency, the a. yen. b. euro. c. dollar. d. pound. e. lira. 136. When Starbucks decided to expand into the international markets of India, Japan, and Argentina, management realized that there would be significant differences in the standards of living, credit, buying power, and income distribution in those countries. Starbucks is currently examining the ____ forces in its environmental analysis. a. economic b. cultural c. ethical d. technological e. legal 137. Which approach entails minimal effort and cost? a. Purchasing foreign subsidiaries to expand market coverage b. Building manufacturing facilities abroad to ensure quality c. Franchising d. Contract manufacturing e. Using an export intermediary

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Chap 09_20e 138. Which of the following countries has the highest GDP? a. Japan b. China c. the United Kingdom d. the United States e. Canada 139. Acer is very interested in taking advantage of business opportunities in India but does not have access to India's market. Acer has the patent on a low-cost, quality computer system that could assist small businesses in India. IBM, Acer's competitor, is experienced in India but does not have a computer comparable to Acer's for the small business market. If Acer and IBM work together to utilize these strengths to seize this opportunity in India, what type of business structure would they likely use? a. Trading company b. Strategic alliance c. Licensing d. Direct ownership e. Exporting 140. Another name for the European Union is a. the Common Market. b. the European Market. c. the Euro. d. NAFTA. e. AECO. 141. Scenario 9.1 Use the following to answer the questions. Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America." Refer to Scenario 9.1. At what level of involvement in international marketing is Harley-Davidson with regard to its bikes? a. Full-scale b. Globalization c. Joint venture d. Direct ownership e. Exporting

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Chap 09_20e 142. The World Trade Organization accomplishes all of the following except a. educating companies about international trade rules. b. lending money to businesses interested in developing international markets. c. serving as a forum for trade negotiations. d. helping settle trade disputes. e. providing legal ground rules for international commerce. 143. Maquiladoras are a. exchange controls from central banks in Latin American countries. b. production facilities in north-central Mexican states. c. import-export agents of the Mexican government. d. global marketing programs established in Latin American countries. e. freight forwarders from Mexico. 144. The term dumping refers to the sale of a. products sold in foreign markets that cannot be sold in the United States. b. products sold in foreign markets at prices above those charged in the United States. c. all discontinued U.S. products in foreign countries. d. products sold in foreign countries at unfairly low prices. e. products sold in foreign markets that cannot pass safety standards in the United States. 145. If India, in an attempt to bolster the sales of its own auto manufacturers, decided to limit the number of automobiles that could be brought in from other countries, India would be using a(n) a. embargo. b. boycott. c. exchange control. d. import tariff. e. quota. 146. Which of the following agreements provides a forum for tariff negotiations, reducing trade restrictions, resolution of international trade problems, and ground rules for international trade? a. The World Trade Organization b. The North American Free Trade Agreement c. The Latin American Free Trade Agreement d. The European Union Free Trade Agreement e. The General Agreement on Tariffs and Trade 147. A business partnership between a domestic firm and a foreign firm is known as a. a joint venture. b. an international partnership. c. a multinational enterprise. d. licensing. e. exporting. Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 148. What level of commitment in international marketing may be most attractive when the political and economic stability of a foreign country is questionable? a. Joint ventures b. Direct ownership c. Exporting d. Limited exporting e. Licensing 149. United Arab Emirates currently limits the number of Michael Kors bags that can be imported during a one-year period, since Michael Kors bags are made in New York, USA. This is an example of a(n) a. exchange control limit. b. embargo. c. quota. d. import tariff. e. supply limit. 150. A company not involved in manufacturing that links buyers and sellers in different countries is usually referred to as a a. franchise. b. contract manufacturer. c. strategic intermediary. d. trading company. e. joint venture. 151. Solaris Sports is excited about expanding its export opportunities to Cuba, since the United States has renewed trade relations with Cuba, and plans to utilize a(n) _______, which links buyers and sellers in different countries but is not involved in manufacturing and does not own assets related to manufacturing. a. trading company b. contract manufacturing c. licensing d. outsourcing e. import agent 152. The United States' former prohibition against importing cigars from Cuba for resale was an example of a(n) a. health control. b. quota. c. embargo. d. exchange control. e. import control.

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Chap 09_20e 153. Scenario 9.1 Use the following to answer the questions. Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America." Refer to Scenario 9.1. Harley-Davidson's practice of having manufacturers in China produce apparel items with the Harley logo is an example of a. contract manufacturing. b. globalization. c. direct ownership. d. joint venture. e. exporting. 154. The Continental AG has been searching for less expensive raw materials for manufacturing its vehicle tires. Continental has found that there are less expensive sources in the country of Indonesia, but it needs to form a partnership with the government of Indonesia in order to gain access to the country's rubber. What type of partnership will need to be formed? a. A multinational enterprise b. A contract manufacturing arrangement c. A strategic alliance d. A franchise e. A joint venture 155. Once a company makes a long-term commitment to a foreign market that has a promising political and economic environment, which of the following options then emerges as a possibility? a. Exporting b. Joint venture c. Limited exporting d. Direct ownership e. Licensing 156. One of the guaranteed constants in the global business environment is a. nationalism. b. instability. c. tariffs. d. taxes. e. war.

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Chap 09_20e 157. The North American Free Trade Agreement (NAFTA) ___________ tariffs on goods produced in and traded between Canada, Mexico, and the United States. a. doubled b. tripled c. introduced d. eliminated e. extended 158. Exporting, licensing, and using trading companies are preferred modes of international market entry for firms with a(n) a. geographic area structure. b. global matrix structure. c. international division structure. d. internationally integrated structure. e. export department structure. 159. Which of the following alliances/agreements is the United States NOT a part of? a. NAFTA b. APEC c. GATT d. WTO e. MERCOSUR 160. Special interest groups and regulatory bodies are ____ forces that must be taken into account in international marketing. a. socioeconomic b. technological c. economic d. social and ethical e. political and legal 161. Brand name, product characteristics, packaging, and labeling are some of the ______________ marketing mix variables to standardize for international markets. a. most difficult b. most urgent c. easiest d. most expensive e. most culturally sensitive

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Chap 09_20e 162. Organizations that employ standardized products, promotion campaigns, and prices for all markets are practicing what is known as a. customization. b. internationalization. c. globalization. d. regionalization. e. nationalization. 163. Albatross Publishing sought to reduce expenditures related to the printing of books in its trade and educational market and contracted with a printing company in China. However, the publishing company soon realized that China has weak enforcement of intellectual property laws and that gray market books began appearing in the marketplace, which greatly affected Albatross's profits. The company found that it had little recourse against the contract manufacturer and learned a very difficult lesson in international marketing. This exemplifies the impact of _______ forces on international business. a. technological b. competitive c. ethical and social responsibility d. political, legal, and regulatory e. sociocultural 164. Scenario 9.1 Use the following to answer the questions. Harley-Davidson Motors manufactures all of its motorcycles in the U.S. at one of four sites. With a large number of its bikes sold in markets all around the world, it still retains the manufacturing close to the headquarters for several reasons, one being that its management wants to keep close watch on the quality of its products. However, for all the accessories, apparel, and other riding gear, Harley-Davidson contracts out to other manufacturers to produce the items with the Harley name and logo. Some of these items, particularly the apparel, are made in China. Lately, some members of the Harley Owners' Group (HOG) have been complaining to the company about this practice, citing that "everything Harley should be made in America." Refer to Scenario 9.1. One of Harley-Davidson's largest international markets is in Japan, where American brands are highly sought after. This is an example of ____ impacting the market. a. international forces b. economic forces c. domestic forces d. cultural forces e. environmental forces

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Chap 09_20e 165. Caterpillar, maker of large construction equipment in the United States, would like to better understand factors that would affect its ability to export its products to various countries. Which of the following forces determine how trade barriers affect Caterpillar's marketing efforts? a. Political and legal b. Economic c. Industrial and technological d. Technological and legal e. Economical and sociocultural 166. Maddy Magoo is a children’s hair salon chain that caters to children of all ethnicities headquartered in South Africa. It has recently opened salons in the United Kingdom, adding to its numerous salons in its home country. Maddy Magoo allows foreign businesspeople to use its name, logo, methods of operation, advertising, and products. In exchange, Maddy Magoo receives a financial commitment and an agreement to conduct business in accordance with its standard of operations. Maddy Magoo is engaging in a. contract manufacturing. b. wholesaling. c. franchising. d. exporting. e. direct investment. 167. Anna is often surprised when she goes to other countries to learn that people do business so differently. In meetings, for instance, Anna is used to getting straight to the point and addressing any relevant issues. However, she has learned that in many countries businesspeople take the time to first make small talk and ask about the family before finally getting down to business. To Anna this seems to make the meetings unnecessarily long and wastes valuable time. These cultural differences seem strange to Anna because she is relying on her a. ethical perspectives. b. international bias. c. cultural relativism. d. self-reference principle. e. self-reference criterion.

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Chap 09_20e 168. Scenario 9.3 Use the following to answer the questions. The United States believes China is selling its steel products in the U.S. at unfairly low prices. For many years, domestic steelmakers have complained, saying that they cannot compete against the influx of Chinese steel entering the market. China denies that it is engaging in such behavior. However, the United States has announced that imports of Chinese steel products will now be more expensive—in some cases, by as much as 265%. American steelmakers believe this is the only way they will be able to compete against Chinese steel imports. Refer to Scenario 9.3. The reason Chinese steel products will be expensive is because the U.S. government is levying __________ against them. a. an embargo b. quotas c. exchange controls d. import tariffs e. export duties 169. Which of the following would be a benefit to a franchisor, such as Sylvan Learning, in expanding into international marketing? a. There are no risks involved with allowing a foreign franchisee. b. The franchisor does not have to put up a large capital investment. c. The franchisor does not have to share its name or operational procedures. d. The franchisee only pays a set fee every month to the franchisor. e. An equal partnership is formed between the franchisor and franchisee. 170. Which of the following centralizes all of the responsibility for international operations? a. Product division structures b. Export department structures c. Internationally integrated structures d. International division structures e. Global matrix structures 171. Both Adidas and Brooks standardize many of their shoe models and colors worldwide, which is an example of a. globalization. b. customization. c. nationalization. d. culturalization. e. internationalization.

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Chap 09_20e 172. Which of the following is NOT true of NAFTA? a. The agreement has a long adjustment phase-in time period. b. It expands trade by requiring equal treatment of U.S. firms in Mexico and Canada. c. It will provide additional opportunities for the United States in long-term affiliations with other countries in the Western Hemisphere. d. It provides protection for intellectual property among its members. e. Business licensing requirements have been increased. 173. Some hospitals in the United States find that their need for radiologists to read X-rays is volatile during the evening and early morning hours, especially between 2:00 and 6:00 a.m. This is because the number of emergency room visits needing X-rays is usually lower than those required during daytime operating hours. There is a recent trend where hospitals in the United States are contracting radiologists from countries such as Australia to read the electronically-transmitted X-rays during the evening and early morning hours. This is an example of a. outsourcing. b. licensing. c. franchising. d. contract manufacturing. e. contract sourcing. 174. Globalization of markets requires developing marketing strategies as if the world were one market. Which of the following marketing mix variables is most difficult to standardize for globalization? a. Brand name b. Package c. Media allocation d. Labels e. Product characteristics 175. Which of the following is the most commonly used by multinational enterprises? a. Export department structure b. Internationally integrated structure c. International division structure d. Global matrix structure e. Product division structure

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Chap 09_20e 176. Brown Dog Cycles creates sleek and modern bicycles for commuters and cycling enthusiasts using the latest materials such as carbon fiber frames. Brown Dog Cycles are relatively expensive, but its urban customers routinely pay $2,000 to $4,000 for the hand-crafted bicycles. The owners are considering expanding their company’s footprint outside the United States and are considering opportunities to export its products to Canada and Mexico. They have learned that _______ eliminated virtually all tariffs on goods produced and traded among Canada, Mexico, and the United States. a. NAFTA b. EU c. APEC d. ASEAN e. MERCOSUR 177. In relation to international marketing, which of the following best describes direct ownership? a. A company owns its own manufacturing facilities. b. A company forms an alliance with a similar company in a foreign country. c. Foreign companies contract with manufacturers in other countries. d. A company owns subsidiaries or facilities in foreign countries. e. Two companies from different nations have interests in each other's facilities. 178. What marketing and ethical problems can bribes create in international marketing transactions?

179. Describe the difficulties encountered in standardizing the marketing mix globally.

180. How do globalized marketing strategies differ from customized marketing strategies? What are the implications of each for marketing managers?

181. Describe how economic and competitive forces affect international marketing strategies.

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Chap 09_20e 182. In what ways can businesses become involved in international marketing activities?

183. In what ways can a nation restrict the flow of imported goods?

184. What effect is NAFTA having on the international trade of the following countries: United States, Canada, and Mexico?

185. Explain why the modes of entry into an international market are a major issue for managers to consider.

186. What effects are technological forces having on international marketing? What opportunities exist in the global marketplace that marketers can exploit with regard to technology?

187. Describe the sociocultural forces that affect international marketing strategy.

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Chap 09_20e Answer Key 1. False 2. True 3. True 4. False 5. True 6. True 7. False 8. False 9. True 10. False 11. False 12. True 13. True 14. False 15. False 16. False 17. False 18. True 19. False 20. True 21. True 22. False 23. True 24. False 25. True 26. False

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Chap 09_20e 27. True 28. True 29. False 30. False 31. False 32. True 33. True 34. False 35. True 36. True 37. False 38. False 39. True 40. True 41. d 42. b 43. a 44. a 45. b 46. a 47. d 48. d 49. b 50. b 51. c 52. e 53. c 54. c Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 55. a 56. a 57. e 58. b 59. c 60. a 61. e 62. d 63. e 64. c 65. b 66. b 67. b 68. d 69. c 70. b 71. c 72. a 73. c 74. c 75. d 76. e 77. d 78. a 79. c 80. e 81. d 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 83. e 84. c 85. a 86. a 87. d 88. d 89. d 90. e 91. c 92. c 93. a 94. c 95. a 96. a 97. b 98. b 99. e 100. c 101. a 102. d 103. d 104. a 105. c 106. b 107. d 108. e 109. b 110. a Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 111. e 112. d 113. b 114. d 115. b 116. d 117. a 118. d 119. c 120. e 121. c 122. b 123. c 124. c 125. b 126. c 127. d 128. b 129. a 130. e 131. b 132. a 133. d 134. c 135. b 136. a 137. e

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Chap 09_20e 138. b 139. b 140. a 141. e 142. b 143. b 144. d 145. e 146. a 147. a 148. e 149. c 150. d 151. a 152. c 153. a 154. e 155. d 156. b 157. d 158. e 159. e 160. e 161. c 162. c 163. c 164. d 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 09_20e 166. c 167. e 168. d 169. b 170. d 171. a 172. e 173. a 174. c 175. e 176. a 177. d 178. The use of payoffs and bribes is deeply entrenched in many governments. Because U.S. trade and corporate policy, as well as U.S. law, prohibits direct involvement in payoffs and bribes, U.S. companies may have a hard time competing with foreign firms that engage in these practices. Under the Foreign Corrupt Practices Act of 1977, it is illegal for U.S. firms to attempt to make large payments or bribes to influence policy decisions of foreign governments. Nevertheless, facilitating payments, or small payments to support the performance of standard tasks, are often acceptable. The Foreign Corrupt Practices Act also subjects all publicly held U.S. corporations to rigorous internal controls and record-keeping requirements for their overseas operations. Differences in ethical standards affect marketing efforts. When marketers do business abroad, they often perceive that other business cultures have different modes of operation. However, many businesspeople adapt to the cultural practices of the country they are in and use the host country’s cultural practices as the rationalization for sometimes straying from their own ethical values when doing business internationally. For instance, by defending the payment of bribes or “greasing the wheels of business” and other questionable practices in this fashion, some businesspeople are resorting to cultural relativism —the concept that morality varies from one culture to another and that business practices are therefore differentially defined as right or wrong by particular cultures. Because of differences in cultural and ethical standards, many companies work both individually and collectively to establish ethics programs and standards for international business conduct.

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Chap 09_20e 179. For many firms, globalization of marketing is the goal; it involves developing marketing strategies as though the entire world (or its major regions) were a single entity: a globalized firm markets standardized products in the same way everywhere. Nike and Adidas shoes, for example, are standardized worldwide. For many years, organizations have attempted to globalize their marketing mixes as much as possible by employing standardized products, promotion campaigns, prices, and distribution channels for all markets. The economic and competitive payoffs for globalized marketing strategies are certainly great. Brand name, product characteristics, packaging, and labeling are among the easiest marketing mix variables to standardize; media allocation, retail outlets, and price may be more difficult. In the end, the degree of similarity among the various environmental and market conditions determines the feasibility and degree of globalization. A successful globalization strategy often depends on the extent to which a firm is able to implement the idea of “think globally, act locally.” International marketing demands some strategic planning if a firm is to incorporate foreign sales into its overall marketing strategy. International marketing activities often require customized marketing mixes to achieve the firm’s goals. Globalization requires a total commitment to the world, regions, or multinational areas as an integral part of the firm’s markets; world or regional markets become as important as domestic ones. Regardless of the extent to which a firm chooses to globalize its marketing strategy, extensive environmental analysis and marketing research are necessary to understand the needs and desires of the target market(s) and successfully implement the chosen marketing strategy. 180. Like domestic marketers, international marketers develop marketing strategies to serve specific target markets. Traditionally, international marketing strategies have customized marketing mixes according to cultural, regional, and national differences. There are many international issues related to product, distribution, promotion, and price. For example, many developing countries lack the infrastructure needed for expansive distribution networks, which can make it harder to get the product to consumers. Realizing that both similarities and differences exist across countries is a critical first step to developing the appropriate marketing strategy effort targeted to particular international markets. Today, many firms strive to build their marketing strategies around similarities that exist instead of customizing around differences. 181. Global marketers need to understand the international trade system, particularly the economic stability of individual nations, as well as trade barriers that may stifle marketing efforts. Economic differences among nations— differences in standards of living, credit, buying power, income distribution, national resources, exchange rates, and the like—dictate many of the adjustments firms must make in marketing internationally. Instability is one of the guaranteed constants in the global business environment. The value of the dollar, euro, and yen has a major impact on the prices of products in many countries. An important economic factor in the global business environment is currency valuation. Opportunities for international trade are not limited to countries with the highest incomes. The countries of Brazil, Russia, India, China, and South Africa (BRICS) have attracted attention as their economies appear to be rapidly advancing. Other nations are progressing at a much faster rate than they were a few years ago, and these countries—especially in Latin America, Africa, eastern Europe, and the Middle East—have great market potential. Competition is often viewed as a staple of the global marketplace. Customers thrive on the choices offered by competition, and firms constantly seek opportunities to outmaneuver their competition to gain customers’ loyalty. Firms typically identify their competition when they establish target markets worldwide. Each country has unique competitive aspects—sociocultural, technological, political, legal, regulatory, and economic forces—that are often independent of the competitors in that market. Although competitors drive competition, nations establish the infrastructure and the rules for the types of competition that can take place.

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Chap 09_20e 182. Businesses become involved in international marketing activities in the following ways: a. Importing and exporting: Importing and exporting require the least amount of effort and commitment of resources. Importing is the purchase of products from a foreign source. Exporting, the sale of products to foreign markets, enables firms of all sizes to participate in global business. b. Licensing and franchising: When potential markets are found across national boundaries, and when production, technical assistance, or marketing know-how is required, licensing is an alternative to direct investment. Franchising is a form of licensing in which a company (the franchisor) grants a franchisee the right to market its product, using its name, logo, methods of operation, advertising, products, and other elements associated with the franchisor's business, in return for a financial commitment and an agreement to conduct business in accordance with the franchisor’s standard of operations. c. Contract manufacturing: Contract manufacturing occurs when a company hires a foreign firm to produce a designated volume of the firm’s product (or a component of a product) to specification and the final product carries the domestic firm’s name. Marketing may be handled by the contract manufacturer or by the contracting company. Three specific forms of contract manufacturing have become popular in the last decade: outsourcing, offshoring, and offshore outsourcing. d. Joint ventures: In international marketing, a joint venture is a partnership between a domestic firm and a foreign firm or government. Joint ventures are especially popular in industries that require large investments, such as natural resources extraction or automobile manufacturing. e. Direct ownership: Once a company makes a long-term commitment to marketing in a foreign country that has a promising market as well as a suitable political and economic environment, direct ownership of a foreign subsidiary or division is a possibility. f. Trading companies: Marketers sometimes employ a trading company, which links buyers and sellers in different countries but is not involved in manufacturing and does not own assets related to manufacturing. Trading companies buy products in one country at the lowest price consistent with quality and sell them to buyers in another country. Trading companies reduce risk for firms that want to get involved in international marketing. A trading company provides producers with information about products that meet quality and price expectations in domestic and international markets. Additional services a trading company may provide include consulting, marketing research, advertising, insurance, product research and design, legal assistance, warehousing, and foreign exchange. 183. A government’s policies toward public and private enterprise, consumers, and foreign firms influence marketing across national boundaries. Some countries have established import barriers, such as tariffs. An import tariff is any duty levied by a nation on goods bought outside its borders and brought into the country. Nontariff trade restrictions include quotas and embargoes. A quota is a limit on the amount of goods an importing country will accept for certain product categories in a specific period of time. An embargo is a government’s suspension of trade in a particular product or with a given country. Embargoes are generally directed at specific goods or countries and are established for political, health, or religious reasons. Exchange controls, government restrictions on the amount of a particular currency that can be bought or sold, may also limit international trade. They can force businesspeople to buy and sell foreign products through a central agency, such as a central bank. Countries may limit imports to maintain a favorable balance of trade. The balance of trade is the difference in value between a nation’s exports and its imports. When a nation exports more products than it imports, a favorable balance of trade exists because money is flowing into the country.

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Chap 09_20e 184. The North American Free Trade Agreement (NAFTA), implemented in 1994, effectively merged Canada, Mexico, and the United States into one market of nearly 450 million consumers. NAFTA virtually eliminated all tariffs on goods produced and traded among Canada, Mexico, and the United States to create a free trade area. The estimated annual output for this trade alliance is nearly $21 trillion. NAFTA makes it easier for U.S. businesses to invest in Mexico and Canada; provides protection for intellectual property (of special interest to high-technology and entertainment industries); expands trade by requiring equal treatment of U.S. firms in both countries; and simplifies country-of-origin rules, hindering China and Japan’s use of Mexico as a staging ground for further penetration into U.S. markets. Canada’s more than 36 million consumers are relatively affluent, with a per capita GDP of $50,000. Canada is the single largest trading partner of the United States, which in turn supports millions of U.S. jobs. NAFTA has also enabled additional trade between Canada and Mexico. Mexico is Canada’s fifth largest export market and third largest import market. With a per capita GDP of $18,900, Mexico’s more than 123 million consumers are less affluent than Canadian consumers. 185. Marketers enter international markets and continue to engage in marketing activities at several levels of international involvement. Traditionally, firms have adopted one of four different modes of entering an international market; each successive “stage” represents different degrees of international involvement. • Stage 1: No regular export activities • Stage 2: Export via independent representatives (agents) • Stage 3: Establishment of one or more sales subsidiaries internationally • Stage 4: Establishment of international production/manufacturing facilities Companies’ international involvement covers a wide spectrum, from purely domestic marketing to global marketing. Domestic marketing involves marketing strategies aimed at markets within the home country; at the other extreme, global marketing entails developing marketing strategies for the entire world (or at least more than one major region of the world). Many firms with an international presence start out as small companies serving local and regional domestic markets and expand to national markets before considering opportunities in foreign markets. (The born global firm is one exception to this internationalization process.) Limited exporting may occur even if a firm makes little or no effort to obtain foreign sales. Foreign buyers may seek out the company and/or its products, or a distributor may discover the firm’s products and export them. The level of commitment to international marketing is a major variable in global marketing strategies. 186. Advances in technology have made international marketing much easier. Interactive Web systems, instant messaging, and podcast downloads, along with the traditional vehicles of voice mail, e-mail, and cell phones, make international marketing activities more affordable and convenient. Internet use and social networking activities have accelerated dramatically within the United States and abroad. In many developing countries that lack the level of technological infrastructure found in the United States and Japan, marketers are beginning to capitalize on opportunities to leapfrog existing technology. For example, cellular and wireless phone technology is reaching many countries at a more affordable rate than traditional hard-wired telephone systems. Consequently, opportunities for growth in the cell phone market remain strong in Southeast Asia, Africa, and the Middle East. One opportunity created by the rapid growth in mobile devices in Kenya is mobile payment services. Because banks tend to avoid catering to lower income populations, such services are likely to grow.

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Chap 09_20e 187. Cultural and social differences among nations can have significant effects on marketing activities. Because marketing activities are primarily social in purpose, they are influenced by beliefs and values regarding family, religion, education, health, and recreation. Local preferences, tastes, and idioms can all prove complicated for international marketers. It can be difficult to transfer marketing symbols, trademarks, logos, and even products to international markets, especially if these are associated with objects that have profound religious or cultural significance in a particular culture. Cultural differences may also affect marketing negotiations and decision-making behavior. Buyers’ perceptions of other countries can influence product adoption and use. Multiple research studies have found that consumer preferences for products depend on both the country of origin and the product category of competing products. When people are unfamiliar with products from another country, their perceptions of the country as a whole may affect their attitude toward the product and influence whether they will buy it. If a country has a reputation for producing quality products and therefore has a positive image in consumers’ minds, marketers of products from that country will want to make the country of origin well known. The extent to which a product’s brand image and country of origin influence purchases is subject to considerable variation based on national culture characteristics.

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Chap 10_20e Indicate whether the statement is true or false. 1. Less than half of Fortune 500 companies maintain a corporate blog. a. True b. False 2. User-generated content relates to consumers that create, converse, rate, collect, join, or simply read online materials. a. True b. False 3. A new trend in video marketing is the use of amateur filmmakers. a. True b. False 4. Although many brands use YouTube to release original video content, they are far outnumbered by vlogging consumers, which makes it difficult for brands to control the messages about their products. a. True b. False 5. Alan got permission to install Microsoft Office on one computer. However, he ended up copying the software so he could install it on all the computers in the office. This is an example of online fraud. a. True b. False 6. Earned media is not controllable like advertising. a. True b. False 7. Online fraud includes any attempt to conduct dishonest activities online, with the exception of tricking consumers into releasing personal information. a. True b. False 8. Companies use wikis as internal tools for teams working on projects requiring lots of documentation. a. True b. False 9. Earned media is the use of traditional print and broadcast advertising as well as advertising on social networks. a. True b. False 10. A problem of digital marketing evaluations is that there are no methods to capture the metrics that indicate the outcomes of strategies. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 11. Evaluating what critics post should be an important part in a company’s digital marketing strategy. a. True b. False 12. Traditional marketing media are more consumer-driven than digital media. a. True b. False 13. Social media should be included only in marketing strategy. a. True b. False 14. People in many foreign countries engage in social networking. a. True b. False 15. Electronic marketing strategy and digital marketing strategy are often used interchangeably, but there are differences between them. a. True b. False 16. Those who subscribe to a podcast will automatically get new content from the podcast delivered to their listening devices or personal computers. a. True b. False 17. Digital media refers to the strategic process of distributing, promoting, and pricing products, and discovering the desires of internet customers using digital marketing. a. True b. False 18. A smart watch is an example of a type of digital media channel. a. True b. False 19. KLM engages with its customers by answering their questions and posting updates. This is an example of accessibility. a. True b. False 20. The fact that most companies in the United States do not routinely monitor consumers’ postings to online social networking sites represents a missed opportunity to gather information. a. True b. False

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Chap 10_20e 21. Positive customer feedback is free publicity that often helps the company more than corporate messages do. a. True b. False 22. The increase in consumers who publish their own thoughts and product reviews through digital media has caused consumer-generated information to be less important because some of the information is false. a. True b. False 23. To communicate with their employees, companies may use wikis and podcasts. a. True b. False 24. Digital media refers to a marketing strategy that engages in the strategic process of distributing, promoting, and pricing products, and discovering consumer desires through social networks. a. True b. False 25. Digital marketing uses all digital media to develop communication and exchanges with customers. a. True b. False 26. So far, social networking has gained popularity only in the United States. a. True b. False 27. Digital marketing can be viewed as a new distribution channel that helps businesses increase efficiency. a. True b. False 28. Digital connections give consumers more control over pricing because it enables them to price compare and search for the lowest deals. a. True b. False 29. Consumers view the illegal downloading of copyrighted materials as more unethical if the person's motivation is primarily utilitarian, then if it is for a hedonistic reason. a. True b. False 30. Twitter is useful for communications between friends, but not for communications between businesses and customers. a. True b. False

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Chap 10_20e 31. Addressability allows customers to respond to a company's marketing communications by expressing their reactions and desires directly to the company. a. True b. False 32. While consumers can use websites to access more information, marketers can also use the same sites to get information on the consumer. a. True b. False 33. Bloggers can post whatever opinions they like about a company or its products, regardless of whether or not the blog's content is factually accurate. a. True b. False 34. Marketers can use digital media to promote their companies, but marketers should not use this medium to address problems. a. True b. False 35. Amazon.com, eBay, Zappos, and a number of other companies engage in e-tailing through their websites. a. True b. False 36. Traditional advertising is unlimited in terms of interactivity. a. True b. False 37. Consumers now have less ability to regulate the information they view as well as the rate and sequence of their exposure to that information. a. True b. False 38. As the internet and digital communication technologies have advanced, marketers are able to target markets more precisely. a. True b. False 39. Control refers to the customer's ability to access information on the internet with simple clicks on a keyboard. a. True b. False 40. E-marketing has developed strategies that include all digital media, including television advertising and other mobile and interactive media that do not rely on the internet. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 41. Attempts to deceive consumers into releasing personal information online are examples of online fraud. a. True b. False 42. An accessible channel means the marketer knows who the customer is and can specifically address that person. a. True b. False 43. Connectivity is the use of digital networks to provide linkages between information providers and users. a. True b. False 44. The ability to process orders electronically and increase the speed of communications via the internet increases inefficiencies, costs, and redundancies throughout the marketing channel. a. True b. False 45. The global regulatory environment is consistent worldwide with all countries treating privacy concerns about the same. a. True b. False 46. E-marketing includes the use of mobile phones, but not digital outdoor marketing devices. a. True b. False 47. The FTC rules for online marketing help maintain the credibility of the internet as an advertising medium. a. True b. False 48. For most businesses, engaging in digital marketing activities is not required to maintain a competitive advantage. a. True b. False 49. The internet is sometimes referred to as a push medium because marketers determine which websites consumers are going to view. a. True b. False 50. Control refers to customers' ability to regulate the information they view and the rate and sequence of their exposure to that information. a. True b. False

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Chap 10_20e 51. Small businesses can use digital media to develop strategies to reach new markets and access inexpensive communication channels. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 52. Which of the following statements is true regarding digital marketing? a. E-marketing includes digital outdoor signs or displays. b. E-tailing is used by all organizations with an online presence. c. Electronic marketing and digital marketing mean the same thing. d. The marketing mix does not apply to electronic marketing media. e. Digital media are media available only via computers. 53. Some companies use ____ as internal tools for teams working on a project requiring lots of documentation. a. Facebook b. Snapchat c. widgets d. wikis e. Notebook pages 54. Vail Mountain Resort in Vail, Colorado, is a world-class ski destination. Vanessa is a newly-hired manager of digital media and electronic marketing for Vail. Vanessa remembers reading about a new trend in video marketing, using _________ to engage and create a community of customers. a. blogs b. amateur filmmakers c. Twitter announcements d. advertising firms to develop videos e. virtual realities 55. The car-related website and media company, Edmunds, provides reviews and ratings of vehicles and is well respected by individuals in the car industry as a neutral source. Consumers appreciate its advice and information and know they can trust Edmunds for non-biased information. In addition to its own website and magazine, Edmunds is using the ________ Pinterest to post photos and links to recent articles as well as answer questions posed by members of Pinterest. a. bulletin-board site b. blog c. wiki d. podcast e. media-sharing site

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Chap 10_20e 56. Internet sites that allow users to share photos, videos, and podcasts are called which of the following? a. Video-sharing sites b. Photo-sharing sites c. Virtual sites d. Media-sharing sites e. Wikis 57. Wag is a service similar to Uber in that it uses an app and promotes the sharing economy concept. Dog owners can use the app to contact independent contractors, who will travel to the dog’s home and take it for walks, usually while the dog’s owner is away. Users often pay the dog walkers tips. However, they receive the benefit of not having to worry about their pet getting exercise. This service capitalizes on which variable of the emarketing mix? a. Product b. Digital media c. Promotion d. Distribution e. Pricing 58. Frito-Lay entices consumers to its websites through contests and games, but it cannot force people to visit its websites due to the ____ characteristic of online media. a. accessibility b. control c. interactivity d. addressability e. connectivity 59. Which of the following describes the pull dynamic of distribution using digital media? a. Forever 21 uses the internet to sell products to consumers. b. Qdoba uses a blog to describe a new meal offering. c. A man is surfing on the internet when a Verizon ad pops up. d. A woman uses her iPhone app to locate the nearest CVS. e. A coupon is sent to a shopper's mobile device. 60. Due to the use of cookies, many websites are able to track visitors when they return to their websites. This helps them track how often the visitor views the website and in what products he or she shows an interest. Some websites have capitalized on this by providing product recommendations to users when they return to their websites based on their past activity. This is an example of a. accessibility. b. addressability. c. interactivity. d. connectivity. e. control.

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Chap 10_20e 61. Samsung provides users with the chance to download a weather ______________ onto its Galaxy S8 smartphone. Once downloaded, users can see current conditions, a local radar, a ten-day forecast, and tropical weather information if relevant. a. social network b. mobile site c. widget d. virtual reality e. podcast 62. As consumers become more informed about their options, the demand for a. low-priced products has remained about the same. b. low-priced products has declined. c. low-priced products has grown. d. high-priced products has grown. e. high-priced products has declined. 63. ____ are audio or video files that can be downloaded from the internet with a subscription that automatically delivers new content to listening devices or personal computers. a. Wikis b. Blogs c. Podcasts d. Virtual realities e. Social networks 64. The internet can be referred to as a ____ medium because users determine which websites they are going to view. a. selective b. connected c. pull d. push e. interactive 65. Electronic media that function using digital codes are called a. digital marketing. b. digital media. c. electronic marketing. d. digital electronics. e. e-marketing.

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Chap 10_20e 66. When influencers fail to disclose a connection to a brand they promote, they may be charged with a. deceptive advertising. b. online fraud. c. identity theft. d. misappropriation of intellectual property. e. extortion. 67. As a result of the escalating use of digital media, some of the marketer's control over dispensing product information has been placed a. in danger. b. under the authority of the government. c. in the hands of the company's competitors. d. in the hands of the consumer. e. in the hands of the stockholders. 68. The _____ of a(n) website will have a major impact on whether the customer exhibits loyalty to the site. a. strength b. quality c. interactivity d. connectivity e. cost 69. Adobe markets software such as Photoshop and Lightroom through a subscription service and maintains an extensive website where customers can post reviews, offer tips and suggestions, and ask technical questions. Adobe appreciates the opportunity to create a forum where users of the software can interact with each other, as well as the company. This example relates to the ______ characteristic of online media. a. accessibility b. control c. connectivity d. addressability e. interactivity 70. ____ is a popular mobile photo-sharing site. a. YouTube b. Facebook c. Tumblr d. Twitter e. Instagram

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Chap 10_20e 71. Scenario 10.1 Use the following to answer the questions. The Walt Disney Company is a master at incorporating all the unique characteristics of digital media into its website. It knows how to appeal to all types of consumers and utilize the full potential of digital media. The Disney website immediately catches your attention with sights and sounds that come alive. Not only can you catch a glimpse of an upcoming movie, but it also connects you with your favorite characters from movies past. The website offers age-appropriate games and activities, including the ability to create a fairy-tale cottage. The Disney Parks have their own links, of course, along with Radio Disney, the Disney Store, family vacation packages, and an educator's corner. An adult or child can enjoy navigating through the electronic marketing of Disney. Refer to Scenario 10.1. The Disney website has a special link for educators that allows them to download educational videos pertaining to various subjects and grade levels. Educators are asked to register online with further information about their needs. This is an example of a. addressability. b. interactivity. c. accessibility. d. connectivity. e. control. 72. Due to increasing consumer demand, many television networks are creating ____ of their shows. a. podcasts b. wikis c. virtual realities d. digital characters e. imitations 73. ____ involves consumers’ ability to be connected with marketers along with other consumers. a. Accessibility b. Addressability c. Interactivity d. Connectivity e. Control 74. Consumers are changing ____ and consumption behaviors to fit with emerging technologies and trends. a. their eating habits b. their spending money c. their disposable income d. their shopping partners e. their information searches

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Chap 10_20e 75. One of the biggest mistakes a marketer can make when engaging in digital marketing is to a. treat it like a traditional marketing channel. b. focus on competitors’ digital marketing efforts. c. fail to devote sufficient resources to it. d. focus on technology. e. focus on price. 76. Scenario 10.1 Use the following to answer the questions. The Walt Disney Company is a master at incorporating all the unique characteristics of digital media into its website. It knows how to appeal to all types of consumers and utilize the full potential of digital media. The Disney website immediately catches your attention with sights and sounds that come alive. Not only can you catch a glimpse of an upcoming movie, but it also connects you with your favorite characters from movies past. The website offers age-appropriate games and activities, including the ability to create a fairy-tale cottage. The Disney Parks have their own links, of course, along with Radio Disney, the Disney Store, family vacation packages, and an educator's corner. An adult or child can enjoy navigating through the electronic marketing of Disney. Refer to Scenario 10.1. The Disney website is missing ____ because the website does not offer the opportunity for customers to directly communicate with Disney employees. Customers cannot express their needs and wants directly to the company. a. addressability b. interactivity c. accessibility d. connectivity e. control 77. Which of the following digital media tend to be more promotional oriented? a. Media-sharing sites b. Blogs c. Social networks d. Apps e. Wikis

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Chap 10_20e 78. Scenario 10.2 Use the following to answer the questions. Regardless of their age, income, or gender, an increasing number of people are turning to the internet to search for information, products, people, news, maps, entertainment, and whatever else you can think of. At the forefront of this massive search is Google; accompanying Google are social media sites such as Facebook, Twitter, and Pinterest. Google has developed methods for making information useful to all types of internet users. Some users want to critique the information, some just want to read the information, and some want to be the information writers. Facebook, originally used as a social networking application, is now picked up by retailers, brands, celebrities, churches, political campaigns, and nonprofit agencies. Twitter is a more real-time site and, as is Pinterest, a more personally-affiliated medium. Refer to Scenario 10.2. Political parties are also using social media to connect with voters and to keep individuals informed about the up-to-the-minute activities in the political campaigns. If the politicians wanted to involve the potential voters in the campaign, they could utilize _______, a new trend in video marketing, and create input for their Facebook pages. a. podcasts b. avatars c. virtual realities d. amateur filmmakers e. specialized video producers 79. The most important feature of apps is a. scalability. b. market share growth. c. sales growth. d. the convenience and cost savings they offer to the marketer. e. the convenience and cost savings they offer to the consumer. 80. Two trends that have caused consumer-generated information to gain importance are a. the recession and a reduction of advertising expenditures. b. globalization and the cultural trend of consumers being influenced by the "village." c. the increase of consumers sharing their opinions through digital media and the consumer's mistrust of information from corporations. d. an increase in mobile digital technology and store brands. e. an increase in children's influence over the purchasing decision and the fact that adults other than parents influence children.

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Chap 10_20e 81. You have just completed a two-day offsite meeting with your marketing team. During the meeting, you solidified your company’s strategy for distributing, promoting, and pricing products, and understanding the needs and desires of your customers by utilizing digital media marketing tactics. Which of the following statements best describes what you just accomplished? a. You developed your company’s marketing concept. b. You developed your company’s go-to-market strategy. c. You developed your company’s e-marketing strategy. d. You developed your company’s marketing mix strategy. e. You developed your company’s product distribution strategy. 82. ______ do not engage in paid internet advertising as much due to smaller budgets. a. Partnerships b. Government agencies c. Multinational corporations d. Nonprofit organizations e. Small businesses 83. Jo-Ann Fabrics encourages customers to visit its website and “like” its Facebook page. It also enlists customers to post feedback on the company, refer articles of interest to other Jo-Ann’ customers, and offer suggestions for future electronic communication. Jo-Ann is using a positive marketing strategy for its Facebook page and company website because customer-generated content appears a. more authentic than company-generated content. b. more interesting than company-generated content. c. more approving than company-generated content. d. more current than company-generated content. e. more flattering than company-generated content. 84. Sysco has developed a website that allows employees to create a profile and connect with coworkers for the purpose of getting acquainted and building a work-related network. This is an example of a a. virtual reality. b. podcast. c. recruiting tool. d. social network. e. employment opportunity.

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Chap 10_20e 85. Scenario 10.1 Use the following to answer the questions. The Walt Disney Company is a master at incorporating all the unique characteristics of digital media into its website. It knows how to appeal to all types of consumers and utilize the full potential of digital media. The Disney website immediately catches your attention with sights and sounds that come alive. Not only can you catch a glimpse of an upcoming movie, but it also connects you with your favorite characters from movies past. The website offers age-appropriate games and activities, including the ability to create a fairy-tale cottage. The Disney Parks have their own links, of course, along with Radio Disney, the Disney Store, family vacation packages, and an educator's corner. An adult or child can enjoy navigating through the electronic marketing of Disney. Refer to Scenario 10.1. Through the Disney website, consumers can access in-depth information about Disney products, movies, theme parks, the corporation, and anything else related to Disney. This is an example of one of the characteristics that distinguishes online media from traditional marketing, namely a. addressability. b. interactivity. c. accessibility. d. connectivity. e. control. 86. Scenario 10.1 Use the following to answer the questions. The Walt Disney Company is a master at incorporating all the unique characteristics of digital media into its website. It knows how to appeal to all types of consumers and utilize the full potential of digital media. The Disney website immediately catches your attention with sights and sounds that come alive. Not only can you catch a glimpse of an upcoming movie, but it also connects you with your favorite characters from movies past. The website offers age-appropriate games and activities, including the ability to create a fairy-tale cottage. The Disney Parks have their own links, of course, along with Radio Disney, the Disney Store, family vacation packages, and an educator's corner. An adult or child can enjoy navigating through the electronic marketing of Disney. Refer to Scenario 10.1. Visitors to the Disney website have the ability to regulate the information they view and the activities they participate in. This is an example of a. addressability. b. interactivity. c. accessibility. d. connectivity. e. control.

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Chap 10_20e 87. The fact that consumers tend to trust other consumers over corporations and often rely on the recommendations of friends, family, and fellow consumers when making purchasing decisions has fostered the growth of sites like a. Pinterest. b. Yelp. c. Tumblr. d. Google+. e. Reddit. 88. Marketers call the internet a pull medium because a. users determine which websites they are going to view. b. they determine which websites consumers are going to view. c. they have great control over the content to which users are exposed. d. social networks have great control over the content to which users are exposed. e. users get pulled along by social media influencers. 89. The internet makes it possible for the marketer to communicate with consumers more effectively and more consistently at a lower cost than previously possible. Moreover, the internet has made it possible for marketers to reach new markets and to target existing markets more precisely. Digital media is the foundation of the marketer’s newfound power via the internet. Digital media–based marketing is different than traditional marketing in a number of ways. More specifically, digital media marketing differs from traditional marketing in which of the following ways? a. Interactivity b. Scalability c. Reliability d. Sensitivity e. Convertibility 90. Due to external pressures and concerns for privacy, Yahoo now has an opt-out option for internet-based advertising. This is an example of a. accessibility. b. addressability. c. interactivity. d. connectivity. e. control. 91. ____ are more consumer-driven than traditional media. a. Television commercials b. Radio spots c. Print ads d. Social media e. Billboard advertisements

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Chap 10_20e 92. ____ includes any attempt to intentionally conduct dishonest activities online. a. Racketeering b. Online spam c. Digital identity theft d. Online fraud e. Online bribery 93. Which of the following regulates and makes rules for privacy, fraud, and misappropriation of copyrighted intellectual property, as well as other illicit internet activities? a. Federal Internet Commission b. Federal Communication Commission c. Federal Trade Commission d. Federal Bureau of Investigations e. Individual states 94. As digital communication technologies have advanced, it is possible for marketers to a. have more control over their product's positioning. b. have more control over the processing of information. c. have more control over people's perceptions of their business. d. be more selective about news releases regarding their company. e. reach markets that were previously inaccessible. 95. Which of the following characteristics distinguish online media from traditional marketing? a. Experience, networking, and personal contact b. Social networking, personal contacts, control, and salesmanship c. Addressability, interactivity, accessibility, connectivity, and control d. Environment, responsiveness, customization, and affordability e. Dynamic responsiveness, control, friendliness, and attention-getting 96. ____ allows customers to express their needs and wants directly to a company in response to its marketing communications. a. Sociability b. Addressability c. Interactivity d. Accessibility e. Control 97. Pottery Barn uses ____ to display snapshots of company events, staff, and products. a. wikis b. blogs c. YouTube d. Instagram e. Twitter Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 98. If online communication is unfair and causes substantial injury that is not reasonably avoidable and is not outweighed by other benefits, then it is considered a. racketeering. b. deceptive. c. identity theft. d. marketing fraud. e. piracy. 99. Which of the following refers to the strategic process of distributing, promoting, and pricing products, and discovering the desires of customers using digital media and digital marketing? a. Digital orientation b. Digital media c. Electronic marketing d. Digital electronics e. Electronic processing 100. Which of the following occurs when consumers are communicating through word-of-mouth interactions to promote a product or company? a. Paid media b. Controlled media c. Owned media d. Free media e. Earned media 101. ____ uses the internet, mobile, and interactive channels to develop communication and exchanges with customers. a. Digital marketing b. Digital media c. Electronic marketing d. Digital electronics e. E-marketing 102. ____ are web-based journals in which writers can editorialize and interact with other internet users. a. Widgets b. Apps c. Blogs d. Podcasts e. Wikis

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Chap 10_20e 103. The growing use of two-day and next-day delivery by online companies best relates to a. the distribution variable of the marketing mix. b. the promotion variable of the marketing mix. c. the pricing variable of the marketing mix. d. the product variable of the marketing mix. e. the environmental variable of the marketing mix. 104. Louis is the owner of a popular bar in a college town and typically advertises in the college newspaper about upcoming drink specials or special events. Louis was an early adopter of e-marketing and worked with a college intern to create a webpage for the business. At the time, Louis believed he could simply modify the newspaper advertisements and Yellow Page listings and publish those to the webpage to attract customers and inform them of events. However, his early efforts with e-marketing were not successful. Which of the following could explain why his website failed? a. Louis treated digital marketing like a traditional marketing channel. b. Louis didn’t spend enough money on digital marketing. c. Louis failed to utilize social networks such as Facebook. d. Louis didn’t hire an advertising agency. e. Louis didn't have a good website design. 105. Delta Airlines encourages customers to post reviews on its company website or Facebook page in the hopes of increasing the company's a. target market. b. credibility. c. market share. d. reach. e. image. 106. Smartphones contain ____ that help consumers access more information about businesses. a. treatments b. digits c. widgets d. actions e. applications

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Chap 10_20e 107. Claudia, a marketer at the local zoo, has been using digital media to promote new exhibits and events. Claudia finds that digital media is a good way to promote events when the zoo does not have a large promotional budget. At the moment, Claudia is working on a strategic process for developing a(n) _________________ for a sustainable seafood event the zoo is holding for its members, most of whom are very active on the zoo's Facebook page. She decides Facebook is the appropriate social media channel she wants to use to reach consumers. Claudia determines the appropriate pricing for the event as well as the best way to distribute and promote the event through its Facebook page. To promote the event more successfully, she is also going to look at past Facebook poll results, member postings, and responses to corporate messages to determine what its members would truly desire to get out of the event. Claudia plans to incorporate this into the digital promotion she will release for the upcoming event through Facebook. a. digital marketing strategy b. electronic marketing strategy c. digital media plan d. social media plan e. e-tailing strategy 108. Gabrielle is a retailing and consumer sciences major and plans to pursue a career in fashion design. She enjoys setting the trends for her friends and owns approximately 50 pairs of shoes. She loves shopping for shoes on Zappos, a popular online retail store that is a subsidiary of Amazon. Zappos offers millions of styles of shoes, but Gabrielle can simplify her search through the use of filters. She can filter the search by style, color, material, brand name, and heel height in order to reduce the number of shoes that appear in the search results. Zappos is taking advantage of _____, one of the characteristics of online media. a. accessibility b. control c. addressability d. connectivity e. interactivity 109. Marketers' ability to obtain digital information is referred to as a. accessibility. b. addressability. c. interactivity. d. connectivity. e. control. 110. ______________ can be ideas and creative materials, songs, movies, books, or electronics that are developed to educate or entertain. a. Blogs b. Virtual sites c. Wikis d. Copyrights e. Intellectual property

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Chap 10_20e 111. Tim maintains a popular blog that highlights restaurants in the Minneapolis area. Tim provides recommendations on the restaurants, posts photos, and gives descriptions of upcoming specials or events. He has a number of followers, and restaurants have begun to take notice. One popular restaurant chain is expanding and hopes that Tim could help it in promoting its new location. Not only does Tim have a lot of people following his blog posts, but the restaurant knows that Tim is highly trusted. What is the best way for the restaurant to make use of Tim's influence in its promotional strategy? a. Ask Tim to post updates on the restaurant's website. b. Invite Tim to write a review of its food. c. Send Tim photos of restaurant meal specials. d. Send Tim a Facebook message asking him to "like" the restaurant. e. Send Tim a press release describing the new location. 112. Whole Earth Provision Company sells online through its website, while also selling through physical store locations. This type of retailing is referred to as a. brick-and-clicks. b. side-by-side. c. bricks-and-mortar. d. online-specialty. e. web-only. 113. Walgreens has set up a website that enables customers to converse with the company and communicate their needs and wants. This is an example of a(n) ____ website. a. accessible b. controlled c. linked d. addressable e. interactive 114. A ____ is a type of software that creates an interface that enables users to add or edit the content of some types of websites. a. widget b. digital diary c. blog d. podcasting e. wiki

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Chap 10_20e 115. Scenario 10.1 Use the following to answer the questions. The Walt Disney Company is a master at incorporating all the unique characteristics of digital media into its website. It knows how to appeal to all types of consumers and utilize the full potential of digital media. The Disney website immediately catches your attention with sights and sounds that come alive. Not only can you catch a glimpse of an upcoming movie, but it also connects you with your favorite characters from movies past. The website offers age-appropriate games and activities, including the ability to create a fairy-tale cottage. The Disney Parks have their own links, of course, along with Radio Disney, the Disney Store, family vacation packages, and an educator's corner. An adult or child can enjoy navigating through the electronic marketing of Disney. Refer to Scenario 10.1. The Disney website offers users the ability to create a character or a comic. You have the option of allowing other people to view and comment on your new creation. Which characteristic of emarketing is being utilized here? a. Addressability b. Interactivity c. Accessibility d. Connectivity e. Control 116. Lucy handles marketing for a start-up cosmetics firm she founded with two of her friends. The products have earned rave reviews from those who’ve tried them, but sales remain sluggish. Lucy knows if she can just get people to try the products, they will love them and buy them. Which of the following would be the best vehicle for boosting product trial and sales? a. Creating an app b. Starting a podcast about makeup tips c. Getting the firm’s products into the hands of influencers who’ll post authentic, user-generated content d. Posting photos on Instagram e. Posting photos and articles on Facebook 117. Dairy Queen communicates with its customers through ____, which is the most popular social networking site in the world. a. Flickr b. Twitter c. Instagram d. Facebook e. Pinterest

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Chap 10_20e 118. _____ are especially useful for relationship marketing. a. Media networks b. Podcasts c. Apps d. Wikis e. Social networking sites 119. Finn is a high school senior and plans to attend college after graduation. Finn enjoys playing computer games such as League of Legends and hopes to pursue a career in computer game design. He’s taking computer programming classes in high school, and his teacher has been discussing recent issues related to consumer _______ and concerns that the Federal Trade Commission may develop regulations that would provide additional protection to consumers by limiting the amount of consumer information that businesses can gather online. a. intelligence b. intellectual property c. credit card information d. privacy issues e. fraud 120. ____ relates to perceptions of value and is the most flexible element of the marketing mix. a. Distribution b. Pricing c. Store location d. Product mix e. Promotion 121. The percentage of users that clicked on a link on a site is known as a. the key performance indicator. b. Google analytics. c. marketing analytics. d. the social-media metric. e. the click-through rate. 122. The ability of a marketer to identify customers before they make a purchase is called a. connectivity. b. addressability. c. interactivity. d. accessibility. e. control.

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Chap 10_20e 123. A positive review of a product or service posted on a(n) ____________ can result in a substantial increase in sales of the product or service. a. news article comments page b. email c. popular blog d. company Web page e. Wikipedia page 124. ________ that can allow almost real-time measurement and evaluation should be embedded at the onset of a social media strategy. a. Strategic performance indicators b. Hashtags c. Google Analytics d. Click-through rates e. Key performance indicators 125. ____ are free online publicity that helps the company. a. Negative customer reviews b. Company websites c. Anti-company wikis d. Positive customer reviews e. Social technographics 126. Zeke is new to the realm of digital marketing. Recently, he saw a blog post about his company that was just untrue. He demanded the blogger remove the post. Much to his surprise, however, the post had already spread to other sites. Zeke immediately released content on the corporate website and social media pages with information that refuted the post. Nevertheless, the original post continued to spread. Zeke does not understand why users are spreading the post when his organization has posted information claiming that the post is untrue. Zeke has failed to realize that a. consumers post much more digital content than marketers do. b. consumer-generated digital content is often trusted over corporate content. c. the majority of corporate digital communication is not trusted at all. d. bloggers are professionals who rarely get content incorrect. e. any publicity, even negative, is better than no publicity.

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Chap 10_20e 127. Scenario 10.2 Use the following to answer the questions. Regardless of their age, income, or gender, an increasing number of people are turning to the internet to search for information, products, people, news, maps, entertainment, and whatever else you can think of. At the forefront of this massive search is Google; accompanying Google are social media sites such as Facebook, Twitter, and Pinterest. Google has developed methods for making information useful to all types of internet users. Some users want to critique the information, some just want to read the information, and some want to be the information writers. Facebook, originally used as a social networking application, is now picked up by retailers, brands, celebrities, churches, political campaigns, and nonprofit agencies. Twitter is a more real-time site and, as is Pinterest, a more personally-affiliated medium. Refer to Scenario 10.2. Which of the media below would be best for the American Red Cross to use in developing relationships with blood donors, and in soliciting funds for storm-ravaged communities as a result of floods and fires? a. Google b. TV c. YouTube d. Facebook e. Twitter 128. Raging Waters is a water park located in San Dimas, California, and typically welcomes 10,000 to 20,000 visitors daily from Los Angeles and nearby cities in Southern California. Raging Waters is known for its coaster-like slides and historically has added one new thrill attraction each season. The company uses its Facebook page to alert followers to the new attraction and typically makes an announcement about the attraction toward the end of the season. During the fall and winter months when the amusement park is closed, the Facebook page may provide updates on the new attraction and provide links to purchase advance tickets or season passes from their website. Which element of the marketing mix is Raging Waters using to generate interest and ticket sales for the park? a. Promotion b. Price c. Product d. Distribution e. Social media 129. Milton Bradley/Parker Brothers are producers of many board games, such as Monopoly, Battleship, Yahtzee, and Clue. The company has posted online cash rewards for consumer reviews of its games. In doing so, Milton Bradley/Parker Brothers is striving to utilize a. electronic media. b. a test market. c. consumer-generated marketing. d. new concept viewing. e. fan pages. Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 130. ____ refers to customers' ability to regulate the information they view and the rate and sequence of their exposure to that information. a. Accessibility b. Addressability c. Interactivity d. Connectivity e. Control 131. Global marketers such as Alibaba have embraced technology that enables them to form better relationships and communicate with customers. One of the benefits of e-marketing that Alibaba enjoys is that a. marketers and customers can share information. b. e-marketing generates more revenue for the firm. c. e-marketing is simple and easy to use. d. e-marketing can be implemented without using advertising agencies. e. websites are better than brick-and-mortar stores. 132. A major benefit of social media marketing is the ability to reach new target markets, such as Millennials. A firm wishing to target Millennials would be advised to use a. Facebook. b. Twitter. c. Pinterest. d. LinkedIn. e. Snapchat. 133. Home Depot has an iOS program that allows users to match colors in photographs with the store's selection of carpets. This is an example of a(n) a. application (app). b. widget. c. voice-activated system. d. digital system. e. interactivity. 134. Digital media have created opportunities for companies to a. gain more control over what the consumer sees. b. target specific markets. c. offer the same kind of experience as a brick and mortar store. d. manage information that is disseminated through the Web. e. stimulate all five senses during the online shopping experience.

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Chap 10_20e 135. One trend that has caused consumer-generated information to gain importance is a. the recession. b. the globalization of companies. c. the increase in store brands. d. the increase of consumers using digital media to publicize their own product reviews. e. the increase in consumer buying power. 136. Devices that trigger a retailer’s app to display custom messages and promotions are known as a. beacons. b. social networks. c. icons. d. apps. e. wikis. 137. Aaron Mahnke is the host of Lore, which posts true life scary stories biweekly. Users love Lore because they enjoy listening to scary stories. Marketers like Lore because they can sponsor content and become affiliated with this popular show. Users can access Lore by going onto the site and accessing the audio content, or they can subscribe through Stitcher and receive new content automatically. Lore is most likely a a. social network. b. virtual game. c. podcast. d. video sharing site. e. widget. 138. One of the most important benefits of e-marketing is the ability of marketers and a. vendors to share resources. b. customers to share information. c. government regulators to share information. d. competitors to share information. e. customers to obtain digital information. 139. Explain the ethical issues associated with digital media.

140. List the various types of digital media and technologies that are available for the marketer to use in reaching consumers.

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Chap 10_20e 141. In what ways can a company use social media to its advantage?

142. How can marketers measure the success of their digital strategies?

143. Explain how digital marketing can help increase the efficiency of a company's distribution process.

144. How have digital media and social networking changed the consumer's buying behavior?

145. Explain how consumer-generated content on digital media can be useful to marketers.

146. Define the characteristics that distinguish e-marketing from traditional marketing.

147. Describe the opportunities that have evolved in marketing due to the use of digital media.

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Chap 10_20e Answer Key 1. True 2. True 3. True 4. True 5. False 6. False 7. False 8. True 9. False 10. False 11. True 12. False 13. False 14. True 15. True 16. True 17. False 18. True 19. False 20. True 21. True 22. False 23. True 24. False 25. True 26. False

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Chap 10_20e 27. True 28. True 29. True 30. False 31. False 32. True 33. True 34. False 35. True 36. False 37. False 38. True 39. False 40. True 41. True 42. False 43. True 44. False 45. False 46. False 47. True 48. False 49. False 50. True 51. True 52. a 53. d 54. b Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 55. a 56. d 57. d 58. b 59. d 60. b 61. c 62. c 63. c 64. c 65. b 66. a 67. d 68. b 69. c 70. e 71. b 72. a 73. d 74. e 75. a 76. b 77. a 78. d 79. e 80. c 81. c 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 83. a 84. d 85. c 86. e 87. b 88. a 89. a 90. e 91. d 92. d 93. c 94. e 95. c 96. c 97. d 98. b 99. c 100. e 101. a 102. c 103. a 104. a 105. b 106. e 107. b 108. b 109. a 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 10_20e 111. b 112. a 113. e 114. e 115. d 116. c 117. d 118. e 119. d 120. b 121. e 122. b 123. c 124. e 125. d 126. b 127. d 128. a 129. c 130. e 131. a 132. e 133. a 134. b 135. d 136. a 137. c

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Chap 10_20e 138. b 139. Some of the ethical issues associated with digital media are personal privacy, fraud, and misappropriation of copyrighted intellectual property. Privacy: One of the most significant privacy issues involves the use of personal information that companies collect from website visitors in their efforts to foster long-term relationships with customers. Some people fear that the collection of personal information from website users may violate users’ privacy, especially when it is done without their knowledge. Hackers may break into websites and steal users’ personal information, enabling them to commit identity theft. Online Fraud: Online fraud includes any attempt to conduct dishonest activities online. Online fraud includes, among other things, attempts to deceive consumers into releasing personal information. Influencer marketing is relatively new area of concern: the Federal Trade Commission (FTC) requires influencers to clearly disclose any connection they have with brands they promote. Intellectual Property: The internet has also created issues associated with intellectual property, the copyrighted or trademarked ideas and creative materials developed to solve problems, carry out applications, and educate and entertain others. The software industry is particularly hard-hit when it comes to the pirating of materials and illegal file sharing. Consumers view illegal downloading in different ways, depending on the motivation for the behavior. If the motivation is primarily utilitarian, or for personal gain, then the act is viewed as less ethically acceptable than if it is for a hedonistic reason, or just for fun. 140. The types of digital media and technologies that are available for the marketer to use in reaching consumers are social media sites, blogs, wikis, media-sharing sites, mobile devices, applications, and widgets. 141. Social media marketing involves obtaining communications with consumers through social media sites. Social media marketing enables firms to promote a message and create online conversations through multiple platforms. Large markets can be targeted and reached through paid media, owned media, and earned media. Marketers can place ads on Google and Facebook just like they place an ad on television. In addition to placing ads, marketers can own their own media outlets and create messages on social networks. Most firms have owned websites but can also develop pages on Facebook and LinkedIn. Finally, markets can have earned media when consumers are communicating on social media sites. These digital word-of-mouth posts or interactions can promote a product or firm. 142. Social media monitoring involves activities to track, measure, and evaluate a firm’s digital marketing initiatives. Monitoring and evaluating the digital marketing strategy is part of the strategic performance evaluation. An advantage of digital marketing evaluations is that there are methods to capture the metrics that indicate the outcomes of strategies. Therefore, expected level of performance can be compared against actual performance. Metrics develop from listening and tracking. For example, a firm could set up a hashtag and promote it. Metrics can be quantitative or qualitative. For example, click-through rate (CTR) determines the percentage of consumers who clicked on a link on a site as a quantitative measure. In addition, a qualitative metric could relate how consumers feel about a product. Key performance indicators (KPIs) that can allow almost real-time measurement and evaluation should be embedded at the onset of a social media strategy. This provides a foundation for making iterative changes to implementation and tactical execution. Applying analytics to social media performance can help develop better targeted social media campaigns. Selecting valid metrics requires specific objectives for the social media strategy. Objectives that are quantitative could include the number of likes on an Instagram post or the CTR of a Facebook post. Additionally, firms can use outside tools, like Google Analytics, to monitor traffic and thus better understand their customers and measure the effectiveness of their marketing efforts.

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Chap 10_20e 143. The role of distribution is to make products available at the right time, at the right place, and in the right quantities. Digital marketing can be viewed as a new distribution channel that helps businesses increase efficiency. The ability to process orders electronically and increase the speed of communications via the internet reduces inefficiencies, costs, and redundancies while increasing speed throughout the marketing channel. Shipping times and costs have become an important consideration in attracting consumers, prompting many companies to offer consumers low shipping costs or next-day delivery. 144. Consumers now have a greater ability to regulate the information that they view as well as the rate and sequence of their exposure to that information. The internet is sometimes referred to as a pull medium because users determine which websites they are going to view; the marketer has only limited ability to control the content to which users are exposed, and in what sequence. Today, blogs, wikis, podcasts, and ratings sites such as Angie’s List and Yelp are used to publicize, praise, or challenge companies. Digital media require marketers to approach their jobs differently compared to traditional marketing. However, most companies in the United States do not routinely monitor consumers’ postings to online social networking sites. In many cases, this represents a missed opportunity to gather information. 145. By understanding where online users are likely to express their thoughts and opinions, marketers can use these forums to interact with consumers, address problems, and promote their companies. Positive customer feedback is free publicity that often helps the company more than corporate messages do. Since consumer-generated content appears more authentic than corporate messages, it can go far in increasing a company’s credibility. 146. The characteristics that distinguish e-marketing from traditional marketing are as follows: Addressability: the ability of the marketer to identify customers before they make a purchase. Interactivity: the ability of customers to express their needs and wants directly to the firm in response to its marketing communications. Accessibility: the ability for marketers to obtain digital information. Connectivity: the ability for consumers to be connected with marketers along with other consumers. Control: the customer’s ability to regulate the information they view as well as the rate and exposure to that information. 147. Digital media are electronic media that function using digital codes—when we refer to digital media, we are referring to media available via computers, mobile devices, and other digital devices that have been released in recent years. Marketers can use a number of digital media sites, including YouTube, Facebook, Pinterest, and Flickr, to promote products and create company awareness. The phenomenal growth of the internet has provided unprecedented opportunities for marketers to forge interactive relationships with consumers. Digital media have made it possible to target markets more precisely and reach markets that were previously inaccessible. One of the most important benefits of e-marketing is the ability of marketers and customers to share information. Today’s marketers can use the internet to form relationships with a variety of stakeholders, including customers, employees, and suppliers.

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Chap 11_20e_MCQs Indicate the answer choice that best completes the statement or answers the question. 1. Convenience products are a. relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. b. frequently purchased items for which buyers are willing to exert considerable effort. c. frequently purchased items that are found in certain retail outlets. d. items that are expensive but are easy to purchase. e. items that require some purchase planning and for which the buyer often will not accept substitutes. 2. Fiona works at the large corporate headquarters of a multinational company. She is a bit of a clean freak. Every week she cleans her office, including the windows. Her favorite window cleaner to use is Windex. In this case, Windex Window Cleaner is which of the following types of business products? a. MRO supplies b. Installations c. Accessory equipment d. Process materials e. Component parts 3. The full and legal name of an organization is called the a. trademark. b. legal title. c. organizational name. d. brand name. e. trade name. 4. Multiple packaging is a. likely to decrease serving size. b. the same as family packaging. c. likely to increase demand. d. the most effective type of packaging for decreasing demand. e. the most expensive type of packaging. 5. The depth of a product mix is measured by the average number of a. convenience products as compared with the number of specialty products. b. different product lines offered by the company. c. different products offered in each product line. d. specialty products as compared with the number of convenience products. e. product features that the company offers.

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Chap 11_20e_MCQs 6. When Fiat offers to let qualified buyers test drive the Fiat 500X Urbana, the dealer is trying to stimulate which stage of the product adoption process? a. Awareness b. Interest c. Evaluation d. Trial e. Adoption 7. The producers of Gillette razor blades use a marketing strategy that includes large advertising expenditures and more price flexibility for the various types of blades offered. Based on this example, razor blades are in the ____ stage of the product life cycle. a. decline b. evaluation c. growth d. introduction e. maturity 8. Roomba is the ____ of the robotic vacuum cleaner made by iRobot. a. brand name b. brand mark c. trade label d. brand e. identifier 9. Which of the following best defines the interest stage in the product adoption process? a. The buyer tries to find the product in a retail store. b. The buyer considers the benefits and determines whether to try the product. c. The buyer tries the product to determine its usefulness. d. The buyer seeks information and is receptive to learning about the product. e. The buyer uses objective sources to learn about the product. 10. A Dell laptop that has an “Intel” logo on its keyboard is an example of a. brand extension. b. brand licensing. c. co-branding. d. individual branding. e. line family branding.

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Chap 11_20e_MCQs 11. Mario is an avid collector of Major League Baseball memorabilia. He greatly desires to own the "special" bat that earned the slugger Sammy Sosa a seven-game suspension due to its illegal contents. This is an example of a(n) ____ product. a. shopping b. unique c. specialty d. historical e. unsought 12. People who are generally skeptical of new products but choose eventually to adopt them out of necessity or economic pressure are best described as a. non-adopters. b. late majority. c. innovators. d. late adopters. e. early majority. 13. Samantha needed to buy an airline ticket to visit her parents. She went to several websites to compare rates and chose a flight on Spirit Airlines because, for a similar price to other airlines, it had a better reputation for service. For Samantha, this flight is an example of which type of product? a. Shopping b. Convenience c. Specialty d. Unsought e. Durable 14. When ____ branding is used, each of a firm's products is branded with at least part of the same name. a. individual b. trademark c. family d. selective e. brand-extension 15. Shopping products have a ____ inventory turnover and need ____ distribution outlets than convenience goods. a. similar; more b. higher; fewer c. higher; more d. lower; more e. lower; fewer

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Chap 11_20e_MCQs 16. Although Sergei’s grandfather still prefers using a landline, he just bought his first cell phone. Sergei’s grandfather is most likely oriented toward the past and is a member of the ____ group. a. non-adopters b. laggards c. innovators d. late adopters e. late majority 17. A distributor of plumbing supplies purchases a desktop computer to aid in inventory control. This computer is an example of which type of business product? a. Raw material b. Installations c. Accessory equipment d. Component part e. Process material 18. A ____ brand type is considered the least protectable under existing trademark regulations. a. descriptive b. fanciful c. generic d. symbolic e. suggestive 19. Kashi, a subsidiary of Kellogg, was placed in a negative light when it was accused of falsely advertising its Kashi bars and cereal products as "all natural" despite ingredient lists that included chemicals that a reasonable consumer might not consider "natural." Critics claimed this made the firm’s claims of "all natural" deceiving. Kashi settled a lawsuit and agreed to remove the claim from its label. Kashi was most likely using the phrase "all natural" on its labels for ___________________ purposes. a. informational b. legal c. promotional d. convenience e. identification 20. When a business finds itself squeezed out of a market for a product or loses interest in that product, it is a sign of being in the ____ stage of the product life cycle. a. maturity b. growth c. introduction d. market reduction e. decline

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Chap 11_20e_MCQs 21. Y ou just finished meeting with your boss and he is very upset about the most recent customer survey results for the firm. A majority of the respondents complained about the limited number of product lines your firm offers. Which of following recommendations should you make to your boss? a. T he firm needs to lengthen its product life cycle. b. T he firm needs to expand the width of its product mix. c. T he firm needs to shorten its product life cycle. d. T he firm needs to expand the depth of its product mix. e. T he firm needs to expand the length of its product mix. 22. Private distributor brands are owned by retailers and do not identify the manufacturer of the product. Which of the following is an example of a private distributor brand? a. Green Giant corn b. Dell computers c. Kroger's canned green beans d. Little Debbie snack cakes e. Nike Air Jordan basketball shoes 23. Claudia’s company has begun offering advertising assistance and allowances to retailers carrying its well-known hair-styling gel. This would suggest that the company’s hair-styling gel has entered which phase of the product life cycle? a. Trial b. Growth c. Introduction d. Decline e. Maturity 24. Ariana loves new electronic products, but she also wants to make sure she gets a good value for her money. Therefore, she typically waits a few months after a product is introduced to see whether all the kinks are worked out. In the meantime, she reads ratings and reviews. She also turns to her friend Eric, who is one of the first people to adopt and test out new products. She relies heavily on Eric's recommendations. When she is satisfied as to its value, she usually buys the product. Ariana most likely fits into which category? a. Early adopter b. Early majority c. Innovator d. Late majority e. Laggard 25. Which one of the following is NOT a benefit of multiple packaging? a. Facilitates special price offers b. Increases demand c. Increases consumer acceptance of the product d. Makes handling or storage easier e. Conveys an overall image of the firm Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 26. Clothing must be labeled with the country of manufacture, fabric content, and a. style. b. size. c. inspection code. d. care instructions. e. universal product code. 27. Scenario 11.2 Use the following to answer the questions. When Silk Soymilk began packaging its chocolate milk in single-serving sizes, the company chose drink boxes that did not need refrigeration. The boxes were only sold in shrink-wrapped sets of six. Single boxes were not available at grocery stores or convenience markets. Once the Silk chocolate product was selling well, they also began offering the Silk Soymilk vanilla flavor in the same type of packaging. The Silk Soymilk brand, logo, and look of the boxes were the same as its larger half-gallon versions. The only difference in packaging style was the color brown for chocolate milk and the color white for vanilla. Refer to Scenario 11.2. Which of the following is NOT a function of the packaging strategy chosen by Silk Soymilk? a. It protects and preserves the product. b. It offers convenience to customers. c. Its size and shape help make storage easier. d. It is less harmful to the environment. e. It most likely appeals to children and those with active lifestyles. 28. Business products that are purchased routinely, do not become part of finished goods, and are expense items rather than capital goods are called a. raw materials. b. installations. c. accessory equipment. d. component parts. e. process materials.

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Chap 11_20e_MCQs 29. Scenario 11.2 Use the following to answer the questions. When Silk Soymilk began packaging its chocolate milk in single-serving sizes, the company chose drink boxes that did not need refrigeration. The boxes were only sold in shrink-wrapped sets of six. Single boxes were not available at grocery stores or convenience markets. Once the Silk chocolate product was selling well, they also began offering the Silk Soymilk vanilla flavor in the same type of packaging. The Silk Soymilk brand, logo, and look of the boxes were the same as its larger half-gallon versions. The only difference in packaging style was the color brown for chocolate milk and the color white for vanilla. Refer to Scenario 11.2. Silk Soymilk's strategy of packaging its single-serve boxes of chocolate milk to look like its half-gallon cartons is known as _________ a. a brand extension. b. individual packaging. c. manufacturer branding. d. family packaging. e. multiple packaging. 30. Bic, which is widely known for producing ballpoint pens and related writing products, tried to introduce Bic disposable underwear. The reason this new product failed is likely because of a. poor timing. b. the failure to match product offerings to customer needs. c. technical problems. d. overestimation of market size. e. ineffective branding. 31. Products are classified as being business or consumer products according to the a. number of buyers involved in the decision. b. buyer's intended use of the product. c. seller's intended use of the product. d. location of use. e. types of outlets from which they are purchased. 32. A co-branded product from Sony and Heinz would likely fail because a. neither of these brands is very well known to consumers. b. their products are not complementary. c. they are both food products. d. this co-branding will not provide product differentiation. e. the market segment for this product is too vast

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Chap 11_20e_MCQs 33. The label on a window air conditioner reads “uses up to 20% less energy.” For what reason is this phrase most likely used? a. To provide product use information b. To encourage multiple purchases c. To promote the product d. To satisfy legal requirements e. To encourage the proper consumption patterns of the product 34. Products used directly in the production of a final product but that are not easily identifiable are categorized as a. accessory products. b. component parts. c. MRO supplies. d. assembly components. e. process materials. 35. Which of the following best illustrates how a firm can use a symbol to make an intangible product more tangible? a. McDonald's arches b. Mercedes Benz emblem c. Nike swoosh d. Traveler's Insurance umbrella e. Arrows on Wrigley gum packages 36. Coca-Cola offers a line of soft drinks that includes Coca-Cola, Diet Coke, Coca-Cola Zero, Sprite, and Fanta. These drinks best illustrate Coca-Cola's product mix a. width. b. depth. c. length. d. volume. e. life cycle. 37. A product line is defined as a. products that can be designated as a unique offering among the organization's products. b. products that an organization makes available to consumers. c. a group of closely related products that are considered a unit because of marketing, technical, or end-use considerations. d. a specific group of products that are offered to the market. e. products that are sold by the same firm or a division of a firm.

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Chap 11_20e_MCQs 38. Melania, a product manager, thinks her company’s FastBrew coffee maker is currently in the growth stage of the product life cycle. If so, the profits for the FastBrew coffee maker ___ and the number of competitors ____. a. are negative; is growing b. have peaked; is growing c. are declining; is growing d. have peaked; is declining e. are declining; is declining 39. Business products are a. purchased for personal consumption. b. chosen on the basis of preferences expressed by a business procurement department. c. purchased for both their functional aspects and their psychological rewards. d. classified according to their characteristics and intended uses. e. not purchased by nonbusiness organizations. 40. Which of the following statements does NOT apply to convenience goods? a. Consumers are brand loyal to convenience products and are not likely to substitute other brands. b. Convenience products require minimal shopping effort. c. Marketing of convenience products requires intensive exposure of these goods in as many stores as possible. d. Consumers tend to feel that the most desirable retail facility for convenience products is the closest one. e. Colas, gasoline, and bread are good examples of convenience goods. 41. Forever 21 clothing stores sell primarily what type of products? a. Convenience b. Shopping c. Unsought d. Nondurable e. Specialty 42. The major characteristic of a private brand is that a. only retailers initiate and own the brand. b. manufacturers are not identified on the product. c. producers become involved with the marketing mix. d. producers price the product. e. wholesalers encourage producers to make the product available.

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Chap 11_20e_MCQs 43. A product item is best described as a a. component of a marketing mix. b. particular brand. c. specific characteristic of a product. d. specific version of a product. e. unit of measure for the product. 44. A product mix is best described as a. all products offered by a firm. b. product, distribution, promotion, and price. c. many products sold by one firm. d. all products of a particular type. e. a group of closely related products that are considered a unit because of market, technical, or end-use considerations. 45. Products for which buyers are willing to spend much time comparing stores and brands for differences in prices, product features, and services are called ____ products. a. shopping b. specialty c. service d. convenience e. unsought 46. The jolly green giant used by the Green Giant Company facilitates the development of a. brand associations. b. brand quality. c. product preference. d. brand loyalty. e. product equity. 47. Jack Harper's Auto Towing Service would best be described as a(n) ____ product. a. convenience b. unsought c. specialty d. durable e. shopping 48. Which of the following products is an example of a manufacturer brand? a. Great Value Corn Flakes b. JCPenney jeans c. Meijer tires d. Sony TVs e. Kroger tomato sauce Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 49. When a customer is aware that a brand exists and considers it a possibility if his preferred brand is out, he exhibits brand a. loyalty. b. insistence. c. preference. d. acknowledgment. e. recognition. 50. A trademark signifies a. that the owner has exclusive use of a brand and others are prohibited from using it. b. that a product was manufactured by a particular company. c. the full and legal name of an organization. d. the level of quality of a product based on its legally protected rights. e. the inventive use of a brand name or brand mark to identify a company's products. 51. Aggressive pricing is typical during the ____ stage of the product life cycle. a. decline b. growth c. introduction d. plateau e. stabilization 52. Head & Shoulders Classic Clean is a ____ of shampoo made by the Procter & Gamble Corporation. a. brand mark b. brand identification c. brand name d. service mark e. trade name 53. A specialty product a. requires minimal effort to purchase. b. is purchased frequently. c. requires purchase planning, and the buyer will usually not accept substitutes. d. is generally less expensive than other items in the same product class. e. prompts the purchaser to make comparisons among alternatives. 54. During the maturity stage a. product modifications are unnecessary. b. there is less emphasis on changing a product's price. c. marketing strategies are rarely altered. d. some competitors are forced out. e. limited advertising expenditures are required to maintain market share. Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 55. Although they become part of a larger product, ____ can often be easily identified and distinguished on the larger product. a. component parts b. accessory parts c. raw materials d. process materials e. MRO supplies 56. A distinguishing factor between a brand name and a brand mark is that a brand name a. creates customer loyalty. b. consists of words. c. identifies only one item in the product mix. d. is registered with the U.S. Patent and Trademark Office. e. implies an organization's name. 57. A light bulb can be all of the following except a. a consumer product. b. a business product. c. either a consumer product or a business product. d. a business product if it is used to light an assembly line in a factory. e. a consumer product if it is used to light the office of the board of directors. 58. The brand name Hamburger Helper would most likely be considered a. arbitrary. b. generic. c. suggestive. d. descriptive. e. fanciful. 59. Two difficulties that often arise during the introduction stage of the product life cycle are that sellers may lack the resources to launch the new product successfully and a. the initial product price may have to be low to achieve some share of the market. b. the initial product price may have to be high to recoup costs. c. many competitors are entering the market. d. marketers must have a large marketing budget to establish the new product successfully. e. profits begin to decline.

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Chap 11_20e_MCQs 60. As Alicia enters Autio car electronics department, she is asked by the salesperson if she has seen the new plugin cell phones with coffee-warming app. She answers that she didn't know that this type of app for cars was available. Based on this information, she is now in what stage of the product adoption process for this item? a. Awareness b. Interest c. Evaluation d. Trial e. Adoption 61. _____ is an example of a trade name and _____ is a brand name owned by that company. a. The McDonald’s Corporation; the Golden Arches b. Chevrolet; Silverado c. Ford Motor Company; Escape d. Nike, Inc.; “Swoosh” e. Kleenex; tissues 62. When an individual considers whether a product will meet certain criteria that are critical for meeting his or her needs, in what stage of the product adoption process is this individual? a. Interest b. Awareness c. Evaluation d. Trial e. Adoption 63. Nike manufactures athletic shoes, shorts, shirts, and a variety of other athletic products. These products make up Nike's product a. line. b. item. c. mix. d. width. e. depth. 64. Labeling is ____________ packaging. a. a lways included on the back of b. a lways included on the front of c. n ever required on d. d one independent of e. c losely interrelated to

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Chap 11_20e_MCQs 65. To promote overall company image, packages of Pillsbury cake and cookie mixes have similar designs and colors. This approach is known as a. family branding. b. brand managing. c. line consistency. d. family packaging. e. product grouping. 66. All packaging must at a minimum a. have a design consistent with the package design of other products sold by the organization. b. clearly communicate the contents and the product's benefits. c. be tamper-proof and safe for children. d. comply with the FDA's packaging regulations. e. be made out of the most cost-effective materials available. 67. Trader Joe’s sells primarily Trader Joe’s–labeled grocery products in its retail stores. The Trader Joe’s brand is not sold in any other outlet. Trader Joe’s is a ____ brand. a. generic b. reseller c. manufacturer d. distribution e. private distributor 68. When a product experiences an increase in the number of competitors, it is usually in the _____ stage of the product life cycle; however, when that competition becomes intense, it is in the ____ stage. a. introduction; maturity b. introduction; growth c. growth; decline d. growth; maturity e. maturity; decline 69. Which of the following is NOT a business product? a. Oil to be refined into fuel b. Chips to be integrated into components for personal computers c. Paper, pens, and tape to be used in an office d. Marketing consulting services to aid a company in marketing a new product e. Calculators bought to help individuals complete their personal federal income tax forms

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Chap 11_20e_MCQs 70. Twin-packs and six-packs are examples of a. family packaging. b. group packaging. c. package bundling. d. family branding. e. multiple packaging. 71. Which of the following tactics would typically be employed when a product is in the growth stage of its life cycle? a. Lowering prices after developmental costs have been recovered b. Raising promotion expenditures as a percentage of total sales c. Moving from intensive to selective distribution d. Raising prices to encourage competitors to enter the market e. Reducing the number of product models in the product line 72. During the introduction stage of a successful product, profits are usually a. at their highest point. b. negative and decreasing. c. negative and increasing. d. positive and increasing. e. declining. 73. A (n)____________ is a tangible physical entity. a. i dea b. a ttribute c. s ervice d. feature e. g ood 74. Which one of the following terms is the best description of what happens in the third stage of the product adoption process? a. E valuation b. A wareness c. T rial d. Interest e. A doption 75. Packaging that is designed to flow through the distribution channel easily is called ____ packaging. a. category-consistent b. multiple c. innovative d. handling-improved e. logistic Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 76. Merissa needs some spaghetti sauce and always buys Ragu. However, her local supermarket is out of Ragu and, since Merissa wants to get home to cook dinner, she settles for Prego. Merissa has brand ____ for Ragu and brand ____ for Prego. a. insistence; recognition b. insistence; preference c. loyalty; preference d. preference; recognition e. preference; loyalty 77. In marketing, family packaging means a. packaging products in a quantity suitable for use for an average-sized family. b. putting a set of related products all in the same package. c. making all of a company's or product line's packaging look similar. d. putting the same brand name on all of a company's products. e. designing and selling only products that are related. 78. Ford sells the Ford Mustang, Ford F-150, and the Ford Explorer. This is an example of a. family branding. b. shared naming. c. individual branding. d. brand suspension. e. single branding. 79. Individual-sized boxes and packages that do not require refrigeration are both benefits of the ____ function of packaging. a. protection b. reusability c. cost-effectiveness d. safety e. convenience 80. The metal used to construct the body of a bicycle would be _________________. The bicycle seat would be a __________________. a. a ccessory equipment; raw material b. r aw materials; accessory equipment c. p rocess materials; component part d. r aw materials; component part e. p rocess materials; raw material

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Chap 11_20e_MCQs 81. When Kellogg’s added Kellogg’s Unicorn Cereal to the line of Kellogg cereal, the firm was using ____ branding. a. brand-extension b. individual c. family d. selective e. licensed 82. Millie's Cookie House sells cookies, pastries, and muffins. She offers 30 different types of cookies, 20 different types of pastries, and 10 types of muffins. While not all of these are available in-store, customers can special order or have the baked goods catered. The depth of the product mix that Millie's offers is ______________, while the width of the product mix is ___________________. a. shallow; deep b. deep; narrow c. deep; long d. narrow; wide e. extreme; narrow 83. The spray bottle for Windex Glass Cleaner could be considered a secondary-use package because a. its shape is ideal for multiple-unit packaging. b. glass cleaner works on chrome as well as glass. c. the spray nozzle has an adjustable valve. d. customers can reuse it for other purposes. e. it has a shape similar to other glass cleaner bottles. 84. The stage of the product life cycle when marketers consider eliminating products that are not contributing to profitability or the overall effectiveness of a product mix is the ____ stage. a. maturity b. decline c. growth d. introduction e. reorganization

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Chap 11_20e_MCQs 85. The Sierra Club is an environmental organization with the mission to "To explore, enjoy, and protect the wild places of the earth; To practice and promote the responsible use of the earth's ecosystems and resources; To educate and enlist humanity to protect and restore the quality of the natural and human environment; and to use all lawful means to carry out these objectives." It engages in much advocacy related to environmental issues including wilderness protection, pollution reduction, clean energy, and more. the Sierra Club's main product is most likely a(n) a. good. b. tangible entity. c. service. d. idea. e. feature. 86. When designing a package, which characteristic is least important? a. An association with the company's brand mark b. Cost-effectiveness c. Environmental responsiveness d. Safety e. The value it has as a promotional tool 87. When Clorox introduced bleach in a no-drip bottle, the firm was taking action consistent with its product being in the ____ stage of the product life cycle. a. introduction b. growth c. stabilization d. maturity e. decline 88. When Starbucks introduced its instant coffee brand, Via, the company only sold it in packages of three singlecup units. Starbucks’ primary objective for selling Via in three-unit packages rather than single-unit packages was most likely a. to encourage the consumer to try the product several times. b. to encourage a higher consumption of all Starbucks products. c. to sell more because of infrequent coffee purchases. d. to reduce costs in the distribution and handling of the Via products. e. to engage in an environmentally responsible behavior. 89. When we speak of the number of product lines that a company offers, we are referring to the ____________ of the company’s product mix. a. w idth b. d epth c. l ength d. s ize e. v olume Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 90. Scenario 11.1 Use the following to answer the questions. Megabus is a bus line operating in the Northeast and Midwestern United States, and in Canada. It offers travelers a cheap alternative to driving and flying between large cities, keeping the fares extremely low yet offering the latest technology. Unlike the traditional Greyhound bus line, Megabus is an express service, and is equipped with at-seat power outlets, video screens, headsets, and seat belts. Many buses also run on biodiesel fuel. Additionally, Megabus picks up and drops off people in the centers of cities rather than at inconveniently located terminals. Riders can book tickets at Megabus.com, where some fares begin at just $1. Routes are limited, and are offered out of cities such as Toronto, New York, Baltimore, Philadelphia, and Chicago. Recently, its competitor Greyhound has launched a new bus line, BoltBus, with similar fares and high-tech amenities. A fare on a BoltBus bus from Washington D.C. to New York City is $26.00 round trip, while the same fare through Greyhound's traditional bus line costs $50.00. The benefit of Greyhound's traditional line is that there are more departure times and more stops in smaller towns along the way. Refer to Scenario 11.1. What product(s) is Megabus marketing? a. Megabus is a service and therefore is not marketing a product. b. The ride between cities is a service product and is the only one Megabus is marketing. c. The ride between the cities, which is the core product, plus the supplemental features of at-seat power outlets, video screens, and other technology. d. The ride between cities, which is a convenience product. e. The ride between cities, which is a specialty product. 91. A secondary-use package is defined as one that a. can be used as a promotional tool. b. can be reused for purposes other than its initial use. c. facilitates transportation, storage, and handling for middlemen. d. is recyclable and environmentally safe. e. promotes an overall company image. 92. National Lumber is evaluating its complete product mix. It wishes to decrease some of its marketing expenditures and streamline its product offerings. National Lumber will most likely look at products in the ____ stage of the product life cycle as possibilities for elimination. a. not yet developed b. growth c. introduction d. maturity e. decline

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Chap 11_20e_MCQs 93. When Marvel characters appear on apparel made by another company, this would be an example of a. brand licensing. b. brand extensions. c. dual branding. d. co-branding. e. cooperative branding. 94. Jorge totals his car and spends two days recuperating in the hospital. After he gets out, he knows he needs a new vehicle. Jorge's old car was a Volvo that he loved. There is no Volvo dealership in his city. Although there are many less expensive vehicles to purchase, Jorge convinces his friend to drive more than 50 miles to a much larger city so that he can purchase a new Volvo. For Jorge the hospital stay was a(n) ______________ product, while his purchase of the Volvo is a ______________ product. a. unsought; convenience b. shopping; specialty c. convenience; shopping d. unsought; shopping e. specialty; specialty 95. Facilities, factories, and production lines with very large equipment are all classified as a. accessory equipment. b. permanents. c. installations. d. component parts. e. MRO facilities. 96. Which of the following should be the least important concern for marketers when selecting a brand name? a. Choosing a name that is easy to say and recall b. Positively suggesting the product's major benefits c. Designing a name that can be used in all different types of media d. Developing an advertising campaign to introduce the name e. Checking to see if the name is already trademarked by another company 97. A ____ brand usually requires a producer to become involved in distribution, promotion, and pricing decisions. a. dealer b. manufacturer c. private distributor d. store e. wholesaler

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Chap 11_20e_MCQs 98. An individual knows that a product exists, but has little information regarding the product and does not seek additional information. In what stage of the product adoption process is that person? a. Trial b. Adoption c. Interest d. Awareness e. Evaluation 99. During the growth stage of the product life cycle, marketers must a. fortify the product position. b. move to exclusive distribution. c. raise the price. d. increase promotion as a percentage of sales. e. introduce private brands. 100. What degree of brand loyalty is the strongest and most desired by marketers? a. Preference b. Requirement c. Awareness d. Insistence e. Recognition 101. A product that is simply labeled with the product category is considered a a. private brand. b. no-name product. c. generic brand. d. poor-quality item. e. lean manufacturer brand. 102. Harry is an athlete who plays a variety of sports that all require various athletic shoes. He has a favorable attitude toward Under Armour shoes. This favorable attitude is called brand a. loyalty. b. recognition. c. preference. d. insistence. e. equity.

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Chap 11_20e_MCQs 103. Recently Raul went to a neighborhood grocery store to pick up a few items. When he looked for Degree Men’s Dry Protection Antiperspirant, it was unavailable. Although there were a number of antiperspirant brands available, he did not buy any deodorant. Raul's behavior indicates that he most likely has what level of brand loyalty toward Degree Men’s Dry Protection deodorant? a. Recognition b. Resistance c. Preference d. Insistence e. No brand loyalty 104. Business products are classified into the following seven categories according to characteristics and intended uses: raw materials, installations, accessory equipment, component parts, process materials, business services, and a. production activities. b. service assistance. c. specialty industrial products. d. computer programming and operation services. e. MRO supplies. 105. Henry went skiing one weekend with several of his friends. While on the slope, he injured his leg and needed to see a doctor. Henry is likely going to view solutions to his problem as a. specialty products. b. installations. c. unsought products. d. shopping products. e. convenience products. 106. Casa Azul Mexican Restaurant purchased several large built-in ovens for use in remodeling its kitchens. These ovens are an example of which type of business product? a. Raw materials b. Installations c. Accessory equipment d. Component parts e. Process materials 107. The Target bullseye is a classic example of a a. brand. b. brand symbol. c. brand name. d. brand mark. e. trade name.

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Chap 11_20e_MCQs 108. Crimson Hexagon is a marketing research company that markets primarily to consumer products organizations. Crimson Hexagon provides products that are most likely considered a. component parts. b. MRO supplies. c. process ideas. d. business services. e. installations. 109. Many brand names have become so common that they are now generic terms for a particular product category. Which of the following is the best example of this? a. Mrs. Butterworths b. Charmin c. Bic d. Crispix e. Shredded Wheat 110. The three levels of brand loyalty from strongest to weakest are a. preference, insistence, recognition. b. insistence, recognition, preference. c. insistence, preference, recognition. d. recognition, preference, insistence. e. insistence, preference, indifference. 111. Charmin toilet paper would be classified as which type of product? a. Convenience b. Shopping c. Specialty d. Unsought e. Industrial service

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Chap 11_20e_MCQs 112. Scenario 11.1 Use the following to answer the questions. Megabus is a bus line operating in the Northeast and Midwestern United States, and in Canada. It offers travelers a cheap alternative to driving and flying between large cities, keeping the fares extremely low yet offering the latest technology. Unlike the traditional Greyhound bus line, Megabus is an express service, and is equipped with at-seat power outlets, video screens, headsets, and seat belts. Many buses also run on biodiesel fuel. Additionally, Megabus picks up and drops off people in the centers of cities rather than at inconveniently located terminals. Riders can book tickets at Megabus.com, where some fares begin at just $1. Routes are limited, and are offered out of cities such as Toronto, New York, Baltimore, Philadelphia, and Chicago. Recently, its competitor Greyhound has launched a new bus line, BoltBus, with similar fares and high-tech amenities. A fare on a BoltBus bus from Washington D.C. to New York City is $26.00 round trip, while the same fare through Greyhound's traditional bus line costs $50.00. The benefit of Greyhound's traditional line is that there are more departure times and more stops in smaller towns along the way. Refer to Scenario 11.1. Lindsey has heard of Megabus and is now searching the website of Megabus.com for the schedule and fares of a trip between Buffalo, New York, and New York City. Lindsey is most likely in which of the following stages of the product adoption process? a. Adoption b. Trial c. Evaluation d. Interest e. Awareness 113. Procter & Gamble makes at least eight different laundry detergents. This is most relevant to the issue of a. width of product mix. b. product mix consistency. c. depth of product mix. d. a market mix. e. a promotion mix. 114. Which stage in the product life cycle is critical to a product's survival because competitive reactions to the product's success during this period will affect the product's life expectancy? a. Decline b. Expansion c. Growth d. Introduction e. Stabilization

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Chap 11_20e_MCQs 115. In order to manufacture its vehicles, Toyota needs to purchase large robotic arms that become permanent

fixtures in their assembly plants. These robotic arms are best described as a. component parts. b. accessory equipment. c. installations. d. process materials. e. MRO supplies. 116. Elements that help create brand equity include all of the following except brand a. quality. b. associations. c. loyalty. d. recognition. e. awareness. 117. Achieving greater penetration of the market is typically a business goal during the ____ stage of the product life cycle. a. maturity b. growth c. introduction d. market testing e. decline 118. Martha works as the purchasing agent for the business department at the local college. One of the staff members has asked her to order a new desk chair because the stuffing is coming out of her old one. Martha approves the purchase, and the school buys the desk chair. The more she researched the chair, however, the more impressed she became. Martha suffers from back problems, and this desk chair had a number of adjustment settings and strong cushioning. Martha operates her own small consulting business from her home office in her off-hours. The chair she currently has for her desk in the office is highly uncomfortable. Despite its expense, Martha decides to purchase the chair for her home office. The first purchase is a(n) _____________, and the second purchase is a ____________________. a. business; consumer b. consumer; consumer c. business; business d. consumer; business e. industrial; consumer 119. Another common name for a private distributor brand is a ____ brand. a. home b. manufacturer c. generic d. store e. label Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 120. As the production manager of an engineering firm, you went out and bought a metal-cutting machine. What you have purchased can best be classified as a a. raw material. b. processed component. c. component part. d. service. e. business product. 121. If Ralph Lauren, a designer of fine clothing, authorized Dan River Mills to market a line of sheets under the Ralph Lauren name, this arrangement is an example of a. brand extension. b. brand licensing. c. product continuation. d. private branding. e. individual branding. 122. When Glidden introduced interior house paint in plastic gallon containers, including a no-drip spout, this was an example of ____ packaging. a. category-consistent b. innovative c. traditional d. green e. convenience 123. For which of the following products would multiple packaging most likely be least effective? a. Coca-Cola soft drinks b. Gillette disposable razors c. Sun-Maid raisins d. Kellogg's cereals e. Heinz vinegar 124. The width of a product mix is measured by the number of product a. dimensions in the product line. b. features in each brand. c. items in the product line. d. lines a company offers. e. specialties a company offers.

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Chap 11_20e_MCQs 125. Which of the following best describes someone who is an early adopter in terms of the major adopter

categories? a. They enjoy new products and are willing to take a risk. b. They are oriented toward the past and are the last to adopt a new product. c. They are skeptical of new products, but eventually adopt them because of economic necessity or social pressure. d. They choose new products carefully and are viewed as “in-the-know” by other adopter categories. e. They are deliberate and cautious in trying new products. 126. The well-known brand UPS (United Parcel Service) would most likely be classified as a. fanciful. b. generic. c. descriptive. d. suggestive. e. arbitrary. 127. Phillip is on his way to work when he realizes he has a flat tire. He swings into Discount Tires and has a new tire installed. Phillip’s purchase of a new tire in this situation is considered to be a. a shopping good. b. a convenience good. c. an unsought good. d. a specialty good. e. an industrial good. 128. Trying to link a grooming products brand like Axe to a food brand like Kashi would be considered a poor decision in this type of branding. a. Co-branding b. Individual branding c. Family branding d. Product branding e. Reseller branding 129. In the packaging for a new line of beef jerky, Hormel should avoid the use of ____ in its packaging. a. red b. yellow c. orange d. green e. clear

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Chap 11_20e_MCQs 130. Independence Brewing markets several brands of beer, including Stash IPA, Redbud Berliner Weissbier, Native Texan pilsner, and Power & Light pale ale. This is an example of which type of branding policy? a. Generic b. Individual c. Family d. Line family e. Brand extension 131. Customers will more easily recognize a new product as belonging to a particular product category if the marketers use a. family branding. b. innovative packaging. c. category-consistent packaging. d. category labeling. e. product category packaging. 132. Scenario 11.2 Use the following to answer the questions. When Silk Soymilk began packaging its chocolate milk in single-serving sizes, the company chose drink boxes that did not need refrigeration. The boxes were only sold in shrink-wrapped sets of six. Single boxes were not available at grocery stores or convenience markets. Once the Silk chocolate product was selling well, they also began offering the Silk Soymilk vanilla flavor in the same type of packaging. The Silk Soymilk brand, logo, and look of the boxes were the same as its larger half-gallon versions. The only difference in packaging style was the color brown for chocolate milk and the color white for vanilla. Refer to Scenario 11.2. If Silk Soymilk were to begin offering Silk Soymilk Chocolate Ice Cream Bars, this would be an example of a. a product line extension. b. individual branding. c. a brand extension. d. a private distributor brand. e. co-branding. 133. Which of the following is least protectable to most protectable f or brand types, as determined by a series of court decisions? a. d escriptive; suggestive; arbitrary; fanciful b. d escriptive; arbitrary; suggestive; fanciful c. f anciful; suggestive; arbitrary; descriptive d. a rbitrary; descriptive; fanciful; suggestive e. f anciful; arbitrary; suggestive; descriptive

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Chap 11_20e_MCQs 134. Private distributor brands are owned by a. manufacturers only. b. manufacturers and retailers. c. wholesalers only. d. manufacturers and wholesalers. e. wholesalers or retailers. 135. Your boss has instructed you to change the packaging on your firm’s products so that they have a common major design element and similar packaging. Based on this directive, you should implement __________ for all the firm’s products. a. c onsistent packaging b. f amily packaging c. h omogeneous packaging d. c ommon packaging e. p roduct line packaging 136. Besides generic names, what other types of names are very difficult to protect? a. Names created by the company b. Surnames and geographic names c. Arbitrarily chosen names not related to the product d. Arbitrarily chosen names related closely to the product e. Names that contain shapes and colors 137. Which of the following issues is least important in using co-branding effectively? a. The brands involved should represent a complementary fit in a customer's mind. b. The brands that are teamed together should not lose their individual identities. c. The brands involved should be owned by different companies. d. Co-branding should be done in a way so that it is obvious which brand is the main brand or key brand. e. Co-branding should take advantage of the distribution capabilities of the brands involved. 138. When a product tries to capitalize on the brand equity of two separate brands, marketers are using a. licensing. b. dual-branding. c. partnerships. d. brand extension. e. co-branding. 139. Of the following choices, which would be the easiest brand name to legally protect? a. Tarzink Yogurt b. Learn and Grow Daycare c. Scout Camping Supplies d. Sullivan Water Filtering Systems e. Western County Distributors Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 140. Sales usually start to decline during the ____ stage of the product life cycle. a. termination b. growth c. decline d. introduction e. maturity 141. The value, measured in either marketing or financial terms, associated with a brand's strength in a market is referred to as brand a. loyalty. b. value. c. share. d. equity. e. association. 142. Which of the following is always used to determine the classification of a good? a. Buyer's intent for using the product b. Amount of shopping required by the buyer to obtain the product c. Price of the product d. Specific product features e. Industry competitors 143. In which stage of the product life cycle do profits begin to decrease? a. Introduction b. Growth c. Maturity d. Decline e. Recovery 144. A package of aluminum foil on the shelf at a Kroger supermarket has only a white package with black letters stating “aluminum foil.” This product is an example of a ____ brand. a. manufacturer's b. private distributor's c. no-name d. generic e. no-frills

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Chap 11_20e_MCQs 145. When are marketers least likely to change a product's design, style, or other attributes? a. Introduction b. Maturity c. Decline d. Growth e. Removal 146. General Mill’s Honey Nut Cheerios, a ____ brand, is likely to be found on the shelf next to Honey Nut Toasted Oats, a ____ brand that has very similar coloring and styling for its package. a. generic; store b. manufacturer; private c. dealer; private distributor d. producer; house e. distributor; store 147. A major advantage of using individual branding is that a. the promotion of one of the company's brands will also promote the company's other brands. b. this branding policy will prevent the overextension of a brand name to products that are completely unrelated to the original. c. a poor-quality product will not contaminate all of the company's other products with negative images. d. a specific brand name for each product will help the company grow during times of economic recession. e. the quality of one of the company's products will help increase the perceived quality image of the company's other related products. 148. Labeling is important for three specific reasons, including promotional and legal reasons. What is the third reason? a. Marketing b. Branding c. Strategy d. Informational e. Packaging 149. Dove introduced new products made for the skin, including a men’s deodorant, men’s body wash, and a men’s moisturizer. These are an example of a _________. The men’s moisturizer is called Men+Care Ultra Hydrating Cream. This is an example of a __________. a. brand; product b. product line; product item c. product line; product extension d. product mix; product e. product mix; brand extension

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Chap 11_20e_MCQs 150. The part of a brand that can be spoken including letters, numbers, and words is the a. brand. b. brand mark. c. brand name. d. trade name. e. trademark. 151. Lakshmi is in charge of the marketing strategy for a new toothbrush her firm introduced. The toothbrush has received strong accolades from critics, and Lakshmi's company has spent considerable resources on advertisements and public relations to promote the product. The biggest hurdle to product adoption, according to Lakshmi, is that consumers are much more familiar with Colgate Palmolive's toothbrushes. Colgate-Palmolive is the company's greatest competitor and is a much more established brand name. Lakshmi plans to release a new advertising campaign highlighting the many benefits of its toothbrush compared to its competitors. She hopes consumers will view her company’s product as superior to Colgate-Palmolive's. After the campaign, Lakshmi's firm plans to offer free samples in select stores. Lakshmi is using this campaign to stimulate _______________ on the part of buyers so that they will compare their benefits with Colgate's. a. evaluation b. risk reduction c. awareness d. adoption e. interest 152. One company markets such diverse products as Old El Paso Mexican foods, Yoplait yogurt products, and Blue Buffalo pet foods. These various offerings exhibit this firm's product mix a. width. b. depth. c. length. d. volume. e. dimension. 153. Darlene loves going shopping. After a long day at work, she stops by a local shopping center. First, she decides to stop by Barnes & Noble. Darlene's favorite bookshop is the small, locally-owned bookshop close to her home, but she visits Barnes & Noble because it is convenient. Next, she stops by a local Starbucks, where she likes to try new things. When she looked at the menu, she saw the name of a new latte she had heard about from friends and decided to try it. Then she went to Ulta to pick up some lipstick that she has run out of. However, when she gets there, Darlene finds Ulta is out of her lipstick brand and color. She is tired after her long day and annoyed that they are out of the lipstick. Because it is her favorite brand, Darlene decides she will just have to come back another day. Darlene displays ______________ for Barnes & Noble, _____________ for the latte at Starbucks, and ________________ for the lipstick. a. brand preference; brand recognition; brand insistence b. brand recognition; brand recognition; brand insistence c. brand recognition; brand insistence; brand insistence d. brand preference; brand insistence; brand recognition e. brand insistence; brand preference; brand recognition Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 154. Cadbury launched a new chocolate product, Cadbury Dairy Milk, with a label proclaiming “with Oreos” on its package. This is an example of _______. a. brand extension b. brand licensing c. family branding d. co-branding e. cohort branding 155. With respect to the major product packaging considerations: a. cost is not a major consideration. b. marketers must consider the package’s promotional role. c. buyers are not willing to pay more for improved packaging. d. package designs should always be consistent regardless of the target market. e. resellers’ needs are not a product packaging consideration. 156. Gain liquid laundry detergent comes in a 40-ounce plastic bottle with a pour spout. When that bottle is empty, consumers can purchase Gain in a plastic pouch designed to refill the original 40-ounce plastic bottle. The pouches use less packaging, store flat, and cost less; however, they are not for repeated usage. The use of the original Gain 40-ounce bottle is an example of a(an) a. reusable container. b. innovative package. c. second-round package. d. secondary-use package. e. dual purpose package. 157. _ ___________ are relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. a. C onsumer products b. S hopping products c. C onvenience products d. B usiness products e. S pecialty products 158. Lola prefers to buy John Frieda Sheer Blonde shampoo; however, if that is not in stock, she will buy L’Oreal or TIGI Bed Head. Riley’s level of brand loyalty can be described as ___. a. recognition. b. acceptance. c. preference. d. insistence. e. acknowledgement.

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Chap 11_20e_MCQs 159. Depending on the length of time it takes them to adopt a new product, people can be divided into five major adopter categories: early adopters, early majority, late majority, laggards, and a. late adopters. b. non-adopters. c. innovators. d. middle adopters. e. middle majority. 160. A customer must have a particular brand and will accept no substitutes. This is termed brand a. preference. b. loyalty. c. insistence. d. recognition. e. requirement. 161. Which of the following statements about labeling is false? a. The label can be used to facilitate the identification of a product. b. Labels do not have to disclose nutritional information. c. The label indicates the content of the product. d. Labeling is used to describe the product. e. The label can play a promotional function. 162. Minerals, chemicals, timber, and agricultural products are considered a. process materials. b. accessory materials. c. MRO supplies. d. component parts. e. raw materials. 163. A(n) ____ is a concept, philosophy, or image. a. product b. good c. idea d. service e. issue 164. A set of Bowers & Wilkins car speakers sold to Volvo for use in the production of XC90 SUV would be an example of a(n) a. component part. b. specialty item. c. accessory equipment. d. raw material. e. process material. Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 165. You are head of a nonprofit organization that has been granted a license to sell products in a small booth in your local airport. You want to maximize your revenue from this venture by selling products that are inexpensive and frequently purchased. Which of the following types of products should you sell? a. U nsought products b. B usiness products c. S pecialty products d. S hopping products e. C onvenience products 166. Scenario 11.2 Use the following to answer the questions. When Silk Soymilk began packaging its chocolate milk in single-serving sizes, the company chose drink boxes that did not need refrigeration. The boxes were only sold in shrink-wrapped sets of six. Single boxes were not available at grocery stores or convenience markets. Once the Silk chocolate product was selling well, they also began offering the Silk Soymilk vanilla flavor in the same type of packaging. The Silk Soymilk brand, logo, and look of the boxes were the same as its larger half-gallon versions. The only difference in packaging style was the color brown for chocolate milk and the color white for vanilla. Refer to Scenario 11.2. Silk Soymilk probably increased demand for its single servings by facilitating increased consumption of the product through its practice of ______ packaging. a. innovative b. category-consistent c. handling-improved d. secondary-use e. multiple 167. An accountant buys a supply of pencils to be used in calculating the taxes of other business firms. Based on this information, pencils in this case would be considered what type of product? a. Business b. Process materials c. Raw material d. Convenience e. Consumer

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Chap 11_20e_MCQs 168. Felicity owns a Dell laptop computer. She uses the computer in class and her classmates can see the Dell

logo when she uses her laptop. One of her classmates is looking to purchase a new laptop and asks Felicity her opinion of Dell computers. Felicity informs her classmate that she is satisfied with her laptop and recommends that her classmate purchases one, too. For Dell, Felicity is exhibiting some of the benefits of _____. a. brand recognition b. brand equity c. brand insistence d. brand loyalty e. brand mark 169. The weakest level of brand loyalty is brand a. recognition. b. insistence. c. equity. d. trial. e. preference. 170. The overall challenge for marketers when developing packaging is to a. make it as attractive as possible to the target market of the product. b. create effective, convenient packaging that appeals to customers and keeps costs low. c. find ways to reduce costs as much as possible for packaging without letting safety suffer. d. always be more innovative than the competitors in order to make a product stand out. e. ensure that product damage is minimized during distribution. 171. Madison is a graphic artist who is currently working on the development of a new container for mustard and mayonnaise. She is also developing its graphic design. Madison is likely working on the product’s a. licensing. b. labeling. c. promotion. d. packaging. e. direct media. 172. According to the text, a product is defined as a. anything the customer receives in an exchange. b. the physical object the customer receives in an exchange. c. the service that is rendered to a customer. d. the idea that the customer receives in an exchange. e. goods and services the customer receives in an exchange.

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Chap 11_20e_MCQs 173. A firm may decide that all packages should be similar and include one major element of the same design. This approach to promote an overall company image is called a. family extension. b. family packaging. c. overall packaging. d. package extension. e. selective packaging. 174. In which stage of a product’s life cycle is the firm focused on establishing and fortifying the product’s market position by encouraging brand loyalty? a. T he maturity stage b. T he introduction stage c. T he decline stage d. T he growth stage e. T he rebirth stage 175. The four major stages of a product life cycle include a. prosperity, recession, depression, and recovery. b. specialty, convenience, shopping, and unsought goods. c. decline, stabilization, exposure, and growth. d. introduction, growth, maturity, and decline. e. awareness, interest, trial, and adoption. 176. In a brand licensing arrangement, the licensee is responsible for a. providing the brand name to another organization for use in promoting products. b. collecting the royalties from sales of the licensed products. c. half of the financial losses in the event that the licensed brand is a failure. d. the production, but not the marketing of the licensed product. e. the manufacturing, marketing, and financing of the licensed product. 177. Gold Rush Vinyl’s large vinyl record press suddenly broke down during its day shift. When considering the purchase of available alternatives, Intuitiv decided to rent one for the next two years instead of buying one. In this situation, the large vinyl record press it rented would be classified as a. an installation. b. accessory equipment. c. an unsought good. d. a process material. e. MRO supplies.

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Chap 11_20e_MCQs 178. Everything associated with the product, including its symbolism and experiences is the____________. a. brand name b. brand mark c. brand d. trademark e. product appeal 179. Brand name awareness is an important element of brand equity because a familiar brand is more likely to be in a customer's ____ than an unfamiliar brand. a. inept set b. loyalty set c. preference group d. brand group e. consideration set 180. If Glade, which markets Glade scented PlugIns and Glade scented candles and wax melts were to introduce Glade laundry detergent and dryer sheets with the same scents, this would be called ____ branding. a. brand-extension b. licensed c. family d. individual e. new-product 181. The manufacturers of Miracle-Gro have square boxes of the plant food that serve as a flower-pot liner. The customer just puts the box inside the flower pot, fills it with potting soil, and then adds water. The Miracle-Gro chemical is activated by the water and begins feeding the plant. This would be an example of ____ packaging. a. multiple b. secondary-use c. innovative d. category-consistent e. handling-improved 182. The Daylight Advertising Agency was developing a name for their client’s new paper towel product. They finally settled on the name, “Soaker.” Regarding the factors that marketers consider when selecting a brand name, which one does this best fulfill? a. Compatibility with other products in the line b. Flexibility to be used in various types of media c. Using fabricated names that cannot be duplicated d. Indicating the product's major benefits e. Keeping the brand name easy to remember

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Chap 11_20e_MCQs 183. You just recently accepted a new job at a company on the East Coast. You will be responsible for making sure your firm’s products contain labeling that meets all federal laws and regulations. Your new company makes gourmet food items. Which of the following federal regulatory agencies should you become very familiar with in order to do your job most effectively? a. W TO b. F TC c. E PA d. S BA e. FDA

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Chap 11_20e_MCQs Answer Key 1. a 2. a 3. e 4. c 5. c 6. d 7. e 8. a 9. d 10. c 11. c 12. b 13. a 14. c 15. e 16. b 17. c 18. c 19. c 20. a 21. b 22. c 23. e 24. b 25. e 26. d

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Chap 11_20e_MCQs 27. d 28. c 29. d 30. e 31. b 32. b 33. c 34. e 35. d 36. b 37. c 38. b 39. d 40. a 41. b 42. b 43. d 44. a 45. a 46. a 47. b 48. d 49. e 50. a 51. b 52. c 53. c 54. d Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 55. a 56. b 57. e 58. c 59. b 60. a 61. c 62. c 63. c 64. e 65. d 66. d 67. e 68. d 69. e 70. e 71. a 72. c 73. e 74. a 75. d 76. d 77. c 78. a 79. e 80. d 81. c 82. b Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 83. d 84. b 85. d 86. a 87. d 88. a 89. a 90. c 91. b 92. e 93. a 94. d 95. c 96. d 97. b 98. d 99. a 100. d 101. c 102. a 103. d 104. e 105. c 106. b 107. d 108. d 109. e 110. c Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 111. a 112. d 113. c 114. c 115. c 116. d 117. b 118. c 119. d 120. e 121. b 122. b 123. e 124. d 125. d 126. c 127. c 128. a 129. d 130. b 131. c 132. c 133. a 134. e 135. b 136. b 137. c

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Chap 11_20e_MCQs 138. e 139. a 140. e 141. d 142. a 143. b 144. d 145. c 146. b 147. c 148. d 149. b 150. c 151. a 152. a 153. a 154. d 155. b 156. a 157. c 158. c 159. c 160. c 161. b 162. e 163. c 164. a 165. e Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_MCQs 166. e 167. a 168. d 169. a 170. b 171. d 172. a 173. b 174. d 175. d 176. e 177. a 178. c 179. e 180. a 181. c 182. d 183. e

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Chap 11_20e_TF_Essay Indicate whether the statement is true or false. 1. Multiple packaging interferes with handling and storage of products. a. True b. False 2. Customers use brands to help judge product quality. a. True b. False 3. Brand names should be different from the company name to avoid confusion. a. True b. False 4. Labeling is most important for branding reasons. a. True b. False 5. Family packaging cannot be used for individual product lines; it must apply to the entire product mix of the firm. a. True b. False 6. The Federal Trade Commission is solely responsible for establishing and enforcing packaging regulations. a. True b. False 7. Marketers may use brand names that have absolutely no meaning to avoid negative connotations. a. True b. False 8. Intense price wars are likely to occur during the growth stage of the product life cycle as competitors attempt to gain market share. a. True b. False 9. A seller's profits peak in the maturity stage of a product's life cycle. a. True b. False 10. A product's classification can influence its price, distribution, and promotion. a. True b. False 11. Bread is usually a convenience product. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 12. Intensive competition causes price increases during the growth stage of the product life cycle. a. True b. False 13. The core product element of the total product can include installation, delivery, training, and financing. a. True b. False 14. Family branding occurs when all of a firm's products are branded with all or part of the same name. a. True b. False 15. A buyer becomes aware of the product during the evaluation phase of the product adoption process. a. True b. False 16. When a firm's packages are designed to appear to be quite similar, the firm is using family packaging. a. True b. False 17. Brand licensing gives a company the ability to gain more revenue and low-cost or free promotional exposure. a. True b. False 18. A brand name is the part of the brand that is spoken. a. True b. False 19. The term "cultural branding" describes how a brand conveys a powerful myth that consumers find useful in strengthening their identities. a. True b. False 20. Four major elements underlie brand equity including brand name awareness, brand loyalty, perceived brand quality, and brand associations. a. True b. False 21. A package can be used to attract customers' attention. a. True b. False 22. Obtaining a specialty product involves a considerable amount of comparison activity. a. True b. False

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Chap 11_20e_TF_Essay 23. "The people who are in-the-know" are the early adopters. a. True b. False 24. Brand equity helps give a brand the power to capture and maintain a consistent market share, which provides stability to an organization's sales volume. a. True b. False 25. Every aspect of a brand is subject to a marketer's control. a. True b. False 26. The two major product categories are business and institutional. a. True b. False 27. The buyer's intent can determine whether an item is classified as a consumer or a business product. a. True b. False 28. Suggestive brand names are easier to protect legally than fanciful names. a. True b. False 29. The marketing mix should be left alone during the maturity stage of the product life cycle; tampering with it may bring an early death to the product. a. True b. False 30. Packages are always secondary ingredients of a marketing strategy. a. True b. False 31. The crush-proof cylinder package for Pringle's potato chips is an example of innovative packaging. a. True b. False 32. Promotion decreases in importance during a product's decline stage. a. True b. False 33. Distribution outlets become more difficult to secure during the growth stage of a product's life cycle because of aggressive competition. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 34. Package safety or convenience features can perform a promotional role. a. True b. False 35. A service is intangible and is the result of the application of human or mechanical efforts to people or objects. a. True b. False 36. Use of the product is the most important means of distinguishing consumer products from business products. a. True b. False 37. Product mix refers to a related group of products in the product line. a. True b. False 38. Brand insistence is the degree of brand loyalty in which a customer strongly prefers a specific brand, will accept no substitute, and is willing to spend a great deal of time and effort to acquire that brand. a. True b. False 39. A product mix is the composite or total group of products that an organization makes available to customers. a. True b. False 40. To try to be creative in developing a label is not worth the effort; most people prefer products to be labeled only with the brand name and relevant consumer information. a. True b. False 41. A business can justify keeping a product as long as it contributes to profits or enhances the effectiveness of a product mix. a. True b. False 42. Many products are in the maturity stage of the product life cycle. a. True b. False 43. During the growth stage, promotion costs rise as a percentage of total sales. a. True b. False 44. A brand name used for a product line should be compatible with most of the products in the line. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 45. Procter & Gamble has a wider product mix than does Baskin Robbins. a. True b. False 46. A product line is a particular version of a product that can be designated as a distinct offering on the organization's list of products. a. True b. False 47. Buyers want to exert only minimal effort to obtain shopping products. a. True b. False 48. Price cuts are typical in a product's growth stage. a. True b. False 49. The Food and Drug Administration requires that food processors indicate the amount of carbohydrates, calories, and fat in a product. a. True b. False 50. Laggards are the last to adopt a new product and usually distrust new products. a. True b. False 51. By law, manufacturers must be identified on the labels of private brands. a. True b. False 52. "Business Services" is not a category or type of business product. a. True b. False 53. A unique cap or applicator is an example of secondary-use packaging. a. True b. False 54. Rejection can occur at the trial stage of the product adoption process. a. True b. False 55. A generic brand indicates only the product category. a. True b. False

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Chap 11_20e_TF_Essay 56. The first adopters of a product are the innovators. a. True b. False 57. Recently, buyers have shown an unwillingness to pay more for improved packaging. a. True b. False 58. The depth of product mix is measured by the number of product lines a company offers. a. True b. False 59. Surnames are simple to protect as brand names. a. True b. False 60. Advertising used in the decline stage may prolong the life of the product. a. True b. False 61. The gross margin percentage on convenience goods is usually fairly high because they are low-priced items. a. True b. False 62. The total product offering consists of three interdependent elements: the core product, its supplemental

features, and its symbolic or experiential benefits. a. True b. False 63. Communicating product benefits to consumers is very important in the introduction stage. a. True b. False 64. The width of a product mix refers to the number of generic products offered by a company. a. True b. False 65. Package characteristics shape buyer impressions of a product during use. a. True b. False 66. Sometimes new marketing channels open up in the decline stage. a. True b. False

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Chap 11_20e_TF_Essay 67. Compared to an unfamiliar brand, a familiar brand is more likely to be selected by a customer because it often is viewed as reliable and of acceptable quality. a. True b. False 68. Marketers must balance consumer desire for convenience against environmental concerns. a. True b. False 69. Component parts usually need to be processed significantly before they are used in production. a. True b. False 70. Brand recognition exists when a customer is aware that the brand exists and views it as an alternative to purchase if the preferred brand is unavailable or if the other available brands are unfamiliar to the customer. a. True b. False 71. Brand insistence is the strongest degree of brand loyalty but the least common type of brand loyalty. a. True b. False 72. New products seldom generate enough sales to bring immediate profits. a. True b. False 73. Because the Cool Whip container can be used to store leftovers; its packaging is an example of a secondaryuse package. a. True b. False 74. The atmosphere and décor of a retail store, the variety and depth of product choices, the customer support, even the sounds and smells all contribute to the experiential element of its total product. a. True b. False 75. Labeling and packaging are closely interrelated. a. True b. False 76. Profits decline in the maturity stage, largely because of increased competition. a. True b. False

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Chap 11_20e_TF_Essay 77. Packaging is sometimes altered to make it easier to handle in the distribution system. a. True b. False 78. A product line includes a group of closely related product items that are considered to be a unit because of marketing, technical, or end-use considerations. a. True b. False 79. Package shape, graphic design, and certain colors may be used to make a product appear taller than it actually is. a. True b. False 80. Brand preference is a degree of brand loyalty in which a customer definitely prefers one brand over competitive offerings and will purchase this brand if available. a. True b. False 81. Labels facilitate product identification. a. True b. False 82. A Jeep leather jacket is an example of brand licensing. a. True b. False 83. The basic purpose of packaging is to create eye appeal. a. True b. False 84. Early adopters are the first group of consumers to adopt a new product. a. True b. False 85. Many products never get beyond the introduction stage. a. True b. False 86. Consumers are reluctant to purchase substitute brands if a desired brand of a convenience product is unattainable. a. True b. False

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Chap 11_20e_TF_Essay 87. Individual branding facilitates market segmentation. a. True b. False 88. To gain customer acceptance, the two brands involved in co-branding must represent a complementary fit in the minds of buyers. a. True b. False 89. Co-branding capitalizes on the trust that customers have in both companies involved, especially when the brands complement one another in the mind of the buyer. a. True b. False 90. Accessory equipment becomes a part of the finished product. a. True b. False 91. The brands used for co-branding cannot be owned by the same company. a. True b. False 92. Profits peak and start to decline in the growth stage. a. True b. False 93. Trial is the first stage of the product adoption process. a. True b. False 94. Brand preference is the strongest form or degree of brand loyalty. a. True b. False 95. When an organization introduces a new product, people do not all begin the adoption process at the same time, nor do they move through the process at the same speed. a. True b. False 96. Desirable product images can be created through the use of colors, design, shapes, and textures in packaging. a. True b. False 97. A brand name should indicate the product's major benefits. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 98. The original marketing strategy should not be altered in any way as a product travels through the stages of the product life cycle because consumers can become confused. a. True b. False 99. Companies are increasingly labeling their products as “natural.” a. True b. False 100. Although difficult to measure, brand loyalty represents the value of a brand to an organization. a. True b. False 101. Labels should be a separate feature that can be detached from the package. a. True b. False 102. The similar jar shapes for mayonnaise products are an example of category-consistent packaging. a. True b. False 103. Sandwich bread would more likely be packaged in a green wrapper than a yellow one. a. True b. False 104. Process materials are used directly in the production of products. a. True b. False 105. A product need not be a physical product. a. True b. False 106. The brand name "Minute Rice" would be more difficult to protect legally than "Exxon." a. True b. False 107. Brand equity is a customer's favorable attitude toward a specific brand and, depending on strength, some likelihood of consistent purchase of the brand when needs for a product in this product category arise. a. True b. False 108. Marketers sometimes change a product’s style, design, or other attributes during its decline. a. True b. False

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Chap 11_20e_TF_Essay 109. Packaging can be used to communicate symbolically the quality or premium nature of a product. a. True b. False 110. Labeling is used to perform only two roles: to promote and to inform. a. True b. False 111. Distinguish between consumer products and business products.

112. Describe and illustrate the four major categories of consumer products.

113. What are the factors that marketers should consider while selecting a brand name?

114. What steps should a marketer take to protect a brand name from use by others?

115. What major changes in a marketing strategy may be required as a product moves into the maturity stage of the product life cycle?

116. Identify and describe the major categories of business products.

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Chap 11_20e_TF_Essay 117. What is brand loyalty? Explain the three degrees of brand loyalty.

118. What is co-branding? Explain what makes co-branding effective.

119. In what ways can packaging be used strategically?

120. What functions do packages perform? What are the factors marketers should consider when developing packages?

121. What are the major functions of a label?

122. Explain the difference between brand name and trademarks.

123. Identify the major stages of the product life cycle, and explain how industry sales and profits vary across these stages.

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Chap 11_20e_TF_Essay 124. How do sellers benefit from the use of brand names and brand marks?

125. Discuss the branding strategies marketers can use. What are the two policies used by a firm to brand its products?

126. Discuss the implications for a firm's marketing strategy of classifying a product as a convenience, shopping, specialty, or unsought item.

127. Explain the major stages of the product adoption process.

128. What is brand equity, and what are the major elements that underlie brand equity?

129. Discuss the dimensions of a product mix.

130. Discuss the marketing efforts that are likely to be used during the growth stage of the product life cycle.

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Chap 11_20e_TF_Essay 131. What are private distributor brands? Describe their characteristics.

132. What is a product? Provide an example of each type of product.

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Chap 11_20e_TF_Essay Answer Key 1. False 2. True 3. False 4. False 5. False 6. False 7. True 8. True 9. False 10. True 11. True 12. False 13. False 14. True 15. False 16. True 17. True 18. True 19. True 20. True 21. True 22. False 23. True 24. True 25. False 26. False

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Chap 11_20e_TF_Essay 27. True 28. False 29. False 30. False 31. True 32. True 33. False 34. True 35. True 36. True 37. False 38. True 39. True 40. False 41. True 42. True 43. False 44. False 45. True 46. False 47. False 48. True 49. True 50. True 51. False 52. False 53. False 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 55. True 56. True 57. False 58. False 59. False 60. True 61. False 62. True 63. True 64. False 65. True 66. True 67. True 68. True 69. False 70. True 71. True 72. True 73. True 74. True 75. True 76. True 77. True 78. True 79. True 80. True 81. True 82. True Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 83. False 84. False 85. True 86. False 87. True 88. True 89. True 90. False 91. False 92. True 93. False 94. False 95. True 96. True 97. True 98. False 99. False 100. False 101. False 102. True 103. False 104. True 105. True 106. True 107. False 108. False 109. True 110. False Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 111. The most widely accepted approach to classifying consumer products is based on characteristics of consumer buying behavior. It divides products into four categories: convenience, shopping, specialty, and unsought products. However, not all buyers behave in the same way when purchasing a specific type of product. Thus, a single product can fit into several categories. To minimize this problem, marketers think in terms of how buyers generally behave when purchasing a specific item. Business products are usually purchased on the basis of an organization’s goals and objectives. Generally, the functional aspects of the product are more important than the psychological rewards sometimes associated with consumer products. Business products can be classified into seven categories according to their characteristics and intended uses: installations; accessory equipment; raw materials; component parts; process materials; maintenance, repair, and operating (MRO) supplies; and business services. 112. The most widely accepted approach to classifying consumer products is based on characteristics of consumer buying behavior. It divides products into four categories: convenience, shopping, specialty, and unsought products. Convenience products are relatively inexpensive, frequently purchased items for which buyers exert only minimal purchasing effort. They range from bread, soft drinks, and chewing gum to gasoline and newspapers. The buyer spends little time planning the purchase or comparing available brands or sellers. Even a buyer who prefers a specific brand will generally choose a substitute if the preferred brand is not conveniently available. A convenience product is normally marketed through many retail outlets, such as 7-Eleven, ExxonMobil, and supermarkets. Shopping products are items for which buyers are willing to expend considerable effort in planning and making the purchase. Buyers spend much time comparing stores and brands with respect to prices, product features, qualities, services, and perhaps warranties. Shoppers may compare products at a number of outlets. Appliances, bicycles, furniture, stereos, cameras, and shoes exemplify shopping products. These products are expected to last a fairly long time and are purchased less frequently than convenience items. Shopping products require fewer retail outlets than convenience products. Specialty products possess one or more unique characteristics, and generally buyers are willing to expend considerable effort to obtain them. Buyers actually plan the purchase of a specialty product; they know exactly what they want and will not accept a substitute. Examples of specialty products include a Mont Blanc pen and a one-of-akind piece of baseball memorabilia, such as a ball signed by Babe Ruth. When searching for specialty products, buyers do not compare alternatives. They are concerned primarily with finding an outlet that has the preselected product available. Unsought products are products purchased when a sudden problem must be solved, products of which customers are unaware, and products that people do not necessarily think of purchasing. Emergency medical services and automobile repairs are examples of products needed quickly to solve a problem. 113. Marketers should consider several factors in selecting a brand name. First, the name should be easy for customers to say, spell, and recall. Short, one-syllable names, such as Cheer, often satisfy this requirement. Second, the brand name should indicate the product’s major benefits and, if possible, should suggest in a positive way the product’s uses and special characteristics; negative or offensive references should be avoided. For example, the brand names of household cleaning products such as Vanish toilet bowl cleaner, Formula 409 multipurpose cleaner, and Wisk laundry detergent connote strength and effectiveness. There is evidence that consumers are more likely to recall and to evaluate favorably names that convey positive attributes or benefits. Third, to set it apart from competing brands, the brand should be distinctive. Further research findings have shown that creating a brand personality that aligns with the products sold and the target market’s self-image is important to brand success—if the target market feels aligned with the brand, they are more likely to develop brand loyalty. If a marketer intends to use a brand for a product line, that brand must be compatible with all products in the line. Finally, a brand should be designed to be used and recognized in all types of media. Finding the right brand has become an increasingly challenging task because many obvious names have already been used. Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 114. A marketer should design a brand so that it can be protected easily through registration. To protect its exclusive rights to a brand, a company must ensure that the brand is not likely to be considered an infringement on any brand already registered with the U.S. Patent and Trademark Office. A marketer should guard against allowing a brand name to become a generic term used to refer to a general product category. Generic terms cannot be protected as exclusive brand names. For example, aspirin, escalator, and shredded wheat—all brand names at one time—eventually were declared generic terms that refer to product classes. Thus, they could no longer be protected. To keep a brand name from becoming a generic term, the firm should spell the name with a capital letter and use it as an adjective to modify the name of the general product class, as in Kool-Aid Brand Soft Drink Mix. Including the word brand just after the brand name is also helpful. An organization can deal with this problem directly by advertising that its brand is a trademark and should not be used generically. The firm also can indicate that the brand is a registered trademark by using the registered symbol. 115. During the maturity phase, the producers who remain in the market are likely to change their promotional and distribution efforts. Advertising and dealer-oriented promotions are typical during this stage of the product life cycle. Marketers also must take into account that as the product reaches maturity, buyers’ knowledge of it attains a high level. Consumers are no longer inexperienced generalists; instead, they are experienced specialists. Marketers of mature products sometimes expand distribution into global markets. Often the products have to be adapted to fit differing needs of global customers more precisely. Because many products are in the maturity stage of their life cycles, marketers must know how to deal with these products and be prepared to adjust their marketing strategies. There are many approaches to altering marketing strategies during the maturity stage. To increase the sales of mature products, marketers may suggest new uses for them. Arm & Hammer has boosted demand for its baking soda by this method, providing multiple uses for this product. Because frozen yogurt has reached the maturity phase, Ben & Jerry’s has released new flavors and yogurt types to appeal to changing consumer tastes. 116. Business products are usually purchased on the basis of an organization’s goals and objectives. Business products can be classified into seven categories according to their characteristics and intended uses: installations; accessory equipment; raw materials; component parts; process materials; maintenance, repair, and operating (MRO) supplies; and business services. Installations include facilities, such as office buildings, factories, and warehouses, and major equipment that is nonportable, such as production lines and very large machines. Normally, installations are expensive and intended to be used for a considerable length of time. Accessory equipment does not become part of the final physical product but is used in production or office activities. Examples include file cabinets, fractional-horsepower motors, calculators, and tools. Compared with major equipment, accessory items usually are much cheaper, purchased routinely with less negotiation, and treated as expense items rather than capital items because they are not expected to last as long. Raw materials are the basic natural materials that actually become part of a physical product. They include minerals, chemicals, agricultural products, and materials from forests and oceans. Component parts become part of the physical product and are either finished items ready for assembly or products that need little processing before assembly. Although they become part of a larger product, component parts often can be identified and distinguished easily. Spark plugs, tires, clocks, brakes, and headlights are all component parts of an automobile. Process materials are used directly in the production of other products. Unlike component parts, however, process materials are not readily identifiable. For example, a salad dressing manufacturer includes vinegar in its salad dressing. MRO supplies are maintenance, repair, and operating items that facilitate production and operations but do not become part of the finished product. Paper, pencils, oils, cleaning agents, and paints are in this category.

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Chap 11_20e_TF_Essay 117. Brand loyalty is a customer’s favorable attitude toward a specific brand. If brand loyalty is strong enough, customers may purchase this brand consistently when they need a product in that product category. Customer satisfaction with a brand is the most common reason for loyalty to that brand. There are three degrees of brand loyalty: recognition, preference, and insistence. Brand recognition occurs when a customer is aware that the brand exists and views it as an alternative purchase if the preferred brand is unavailable or if the other available brands are unfamiliar. This is the mildest form of brand loyalty. The term loyalty is clearly used very loosely here. Brand preference is a stronger degree of brand loyalty. A customer definitely prefers one brand over competitive offerings and will purchase this brand if it is available. However, if the brand is not available, the customer will accept a substitute brand rather than expending additional effort finding and purchasing the preferred brand. When brand insistence occurs, a customer strongly prefers a specific brand, will accept no substitute, and is willing to spend a great deal of time and effort to acquire that brand. If a brand-insistent customer goes to a store and finds the brand unavailable, he or she will seek the brand elsewhere rather than purchase a substitute brand. Brand insistence is the strongest degree of brand loyalty; it is a brander’s dream. However, it is the least common type of brand loyalty. 118. Co-branding is the use of two or more brands on one product. Marketers employ co-branding to capitalize on the brand equity of multiple brands. Co-branding is popular in several processed-food categories and in the credit card industry. The brands used for co-branding can be owned by the same company. For example, Kraft’s Lunchables product teams the Kraft cheese brand with Oscar Mayer lunch meats, another Kraft-owned brand. The brands also may be owned by different companies. Effective co-branding capitalizes on the trust and confidence customers have in the brands involved. The brands should not lose their identities, and it should be clear to customers which brand is the main brand. Nike and Apple successfully teamed up to release a co-branded running shoe, the Nike +. It syncs with an iPod to track running performance. The co-branded shoe and iPod accessories helped boost sales for both brands. It is important for marketers to understand that when a co-branded product is unsuccessful, both brands are implicated in the product failure. To gain customer acceptance, the brands involved must represent a complementary fit in the minds of buyers. Trying to link a brand such as Harley-Davidson with a brand such as Healthy Choice will not achieve cobranding objectives because customers are not likely to perceive these brands as compatible.

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Chap 11_20e_TF_Essay 119. Packaging can be a major component of a marketing strategy. A new cap or closure, a better box or wrapper, or a more convenient container may give a product a competitive advantage. The right type of package for a new product can help it to gain market recognition very quickly. For instance, one company produces high-quality organic baby food packaged in convenient resealable pouches. Even though the package costs more to use than the traditional glass jar packaging, its design with the zipper closure decreases the time it takes to heat up the baby food, allows it to fit more conveniently in diaper bags, and keeps food fresh for three days after it is first opened. At times, a marketer changes a package or labeling because the existing design is no longer in style, especially when compared with the packaging of competitive products. A package may be redesigned because new product features need to be highlighted or because new packaging materials have become available. An organization may also decide to change a product’s packaging to make the product safer or more convenient to use. A product’s packaging can also be changed to make it easier to handle in the distribution channel—for example, by changing the outer carton or using special bundling, shrink-wrapping, or pallets. In some cases, the shape of the package is changed. Outer containers for products are sometimes changed so that they will proceed more easily through automated warehousing systems. Marketers also use innovative or unique packages that are inconsistent with traditional packaging practices to make the brand stand out from its competitors. Finally, multiple packaging can also be implemented in a firm’s packaging strategy. Rather than packaging a single unit of a product, marketers sometimes use twin-packs, tri-packs, six-packs, or other forms of multiple packaging. Multiple packaging may increase demand because it increases the amount of the product available at the point of consumption. It also may increase consumer acceptance of the product by encouraging the buyer to try the product several times. Multiple packaging can make products easier to handle, store, and increase consumption. 120. Effective packaging involves more than simply putting products in containers and covering them with wrappers. First, packaging materials serve the basic purpose of protecting the product and maintaining its functional form. Fluids such as milk and orange juice need packages that preserve and protect them. The packaging should prevent damage that could affect the product’s usefulness and thus lead to higher costs. Because product tampering has become a problem, several packaging techniques have been developed to counter this danger. Some packages are also designed to deter shoplifting. Another function of packaging is to offer convenience to consumers. For example, single-serving containers for food and drinks that do not require refrigeration appeal to children, parents, and those with active lifestyles because they are easily portable. The size or shape of a package may relate to the product’s storage, convenience of use, or replacement rate. Small, single-serve products may prevent waste, make storage easier, and promote greater consumption. A third function of packaging is to promote a product by communicating its features, uses, benefits, and image. Sometimes a reusable package is developed to make the product more desirable. For example, the Cool Whip package can be reused as a food-storage container. As they develop packages, marketers must take many factors into account. Obviously, one major consideration is cost. Although a number of different packaging materials, processes, and designs are available, costs vary greatly. In recent years, buyers have shown a willingness to pay more for improved packaging, but there are limits. Marketers should consider how much consistency is desirable among an organization’s package designs. No consistency may be the best policy, especially if a firm’s products are unrelated or aimed at vastly different target markets. To promote an overall company image, a firm may decide that all packages should be similar or include one major element of the design. This approach is called family packaging. Sometimes it is used only for lines of products, as with Campbell’s soups, Weight Watchers foods, and Planters Nuts.

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Chap 11_20e_TF_Essay 121. Labeling is very closely interrelated with packaging and is used for identification, promotional, informational, and legal purposes. Labels can be small or large relative to the size of the product and carry varying amounts of information. A label can be a part of the package itself or a separate feature attached to the package. The label on a can of Coke is actually part of the can, whereas the label on a two-liter bottle of Coke is separate and can be removed. Information presented on a label may include the brand name and mark, the registered trademark symbol, package size and content, product features, nutritional information, potential presence of allergens, type and style of the product, number of servings, care instructions, directions for use and safety precautions, the name and address of the manufacturer, expiration dates, seals of approval, and other facts. Labeling can be an important part of the marketing strategy. A label can be attached to the packaging to communicate that the product is eco-friendly. Labeling can include claims about sustainability as well as other information that is potentially valuable to the buyer. Labels can facilitate the identification of a product by displaying the brand name in combination with a unique graphic design. By drawing attention to products and their benefits, labels can strengthen an organization’s promotional efforts. Labels may contain promotional messages such as the offer of a discount or a larger package size at the same price or information about a new or improved product feature. Several federal laws and regulations specify information that must be included on the labels of certain products. Food product labels must state the number of servings per container, serving size, number of calories per serving, number of calories derived from fat, number of carbohydrates, and amounts of specific nutrients such as vitamins. 122. A brand name is the part of a brand that can be spoken—including letters, words, and numbers—such as 7UP or V8. A brand name is often a product’s only distinguishing characteristic. Without the brand name, a firm could not differentiate its products. To consumers, a brand name is as fundamental as the product itself. Indeed, many brand names have become synonymous with the product, such as Scotch Tape, Xerox copiers, and FedEx delivery. Through promotional activities, the owners of these brand names try to protect them from being used as generic names for tape, photocopiers, and overnight shipping. A trademark is a legal designation indicating that the owner has exclusive use of a brand or a part of a brand and that others are prohibited by law from its use. To protect a brand name or brand mark in the United States, an organization must register it as a trademark with the U.S. Patent and Trademark Office. 123. A product life cycle has four major stages: introduction, growth, maturity, and decline. As a product moves through its cycle, the strategies relating to competition, pricing, distribution, promotion, and market information must be evaluated periodically and possibly changed. The introduction stage of the product life cycle begins at a product’s first appearance in the marketplace, when sales start at zero and profits are negative. Profits are below zero because initial revenues are low, and the company generally must cover large expenses for product development, promotion, and distribution. During the growth stage, sales rise rapidly; profits reach a peak and then start to decline. The growth stage is critical to a product’s survival because competitive reactions to the product’s success during this period will affect the product’s life expectancy. Profits begin to decline late in the growth stage as more competitors enter the market, driving prices down and creating the need for heavy promotional expenses. During the maturity stage, the sales curve peaks and starts to decline, and profits continue to fall. This stage is characterized by intense competition because many brands are now in the market. Competitors emphasize improvements and differences in their versions of the product. As a result, during the maturity stage, weaker competitors are squeezed out of the market. During the decline stage, sales fall rapidly. When this happens, the marketer considers pruning items from the product line to eliminate those not earning a profit. The marketer also may cut promotion efforts, eliminate marginal distributors, and, finally, plan to phase out the product.

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Chap 11_20e_TF_Essay 124. Sellers benefit from branding because each company’s brands identify its products, which makes repeat purchasing easier for customers. Branding helps a firm to introduce a new product that carries the name of one or more of its existing products because buyers are already familiar with the firm’s existing brands. It facilitates promotional efforts because the promotion of each branded product indirectly promotes all other similarly branded products. Branding also fosters brand loyalty. To the extent that buyers become loyal to a specific brand, the company’s market share for that product achieves a certain level of stability, allowing the firm to use its resources more efficiently. Once a firm develops some degree of customer loyalty for a brand, it can maintain a fairly consistent price rather than continually cutting the price to attract customers. 125. Before establishing branding policies, a firm must decide whether to brand its products at all. If a company’s product is homogeneous and is similar to competitors’ products, it may be difficult to brand in a way that will generate brand loyalty. Raw materials such as coal, sand, and farm produce are hard to brand because of the homogeneity of such products and their physical characteristics. If a firm chooses to brand its products, it may use individual branding, family branding, or a combination. Individual branding is a policy of naming each product differently. Nestlé S.A. is the world’s largest food and nutrition company. Nestlé uses individual branding for many of its different brands, such as NESCAFÉ coffee, PowerBar nutritional food, Maggi soups, and Haagen-Dazs ice cream. A major advantage of individual branding is that if an organization introduces an inferior product, the negative images associated with it do not contaminate the company’s other products. An individual branding policy also may facilitate market segmentation when a firm wishes to enter many segments of the same market. Separate, unrelated names can be used, and each brand can be aimed at a specific segment. When using family branding, all of a firm’s products are branded with the same name or at least part of the name, such as Kellogg’s Frosted Flakes, Kellogg’s Rice Krispies, and Kellogg’s Corn Flakes. In some cases, a company’s name is combined with other words to brand items. Arm & Hammer uses its name on all its products, along with a general description of the item, such as Arm & Hammer Heavy Duty Detergent, Arm & Hammer Pure Baking Soda, and Arm & Hammer Carpet Deodorizer. Unlike individual branding, family branding means that the promotion of one item with the family brand promotes the firm’s other products.

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Chap 11_20e_TF_Essay 126. The most widely accepted approach to classifying consumer products is based on characteristics of consumer buying behavior. It divides products into four categories: convenience, shopping, specialty, and unsought products. However, not all buyers behave in the same way when purchasing a specific type of product. Thus, a single product might fit into several categories. To minimize complexity, marketers think in terms of how buyers generally behave when purchasing a specific item. Examining the four traditional categories of consumer products can provide further insight. A convenience product is normally marketed through many retail outlets, such as gas stations, drugstores, and supermarkets. Because sellers experience high inventory turnover, per-unit gross margins can be relatively low. Producers of convenience products, such as Wrigley’s chewing gum, expect little promotional effort at the retail level and thus must provide it themselves with advertising and sales promotion. Packaging and displays are also important because many convenience items are available only on a self-service basis at the retail level, and thus the package plays a major role in selling the product. Shopping products are expected to last a fairly long time and are more expensive than convenience products. These products, however, are still within the budgets of most consumers and are purchased less frequently than convenience items. Shopping products are distributed via fewer retail outlets than convenience products. Because shopping products are purchased less frequently, inventory turnover is lower, and marketing channel members expect to receive higher gross margins to compensate for the lower turnover. In certain situations, both shopping products and convenience products may be marketed in the same location. A marketer must consider several key issues to market a shopping product effectively, including how to allocate resources, whether personal selling is needed, and cooperation within the supply chain. Although advertising for shopping products often requires a large budget, an even larger percentage of the overall budget is needed if marketers determine that personal selling is required. The producer and the marketing channel members usually expect some cooperation from one another with respect to providing parts and repair services and performing promotional activities. Marketers will approach their efforts for specialty products differently from convenience or shopping products in several ways. Specialty products are often distributed through a very limited number of retail outlets. Similar to shopping products, they are purchased infrequently, causing lower inventory turnover and thus requiring high gross margins to be profitable. Unsought products are those purchased when a sudden problem must be solved, products of which customers are unaware until they see them in a store or online, and products that people do not plan on purchasing. Emergency medical services and automobile repairs are examples of products needed quickly and suddenly to solve a problem. Speed of problem resolution is more important than price or other features a buyer might normally consider if there were more time for making a decision. 127. The stages of the product adoption process are awareness, interest, evaluation, trial, and adoption. In the first stage, when individuals become aware that the product exists, they have little information about it and are not concerned about obtaining more. Consumers enter the interest stage when they are motivated to get information about the product’s features, uses, advantages, disadvantages, price, or location. During the evaluation stage, individuals consider whether the product will satisfy certain criteria that are crucial to meeting their specific needs. In the trial stage, they use or experience the product for the first time, possibly by purchasing a small quantity, taking advantage of free samples, or borrowing the product from someone. Individuals move into the adoption stage by choosing a specific product when they need a product of that general type. Entering the adoption process does not mean that the person will eventually adopt the new product. Rejection may occur at any stage, including the adoption stage. Both product adoption and product rejection can be temporary or permanent.

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Chap 11_20e_TF_Essay 128. A well-managed brand is an asset to an organization. The value of this asset is often referred to as brand equity. Brand equity is the marketing and financial value associated with a brand’s strength in a market. Besides the actual proprietary brand assets, such as patents and trademarks, four major elements underlie brand equity: brand name awareness, brand loyalty, perceived brand quality, and brand associations. Being aware of a brand leads to brand familiarity, which in turn results in a level of comfort with the brand. A familiar brand is more likely to be selected than an unfamiliar brand because the familiar brand often is viewed as more reliable and of more acceptable quality. The familiar brand is likely to be in a customer’s consideration set, whereas the unfamiliar brand is not. 129. A product mix is the composite, or total, group of products that an organization makes available to customers. Procter & Gamble’s product mix comprises all the health-care, beauty care, laundry and cleaning, food and beverage, paper, cosmetic, and fragrance products the firm manufactures. The width of product mix is measured by the number of product lines a company offers. General Electric offers multiple product lines, including consumer products such as housewares; healthcare products such as molecular imaging; and commercial engines for the military. The depth of product mix is the average number of different product items offered in each product line. Procter & Gamble is known for using distinctive branding, packaging, segmentation, and consumer advertising to promote individual items in its detergent product line. Tide, Bold, Gain, Cheer, and Era—all Procter & Gamble detergents—share the same distribution channels and similar manufacturing facilities, but each is promoted as a distinctive product, adding depth to the product line. 130. In the growth stage, profits begin to decline later as more competitors enter the market, driving prices down and creating the need for heavy promotional expenses. At this point, a typical marketing strategy encourages strong brand loyalty and competes with aggressive emulators of the product. During the growth stage, the organization tries to strengthen its market share and develop a competitive niche by emphasizing the product’s benefits. Marketers should also analyze competing brands’ product positions relative to their own brands and take corrective action. Aggressive pricing, including price cuts, is also typical during this stage. As sales increase, management must support the momentum by adjusting the marketing strategy. The goal is to establish and fortify the product’s market position by encouraging brand loyalty. To achieve greater market penetration, segmentation may have to be used more intensely. This requires developing product variations to satisfy the needs of people in several different market segments. As a product gains market acceptance, new distribution outlets usually become easier to obtain. Marketers sometimes move from an exclusive or a selective exposure to a more intensive network of dealers to achieve greater market penetration. Marketers must also make sure the physical distribution system is running efficiently so that customers’ orders are processed accurately and delivered on time. Promotion expenditures may be slightly lower than during the introductory stage but are still quite substantial. As sales increase, promotion costs should drop as a percentage of total sales. A falling ratio between promotion expenditures and sales should contribute significantly to increased profits. The advertising messages should stress brand benefits. Coupons and samples may be used to increase awareness as well as market share. 131. Private distributor brands also called private brands, store brands, or dealer brands are initiated and owned by resellers —wholesalers or retailers. The major characteristic of private brands is that the manufacturers are not identified on the products. Retailers and wholesalers use private distributor brands to develop more efficient promotion, generate higher gross margins, and change store image. Private distributor brands give retailers or wholesalers freedom to purchase products of a specified quality at the lowest cost without disclosing the identities of the manufacturers. Familiar retailer brand names include Sears’s Kenmore and JCPenney's Arizona. Many successful private brands are distributed nationally. Kenmore appliances are as well known as most manufacturer brands. Sometimes retailers with successful private distributor brands start manufacturing their own products to gain more control over product costs, quality, and design in the hope of increasing profits. Sales of private labels have grown considerably as the quality of store brands has increased. Copyright Cengage Learning. Powered by Cognero.

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Chap 11_20e_TF_Essay 132. A product is a good, a service, or an idea received in an exchange. It can be either tangible or intangible and includes functional, social, and psychological utilities or benefits. It also includes supporting services, such as installation, guarantees, product information, and promises of repair or maintenance. A good is a tangible physical entity, such as an iPad or a Subway sandwich. A service, in contrast, is intangible; it is the result of the application of human and mechanical efforts to people or objects. Many intangible products try to make their products more tangible to consumers through advertising and tangible images. An idea is a concept, philosophy, image, or issue. Ideas provide the psychological stimulation that aids in solving problems or adjusting to the environment. For example, Mothers Against Drunk Driving (MADD) promotes safe consumption of alcohol and stricter enforcement of laws against drunk driving.

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Chap 12_20e Indicate whether the statement is true or false. 1. How a pair of jeans looks, regardless of the price, is an example of styling. a. True b. False 2. Concept testing gives reliable feedback, but at a relatively high cost. a. True b. False 3. Designing a product that customers perceive as different from competing products is an example of product differentiation. a. True b. False 4. The run-out approach to product deletion is used for technologically obsolete products. a. True b. False 5. Marketers have little influence over shaping consumers' concepts or perceptions. a. True b. False 6. Sales personnel are an external source for new product ideas. a. True b. False 7. The concept of product quality is the same from consumer to consumer and from consumer markets to organizational markets. a. True b. False 8. Styling involves the specific design characteristics that allow a product to perform certain tasks. a. True b. False 9. Test marketing is an extension of the product screening process. a. True b. False 10. A brand manager is a type of product manager. a. True b. False

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Chap 12_20e 11. Venture teams work outside of established organization divisions. a. True b. False 12. A run-out approach to product deletion lets the product decline without changing the marketing strategy. a. True b. False 13. Product design is the process of creating and designing products so that consumers perceive them as different from competing products. a. True b. False 14. New products are classified solely as innovations that have never been sold by any organization. a. True b. False 15. Functional modifications are usually executed by altering the materials or the production process. a. True b. False 16. The decision to drop a product should always be a unanimous decision of the management team. a. True b. False 17. Companies that excel at managing their product mixes usually have systematic approaches for developing new product ideas. a. True b. False 18. The phase-out approach to product deletion involves a process of continuous price increases to make as much profit as possible before the product is finally priced out of existence. a. True b. False 19. New-product development does not include planning for advertising. a. True b. False 20. During the commercialization phase of new-product development, plans for full-scale manufacturing and marketing are refined and settled. a. True b. False

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Chap 12_20e 21. Estimates of sales are an important component of business analysis. a. True b. False 22. Automobile makers rely heavily on aesthetic modifications. a. True b. False 23. Delivery, installation, financing, repair, warranties, and guarantees are all examples of product features. a. True b. False 24. Repositioning requires changes in perception but not usually changes in product features. a. True b. False 25. Product managers can be responsible for a single product, a product line, or several products. a. True b. False 26. Test marketing should be conducted when a product has been given a low probability of success. a. True b. False 27. The overall characteristics of a product that allow it to perform as expected in satisfying customer needs are called product quality. a. True b. False 28. Functional modifications make an existing product more durable. a. True b. False 29. Line extensions are less common than other new products because line extensions are more expensive and more risky. a. True b. False 30. Warranties and customer training are examples of customer services. a. True b. False 31. Concept testing presents a small sample of potential buyers with a trial version of the new product to determine their initial reactions. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 32. A venture team has the authority to execute plans for the development of products. a. True b. False 33. Brand and product managers operate cross-functionally. a. True b. False 34. Relatively few product ideas are put into the product development stage. a. True b. False 35. Functional modifications usually require that the product be redesigned. a. True b. False 36. Venture team members usually come from the same functional areas within the firm. a. True b. False 37. Systematic reviews of a company's product mix aid in determining when product deletion is necessary. a. True b. False 38. Positioning to avoid competition may be best when the product's performance characteristics do not differ significantly from competing brands. a. True b. False 39. Head-to-head positioning can be appropriate even when the price is higher. a. True b. False 40. Most organizations place far more emphasis on price than on product quality. a. True b. False 41. The product development stage determines the technical feasibility of producing the new product. a. True b. False 42. Many of the so-called new products that are launched each year are in fact line extensions. a. True b. False

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Chap 12_20e 43. The major drawback in using aesthetic modifications is that their value is determined subjectively. a. True b. False 44. An important question in the business analysis stage of new-product development is "Is demand strong enough to justify entering the market and will this demand endure?" a. True b. False 45. Business analysis provides a tentative sketch of a product's profitability. a. True b. False 46. Disruptive innovations involve completely new technologies. a. True b. False 47. There is no best approach to managing products. a. True b. False 48. The majority of new-product projects initiated by major companies reach the commercialization stage. a. True b. False 49. The phase-out approach to product deletion exploits any strengths left in the product. a. True b. False 50. Product support services are important mainly for products that are mechanical in nature. a. True b. False 51. Consistency of product quality means giving consumers the quality they expect every time they purchase a product. a. True b. False 52. Functional modifications help an organization achieve and maintain a progressive image. a. True b. False 53. Product managers are most useful in the development of new products. a. True b. False

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Chap 12_20e 54. Quality modifications never seek to reduce product quality. a. True b. False 55. The business analysis stage of new-product development explores how well the new product fits in with the firm's existing product mix. a. True b. False 56. Positioning decisions are only for new products. a. True b. False 57. Test marketing is a sample launching of the entire marketing mix. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 58. What step in developing new products involves determining whether the product idea is compatible with company objectives, needs, and resources on a general level? a. Product development b. Evaluation of competitor's efforts c. Screening d. Idea generation e. Business analysis

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Chap 12_20e 59. Scenario 12.2 Use the following to answer the questions. Jon Moore, president of Vortex Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job of managing Vortex's product mix. Jon calls a meeting of all the managers responsible for each of the product lines that Vortex currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Vortex's line of personal thermal underwear; this product, however, is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The company has conducted several focus groups in which a sample of these consumers have participated. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Refer to Scenario 12.2. Because some products are not doing well, Jon Moore thinks that the company should set up a procedure to evaluate each product so that management will know when and how a product should be discontinued. He is suggesting a a. product-drop decision. b. discontinuance procedure. c. performance review. d. sporadic product review. e. systematic review. 60. If Parkland School Furniture Company provides standard primary school chairs in new colors to match the interiors of schools, this modification is most likely to be viewed as a(n) ____ modification. a. aesthetic b. functional c. quality d. image e. feature 61. When marketers at Link Snacks met with groups of young adults to identify the types of snacks that young people want, they were engaging in which phase of new-product development? a. Idea generation b. Business analysis c. Test marketing d. Commercialization e. Product development

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Chap 12_20e 62. The three major ways to modify a product include a. aesthetic, quality, and functional changes. b. extensions, generations, and upgrades. c. color, size, and quality modifications. d. styling, product features, and product design. e. quality, quantity, and design. 63. Changes that affect the sensory appeal of a product by altering its taste, texture, sound, smell, or visual characteristics are called ____ modifications. a. aesthetic b. functional c. operational d. quality e. feature 64. Which of the following statements is true about product support services? a. They include only human efforts. b. They do not affect customer satisfaction. c. They include delivery, installation, financing, and customer training. d. They do not add product value. e. Some marketers do not provide these to any degree. 65. Product deletion can best be described as the process of deleting a product from the product mix when it a. is perceived as a failure by top management. b. is reviewed negatively by a systematic review board. c. increases production costs and decreases profits. d. no longer responds to promotional efforts. e. no longer satisfies a sufficient number of customers. 66. A ____ is responsible for a product, product line, or several distinct products in an interrelated group within an organization. a. product marketer b. brand manager c. market manager d. product manager e. line manager

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Chap 12_20e 67. Scenario 12.2 Use the following to answer the questions. Jon Moore, president of Vortex Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job of managing Vortex's product mix. Jon calls a meeting of all the managers responsible for each of the product lines that Vortex currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Vortex's line of personal thermal underwear; this product, however, is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The company has conducted several focus groups in which a sample of these consumers have participated. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Refer to Scenario 12.2. Vortex management is currently in which stage of new product development? a. Idea generation b. Screening c. Concept testing d. Product development e. Test marketing 68. When the manufacturer of Cool Whip introduced a chocolate-flavored Cool Whip and still continued to produce all of its other Cool Whip products, this was an example of a. a brand extension. b. a line extension. c. functional modification. d. quality modification. e. a new-to-the-world product. 69. Gabriel is an accountant at Ralston Purina. However, he is currently working with a group to determine the feasibility of a new brand of organic, grain-free premium dog food. After the product is launched, Gabriel will return to the accounting department. His present position can be described as a a. product manager. b. brand manager. c. consulting team member. d. member of a venture team. e. market account manager.

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Chap 12_20e 70. During the new-product development process, two of the stages designed to reject possible product ideas that are likely to fail are _____, which analyzes a product idea to see if it matches an organization’s objectives and resources, and _____, which involves asking potential buyers about their attitudes and initial buying intentions regarding the product. a. business analysis; test marketing b. screening; concept testing c. product development; test marketing d. screening; test marketing e. business analysis; concept testing 71. A suggested approach to deleting products, in which each product is evaluated periodically to determine its impact on the overall effectiveness of the firm's product mix, is called a(n) a. evaluation study. b. value analysis. c. product inspection. d. systematic review. e. reassessment examination. 72. ______________ refers to how a product is conceived, planned, and produced. a. P roduct differentiation b. L evel of quality c. P roduct positioning d. Product features e. P roduct design 73. The manager at an engine manufacturer has asked a venture team to develop a more improved version of its most popular engine. Currently, the members of the venture team a re brainstorming ways to improve the engine so that it better serves its target market. It decides to send customers surveys asking them what features they would like to see in a new engine. The venture team is most likely in the _________________ stage of product development. a. t est marketing b. b usiness analysis c. c oncept testing d. i dea generation e. s creening 74. Three major ways in which marketers engage in product differentiation are a. product quality, product design and features, and product support services. b. product quality, product support services, and packaging. c. product support services, product design and features, and product positioning. d. product positioning, product quality, and product management. e. product positioning, product design and features, and product promotion.

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Chap 12_20e 75. A brand manager in a multiproduct firm would be responsible for a. performance of a specific brand. b. all brands within a product line. c. branding the products of the firm. d. all products in the brand-line group. e. all brands made by the firm. 76. Select the true statement concerning test marketing. a. Test marketing is simply an extension of the screening and developing stages. b. Test marketing should be conducted after all the marketing mix variables have been finalized. c. Test marketing is a limited introduction of the product in areas chosen to represent the intended market. d. If the product is successful in the test market, then it is ensured of success upon total introduction. e. Large corporations usually launch test marketing efforts in one small area at a time. 77. Ideally, test marketing should follow which stage in the new-product development process? a. Commercialization b. Business analysis c. Screening d. Limited production e. Product development 78. Product deletion a. tends to be an easy task for most organizations. b. may be opposed by management. c. usually involves immediate termination. d. is a matter of indifference to customers. e. usually occurs only with convenience items. 79. The product deletion process is similar to the ____ step of the new-product development process because both involve deciding whether the product should be in the product mix based on an assessment of sales, costs, and profits. a. idea generation b. screening c. product development d. test marketing e. business analysis

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Chap 12_20e 80. Scenario 12.1 Use the following to answer the questions. Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for making reduced-fat snacks that taste cheesier and stay fresh longer. About 18 months after the manufacturer launched Cheetos Fat-free Crunchies, a competitor ran a series of ads claiming that Cheetos Crunchies actually contained 1.5 grams of fat and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took out the preservatives, and improved the taste. Refer to Scenario 12.1. The Cheetos Fat-free Crunchies was a(n) ____. a. quality modification b. aesthetic modification c. functional modification d. brand extension e. line extension 81. Marianna tells Rajesh that she likes his team's idea about a new three-lace running shoe but wants him to put together some figures regarding anticipated sales, costs, and resulting profits. She is asking Rajesh to proceed to which stage of the new-product development process? a. Idea generation b. Business analysis c. Commercialization d. Test marketing e. Screening 82. A _________ works outside established organizational divisions and has greater flexibility to apply innovative approaches to new products and markets. a. market manager b. v enture team c. b rand manager d. product manager e. m arketing manager 83. If a company is introducing a brand into a market where it already has one or more brands, it would likely choose which of the following bases for positioning the new product? a. A voiding competition positioning b. H ead-to-head competition positioning c. P ositioning based on price d. T arget market positioning e. P ositioning based on style

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Chap 12_20e 84. A group of managers has been assigned the task of developing a new product. They are now in the process of assessing several ideas to determine whether they are consistent with the firm's overall objectives and resources. The managers are at what stage of the new-product development process? a. Business analysis b. Product testing c. Idea generation d. Commercialization e. Screening 85. Top managers at ESCORT Radar believe that they have a successful working prototype of their new radar detector and plan to go directly to regional commercialization of the new product. In this instance, they are contemplating skipping the ____ phase of the new-product development process. a. screening b. test marketing c. product development d. business analysis e. idea generation 86. Lowinski Lawn Care Equipment Company manufactures lawn mowers and other lawn care products. Its latest lawn mower comes with blades that incorporate new technology that allows them to last five times longer than typical blades. The lawn mower also includes a comfort grip that is easier to hold and an updated style design available in a variety of colors. Lowinski Lawn Care Equipment Company is most likely differentiating itself through _____ with its blades and through _____ with its handle and styling. a. durability; style b. quality; design c. design; attractiveness d. customer focus; design e. quality; comfort 87. The overall characteristics of a product that allow it to perform as expected in satisfying customer needs is a. quality. b. consistency. c. durability. d. functionality. e. design.

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Chap 12_20e 88. Allison's company plans to release a new version of its signature television set. This television will have more advanced features, including better sound quality, higher definition, and more smart capabilities. It plans to discontinue the older version once this newer version is launched. This is an example of a a. brand extension. b. aesthetic modification. c. line extension. d. product modification. e. perceptual mapping. 89. What is the primary distinction between a line extension and a product modification? a. A product modification results in a completely new product while a line extension is simply changing an old product. b. In both cases an existing product is altered, but the alteration is more dramatic with a product modification than it is with a line extension. c. Line extensions are designed to better meet the needs of the existing market segment while product modifications target entirely new segments of the market. d. With product modifications, the original product is replaced in the product line while both the old and the new products remain in the case of line extension. e. Line extensions are strictly aesthetic changes to an existing product whereas product modifications consist of changes in quality and functionality. 90. You work in the marketing department of Colgate-Palmolive (CP). CP recently made the announcement that it was going to delete certain brands that were not meeting profit expectations. You are part of the team to help in this product deletion process. You and your team get together to discuss a brand of soap that has seen sales decrease in recent years. The team discusses how you should delete the product. Each of you writes down comments regarding your thoughts about the brand. The comments can be summed up as follows: "The brand is not doing well, but it still has a loyal following among some consumers." "I think this brand still has some strengths left." Based on these comments, which product deletion strategy should the company adopt? a. Phase-out b. Drop-down c. Run-out d. Immediate drop e. Close-out 91. Which of the following is the best definition of product features? a. The things a product does that provide benefits to the customer b. Mechanical efforts or activities a company provides that add value to a product c. Specific design characteristics that allow a product to perform certain tasks d. How a product is conceived, planned, and produced with the necessary functions e. The physical appearance of a product

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Chap 12_20e 92. Scenario 12.1 Use the following to answer the questions. Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for making reduced-fat snacks that taste cheesier and stay fresh longer. About 18 months after the manufacturer launched Cheetos Fat-free Crunchies, a competitor ran a series of ads claiming that Cheetos Crunchies actually contained 1.5 grams of fat and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took out the preservatives, and improved the taste. Refer to Scenario 12.1. Suppose that Cheetos stops production of Cheetos Fat-free Crunchies and sells all of its remaining inventory to a warehouse club. This would be an example of a(n) a. strategy for the maturity phase. b. phase-out product deletion strategy. c. immediate-drop decision. d. pullout product deletion policy. e. a run-out deletion strategy. 93. LaCroix has a new flavor of sparkling water that it wants to test to determine reactions of probable buyers. Which of the following test market characteristics would be least useful to LaCroix when testing the new beverage? a. There are research and audit services available. b. Retailers would be cooperative. c. Testing efforts would not be easily jammed by competitors. d. Tourism is a major industry in the area. e. The city has stable year-round sales of flavored and sparkling waters. 94. Which of the following is an example of a functional modification? a. Planters Nuts redesigns the packaging of its nut products so they are easier for those with arthritis to open. b. N issan installed a new battery for its Nissan Leaf that will allow it to travel much longer before needing to be recharged. c. A smartphone manufacturer uses a more durable metal for its phones that is less likely to break if dropped. d. PepsiCo begins using a new sweetener in its Pepsi product that changes the taste slightly. e. P rada releases a handbag with a different design and color.

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Chap 12_20e 95. Stephen recently purchased a new Legacy Billiards table for his recreation room. The next day after delivery, Seth noticed a problem with the way one of the pockets was strung. Since it was a weekend, he didn’t expect to have it repaired. However, when he called the store to leave a message, someone answered the phone. She gave Stephen a number where he could call a repair representative who would come straight to Stephen’s house within an hour. Legacy Billiards is most likely differentiating itself through a. support of its level of quality. b. product support services. c. product design feedback. d. product features. e. customer requests. 96. The car has undergone major redesigns and upgrades in the past few decades. For instance, car windows used to have to be rolled down manually. Now drivers can push a button to roll their windows up and down. The body of the car has been changed as well. In particular, the front of the car has been changed so that in case of a crash, the very front of the car will absorb more of the impact. The intent is to leave the cabin area intact so that the driver and passengers will not be harmed. The first example is a(n) _________________ modification, while the second change is an example of a(n) ______________modification. a. q uality; functional b. p roduct; functional c. f unctional; quality d. p roduct; aesthetic e. a esthetic; quality 97. Early in the commercialization phase, marketers must make decisions about a. warranties, repairs, and replacement parts. b. product features and break-even points. c. functionality, safety, and convenience. d. the proposed marketing mix variables. e. which ideas to further pursue. 98. When Nadia and Nathan analyze the results from the recently completed test market to determine if any changes in the marketing mix are needed, they are in the beginning of which phase of the new-product development process? a. idea generation b. commercialization c. test marketing d. business analysis e. screening

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Chap 12_20e 99. The following organizational approaches accomplish tasks necessary to develop and manage products: market manager approach, product manager approach, and the ____ approach. a. brand manager b. functional team c. multiproduct manager d. special projects e. venture team 100. One disadvantage of test marketing a new product is that a. the product is distributed on a regional basis. b. competitors may copy the product. c. the results give little indication of the product's future success. d. price, advertising, and packaging cannot be varied from market to market. e. it might fail before it can be commercialized. 101. Which of the following is the best example of disruptive innovation? a. iPhone b. Can opener c. Snickers candy bar d. Razor blade e. Chevy Corvette 102. Which of the following creates entirely new products, often aimed at new markets? a. Line manager b. Venture team c. Product manager d. Brand manager e. Executive manager 103. All of the following are major steps in developing new products except a. test marketing. b. evaluation of competitors' efforts. c. screening. d. business analysis. e. idea generation. 104. Often, a new product is launched in stages during commercialization. This gradual introduction of the product is known as a. market development. b. regional commercialization. c. rollout. d. test market extension. e. competitive introduction. Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 105. Tim is a new product manager for a large biochemical firm. He is currently working on a proposal for a new chemical solvent and knows that introducing the new product can be risky because it might fail. He also knows that ___ is risky as well. a. performing marketing research b. keeping tabs on the actions of competitors c. not introducing new products d. generating new product ideas e. addressing customers' concerns about products 106. To differentiate their products, companies sometimes emphasize the product support services that they offer. This is especially true when a. the company's prices are higher than the competition's. b. the company introduces a new product. c. consumers are willing to pay for product support services. d. consumers perceive all products in a market to have essentially the same quality, design, and features. e. the quality of the company's products is inferior to the quality of competing products. 107. Which of the following is appropriate for a firm engaging in different types of marketing activities to diverse customer groups? a. Product marketer b. Brand manager c. Market manager d. Venture team e. Line manager 108. One downside to modifying a successful product is that consumers who enjoyed the original version of the product a. will reject a modified version outright. b. may complain about a modified version on social media. c. will turn to competing products. d. will reject a modified product unless it is cheaper. e. may view a modified version as a riskier purchase. 109. Bethany and Joseph are preparing budgets for a new product as well as finalizing plans for the full-scale marketing and manufacturing of the new UtiliBot. They are in the ____ phase of the new-product development process. a. test marketing b. business analysis c. concept testing d. product development e. commercialization

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Chap 12_20e 110. If Jade were given total marketing responsibility over Hill’s Ideal Balance pet food, she would hold the position of ____ manager. a. product b. sales c. marketing d. advertising e. brand 111. Quality modifications are changes that relate to a product's a. dependability and durability. b. effectiveness and versatility. c. price and availability. d. reliability and value. e. value and durability. 112. Changes that affect a product's versatility, effectiveness, convenience, or safety are called ____ modifications. a. functional b. formal c. aesthetic d. quality e. package 113. Which of the following is the stage of the new-product development process where customers are first exposed to the new product idea? a. Screening b. Concept testing c. Business analysis d. Product development e. Test marketing 114. Increasing the quality of a product may a. allow the firm to lower the price of the product. b. allow the firm to use less expensive ingredients. c. allow the firm to use less expensive processes. d. put the firm at a disadvantage relative to competing brands. e. give a firm an advantage over competing brands.

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Chap 12_20e 115. Your company has a product that is struggling in its market. However, the product appears to have some strength left that can be exploited. Which of the following product deletion actions would be most appropriate for the product? a. I ncrease the price and implement a run-out strategy. b. I mmediately drop the product. c. I ncrease the marketing for the product and gradually phase it out. d. R educe the price and implement a run-out strategy. e. I ncrease the marketing expenditures on the product and implement a run-out strategy. 116. The phase of the new-product development process when the organization determines the technological feasibility of producing the product at a cost that results in a reasonable selling price is a. test marketing. b. commercialization. c. concept testing. d. product development. e. business analysis. 117. Which of the following is a disadvantage of gradually introducing a product to market? a. It reduces the risk of introducing a new product. b. It is easier logistically to introduce it all at once. c. It is difficult to slow down production enough for a gradual introduction. d. It allows competitors to monitor the results of the new product. e. It prevents product differentiation based on geographical differences. 118. ____ is the development of a product that is closely related to one or more products in a firm's existing product line but is designed specifically to meet somewhat different customer needs. a. Quality modification b. Line extension c. Aesthetic modification d. Feature modification e. Product mix modification 119. Why are line extensions more common than new products? a. They are higher risk and more expensive. b. They are guaranteed to succeed in the marketplace. c. They are less expensive and lower-risk. d. They require no market research. e. Modifications to existing products are very easy.

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Chap 12_20e 120. Octavia runs a local ice cream stand and is developing a new type of ice cream sundae. She just sent a press release to the local newspaper and featured the new sundae on her Facebook page and Instagram account. Based on this information, Octavia is most likely in the _____ stage of the new-product development process. a. screening b. commercialization c. business analysis d. concept testing e. product development 121. When Old Spice came out with the “Smell like a Man” advertising campaign, the goal was to _____ the brand from one that appealed to older men to a new, younger target market. a. transfer b. reposition c. adapt d. update e. revitalize 122. A genuinely new product, like the iPhone once was, offers a. lower prices than existing products. b. at least two new product features. c. innovative benefits to consumers. d. better value than existing products. e. at least two new product features at a lower price. 123. A new variety of Lays is initially introduced in Phoenix, Arizona; Cleveland, Ohio; Battle Creek, Michigan; and Peoria, Illinois. After its initial success, Frito-Lay markets the new Lays in those entire states, then the adjacent states, and finally the entire country. Frito-Lay is using a ____ for its new variety of Lays. a. multistage introduction b. rollout approach c. test market expansion d. mass commercialization e. trickle-down approach 124. The major drawback to using aesthetic modifications is a. the cost of the modifications. b. that the value of the modification is determined subjectively. c. the need for redesign of the product. d. a possible decrease in market share. e. that there is no differentiation for the product in the market.

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Chap 12_20e 125. If Julio, product manager at Frito-Lay, became aware that General Mills was in the process of test marketing a new snack chip in the southeast U.S. region, he might want to engage in ____ to reduce the validity of the other firm's results. a. testing interference b. leadership pricing c. jamming d. test marketing e. stress marketing 126. ____ and ____ are important characteristics of quality for consumer markets, and ____ and ____ are important characteristics of quality for business markets. a. Reliability/ease of use; technical suitability/ease of repair b. Technical suitability/reasonable price; trusted brand name/ease of repair c. Durability/technical suitability; company reputation/ease of repair d. Ease of maintenance/durability; company reputation/technical suitability e. Trusted brand name/ease of repair; reliability/company reputation 127. Which of the following would suggest that a company is implementing a phase-out strategy for a declining product? a. Maintaining the product’s marketing mix b. Eliminating advertising c. Reducing the price d. Raising the price e. Selling all remaining products to a liquidating firm 128. Jennings Flooring found a supplier of very inexpensive fibers that could be used to produce low-grade carpeting at a very low cost. Because Jennings had been facing stiff competition in the medium-grade carpet industry, it started using the new material in all of its carpeting and reducing its prices. This is an example of a(n) a. aesthetic modification. b. line extension. c. material adjustment. d. functional modification. e. quality modification.

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Chap 12_20e 129. Jimmy is interested in determining how customers consider his firm's dietary products compared with its competitors. He begins surveying customers and asking them to express what they think about the products and brands in the dietary industry based on the dimensions of effectiveness and affordability. He will use this feedback to create "ideal points" for what consumers desire in dietary products. He will then compare these "ideal points" with his firm's products as well as other brands in the industry to see how they measure up. Jimmy is engaging in a. brand management. b. perceptual mapping. c. idea generation. d. product modification. e. product differentiation. 130. "Is the demand strong enough?" is a question that marketers ask during the ____ phase of new-product development. a. idea generation b. concept testing c. business analysis d. product development e. test marketing 131. Dorito’s has expanded to Nacho Cheese Doritos, Cool Ranch Doritos, and Salsa Verde Doritos, to name a few. These are examples of a. product modifications. b. functional modifications. c. aesthetic modifications. d. line extensions. e. product line modification. 132. The members of a venture team come from a. the marketing department. b. a consulting firm. c. the research and development department. d. the production and finance departments. e. different functional areas of an organization.

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Chap 12_20e 133. Jaguar I-Pace sedans have the unique characteristics of being a totally electric, luxury sports sedan. The marketing manager wants to focus on these unique aspects rather than comparing the vehicles directly to competitors. He wants the I-Pace to be seen in a totally different light. Based on these objectives, he would want a. to avoid competition. b. to engage in head-to-head competition. c. to base its positioning on price. d. to base its positioning on the target market. e. to base its positioning on the vehicle's styling. 134. Compared with other phases of the new-product development process, the largest number of new-product ideas is rejected during the ____ phase. a. idea generation b. concept testing c. business analysis d. screening e. test marketing 135. You are in the new product development process for a new snack food product. So far, everything has been very positive, and you are starting to believe this product might be a blockbuster. As you prepare for the next stage of the process, you are concerned that your competition might try to “jam” your new product by increasing promotional activities for their own products. More importantly, you are concerned that these competitors might try to copy your product as you move into this next stage. Which of the following stages of the new-product development process are you about to enter? a. Product development b. Test marketing c. Concept testing d. Commercialization e. Screening 136. Samuel is an engineer involved in the product development of a new engineered stone that would be sold to manufacturers of kitchen countertops. Currently, Samuel and his colleagues are considering the potential for profitability of the new product. They are likely in the ____ phase of the new product development process. a. idea generation b. market testing c. business analysis d. concept testing e. compatibility research

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Chap 12_20e 137. The phase of new-product development in which a small sample of potential buyers are presented with a product idea through a written or oral description in order to determine their attitudes and initial buying intentions regarding the product is called a. concept testing. b. customer response testing. c. idea analysis. d. test marketing. e. screening. 138. Repositioning a product can be executed by physically changing the product, its price, or its distribution, or by changing its a. perceptual map. b. features. c. image through digital efforts. d. image through promotional efforts. e. image through segmentation efforts. 139. When determining how a product is conceived, planned, produced, and even its physical appearance and its specific characteristics, one is really talking about the product's a. positioning. b. level and consistency of quality. c. ability to meet customer service needs. d. design, styling, and level of quality. e. design, styling, and features. 140. When Cameron was visiting family in Missouri, he ate a flavor of Boulder Canyon Kettle Chips that he had never seen before. When he returned home to Virginia, he could not find the flavor in any store. Which of the following reasons most likely explains why he could not find the flavor at home? a. The flavor was being deleted through an immediate drop. b. The flavor was in the screening phase of the new-product development process. c. The chips were undergoing a repositioning. d. He was visiting a city being used as a Boulder Canyon’s test market. e. The new flavor was going through product differentiation. 141. Dropping an unprofitable product immediately is the best strategy when a. all advertising and promotional efforts have been exhausted. b. customers have a negative outlook on other products. c. losses are too great to prolong the product's life. d. the product's performance cannot be improved. e. there is low compatibility with the firm's business strategies.

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Chap 12_20e 142. A run-out policy of product deletion a. lets the product decline without changing the product strategy. b. is an immediate-drop decision. c. exploits any strengths left in the product. d. raises the price of the product continually to secure as much profit as possible before the product is priced out of the market. e. occurs when production cannot keep pace with demand because of material shortages. 143. Marketers of a particular brand of ice cream have decided to delete their line of ice cream bars. They will do so by letting the product decline and not change the current marketing strategy. This method of deletion is called a. business analysis. b. immediate drop. c. screening. d. phase-out. e. run-out. 144. Modifying a product to have _______ may enable a company to charge a higher price by creating customer loyalty and lowering customer sensitivity to price. a. more outlets b. higher costs c. lower costs d. lower quality e. higher quality 145. The decisions and activities intended to create and maintain a certain concept of the firm’s product, relative to competitive brands, in customers’ minds is a. perceptual mapping. b. repositioning. c. product deletion. d. product development. e. product positioning. 146. Marketers begin to make decisions about labeling, packaging, branding, pricing, and promotion during a. commercialization. b. screening. c. concept testing. d. product development. e. test marketing.

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Chap 12_20e 147. Functional modifications usually require that the product be a. less specific. b. limited to its functions. c. more appealing. d. more technical. e. redesigned. 148. Sunny works in marketing at a mid-sized firm that sells to both business and consumer markets. He is in charge of all the marketing activities targeted toward construction business customers, while his partner focuses on the activities targeting retailers. Sunny is most likely a a. sales manager. b. venture team manager. c. product manager. d. brand manager. e. market manager. 149. Sarah and Felix at Dyad Foods believe they have come up with a delicious low-calorie dessert, but they have some doubt about which of two promotional and pricing campaigns will be better received by consumers. In this instance, they probably should proceed to the ____ stage of the new-product development process. a. business analysis b. commercialization c. screening d. test marketing e. product development 150. Scenario 12.1 Use the following to answer the questions. Cheetos Fat-free Crunchies is a product developed through advanced technology. Cheetos engineered a technique for making reduced-fat snacks that taste cheesier and stay fresh longer. About 18 months after the manufacturer launched Cheetos Fat-free Crunchies, a competitor ran a series of ads claiming that Cheetos Crunchies actually contained 1.5 grams of fat and that they contained preservatives and additives. Research showed that the taste of Cheetos Crunchies was also perceived negatively by some people. To save the product, Cheetos reduced the remaining fat to 0 grams, took out the preservatives, and improved the taste. Refer to Scenario 12.1. Cheetos produces several cheese snack products and is considering a cracker-shaped Cheeto. This new Cheetos product would most likely be an example of a. a product modification. b. a line extension. c. a quality modification. d. a functional extension. e. an aesthetic modification. Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 151. When Herstyler adds an electrical component that automatically shuts off its curling irons when they have been left on for more than one hour, this improvement would best be classified as a(n) a. product line extension. b. quality modification. c. aesthetic modification. d. brand extension. e. functional modification. 152. Break-even analysis is a tool that marketers are likely to employ during the ____ stage of the new-product development process. a. screening b. concept testing c. business analysis d. product development e. test marketing 153. In product modification, three conditions must be met to improve a firm's product mix: the product must be modifiable, customers must be able to perceive that a modification has been made, and a. a modification should make the product more consistent with customers' desires. b. competing companies should not be aware of planned product modifications. c. a modification should change customers' desires to provide greater satisfaction. d. management must perceive the modification as a reasonable and necessary action. e. needed materials and production costs should be limited. 154. Which of the following identifies old technologies that can be used in new ways or creates new business models to give consumers more benefits than offered by current products in the marketplace? a. Corruptive innovation b. Business analysis c. Concept testing d. Congestive innovation e. Disruptive innovation 155. Keira is a member of the product development team at a company that manufactures sports equipment. During a recent meeting, one of the team members asked, "What level of quality are we building into the camping gear?" Based on this question, Keira and her team are most likely in the ____ phase of new-product development. a. commercialization b. concept testing c. business analysis d. product development e. test marketing

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Chap 12_20e 156. The annual Consumer Reports rating of your company’s flagship product was just released. Generally speaking the rating was good but not great. Based on the consumer comments that were referenced in the rating, it appears that many consumers have a negative view of the product’s convenience and safety attributes. In order to address these consumer concerns your company should consider doing which of the following? a. Make aesthetic modifications to the product. b. M ake line extensions to the product. c. M ake functional modifications to the product. d. L ower the price of the product. e. M ake quality modifications to the product. 157. Which of the following statements is true about organizational structures for managing products? a. A product manager is responsible for several distinct products that make up a group. b. B rand managers do not operate cross-functionally in an organization. c. M arket managers are responsible for managing multiple brands. d. P roduct managers do not operate cross-functionally in an organization. e. A brand manager is responsible for a product line. 158. Melissa is interested in upgrading to a new sofa for her apartment. She looks online to see what new models her favorite sofa brand has available and can get information on the style and color; however, she can’t actually sit on the sofa to determine its comfort level. Melissa is able to evaluate the ____ modifications to the sofa, but not the ____ modifications. a. aesthetic; quality b. quality; aesthetic c. aesthetic; functional d. functional; quality e. functional; aesthetic 159. After building a prototype of his new device, Barry is asked to conduct rigorous functional testing to see if the device meets performance and safety qualifications. This is part of the ____ phase of the new-product development process. a. product design b. screening c. product development d. concept testing e. test marketing 160. The ability of a product to provide the same level of quality over time is called a. consistency. b. longevity. c. variability. d. status. e. image. Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 161. Adrienne has gone to the store to shop for a new backpack. She looks for the same brand she has always bought in the past but notices that the backpack is now available in a variety of new colors. The backpack has undergone a(n) _____ modification. a. subjective b. quality c. aesthetic d. functional e. sensory 162. Scenario 12.2 Use the following to answer the questions. Jon Moore, president of Vortex Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job of managing Vortex's product mix. Jon calls a meeting of all the managers responsible for each of the product lines that Vortex currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Vortex's line of personal thermal underwear; this product, however, is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The company has conducted several focus groups in which a sample of these consumers have participated. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Refer to Scenario 12.2. The decision to delete the industrial product line of ice chests is an example of deleting a product through a(n) ____, while the decision to drop the thermal underwear line is an example of a(n) ____. a. run-out; phase out b. phase-out; immediate drop c. immediate drop; run-out d. immediate drop; phase-out e. phase-out; run-out 163. Minerva is frustrated with the cost of ink cartridges for her small business computer. Although she paid just $199 for the name-brand printer, replacing the ink cartridges on a near monthly basis is time consuming and costs her about $50 a month, no matter how much she actually uses the printer. Minerva is beginning to work on a new business model that would involve marketing lower priced ink cartridges delivered right to the customer on a subscription basis. This best illustrates a. test marketing. b. business analysis. c. concept testing. d. product development. e. disruptive innovation.

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Chap 12_20e 164. Milo is a product manager at Hershey. He learned that one of his competitors, the Mars Candy Company, was engaging in test marketing of a new candy bar. He decided to increase promotional activity, including coupons with significant price reductions, in the test markets in order to _____ the test program. a. end b. stimulate c. jam d. scramble e. screen 165. Scenario 12.2 Use the following to answer the questions. Jon Moore, president of Vortex Manufacturing Company, has just reviewed the performance reports for the previous year and sees that there are some areas in which the company needs to improve. He specifically feels they could do a better job of managing Vortex's product mix. Jon calls a meeting of all the managers responsible for each of the product lines that Vortex currently manufactures. The group decides that they need to eliminate the complete industrial product line of ice chests, and plan to do so by letting the product decline without any changes in the marketing strategy or product. The group also decides to delete Vortex's line of personal thermal underwear; this product, however, is to be discontinued within the week due to its unprofitability. While discussing these strategies, the group has also uncovered several customer groups for which new products could be developed. The company has conducted several focus groups in which a sample of these consumers have participated. The managers decide to assemble a group of people from all functional areas of the company and give them the responsibility for all aspects of the new-product development. Refer to Scenario 12.2. The group of people that management has assembled to take on the task of newproduct development is best described as a. a buying center. b. a product development task force. c. a marketing development team. d. a venture team. e. a brand management team. 166. Jonah is a member of a consumer panel consisting of about 30 people. The consumer panel has been introduced to a company’s new idea for energy drinks. Some of the questions panel members have been asked are “How often would you buy this product?" and "Which features are of little or no interest to you?" Jonah is most likely participating in the ___ phase of the new-product development process. a. concept testing b. business analysis c. idea screening d. idea generation e. test marketing

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Chap 12_20e 167. As Richard works on the prototype of a new action-oriented computer game, he is engaging in which phase of the new-product development process? a. Idea generation b. Commercialization c. Test marketing d. Screening e. Product development 168. The concept of level of quality is relative because it cannot be described without a. evaluating its features. b. evaluating its design and styling. c. assessing its components. d. comparing it with its price. e. comparing it to other products. 169. The test marketing stage a. is an extension of the screening stage. b. should come immediately after business analysis. c. ensures that the product will not fail. d. is a sample launching of the entire marketing mix. e. prevents competitors from copying the product. 170. What exactly is analyzed during the business analysis phase of new-product development?

171. Identify and explain the dimensions of product quality.

172. Compare and contrast a product manager and a brand manager.

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Chap 12_20e 173. What is concept testing, and why is it important?

174. Why and how might an organization delete existing products?

175. Compare and contrast line extensions and product modifications.

176. Identify and describe the three major ways to modify existing products, and give an example of each.

177. Describe product positioning. List and explain the bases for positioning.

178. List and discuss the major phases of the new-product development process.

179. Why is it often difficult for organizations to delete products?

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Chap 12_20e 180. Discuss the advantages and problems associated with test marketing.

181. Discuss the major approaches that marketers use to differentiate their products.

182. Why do brands require repositioning? What are the ways in which repositioning can be accomplished?

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Chap 12_20e Answer Key 1. True 2. False 3. True 4. True 5. False 6. False 7. False 8. False 9. False 10. True 11. True 12. False 13. False 14. False 15. False 16. False 17. True 18. False 19. False 20. True 21. True 22. True 23. False 24. False 25. True 26. False

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Chap 12_20e 27. True 28. False 29. False 30. True 31. False 32. True 33. True 34. True 35. True 36. False 37. True 38. True 39. True 40. False 41. True 42. True 43. True 44. True 45. True 46. False 47. True 48. False 49. False 50. False 51. True 52. True 53. False 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 55. True 56. False 57. True 58. c 59. e 60. a 61. a 62. a 63. a 64. c 65. e 66. d 67. a 68. b 69. d 70. b 71. d 72. e 73. d 74. a 75. a 76. c 77. e 78. b 79. e 80. e 81. b 82. b Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 83. a 84. e 85. b 86. b 87. a 88. d 89. d 90. c 91. c 92. c 93. d 94. a 95. b 96. c 97. a 98. b 99. e 100. b 101. a 102. b 103. b 104. c 105. c 106. d 107. c 108. e 109. e 110. e Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 111. a 112. a 113. b 114. e 115. d 116. d 117. d 118. b 119. c 120. b 121. b 122. c 123. b 124. b 125. c 126. d 127. a 128. e 129. b 130. c 131. d 132. e 133. a 134. d 135. b 136. c 137. a

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Chap 12_20e 138. d 139. e 140. d 141. c 142. c 143. d 144. e 145. e 146. d 147. e 148. e 149. d 150. b 151. e 152. c 153. a 154. e 155. d 156. c 157. a 158. c 159. c 160. a 161. c 162. b 163. e 164. c 165. d Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 166. a 167. e 168. e 169. d 170. During the business analysis stage, a product idea is evaluated to determine its potential contribution to a firm’s sales, costs, and profits. In the course of a business analysis, evaluators determine whether a product fits with the organization’s existing product mix. They also ascertain if demand of the product is strong enough to justify entering a market, and whether the demand will endure. Moreover, the evaluators estimate types of environmental and competitive changes that can affect the product’s future sales, costs, and profits. During the business analysis stage, a firm determines whether its research, development, engineering, and production capabilities are adequate to develop a product; whether new facilities must be constructed, how quickly they can be built, and how much they will cost; and whether the necessary financing for development and commercialization is on hand or is obtainable based on terms consistent with a favorable return on investment. 171. The two dimensions of product quality are level of quality and consistency of quality. Level of quality is the amount of quality a product possesses. The concept is a relative one because the quality level of one product is difficult to describe unless it is compared with that of other products. Consistency of quality refers to the degree to which a product has the same level of quality over time. Consistency means giving customers the quality they expect every time they purchase the product. As with level of quality, consistency is a relative concept. It implies a quality comparison within the same brand over time. 172. A product manager is responsible for a product, a product line, or several distinct products that make up an interrelated group within a multiproduct organization. On the other hand, a brand manager is responsible for a single brand. Both product and brand managers operate cross-functionally to coordinate the activities, information, and strategies involved in marketing an assigned product. Product managers and brand managers plan marketing activities to achieve objectives by coordinating a mix of distribution, promotion (especially sales promotion and advertising), and price. 173. In concept testing, a small sample of potential buyers is presented with a product idea through a written or oral description (and perhaps a few drawings) to determine their attitudes and initial buying intentions regarding a product. For a single product idea, an organization can test one or several concepts of the same product. Concept testing is important because it is a low-cost procedure that allows a company to determine customers’ initial reactions to a product idea before it invests considerable resources in research and development. 174. Product deletion is the process of eliminating a product from the product mix, usually because it no longer satisfies a sufficient number of customers. A declining product reduces an organization’s profitability and drains resources that could be used to modify other products or develop new ones. A marginal product may require shorter production runs, which can increase per-unit production costs. Finally, when a dying product completely loses favor with customers, the negative feelings may transfer to some of the company’s other products. There are three basic ways to delete a product: phase it out, run it out, or drop it immediately. A phase-out allows the product to decline without a change in the marketing strategy; no attempt is made to give the product new life. A run-out exploits any strengths left in the product. The third alternative, an immediate drop of an unprofitable product, is the best strategy when losses are too great to prolong the product’s life.

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Chap 12_20e 175. A line extension is the development of a product closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs. On the other hand, a product modification involves changing one or more characteristics of a product. A product modification differs from a line extension because the original product does not remain in the line. However, like a line extension, a product modification entails less risk than developing new products. 176. There are three major ways to modify products: quality, functional, and aesthetic modifications. Quality modifications are changes relating to a product’s dependability and durability. The changes usually are executed by altering the materials or the production process. For instance, for a service, such as air travel, quality modifications may involve increasing leg room in the seating area. Changes that affect a product’s versatility, effectiveness, convenience, or safety are called functional modifications; they usually require that the product be redesigned. For example, making programs available in 3-D on DirectTV is a functional modification. Aesthetic modifications change the sensory appeal of a product by altering its taste, texture, sound, smell, or appearance. The fashion industry relies heavily on aesthetic modifications from season to season. For example, Louis Vuitton clothing, handbags, and leather goods are leaders in the haute couture industry. In order to maintain its reputation for the utmost level of quality and style, the company performs aesthetic modifications on its products regularly. 177. Product positioning refers to the decisions and activities intended to create and maintain a certain concept of a firm’s product (relative to competitive brands) in customers’ minds. When marketers introduce a product, they try to position it so that it appears to have the characteristics that the target market most desires. Marketers can use several bases for product positioning. A common basis for positioning products is to use competitors. A firm can position a product to compete head-on with another brand. Head-to-head competition may be a marketer’s positioning objective if the product’s performance characteristics are at least equal to those of competitive brands and if the product is priced lower. Head-to-head positioning may be appropriate even when the price is higher if the product’s performance characteristics are superior. A product’s position can be based on specific product attributes or features. If a product has been planned properly, its features will give it the distinct appeal needed. The target market can also be a positioning basis caused by marketing. This type of positioning relies heavily on promoting to the types of people who use the product. Other bases for product positioning include price, quality level, and benefits provided by the product. 178. The seven phases of the new-product development process are idea generation, screening, concept testing, business analysis, product development, test marketing, and commercialization. Businesses and other organizations seek product ideas that will help them to achieve their objectives. This activity is idea generation. In the process of screening, the ideas with the greatest potential are selected for further review and analyzed to determine whether or not they match the organization’s objectives and resources. In concept testing, a small sample of potential buyers is presented with a product idea through a written or oral description (and perhaps a few drawings) to determine their attitudes and initial buying intentions regarding the product. During the business analysis stage, the product idea is evaluated to determine its potential contribution to the firm’s sales, costs, and profits. Product development is the phase in which the organization determines if it is technically feasible to produce the product and if it can be produced at costs low enough to make the final price reasonable. A limited introduction of the product in geographic areas chosen to represent the intended market is called test marketing. During the commercialization phase, plans for full-scale manufacturing and marketing must be refined and settled and budgets for the project prepared. 179. Most organizations find it difficult to delete a product because a decision to drop a product may be opposed by managers and other employees who believe that the product is necessary to the product mix. Salespeople who still have some loyal customers are especially upset when a product is dropped. Considerable resources and effort are sometimes spent trying to change a slipping product’s marketing mix to improve its sales and thus avoid having to eliminate it. Copyright Cengage Learning. Powered by Cognero.

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Chap 12_20e 180. Test marketing provides several benefits. It lets marketers expose a product in a natural marketing environment to measure its sales performance. A company can strive to identify weaknesses in a product or in other parts of the marketing mix. A product weakness discovered after a nationwide introduction can be expensive to correct. Moreover, if consumers’ early reactions are negative, marketers may be unable to persuade consumers to try the product again. Thus, making adjustments after test marketing can be crucial to the success of a new product. On the other hand, test marketing results may be positive enough to warrant accelerating the product’s introduction. Test marketing also allows marketers to experiment with variations in advertising, pricing, and packaging in different test areas and to measure the extent of brand awareness, brand switching, and repeat purchases resulting from these alterations in the marketing mix. Test marketing is not without risks. It is expensive, and competitors may try to interfere. A competitor may attempt to “jam” the test program by increasing its own advertising or promotions, lowering prices, and offering special incentives, all to combat the recognition and purchase of the new brand. Sometimes, too, competitors copy the product in the testing stage and rush to introduce a similar product. It is desirable to move to the commercialization phase as soon as possible after successful testing. 181. The three approaches that marketers use to differentiate their products from their competitors’ products are product quality, product design and features, and product support services. Product quality refers to the overall characteristics of a product that allow it to perform as expected in satisfying customer needs. The concept of quality varies between consumer and business markets. For business markets, technical suitability, ease of repair, and company reputation are important characteristics. Unlike consumers, most businesses place far less emphasis on price than on product quality. Product design refers to how a product is conceived, planned, and produced. The style of a product is one design feature that can allow certain products to sell very rapidly. Good design, however, means more than just appearance; it also involves a product’s functionality and usefulness. Product features are specific design characteristics that allow a product to perform certain tasks. By adding or subtracting features, a company can differentiate its products from those of the competition. Product features also can be used to differentiate products within the same company. Many companies differentiate their product offerings by providing support services. Usually referred to as customer services, these services include any human or mechanical efforts or activities a company provides that add value to a product. 182. When introducing a new product into a product line, one or more existing brands may have to be repositioned to minimize cannibalization of established brands and thus ensure a favorable position for the new brand. Repositioning can be accomplished by physically changing the product, its price, or its distribution. Rather than making any of these changes, marketers sometimes reposition a product by changing its image through promotional efforts. Finally, a marketer may reposition a product by aiming it at a different target market.

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Chap 13_20e Indicate whether the statement is true or false. 1. The education a student gets is an example of the intangibility of services. a. True b. False 2. Customers seldom rely on the price-quality associations. a. True b. False 3. Because services are intangible by nature, marketers should downplay the tangibles associated with a particular service (such as facilities or employees). a. True b. False 4. Sarafina owns a popular Mexican restaurant. She makes all her waiters, waitresses, and cooks go through a three-week training program in the hopes that they will learn how to offer more consistent, high-quality service. This is Sarafina's attempt to reduce problems associated with perishability. a. True b. False 5. Nonprofit organizations deal with ideas and services more often than with goods. a. True b. False 6. Direct consumers of a nonprofit organization’s products are called general publics. a. True b. False 7. In most developed countries, services account for the majority of gross domestic product. a. True b. False 8. Customers are the ultimate judges of good service quality. a. True b. False 9. A hair stylist who gives good haircuts in the morning but tends to give haircuts of lesser quality in the afternoon is suffering from the challenges associated with intangibility. a. True b. False 10. The core service is used to differentiate the service bundle from those of competitors. a. True b. False

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Chap 13_20e 11. Suppose Little Caesar’s Pizza discounts its pizzas on Tuesday evening because demand is slow. This pricing strategy is known as low demand pricing. a. True b. False 12. Balancing the supply and demand of services can be done by keeping service prices the same regardless of the time of day, week, or year. a. True b. False 13. Social marketing is the use of marketing concepts and activities by organizations whose goals do not include profits. a. True b. False 14. Demand-based pricing relies on information concerning peak demand times and off-peak demand times. a. True b. False 15. Because of inseparability of the consumption and production of services, customers are often present when a service is produced. a. True b. False 16. It is easier for administrators to evaluate the performance of professors or social workers than it is for sales managers to evaluate the performance of salespeople in a for-profit organization. a. True b. False 17. Customer-oriented measures of employee performance may be a better basis of evaluation and rewards. a. True b. False 18. The concept of opportunity cost is important in determining the price paid by an individual for a nonprofit product. a. True b. False 19. Services are products that can be touched and felt. a. True b. False 20. Homesourcing occurs when customer-contact jobs are outsourced to homes of workers. a. True b. False

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Chap 13_20e 21. Attributes that customers may be unable to evaluate even after the purchase and consumption of the service are called experience qualities. a. True b. False 22. Compared with goods marketers, service providers are less likely to promote price, guarantees, performance documentation, availability, and training and certification of contact personnel. a. True b. False 23. Goods can be defined in terms of their physical attributes, but services cannot because they are intangible. a. True b. False 24. Two types of monetary pricing exists for nonprofit services: fixed and opportunity cost. a. True b. False 25. Personal selling is not used to promote services. a. True b. False 26. Training of employees is less important for high-contact services than it is for low-contact services. a. True b. False 27. Inseparability also means that customers expect a service to be provided in a certain way by a specific person. a. True b. False 28. The response that a nonprofit organization desires from its target market or public may be a change in values, financial contributions, or the donation of services. a. True b. False 29. Service quality is defined as the company's perception of how well a service meets or exceeds customer expectations. a. True b. False 30. Selecting a marketing mix is the first step in developing any nonprofit marketing strategy. a. True b. False

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Chap 13_20e 31. There is no way to combat the supply-demand problem associated with the perishability of services. a. True b. False 32. The ability to customize services to match the specific needs of individual customers is an advantage to service marketers and may lead to standardized packages. a. True b. False 33. Nonprofit organizations usually have more diverse groups to serve than do for-profit organizations. a. True b. False 34. Client-based relationships are interactions that result in satisfied customers who repeatedly use a service over time. a. True b. False 35. The intangible nature of services often leads customers to use prices as a measuring tool for quality. a. True b. False 36. Personal selling is one noticeable marketing activity used to gain acceptance of a social idea or to solicit donations. a. True b. False 37. Pinpointing a target market should be done only after the selection of a marketing mix. a. True b. False 38. When a customer takes part in the production of a service, other customers can affect the outcome of the service. a. True b. False 39. Services are highly perishable and cannot be inventoried for future use. a. True b. False 40. Supplementary services are the basic services that a customer expects to receive. a. True b. False

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Chap 13_20e 41. Demand-based pricing means higher prices during times of lower demand and lower prices during times of higher demand. a. True b. False 42. O ne of the most critical aspects of service quality specifications is managers' commitment to service quality. a. True b. False 43. The U.S. economy is the world's first service economy. a. True b. False 44. Nonprofit organizations have greater opportunities for creativity than most for-profit business organizations. a. True b. False 45. Although nonprofit goals differ from for-profit goals, certain business marketing concepts can be adopted to enhance nonprofit operations. a. True b. False 46. Service quality guarantees are examples of customer services. a. True b. False 47. All services must be delivered either directly at the customer's home or a t the service facility. a. True b. False 48. A church's marketing objective could be to inform the public about its doctrine and convince people to become members. a. True b. False 49. Marketing as a field of study does not attempt to make value judgments about what a nonprofit organization's goals should be. a. True b. False 50. Credence qualities are attributes, such as taste, satisfaction, or pleasure, which can be assessed only during the purchase and consumption of a service. a. True b. False

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Chap 13_20e 51. Because most services are people based, they are susceptible to heterogeneity, or variation in demand over time. a. True b. False 52. Distribution of services is often more direct, even if the customer must go to the service provider's facilities. a. True b. False 53. The goal of building client-based relationships is to satisfy customers so well that they become very loyal and would be unlikely to switch to competitors. a. True b. False 54. There is an indirect relationship between the satisfaction of a company’s contact employees and the satisfaction of its customers. a. True b. False 55. One of the best ways to better understand customer needs and expectations is to ask contact employees. a. True b. False 56. An advantage of heterogeneity is that services can be customized. a. True b. False 57. Intangible cues are used to provide customers with some assurance of service quality. a. True b. False 58. State and local government regulations do not affect the pricing of services. a. True b. False 59. Advertisements for services use tangible cues to help customers understand the intangible attributes associated with a particular service. a. True b. False 60. Because of service perishability, it is difficult to price services in a manner that takes into account fluctuations in demand. a. True b. False

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Chap 13_20e 61. Both production and consumption of services occur at the same time. a. True b. False 62. Financial price, which is an exact dollar amount, may or may not be charged for a nonprofit product. a. True b. False 63. Intangibility of services creates promotional challenges because it is difficult to display a service in a store and to demonstrate the quality of a service. a. True b. False 64. High-contact services are very expensive to deliver because they are equipment-intensive. a. True b. False 65. The nonprofit organization does not need to develop a strategy for each of the marketing mix variables of product, price, distribution, and promotion. a. True b. False 66. Selecting a convenient location is important to the distribution of a nonprofit service. a. True b. False 67. Tangible attributes such as color, style, size, feel, or fit that can be evaluated prior to purchase are known as search qualities. a. True b. False 68. A nonprofit organization may exist in an environment in which its goals are opposed by some members of society. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 69. The four factors that affect a customer’s evaluation of a service are the analysis of customer expectations, service quality specifications, management of service expectations, and a. employee performance. b. company reputation. c. employee courtesy. d. experience of employees. e. price of the service.

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Chap 13_20e 70. If Ramada Inn bundles its rooms with services such as free local phone calls, cable television, wireless internet access, and complimentary breakfast, these services are known as ____ services. a. core b. supplementary c. packaged d. business e. complimentary 71. Ethan works as a salesperson at an auto dealership. His annual bonus has been calculated based on the volume of cars sold during the year. Next year, however, the calculation for the bonus will also include information from customer comments. The new bonus calculation is most likely designed to improve Ethan’s a. service expectations. b. reliability. c. employee performance. d. empathy. e. responsiveness. 72. Which of the following services falls closest to the middle of the tangibility continuum? a. College education b. Dinner at the Olive Garden c. A new Ford Escape d. A custom built yacht e. A trip to Brazil 73. By installing automated check-in kiosks in some airports, airlines have increased production capacity and reduced the number of personnel. This results in a decrease in a. perishability. b. intangibility. c. customer contact. d. inseparability. e. customer service. 74. The marketing channels for services are usually a. complex and multifaceted. b. characterized by two to three intermediaries. c. dependent on the geographical location of the consumer. d. determined by the customer. e. direct from provider to customer.

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Chap 13_20e 75. Scenario 13.1 Use the following to answer the questions. The YMCA in mid-town Atlanta has recently upgraded its facilities, including building a new Olympic-sized swimming pool and children's playground. All locations of the Atlanta "Y" are open from 6:00 am until 11:00 pm, 360 days a year. The children's playground is accessible for members only and is a fenced and secured area. During the weekdays, children under the age of 12 can engage in supervised activities at the playground, for no extra fee. Additionally, there are swimming classes for children of all ages, which is also covered by the monthly membership fee. The swimming pool has been very popular with the professionals who stop by for a swimming workout before or after work. Many of the YMCA locations are very busy all day; however, the midtown "Y" is busier during the early morning and early evenings. At a recent meeting, Malia Monroe, its manager, shared her concerns about getting more people into the "Y" at other times of the day. She asked for ideas from her staff about how to do this. She also said that the city of Atlanta had reduced the "Y"'s funding for the next year by 20%. This would cause a need for the "Y" to either gain additional members or charge more per member for the annual fee. Refer to Scenario 13.1. Ben, one of the staff members at the YMCA, suggested that the "Y" offer discounted memberships to senior citizens over the age of 65; however, they could only use the facility between the hours of 9:00 am and 4:00 pm. Ben's plan is most likely addressing the issue with ____, and relates to the ____ characteristic of services. a. peak demand; intangibility b. off-peak demand; perishability c. off-peak demand; heterogeneity d. demand-based pricing; heterogeneity e. preferred demand; perishability 76. Services have six basic characteristics: intangibility, inseparability of production and consumption, perishability, client-based relationships, customer contact, and a. labor-intensiveness. b. orientation toward value. c. homogeneity. d. heterogeneity. e. specialization. 77. Client-based relationships are most likely to be developed by a. funeral directors. b. electricians. c. installers. d. doctors. e. bricklayers.

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Chap 13_20e 78. Which of the following is similar for both for-profit and nonprofit marketing? a. Emphasis on profit as a motive b. Ability to use effective marketing activities c. Concern for the entry of competitors into the field d. Complexity of the typical distribution channels e. Definition of target markets 79. Which of the following service characteristics results in variability of service quality yet provides the opportunity for customizing services to match the specific needs of individual customers? a. Homogeneity b. Perishability c. Heterogeneity d. Intangibility e. Inseparability 80. A service is usually offered as part of a bundled package of services with a core service and one or more ____ services. a. basic b. tangible c. supplementary d. auxiliary e. other core 81. Some services are time sensitive, meaning that a significant number of customers desire the service around the same time. This point in time is called a. peak demand. b. preferred demand. c. off-peak demand. d. high demand. e. high intensity time. 82. Wayo was interested in taking classes to become a certified yoga instructor. In order to earn the certification, he found out he would need to take 200 hours of training. He would have to be present in the training classes with a trainer for all 200 hours. The fact that he would have to attend the classes with a trainer reflects the _____ quality of services. a. customer contact b. inseparability c. intangibility d. heterogeneity e. perishability

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Chap 13_20e 83. The intangibility aspect of a service means that a. there is a lack of perceived quality compared to a tangible good. b. unused capacity cannot be stockpiled or inventoried for later use. c. consumers may have a problem evaluating service offerings. d. services are not produced at the same time they are consumed. e. services are not labor-intensive. 84. Which of the following is the best example of a high-contact service? a. Appliance repair b. Newspaper delivery c. Dog training d. Interior decorating e. Plastic surgery 85. Joseph donates his time to a nursing home every Friday after school. Sometimes this means he misses hanging out with his friends for certain events. However, Joseph is committed to volunteering at the nursing home because his grandfather is one of the residents. He only misses his regular routine at the nursing home for very special occasions. Because Joseph must sometimes sacrifice events with his friends to volunteer, this represents a(n) a. variable cost. b. opportunity cost. c. fixed cost. d. steady cost. e. off-peak cost. 86. Production and consumption of services must simultaneously occur due to the ____ characteristic of services. a. intangibility b. heterogeneity c. customer contact d. perishability e. inseparability 87. Allstate Insurance uses a logo with a stylized pair of hands to communicate stability and security to consumers —"You’re in good hands with Allstate." This is Allstate's attempt to help customers better understand its services by a. emphasizing tangible cues in promoting the service. b. using word association. c. personalizing the selling of the service. d. utilizing publicity techniques to enhance the service. e. distributing the service directly through television.

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Chap 13_20e 88. Felicity recently moved to a new city and is trying to find a new mechanic to do maintenance and repair on her car. She visits several places to judge their overall appearance, cleanliness, and organization and finally chooses a mechanic. Felicity was trying to overcome the ____ aspect of services. a. heterogeneity b. perishability c. customer contact d. intangibility e. inseparability 89. Service marketers make promises to customers, suggesting that the customer place some degree of trust in the service provider. In this way, service marketers are trying to address the challenge of the service characteristic of a. perishability. b. heterogeneity. c. inseparability. d. intangibility. e. customer contact. 90. Wendy had to get braces for her crooked teeth. She picked out the color bands she liked best, and her orthodontist put the braces on. For several days afterward, Wendy's mouth was sore. She was not sure if this was normal or not. She figures that different people probably have different experiences. Despite not knowing, she has a lot of faith in her orthodontist as he has a great reputation and has never steered her wrong before. Wendy was able to evaluate the bands used for her braces using ____________ qualities. She evaluates the doctor's expertise and service based on _____________ qualities. a. search; credence b. experience; credence c. credence; experience d. credence; search e. search; experience 91. Which of the following best defines nonprofit marketing? a. Activities conducted by individuals and organizations to achieve some goal other than ordinary business goals such as profit or return on investment b. Marketing activities conducted by organizations operated by volunteers c. Nonbusiness activities aimed at goals such as profit or return on investment d. Marketing activities aimed at getting the product to the retailers through intermediaries e. The marketing activities conducted by individuals and organizations that are considered volunteer establishments

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Chap 13_20e 92. Mikhail works on developing press releases for a nonprofit organization looking for new ways to encourage recycling among consumers and businesses. Mikhail is engaging in a. strategic marketing. b. nonprofit-organization marketing. c. social entrepreneurship. d. social marketing. e. client marketing. 93. The necessary interaction between service provider and customer that allows a service to be delivered is called a. customer contact. b. service exchange. c. marketing. d. relationship marketing. e. service contact. 94. An important difference between for-profit and nonprofit marketing is that a. there is no exchange in nonprofit marketing because the nonprofit organization receives something of value but does not give anything of value. b. marketing exists only in the for-profit organization. c. the goals of the nonprofit organization differ from the goals of the for-profit organization. d. a target market need not be determined by a nonprofit organization. e. there is no price in the marketing mix of the nonprofit organization. 95. The fact the services cannot be inventoried and then sold at a later date is called a. intangibility. b. heterogeneity. c. inseparability. d. perishability. e. nonstorability. 96. Alan is planning a trip to Playacar for spring break. He will likely be able to evaluate the hotel’s size, amenities offered, and prices by looking at information on its website. However, he won’t be able to evaluate the comfort level of the bed or the friendliness of the employees until he actually spends time at the hotel. The type of evaluation attributes Alan is using before his trip are called _______ and those he uses during the trip are called _____. a. search; experience b. search; credence c. credence; experience d. credence; search e. experience; credence

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Chap 13_20e 97. Client-based relationships are least likely to be developed by a. appliance repairmen. b. accountants. c. beauticians. d. orthodontists. e. psychiatrists. 98. Any service provider that offers time-sensitive services receives most of its revenue during a. peak demand. b. heavy use time. c. the off-season. d. preferred demand. e. low demand. 99. Dentists find it difficult to attract customers because many customers cannot distinguish whether or not the product offered is beneficial. This aspect of the dentist's product is called ____ quality. a. search b. experience c. credence d. tangible e. separable 100. Which of the following service providers are most likely to use demand-based pricing? a. Dentists b. Lawyers c. Doctors d. Hair stylists e. Cruise ships 101. The main characteristic of a ____ is that customers are satisfied to the point that they use a service repeatedly over a period of time. a. service relationship b. professional marketer c. high-contact service d. heterogeneous service e. client-based relationship

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Chap 13_20e 102. Amber, a waitress at the City Grill, is angry that a customer complained that his soup was cold because of her slow service. City Grill owner Marc Devereaux reminds her that she must focus on service quality as defined by a. the health department. b. restaurant management. c. the customer's perceptions. d. temperature guidelines. e. general practices. 103. Which of the following statements about customer contact in services marketing is false? a. Service employees are important in creating satisfied customers. b. High-contact services are less expensive to deliver because they are typically equipment based. c. The main principle of customer contact is that satisfied employees lead to satisfied customers. d. Service companies can minimize customer dissatisfaction by changing high-contact services into lowcontact services. e. Employee training programs are an effective way to ensure good customer contact and reduce problems. 104. Which of the following makes word-of-mouth communication particularly important in service promotion? a. Homogeneity and intangibility b. Perishability and intangibility c. Heterogeneity and intangibility d. Inseparability and heterogeneity e. Inseparability and perishability 105. The heterogeneity characteristic of services provides marketers with tremendous opportunity to a. customize their services to meet unique individual needs. b. hold down the cost of providing services to customers. c. create standardized packages that will appeal to many customers. d. offer the same service as all of their competitors. e. develop relationship marketing with their customers. 106. Deanna asks Beverly what housecleaning service she would recommend in Oakview. Beverly responds that Pristine Cleaning is great if you can be assured that Tasha will be the person assigned to your house. Beverly's recommendation addresses which of the following service features? a. Heterogeneity b. Intangibility c. Perishability d. Inseparability e. Homogeneity

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Chap 13_20e 107. ____ is the value of the benefit that is given up by selecting one alternative rather than another. a. Benefit loss b. Opportunity cost c. Privileged cost d. Selection cost e. Exchange loss 108. In service marketing, the most important link to the customer is a. effective advertising. b. good word-of-mouth communication. c. well-trained contact employees. d. the tangible aspects of the service. e. exceptional service quality. 109. Consumers look closely at service quality when comparing competing services because a. they perceive all services to be essentially the same. b. they typically have very few services from which to select. c. all services are priced about the same. d. quality is the only relevant service characteristic. e. services are very difficult to evaluate. 110. When a theater entices customers to see movies during the daytime by offering tickets at a reduced price, it is trying to solve the services marketing problem of a. inseparability. b. intangibility. c. customer contact. d. off-peak demand. e. heterogeneity.

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Chap 13_20e 111. Scenario 13.2 Use the following to answer the questions. Carly Brown needed to find a new company to prepare her tax return this year. Carly looked online to find information about any tax preparers in the area. She found the names and numbers of several accountants, as well as the popular H&R Block and Jackson Hewitt. Because Carly has a somewhat complicated financial situation, she decided on using an accountant rather than the two popular companies. Carly found the websites of three of the accountants, but the other two did not have websites. She visited the offices of the three accountants who had websites. The first office was in a somewhat "seedy" part of town, but had a nice interior and a receptionist. The second office was in a nicer part of town, but did not have any employees other than the accountant, and had old furniture and old carpet. The third office was all around in better condition, and Kaycee felt better about its accountant, so she decided on him. Refer to Scenario 13.2. When Carly went online for information on the accountants in the area, she was most likely using ____ qualities to evaluate the accountant service. a. credence b. search c. product d. service quality e. assurance 112. Sarah sets up her new interior decorating business and advertises her expertise in high-quality draperies and other window treatments. One of her first customers is extremely dissatisfied with Sarah’s work, so Sarah redoes the job at her own expense because she knows how powerful ____ is (are) for services and wants to stay in business. a. service expectations b. word-of-mouth communication c. zones of tolerance d. customer perceptions e. experience qualities 113. The more ____ involved with delivering a service, the greater the degree of heterogeneity. a. mechanical efforts b. phone contact c. perishability d. tangibility e. human labor 114. When service companies change high-contact services into low-contact services, the a. service becomes more expensive to deliver. b. quality of the service declines. c. service becomes less personalized. d. time required to deliver the service increases. e. service becomes less standardized. Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 115. The two levels of expectations that consumers generally have about services are a. acceptable and unacceptable. b. desired and undesired. c. reliable and unreliable. d. acceptable and desired. e. tolerable and desired. 116. Many services base their success on building a group of satisfied customers who use their services on a regular basis over long periods of time. This critical component of success is referred to as a. partnerships. b. repeated customer contact. c. inseparable clientele. d. long-term customers. e. client-based relationships. 117. Maya has been using the same hairdresser for years. What has kept Maya loyal is the fact that she knows her hairdresser is going to consistently do a great job. Maya places great importance on _____ when evaluating her hairdresser. a. empathy b. tangibles c. reliability d. responsiveness e. assurance 118. Sonequa is a concert promoter who works for singer Beyoncé. She works very hard to make sure most of Beyoncé’s concerts are sold out because she understands the concept of perishability, which means a. because the concert is not tangible, customers will have a difficult time judging its quality in advance. b. the production of the concert and the consumption of the concert by the fans cannot be separated so tickets must be sold. c. a high level of interaction will exist between the customers and the musicians, which makes the customers' presence necessary. d. that if the tickets are not sold, seats will remain empty and they can never be sold to anyone again for that specific concert. e. that each concert is different and customers will miss a unique experience if they are not present at the concert. 119. Tatiana finds evaluating a new pair of jeans much easier than evaluating tennis lessons because she can try on the jeans to see exactly how they feel and fit. In other words, the jeans have many ____ qualities. a. experience b. search c. intangible d. credence e. assurance Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 120. Which of the following countries was the world's first service economy? a. England b. United States c. Sweden d. Canada e. Germany 121. All of the following are elements of the inseparability characteristic of services except that a. consumers are involved in production. b. centralized mass production is difficult. c. consumption and production are simultaneous. d. many services cannot be performed without the customer being present. e. services are easy to standardize and control. 122. Shazad owns Changez, a salon specializing in the unique hair needs of minority populations. Recently, Shazad has been trying to improve the quality of service received by his customers. However, he has experienced difficulty in finding ways to standardize and control the salon’s quality of service. Shazad’s problem illustrates which of the following unique features of service? a. Intangibility b. Inseparability c. Perishability d. Heterogeneity e. Homogeneity 123. The fact that the first massage Michelle gives each day is better than the last massage demonstrates the ____ of services. a. heterogeneity b. customer contact aspect c. intangibility d. inseparability e. perishability 124. The U.S. economy is now referred to as a(n)____________. a. export economy b. skilled economy c. manufacturing economy d. product economy e. service economy

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Chap 13_20e 125. Scenario 13.1 Use the following to answer the questions. The YMCA in mid-town Atlanta has recently upgraded its facilities, including building a new Olympic-sized swimming pool and children's playground. All locations of the Atlanta "Y" are open from 6:00 am until 11:00 pm, 360 days a year. The children's playground is accessible for members only and is a fenced and secured area. During the weekdays, children under the age of 12 can engage in supervised activities at the playground, for no extra fee. Additionally, there are swimming classes for children of all ages, which is also covered by the monthly membership fee. The swimming pool has been very popular with the professionals who stop by for a swimming workout before or after work. Many of the YMCA locations are very busy all day; however, the midtown "Y" is busier during the early morning and early evenings. At a recent meeting, Malia Monroe, its manager, shared her concerns about getting more people into the "Y" at other times of the day. She asked for ideas from her staff about how to do this. She also said that the city of Atlanta had reduced the "Y"'s funding for the next year by 20%. This would cause a need for the "Y" to either gain additional members or charge more per member for the annual fee. Refer to Scenario 13.1. The fact that the "Y" is open from 6:00 am until 11:00 pm is most directly related to the ____ element of its marketing mix. a. promotional b. product c. price d. distribution e. service 126. Personal trainers cannot complete their work without their clients present because of the ____ feature of services. a. perishability b. intangibility c. inseparability d. heterogeneity e. tangibility 127. Marcelo booked his flight to Austin on Delta Airlines through Orbitz, a third-party travel search engine and fare aggregator. Using such third parties to facilitate services represents which marketing mix element? a. Product b. Promotion c. Distribution d. Research e. Price

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Chap 13_20e 128. You recently began working as the marketing director for a nonprofit organization. Prior to this role, you always worked in for-profit organizations. You immediately recognize that marketing in a nonprofit environment is dramatically different than marketing in a for-profit environment. Which of the following statements is true regarding the differences in marketing in a nonprofit versus a for-profit environment? a. N onprofit organizations usually deal more with ideas and services than with goods. b. P ricing strategies of nonprofit organizations are designed to match costs with revenues. c. D istribution decisions are not as important in nonprofit organizations. d. M arketing ideas and concepts are more abstract in for-profit organizations. e. F or-profit marketing offers greater opportunities for creativity than nonprofit marketing. 129. Scenario 13.1 Use the following to answer the questions. The YMCA in mid-town Atlanta has recently upgraded its facilities, including building a new Olympic-sized swimming pool and children's playground. All locations of the Atlanta "Y" are open from 6:00 am until 11:00 pm, 360 days a year. The children's playground is accessible for members only and is a fenced and secured area. During the weekdays, children under the age of 12 can engage in supervised activities at the playground, for no extra fee. Additionally, there are swimming classes for children of all ages, which is also covered by the monthly membership fee. The swimming pool has been very popular with the professionals who stop by for a swimming workout before or after work. Many of the YMCA locations are very busy all day; however, the midtown "Y" is busier during the early morning and early evenings. At a recent meeting, Malia Monroe, its manager, shared her concerns about getting more people into the "Y" at other times of the day. She asked for ideas from her staff about how to do this. She also said that the city of Atlanta had reduced the "Y"'s funding for the next year by 20%. This would cause a need for the "Y" to either gain additional members or charge more per member for the annual fee. Refer to Scenario 13.1. One of Malia’s staff suggested that they offer senior citizens a free month of membership for every person they recommended to the “Y.” This particular form of promotion would be designed to a. increase perceptions of quality. b. increase positive word-of-mouth communication. c. increase negative word-of-mouth communication. d. increase advertising effectiveness. e. increase the customer contact associated with the “Y.” 130. Surveys, focus groups, and customer comment cards are all methods used by service companies to a. understand customer needs and expectations. b. set service quality specifications. c. establish guidelines for employee performance. d. manage service expectations. e. control service intangibility.

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Chap 13_20e 131. Chad saw an advertisement for a local gym on television. During the ad, there were images of the gym, its equipment, and its staff. This ad was most likely designed with the goal of a. making the intangible aspects of the gym more tangible. b. showing that the gym’s staff was highly trained. c. depicting the gym as being a good value for its customers. d. showing how happy Donald would be as a member of the gym. e. appealing to the gym’s general publics. 132. 1-800-FLOWERS, Carnival Cruise Lines, and JetBlue contract to U.S. businesses some of their customer service and tech support. These companies then have staff answer customer support calls from their own homes. This practice is known as a. outsourcing. b. homesourcing. c. crowdsourcing. d. offshoring. e. client-based tech support. 133. In many service industries, customer-contact employees are a. valued as the most important employees in the organization. b. the best-trained employees in the organization. c. the lowest-paid and least-trained employees. d. well trained but have high turnover rates. e. moderately paid personnel with high rates of turnover. 134. Demand-based pricing most closely relates to the ____ of services. a. perishability b. intangibility c. heterogeneity d. customer contact aspect e. inseparability 135. What should marketers do to promote the consistency and reliability of their services most effectively? a. Limit the number of employees in their organization b. Train employees and develop standard procedures for dealing with customers c. Encourage employees to be creative in solving customer issues and complaints d. Perform as much of the service as possible before the customer arrives e. Require employees to be shining, happy people all day long

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Chap 13_20e 136. The willingness and readiness of employees to meet the needs of the customer while providing the service is an important dimension of service quality called a. reliability. b. responsiveness. c. empathy. d. tangibles. e. assurance. 137. An American Airlines flight from Dallas to Houston was nearly full, and the tickets were more expensive than the almost-empty American Airlines flight from Chicago to Phoenix. This is an example of what kind of service pricing? a. Bundled b. Demand-based c. Supply-based d. Cost-based e. Customer-based 138. Symbols such as the Travelers' Insurance umbrella are designed to help customers overcome the ____ of services. a. heterogeneity b. unpredictability c. inseparability d. intangibility e. perishability 139. Attributes that are assessed only during the consumption of a service are called a. tangibles. b. search qualities. c. experience qualities. d. use benefits. e. credence qualities. 140. Which of the following increases the overall importance of a product’s brand image during the consumer buying decision process? a. Heterogeneity b. Homogeneity c. Customer contact d. Intangibility e. Perishability

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Chap 13_20e 141. Meghan is planning her upcoming wedding later this year. She has made a list of all the expenses that will be required for the wedding she has planned. Which of the following is NOT one of the service products associated with Meghan’s wedding? a. Delivery of the wedding cake b. Hiring a limo and driver c. Flowers for the church d. Renting the reception hall e. String quartet music 142. You are considering hiring an outside consultant to help you improve your services business. You believe your most pressing issue is how to maintain consistent quality in the delivery of your services. Your customer surveys suggest you need to work on this very important issue. Based on this, you should be looking for a consultant who has experience in dealing with the _______________ issue related to services. a. i nseparability b. p erishability c. h eterogeneity d. i ntangibility e. c ustomer relationship 143. Which of the following represents a supplementary service? a. A irline flight b. R oom service c. Lawn care maintenance d. T utoring services e. Tax preparation 144. According to the text, the direct consumers of a nonprofit organization's ideas or services are called its ____ public. a. general b. consumer c. member d. client e. nonbusiness 145. Cole is in charge of designing a promotion campaign for Wings, a private jet service company that has a high level of service quality. In an effort to make the service more tangible to potential consumers, the ad Cole is creating will feature a. pictures of the exterior and interior of the planes. b. the price of leasing one of their jets for a week. c. its brand name prominently. d. images of destinations that can be reached via Wings. e. comments from satisfied customers.

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Chap 13_20e 146. One way service businesses communicate a higher level of service quality to their customers is by having their employees be clean, sharp looking, and dressed in appropriate uniforms. This is a way to address the ____ characteristic of services. a. intangibility b. perishability c. level of customer contact d. inseparability e. heterogeneity 147. Scenario 13.2 Use the following to answer the questions. Carly Brown needed to find a new company to prepare her tax return this year. Carly looked online to find information about any tax preparers in the area. She found the names and numbers of several accountants, as well as the popular H&R Block and Jackson Hewitt. Because Carly has a somewhat complicated financial situation, she decided on using an accountant rather than the two popular companies. Carly found the websites of three of the accountants, but the other two did not have websites. She visited the offices of the three accountants who had websites. The first office was in a somewhat "seedy" part of town, but had a nice interior and a receptionist. The second office was in a nicer part of town, but did not have any employees other than the accountant, and had old furniture and old carpet. The third office was all around in better condition, and Carly felt better about its accountant, so she decided on him. Refer to Scenario 13.2. When using an accountant to prepare her tax return, Carly really can't determine the level of the accountant's expertise, or whether the accountant actually determined the most accurate amount of taxes owed. This is an example of the ____ of a service. a. search qualities b. product qualities c. service quality d. credence qualities e. experience qualities 148. A significant catalyst in the growth of consumer services has been ______, which has led to increased prosperity and interest in financial services, travel, entertainment, and personal care. a. economic stability b. inflation c. short-term economic growth d. long-term economic growth e. long-term recession

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Chap 13_20e 149. Who judges service quality? a. Employees b. The company c. Independent raters d. Customers e. Marketers 150. Safe Auto Insurance advertises "minimum coverage for minimum budgets" for its automobile insurance. Which of the following best describes Safe Auto's approach? a. Customers often use price as an indicator of quality, and Safe wants to be seen as a low-quality provider. b. This type of advertising makes insurance more tangible to the customer. c. Safe wants to reassure customers that they provide the highest level of service quality available. d. Because market conditions limit prices on auto insurance, Safe uses this approach to gain customers. e. For some services, customers look for the low-cost provider, which is what Safe claims to be. 151. Jackson Hewitt, a major tax preparation firm, reported having a problem with its employees being inconsistent in the filing of returns. The firm is experiencing a problem with which of the following characteristics of the service offering? a. Tangibility b. Intangibility c. Perishability d. Inseparability e. Heterogeneity 152. Service industries account for ____ of the gross domestic product of most developed nations. a. more than half b. a small portion c. approximately 25% d. nearly all e. nearly three-quarters 153. There are five elements that affect customers' perceptions of service quality. They are reliability, appearance of the tangibles, responsiveness, assurance, and a. credibility. b. experience within industry. c. responsibility. d. employee empathy. e. product knowledge.

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Chap 13_20e 154. Because practically all marketers provide some services, ____ typically do not exist in today's business environment. a. pure goods b. pure services c. customer services d. service products e. tangible-dominant products 155. Cassie’s flight to San Jose was almost 90 minutes late. However, the flight attendants were professional and empathetic, and the flight’s Wi-Fi was fast enough for her to polish her presentation while in flight. On top of that, Cassie had been able to cash in some frequent flyer miles, so her out-of-pocket expense was lower than usual. Although Cassie’s expectation for her flight was not satisfied as desired because it arrived late, it was better than acceptable. For Cassie, the provision of the flight fell into her a. tolerance specification. b. expectation of excellence. c. comfort zone. d. zone of satisfaction. e. zone of tolerance. 156. Which of the following is NOT a service product? a. Ariana Grande concert b. Flight on Southwest Airlines c. Tennis racket d. Overnight stay at an Aloft Hotel e. Dry cleaning of a suit 157. What are the three primary ways that marketers deliver services? a. Over the phone, online, or in-person b. Continuously, periodically, or on demand c. At the customer's home, in-person, or by telecommunications d. Through service centers, delivery vehicles, or the mail e. Service facilities, customer's home, or from a distance 158. When Fur Baby Pet Grooming offers pet owners who recommend the business to a friend $10 off their next grooming bill, it is a program designed primarily to a. increase the amount of customer contact. b. elevate expectations. c. encourage word-of-mouth communication. d. increase the commitment of the customer. e. increase advertising effectiveness.

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Chap 13_20e 159. Trey is a service provider for a low-contact type of service. Which of the services below is Trey most likely to provide? a. Childcare b. Website design c. Health care d. Auto detailing e. Personal trainer 160. Which of the following contributes to the challenges of supply and demand management? a. Homogeneity and level of customer contact b. Perishability and intangibility c. Inseparability and level of customer contact d. Intangibility and heterogeneity e. Heterogeneity and intangibility 161. Select the true statement about nonprofit marketing. a. The chief beneficiaries of a nonprofit organization are the owners or stockholders. b. The planning of marketing strategies requires less refinement and coordination of goals in the nonprofit field than in the for-profit field. c. Major nonprofit marketers in the United States are social causes and charitable organizations. d. Marketing goals in nonprofit activities cannot be determined. e. All nonprofit organizations that have adopted the marketing concept have been successful. 162. Consumers are ________________likely to tell other people about a bad customer service experience compared to a good one. a. e qually b. t wo times less c. t hree times more d. t wo times more e. t hree times less 163. The continuum of tangibility goes from ____ on one end to ____ on the other end. a. service-dominant products; good-dominant products b. pure products; pure services c. rational products; irrational products d. mostly service goods; mostly product goods e. easy to see; not easy to see

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Chap 13_20e 164. You run a services business and you are constantly looking for ways to project an image of quality to your current and potential customers. You recognize there are very few tangible elements customers can view before making a services purchase. If you want to improve these elements of your business, then you should focus on improving _________________. a. t he search qualities of your services b. t he experience qualities of your services c. t he credence qualities of your services d. y our facilities and your employees e. y our prices and promotional activities 165. High-contact services typically require that the a. customer go to the production facility. b. service provider go to the customer. c. customer go to a wholesaler. d. customer go to the mall. e. service provider meet the customer at a third party. 166. As the owner of a services business, you are constantly challenged to maintain consistent quality in your services. This heterogeneity is both a challenge and an opportunity. The opportunity arises because __________________. a. i t allows you to standardize your services b. i t allows you to customize your services to match the specific needs of individual customers c. i t allows you to be more selective in choosing your customers d. i t allows you to deliver your services for less cost e. i t leads to more satisfied customers 167. In an attempt to attract customers, service marketers often promise great results and satisfaction to customers, but marketers should be careful not to a. deliver on these promises and risk financial losses and the success of the company. b. promise less than they can actually deliver and keep customers away. c. make the appearance of their facilities consistent with their promises to customers. d. promise too much and cause customer expectations beyond what they can deliver. e. make the quality of their services too tangible in the eyes of the customer. 168. Which of the following statements is true about customer services? a. Both goods and service marketers offer customer services. b. Customer services are dependent on the human element. c. Customer services are intangible products involving a performance, deed, or effort that cannot be physically possessed. d. Tangible products do not require customer services. e. Consumers prefer mechanical customer services over human contact.

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Chap 13_20e 169. Services delivered through machinery such as computer kiosks, ATMs, and vending machines can reduce the ____ that comes from increased contact with human employees. a. intangibility b. perishability c. inseparability d. heterogeneity e. tangibility 170. Scenario 13.2 Use the following to answer the questions. Carly Brown needed to find a new company to prepare her tax return this year. Carly looked online to find information about any tax preparers in the area. She found the names and numbers of several accountants, as well as the popular H&R Block and Jackson Hewitt. Because Carly has a somewhat complicated financial situation, she decided on using an accountant rather than the two popular companies. Carly found the websites of three of the accountants, but the other two did not have websites. She visited the offices of the three accountants who had websites. The first office was in a somewhat "seedy" part of town, but had a nice interior and a receptionist. The second office was in a nicer part of town, but did not have any employees other than the accountant, and had old furniture and old carpet. The third office was all around in better condition, and Carly felt better about its accountant, so she decided on him. Refer to Scenario 13.2. When Carly visited the accountants' offices and used the look of the surroundings, as well as the office furniture condition in her evaluation of the service business, she was most likely using the elements of the ____ dimension of service quality. a. tangibles b. reliability c. empathy d. assurance e. responsiveness 171. Distribution for nonprofit organizations is a. unimportant because physical movement does not take place. b. not an important decision. c. coordinated by middlemen. d. inefficient rather than efficient. e. typically characterized by short channels. 172. Many services have aspects that consumers may never be able to evaluate, even years after the purchase and consumption of the service. These attributes are called a. search qualities. b. performance attributes. c. experience qualities. d. immeasurable attributes. e. credence qualities. Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 173. A small private college in Alabama paid a significant sum of money to a marketing firm to study the college's current marketing strategy and help develop new strategies for attracting students. The college is having a difficult time evaluating the effectiveness of the marketing firm's work because this type of service has many a. search qualities. b. undefined parameters. c. credence qualities. d. experience qualities. e. unknown results. 174. ____ marketing includes activities conducted by individuals and organizations to achieve some goal other than ordinary business goals such as profit. a. Cause b. Nonprofit c. Social d. Individual e. Business 175. In general, differences between goods and services are determined by the a. degree of labor intensiveness. b. type of target market. c. degree of tangibility. d. type of provider. e. degree of consumer contact. 176. The perishability of services means a. w hen demand is low, the unused capacity is lost forever. b. w hen demand is low, the unused capacity can be stored. c. w hen demand is low, the unused capacity can be recovered the next day. d. w hen demand is low, the unused capacity must be immediately used. e. w hen demand is low, the unused capacity should be re-directed. 177. The biggest obstacle for customers in evaluating service quality is a. they perceive all services to be essentially the same. b. they typically have very few services from which to select. c. the reliability of the service. d. the responsiveness of the service. e. the intangible nature of the service.

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Chap 13_20e 178. George just bought a new phone. However, almost immediately he started experiencing glitches. George called the phone company's helpline. He was surprised to find that the helpline was entirely automated. The automated helpline described some common problems that customers might experience and provided instructions on what to do. George followed the instructions and his phone started working correctly. Although George was happy that the problem was fixed, he was frustrated that the entire process was automated. George would prefer to have a higher degree of ____________________ when he calls in to ask for help. a. product-based relationships b. tangibility c. inseparability d. heterogeneity e. customer contact 179. Analyzing __________ can help a firm identify patterns that may indicate the need for corrective action or suggest market opportunities that can be exploited. a. the empathy of service providers b. complaints and reviews c. the reliability of the service d. the responsiveness of the service e. the intangible nature of the service 180. Because of a service's ____, standardization and quality are difficult to control. a. intangibility b. inseparability c. homogeneity d. heterogeneity e. perishability 181. Services are usually provided through ____ directed at people or objects. a. tangible and intangible products b. physical labor c. the application of human or mechanical efforts d. ideas and other intangible efforts e. knowledge and technology 182. During periods of high demand, Uber pricing will often go up, a practice it terms "surge pricing." On the other hand, when times are slow, the prices of rides will often go down. This is to encourage passengers to use Uber during periods of slow demand. This pricing strategy is an example of a. peak pricing. b. demand-based pricing. c. bundled pricing. d. low-cost pricing. e. slump pricing.

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Chap 13_20e 183. A university's student body would be considered its ____ public; parents, alumni, and trustees would be included as its ____ public. a. client; general b. specialized; general c. target; simple d. general; client e. target; market 184. Discuss how employee performance affects service quality. How can companies improve employee performance and thereby improve customer satisfaction?

185. How do the target markets of nonprofit organizations differ from the target markets of for-profit organizations?

186. List and explain the six distinguishing characteristics of service products. Then discuss some of the marketing issues and problems associated with each characteristic.

187. Explain how the characteristics of services affect the development and management of marketing mixes.

188. Describe how nonprofit marketing differs from for-profit marketing.

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Chap 13_20e 189. What dimensions do customers use to evaluate service quality?

190. In what ways do perishability and intangibility affect the pricing of services?

191. What specific marketing problems are experienced by a provider of high-contact services that are not experienced by a provider of low-contact services?

192. Discuss the importance of services in the U.S. economy, and explain the growth of services in our economy.

193. How does the promotion of services differ from the promotion of goods?

194. How does the marketing mix (product, price, distribution, and promotion) differ in nonprofit marketing?

195. How can a service marketer smooth the fluctuations in demand from times of peak demand to times of off-peak demand?

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Chap 13_20e 196. E xplain the role of “promises” and “trust” in the successful marketing of a service.

197. All services suffer from heterogeneity. Explain this problem, and discuss different ways that heterogeneity can occur in service delivery.

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Chap 13_20e Answer Key 1. True 2. False 3. False 4. False 5. True 6. False 7. True 8. True 9. False 10. False 11. False 12. False 13. False 14. True 15. True 16. False 17. True 18. True 19. False 20. True 21. False 22. False 23. True 24. False 25. False 26. False

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Chap 13_20e 27. True 28. True 29. False 30. False 31. False 32. True 33. True 34. True 35. True 36. True 37. False 38. True 39. True 40. False 41. False 42. True 43. True 44. True 45. True 46. True 47. False 48. True 49. True 50. False 51. False 52. True 53. True 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 55. True 56. True 57. False 58. False 59. True 60. False 61. True 62. True 63. True 64. False 65. False 66. True 67. True 68. True 69. a 70. b 71. c 72. b 73. c 74. e 75. b 76. d 77. d 78. b 79. c 80. c 81. a 82. b Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 83. c 84. e 85. b 86. e 87. a 88. d 89. d 90. a 91. a 92. d 93. a 94. c 95. d 96. a 97. a 98. a 99. c 100. e 101. e 102. c 103. b 104. c 105. a 106. a 107. b 108. c 109. e 110. d Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 111. b 112. b 113. e 114. c 115. d 116. e 117. c 118. d 119. b 120. b 121. e 122. d 123. a 124. e 125. d 126. c 127. c 128. a 129. b 130. a 131. a 132. b 133. c 134. a 135. b 136. b 137. b

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Chap 13_20e 138. d 139. c 140. d 141. c 142. c 143. b 144. d 145. a 146. a 147. d 148. d 149. d 150. e 151. e 152. e 153. d 154. a 155. c 156. c 157. e 158. c 159. b 160. c 161. c 162. d 163. a 164. d 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 166. b 167. d 168. a 169. d 170. a 171. e 172. e 173. c 174. b 175. c 176. a 177. e 178. e 179. b 180. d 181. c 182. b 183. a 184. Contact employees in most service industries (bank tellers, flight attendants, servers, sales clerks, etc.) are often the least-trained and lowest-paid members of the organization. Service organizations that excel recognize that contact employees are the most important link to the customer, and thus their performance is critical to customer perceptions of service quality. There is a direct relationship between the satisfaction of a company’s contact employees, which is manifested in a positive attitude and a good work ethic, and the satisfaction of its customers. Employee and customer satisfaction levels also have a direct relationship with customer retention and loyalty. The way to ensure that employees perform well is to train them effectively so they understand how to do their jobs. Providing information about customers, service specifications, and the organization itself during the training promotes this understanding. The evaluation and compensation system the organization uses also plays a part in employee performance. Many service employees are evaluated and rewarded on the basis of output measures, such as sales volume (automobile salespeople) or a low error rate (bank tellers). Systems using output measures may overlook other major aspects of job performance, including friendliness, teamwork, effort, and customer satisfaction. These customer-oriented measures of performance might be a better basis for evaluation and reward. In fact, a number of service marketers use customer satisfaction ratings to determine a portion of service employee compensation.

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Chap 13_20e 185. The terms target market and target public are difficult to distinguish from many non-product or social-cause profit organizations. Whereas a business seeks out target groups that are potential purchasers of its product, a nonprofit organization may attempt to serve many diverse groups. For our purposes, a target public is a collective of individuals who have an interest in or a concern about an organization, a product, or a social cause. For instance, the target public for ACCION International is anyone interested in supporting international development and relief work. However, the target market for ACCION’s advertisements consists of people in developing nations who want microloans to start businesses and spur economic development. Additionally, the target public can be divided into client publics—direct consumers of the nonprofit’s products—and general publics—indirect consumers. For example, the client public for a university is its student body, while its general public includes parents, alumni, and trustees. 186. Services have six basic characteristics: intangibility, inseparability of production and consumption, perishability, heterogeneity, client-based relationships, and customer contact. Intangibility means a service is not physical and therefore cannot be touched. Pure goods, if they exist at all, are rare because practically all marketers of goods also provide customer services. Even a tangible product like sugar must be delivered to the store, priced, and placed on a shelf before a customer can purchase it. Intangible, servicedominant products such as education or health care are clearly service products. Most products fall somewhere in the middle of this continuum. Products such as a restaurant meal or a hotel stay have both tangible and intangible dimensions. Knowing where the product lies on the continuum is important in creating marketing strategies for service-dominant products. Inseparability refers to the fact that the production of a service cannot be separated from its consumption by customers. Inseparability implies a shared responsibility between the customer and service provider. Training programs for employees in the service sector should stress the importance of the customer in the service experience so that employees understand that the shared responsibility exists. Services are characterized by perishability because the unused service capacity of one time period cannot be stored for future use. Goods marketers can handle the supply–demand problem through production scheduling and inventory techniques. Service marketers do not have the same advantage and face several hurdles in trying to balance supply and demand. They can, however, plan for demand that fluctuates according to day of the week, time of day, or season. Heterogeneity refers to variation in quality. Services delivered by people are susceptible to heterogeneity. Quality of manufactured goods is easier to control with standardized procedures, and mistakes are easier to isolate and correct. The quality of the service a single employee provides can vary from customer to customer, day to day, or even hour to hour. Although many service problems are one-time events that cannot be predicted or controlled ahead of time, employee training and the establishment of standard procedures can help increase consistency and reliability. Client-based relationships refer to interactions with customers that result in satisfied customers who use a service repeatedly over time. The success of many services depends on creating and maintaining client-based relationships. Word-of-mouth (or going viral, which is the online equivalent) is a key factor in creating and maintaining client-based relationships. To ensure that it actually occurs, the service provider must take steps to build trust, demonstrate customer commitment, and satisfy customers so well that they become very loyal to the provider and unlikely to switch to competitors. Customer contact refers to the level of interaction between a service provider and a customer that is necessary to deliver a service. Not all services require a high degree of customer contact, but many do. Employees of highcontact service providers represent a very important ingredient in creating satisfied customers. A fundamental precept of customer contact is that satisfied employees lead to satisfied customers. Employee satisfaction is one of the most important factors in providing high service quality to customers.

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Chap 13_20e 187. The characteristics of services create a number of challenges for service marketers in the development of marketing mixes. A service offered by an organization generally is a package, or bundle, of services consisting of a core service and one or more supplementary services. Heterogeneity results in variability in service quality and makes it difficult to standardize services. However, heterogeneity provides one advantage to service marketers: It allows them to customize their services to match the specific needs of individual customers. Customization plays a key role in providing competitive advantage for the service provider. Being able to personalize the service to fit the exact needs of the customer accommodates individual needs, wants, or desires. The characteristic of intangibility makes it difficult for customers to evaluate a service prior to purchase. Intangibility requires service marketers, such as hairstylists, to make promises to customers. The customer is forced to place some degree of trust in the service provider to perform the service in a manner that meets or exceeds those promises. Service marketers must guard against making promises that raise customer expectations beyond what they can provide. The inseparability of production and consumption and the level of customer contact also influence the development and management of services. The fact that customers are present during the production of a service means that other customers can affect the outcome of the service. Service marketers can reduce problems by encouraging customers to share the responsibility of maintaining an environment that allows all participants to receive the intended benefits of the service environment. 188. Nonprofit marketing refers to marketing activities that are conducted by individuals and organizations to achieve some goal other than ordinary business goals like profit, market share, or return on investment. Whereas the chief beneficiaries of a business enterprise are its owners and stockholders, in theory, the only beneficiaries of a nonprofit organization are its clients, its members, or the public at large. Nonprofit organizations have greater opportunities for creativity than most for-profit business organizations, but trustees or board members of nonprofit organizations are likely to have difficulty judging the performance of the trained professionals they oversee. It is harder for administrators to evaluate the performance of professors or social workers than it is for sales managers to evaluate the performance of salespeople in a for-profit organization. Another way nonprofit marketing differs from for-profit marketing is that nonprofit marketing is sometimes quite controversial. Large national nonprofit organizations, such as Greenpeace, the National Rifle Association, and the National Organization for Women, allocate lobbying efforts in their budgets to inform Congress, the White House, and others of their interests and to gain their support. Some nonprofits must devote a large amount to lobbying because their mission is controversial or misunderstood by the general public. 189. The biggest obstacle for customers in evaluating service quality is the intangible nature of the service. How can customers evaluate something they cannot see, feel, taste, smell, or hear? Despite the difficulties in evaluating quality, service quality may be the only way customers can choose one service over another. For this reason, successful service marketers must understand how consumers judge service quality. There are five dimensions consumers use when evaluating service quality: tangibles, reliability, responsiveness, assurance, and empathy. Note that all of these dimensions have links to employee performance. Of the five, reliability is the most important in determining customer evaluations of service quality. Service marketers pay a great deal of attention to the tangibles of service quality. Tangible elements, such as the appearance of facilities and employees, are often the only aspects of a service that can be viewed before purchase and consumption. Reliability is defined as consistency and dependability in performing the service and is evaluated by things such as accuracy of billing or recordkeeping and performing services when promised. Responsiveness is defined as willingness or readiness of employees to provide the service and is evaluated by such things as returning customer phone calls, providing prompt service, and handling urgent requests. Assurance is defined as knowledge/competence of employees and ability to convey trust and confidence, and it is evaluated by such things as knowledge and skills of employees, company name and reputation, and personal characteristics of employees. Empathy is defined as caring and individual attention provided by employees and is evaluated by such things as listening to customer needs, caring about customers’ interests, and providing personalized attention. Copyright Cengage Learning. Powered by Cognero.

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Chap 13_20e 190. Services should be priced with consumer price sensitivity, the nature of the transaction, and its costs in mind. Prices for services can be established on several different bases. Some services use demand-based pricing. When demand for a service is high, the price is also high; when demand for a service is low, so is the price. The perishability of services means that when demand is low, the unused capacity cannot be stored and is therefore lost forever. Some services are very time sensitive because a significant number of customers desire the service at a particular time. This point in time is called peak demand. A provider of time-sensitive services brings in most of its revenue during peak demand. Providers of time-sensitive services often use demand-based pricing to manage the problem of balancing supply and demand. Because of the intangible nature of services, customers rely heavily at times on price as an indicator of quality. If customers perceive the available services in a service category as being similar in quality, and if the quality of such services is difficult to judge even after these services are purchased, customers may seek out the lowest-priced provider. 191. Customer contact refers to the level of interaction between a service provider and a customer that is necessary to deliver a service. High-contact services include health care, real estate, legal, and spa services. These services generally involve actions directed toward people, who must be present during production. When a customer must be present, the process of production may be just as important as its final outcome. High-contact services typically require that the customer go to the production facility. Thus, the physical appearance of the facility may be a major component of the customer’s overall evaluation of the service. Employees of high-contact service providers are part of a very important ingredient in creating satisfied customers. A fundamental precept of customer contact is that satisfied employees lead to satisfied customers. To minimize the problems that customer contact can create, service organizations must take steps to understand and meet the needs of employees by training them adequately, empowering them to make more decisions, and rewarding them for customer-oriented behavior. Not all services require a high degree of customer contact, but many do. Examples of low-contact services are tax preparation, auto repair, travel reservations, and dry cleaning. Technology has enabled many service-oriented businesses to reduce their level of customer contact. Even in low-contact service situations, the appearance of the facility is important because the customer likely will need to be present to initiate and finalize the service transaction. 192. The importance of services in the U.S. economy led the United States to be known as the world’s first service economy. More than one-half of new businesses in the United States are service businesses, and service employment is expected to continue to grow. A practice that has gained popularity among U.S. businesses as telecommunications technology has improved is homesourcing, in which customer-contact jobs, such as at call centers, are outsourced to the homes of workers. A major catalyst in the growth of consumer services has been long-term economic growth (slowed by a few recessions) in the United States, which has led to increased prosperity and interest in financial services, travel, entertainment, and personal care. Another driver of services is the aging population in the United States, which has spurred expansion of health-care services. Finally, the increasing number and complexity of high-tech goods have spurred demand for support services. Indeed, dramatic changes in information technology have influenced and expanded the services sector in the 21st century. Business services have grown as well. Business services include support and maintenance, consulting, installation, equipment leasing, marketing research, advertising, temporary office personnel, and janitorial services. The growth in business services can be attributed to the increasingly complex, specialized, and competitive business environment.

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Chap 13_20e 193. The intangibility of services results in several promotion-related challenges to service marketers. Because it may not be possible to depict the actual performance of a service in an advertisement or to display it in a store, explaining a service to customers can be a difficult task. Promotion of services typically includes tangible cues that symbolize the service. To make a service more tangible, advertisements for services often show pictures of facilities, equipment, and service personnel. Marketers may also promote their services as a tangible expression of consumers’ lifestyles. Compared with goods marketers, service providers are more likely to promote price, guarantees, performance documentation, availability, and training and certification of contact personnel. It is common, for example, for gyms and yoga or aerobics studios to promote their trainers’ degrees and certifications as a way to assure customers that their trainers are well qualified to help them reach their fitness goals. 194. In developing the product, nonprofit organizations usually deal with ideas and services. Problems may evolve when an organization fails to define what it provides. What product, for example, does the Peace Corps provide? Its services include vocational training, health services, nutritional assistance, and community development. It also markets the ideas of international cooperation and U.S. foreign policy ideals. The product of the Peace Corps is more difficult to define than the average business product. Distribution decisions in nonprofit organizations relate to how ideas and services will be made available to clients. If the product is an idea, selecting the right media to communicate the idea will facilitate distribution. By nature, services consist of assistance, convenience, and availability. Availability is therefore part of the total service. Developing a channel of distribution to coordinate and facilitate the flow of nonprofit products to clients is necessary, but in a nonprofit setting, marketers may need to revise the traditional concept of the marketing channel because the independent wholesalers available to a business enterprise do not exist in most nonprofit situations. Instead, a very short channel— nonprofit organization to client—is the norm because production and consumption of ideas and services are often simultaneous. Making promotional decisions may be the first sign that a nonprofit organization is performing marketing activities. Nonprofit organizations use advertising and publicity to communicate with clients and the public. Direct mail continues to be used for fundraising by many social service organizations, such as the Red Cross and Special Olympics. Though direct mail remains important, some organizations have reduced their volume of direct mail in favor of e-mails or other digital communications. Increasingly, nonprofits are using the internet to reach fundraising and promotional goals through e-mail, websites, and software that permits online donations. The different pricing concepts the nonprofit organization faces include pricing in user and donor markets. Two types of monetary pricing exist: fixed and variable. There may be a fixed fee for users, or the price may vary depending on the user’s ability to pay. When a donation-seeking organization will accept a contribution of any size, it is using variable pricing. The broadest definition of price (valuation) must be used to develop nonprofit marketing strategies. Financial price, an exact dollar value, may or may not be charged for a nonprofit product. Economists recognize giving up alternatives as a cost. Opportunity cost is the value of the benefit given up by selecting one alternative over another. According to this traditional economic view of price, if a nonprofit organization persuades someone to donate time to a cause or to change his or her behavior, the alternatives given up are a cost to (or a price paid by) the individual. For other nonprofit organizations, financial price is an important part of the marketing mix. Nonprofit organizations today raise money by increasing the prices of their services or charging for previously free services. 195. Providers of time-sensitive services often use demand-based pricing to manage the problem of balancing supply and demand. They charge top prices during peak demand and lower prices during off-peak demand to encourage more customers to use the service.

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Chap 13_20e 196. The characteristic of intangibility makes it difficult for customers to evaluate a service prior to purchase. Intangibility requires service marketers, such as hairstylists, to make promises to customers. The customer is forced to place some degree of trust in the service provider to perform the service in a manner that meets or exceeds those promises. Service marketers must guard against making promises that raise customer expectations beyond what they can provide. To cope with the problem of intangibility, marketers employ tangible cues, such as well-groomed, professional-appearing contact personnel and clean, attractive physical facilities, to help assure customers about the quality of the service. Service companies must be careful not to promise too much regarding their services so that customer expectations do not rise to unattainable levels. 197. Services delivered by people are susceptible to heterogeneity, or variation in quality. Quality of manufactured goods is easier to control with standardized procedures, and mistakes are easier to isolate and correct. Because of the nature of human behavior, however, it is very difficult for service providers to maintain a consistent quality of service delivery. This variation in quality can occur from one organization to another, from one service person to another within the same service facility, and from one service facility to another within the same organization. Heterogeneity usually increases as the degree of labor intensiveness increases. Many services, such as auto repair, education, and hairstyling, rely heavily on human labor. People-based services are often prone to fluctuations in quality from one time period to the next.

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Chap 14_20e Indicate whether the statement is true or false. 1. Rail transportation is the fastest yet most expensive form of shipping. a. True b. False 2. RFID uses radio waves to communicate information wirelessly through every phase of materials handling. a. True b. False 3. Suppliers may institute tying agreements as a means of getting rid of slow-moving inventory. a. True b. False 4. Drawing together the processes and functions of two or more stages of the channel under one management is horizontal integration. a. True b. False 5. Refusal-to-deal arrangements involve a manufacturer that forbids an intermediary to carry products of competing manufacturers. a. True b. False 6. Specialty products that require service information and are consumed over a long period of time are likely to be distributed on an exclusive basis. a. True b. False 7. Small firms are more likely to be in a position to have more distribution centers that may reduce delivery times to customers. a. True b. False 8. The cost of a business product may affect the distribution channel selected for it. a. True b. False 9. Exclusive dealing occurs when a supplier stipulates that a channel member must purchase additional products besides the one it wants. a. True b. False

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Chap 14_20e 10. Olivia, a shoe designer, has developed a new type of high-heeled shoe at a reasonable price point. It is time to decide how the shoe should be distributed. Olivia knows that the shoe will require adequate service from retailers at the point of purchase. She should use an exclusive distribution strategy. a. True b. False 11. Marketing intermediaries can reduce the cost of exchanges. a. True b. False 12. The reorder point can be calculated by multiplying the usage rate by the order lead time and then adding in the number of safety stock. a. True b. False 13. Because costs for small shipments (under 500 pounds) are sharply higher than costs for full loads in railroad cars and trucks, firms share costs and services by consolidating shipments. a. True b. False 14. Bonded storage means that goods will not be released until U.S. customs duties or federal or state taxes or other fees are paid. a. True b. False 15. The services or responsibilities provided by some intermediaries can be eliminated effectively without causing an increase in the services or responsibilities provided by other intermediaries. a. True b. False 16. Marketing channels create several types of utility including time, place, possession, and form. a. True b. False 17. Freight forwarders are companies that offer several shipment methods, including rail, truck, and air service. a. True b. False 18. Full-line forcing requires that channel members purchase the supplier's entire line to obtain any of the products. a. True b. False 19. A producer that sells similar products through different channels under different brand names is engaging in multichannel distribution. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 20. Because of its speed, electronic order processing provides greater flexibility than manual processing in unique situations. a. True b. False 21. Conflicts with the retailer may develop if the dealer decides to place too much emphasis on competing product lines. a. True b. False 22. Like manufacturers' agents, industrial distributors do not take title to products or carry inventories. a. True b. False 23. Whereas the marketing channel is a group of interrelated organizations that directs products to customers, physical distribution deals with the activities used to move products from producer to consumer. a. True b. False 24. Place utility is created by the customer having access to the product to use or store for future use. a. True b. False 25. Marketing intermediaries never establish pricing policies and terms of sale. a. True b. False 26. The courts have determined that producers have the right under most circumstances to choose or reject the channel members with which they will do business. a. True b. False 27. Public warehouses do not furnish security for products being used as collateral for loans. a. True b. False 28. Long-term commitments usually characterize the relationships among channel members. a. True b. False 29. Today, marketing focuses solely on certain downstream supply chain activities. a. True b. False

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Chap 14_20e 30. Producers do not engage in horizontal integration. a. True b. False 31. Safety stock helps protect an organization against stockouts. a. True b. False 32. Convenience products usually are distributed intensively because sales of these products tend to have a direct relationship to availability. a. True b. False 33. Materials handling is important in efficient warehouse operations but has little to do with customers' ultimate satisfaction with a product. a. True b. False 34. Transportation is the least expensive logistics function. a. True b. False 35. Business customers prefer to deal with producers through intermediaries and thus eliminate much of the burden of sorting out details. a. True b. False 36. Distribution decisions have little influence on the rest of the marketing mix. a. True b. False 37. Channel power is an ability related to influencing the goals of other channel members. a. True b. False 38. Buyers' behavior is unimportant to channel members. a. True b. False 39. Unit loading is grouping one or more boxes on a skid. a. True b. False

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Chap 14_20e 40. Inventory management involves developing and maintaining adequate assortments of products to meet customers' needs. a. True b. False 41. The use of a freight forwarder that consolidates shipments from several organizations into efficient lot sizes usually increases transit time and sometimes raises shipping costs. a. True b. False 42. Marketers of complex and expensive products such as automobiles will likely employ long channels with many knowledgeable intermediaries. a. True b. False 43. It is usually easier to change marketing channels than to change prices or promotion. a. True b. False 44. Marketing intermediaries are marketing institutions, such as retailers and wholesalers, which perform marketing functions necessary to direct products to customers. a. True b. False 45. When AT&T acquired Time Warner, this was an example of a contractual VMS. a. True b. False 46. A marketing channel is not the same thing as a distribution channel. a. True b. False 47. In vertical integration, control is expanded to two or more successive links of production or distribution. a. True b. False 48. Third-party logistics firms combine shipments from several organizations into efficient lot sizes. a. True b. False 49. Industrial distributors and their agents are typical types of intermediaries found in channels for consumer products. a. True b. False

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Chap 14_20e 50. Product availability is dependent on transportation functions. a. True b. False 51. Inventory decisions seldom have a strong impact on logistics costs and on the level of customer service provided. a. True b. False 52. Marketing intermediaries bridge the gap between suppliers (or producers) and buyers (or consumers). a. True b. False 53. The purpose of a marketing channel is to make products available at the right time at the right place in the right quantities. a. True b. False 54. Both a manufacturers' agent and an industrial distributor may be used when the organizational marketer wishes to cover a larger geographic area but does not maintain a sales force. a. True b. False 55. Intensive distribution is appropriate for shopping products. a. True b. False 56. When customers are concentrated in a small geographic area, a direct channel may be best, but when many customers are spread across an entire state or nation, distribution through multiple intermediaries is likely to be more efficient. a. True b. False 57. The line between different marketing channels is becoming increasingly blurred. a. True b. False 58. Sometimes a marketing channel is quite simple and short, perhaps running directly from a producer to the final user or consumer. a. True b. False 59. The shortest possible distribution channel would be producer to retailer to consumer. a. True b. False

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Chap 14_20e 60. The success or failure of a competitor's marketing channel may encourage or dissuade an organization from considering a similar approach. a. True b. False 61. Agents are seldom used in channels for consumer products. a. True b. False 62. Retailers are frequently found in business product channels. a. True b. False 63. Supply chains start with the producer. a. True b. False 64. During order entry, a customer's credit rating is checked by the credit department. a. True b. False 65. The internet has reduced the potential for conflict and resentment between manufacturers and intermediaries. a. True b. False 66. Leading retailers are increasingly concentrating their buying power among fewer suppliers, making it easier to coordinate and maintain a high level of quality and transparency along the entire supply chain. a. True b. False 67. Private warehouses are usually leased or purchased when a firm believes its warehouse needs are so stable that it can make a long-term commitment to fixed facilities. a. True b. False 68. The overall safety stock, or inventory needed to prevent a stockout, depends on the general level of prices. a. True b. False 69. Third-party logistics firms have special expertise in core physical distribution activities and can often perform these activities more efficiently. a. True b. False

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Chap 14_20e 70. Order processing can be manual or electronic. a. True b. False 71. Some marketing channels are organized and controlled by a single leader. a. True b. False 72. When higher-priced or technically complex business products are involved, business customers prefer to deal directly with producers rather than through intermediaries. a. True b. False 73. Franchising is typical of the administered vertical marketing system. a. True b. False 74. On-time deliveries may give a firm a competitive edge. a. True b. False 75. Public warehouses are business organizations whose primary activity is providing storage and related logistics facilities on a rental basis to government organizations. a. True b. False 76. Only producers can be channel captains. a. True b. False 77. Multichannel distribution is the use of a variety of marketing channels to ensure maximum distribution. a. True b. False 78. Procurement involves the processes to obtain resources to create value through sourcing, purchasing, and recycling, including materials and information. a. True b. False 79. Warehousing involves designing and operating facilities to store and move goods. a. True b. False

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Chap 14_20e 80. Cost, speed, load flexibility, dependability, frequency, and accessibility are considered when choosing a transportation mode. a. True b. False 81. Pipelines are not one of the major transportation modes for moving goods between cities in the United States. a. True b. False 82. Channel conflict is necessary to facilitate efficient performance within the channel. a. True b. False 83. Supply chain management includes only producers, wholesalers, retailers, and customers. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 84. You are the head of supply chain management at a large manufacturing company in the Midwestern United States. You just returned from a series of workshops on how technology is being deployed by different companies around the world to improve their supply chain management activities. You are excited about the prospect of increasing the use of technology in your firm. Which one of the following reasons would you use to convince your firm’s CEO to invest more money in technology for supply chain management? a. It will eliminate product defects in the manufacturing process. b. It will eliminate errors in financial reporting in the accounting department. c. It will significantly reduce marketing costs. d. It will increase the sales force’s success rate in winning new customers. e. It will create a more effective process for matching inventory needs to manufacturing requirements. 85. Tesco is a large U.K. supermarket. The firm's supply chain operates using a number of _______ to receive, store, and redistribute its many goods. Two of these facilities are used for frozen food. Many of the facilities are designed for the rapid flow of food products. They use automation such as forklifts and hoists to collect and move products to loading docks. a. distribution centers b. private warehouses c. public warehouses d. third-party logistics firms e. megacarriers

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Chap 14_20e 86. Walgreens drug stores prefer to receive refills of prescriptions through a phone-based system where customers can directly key in the information about the drug. By receiving orders in this manner rather than through a paper-based system or by a phone conversation with a pharmacy employee, Walgreens has been able to save time and money on a. electronic data interchange. b. order entry. c. inventory management. d. order delivery. e. materials handling. 87. Select the greatest advantage of horizontal channel integration. a. The flexibility of the channel is decreased. b. The markets are more heterogeneous. c. The expanded number of units is coordinated. d. Efficiencies in advertising, marketing research, and purchasing are increased. e. Planning and research are increased to cope with increased competition. 88. Jake attends a seminar on just-in-time inventory management. Excited about the idea, he returns to his office at Riverdale Auto Supply to start designing such an inventory system. Which of the following steps must Jake take as he institutes this change? a. Increase safety stock b. Raise the reorder point c. Reduce customer service standard d. Increase order frequency e. Reduce estimates of inventory turnover rate 89. If a firm decides to contract its logistics functions to third parties that have no managerial authority within the marketing channel, it is using a. outsourcing. b. sole-sourcing. c. logistics. d. wholesaling. e. distribution services. 90. Durable goods such as appliances generally reach their target markets through ____; goods such as automobile tires generally reach their target markets through _____. a. intensive distribution; intensive distribution b. exclusive distribution; intensive distribution c. selective distribution; exclusive distribution d. selective distribution; intensive distribution e. selective distribution; selective distribution

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Chap 14_20e 91. The courts generally accept tying agreements when the supplier is the only firm able to provide products of a certain quality, when the intermediary is free to carry competing products as well, and when a. the product is in decline. b. the supplier has a dominant market share. c. the supplier has a logistics disadvantage. d. a company has just entered the market. e. the company is experiencing shortfalls. 92. The objective of inventory management is to minimize inventory costs while a. having only enough supplies on hand as needed for production or resale. b. increasing stockouts. c. eliminating safety stock. d. maintaining an adequate supply of goods to satisfy customers. e. facilitating electronic data interchange. 93. At the annual managers' planning conference, Deanna Riker asks the other managers to consider her proposal to increase the quantity of inventory to a five-week supply in order to increase the percentage of completely filled customer orders from 85% to 90%. She states that she is willing to trade off the ____ incurred for the positive effect of better customer service. a. lower response time b. higher warehousing costs c. higher transportation costs d. higher order processing costs e. higher performance levels 94. A public warehouse is a a. business that leases storage space and related facilities for logistics to other firms. b. large, centralized warehouse that focuses on moving rather than storing goods. c. company that provides a complete array of logistical services for businesses. d. company-operated facility for storing and shipping products. e. warehouse used to store the personal property of many different customers. 95. When Bud Light Orange beer was introduced as part of the Anheuser-Busch product line, the company most likely used ____ distribution. a. horizontal b. intensive c. selective d. vertical integration e. exclusive

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Chap 14_20e 96. Consumers receive the benefits of place utility when a. they have to travel excessively to obtain products they want. b. retailers remain open 24 hours a day. c. they can stock up on products they need but not use them right away. d. they make purchases with credit and debit cards. e. products are available in locations where consumers want to buy them. 97. A marketing channel is defined as a group of individuals and organizations that a. consumes about one-half of every dollar spent on products in the United States. b. directs the flow of products from producers to customers. c. links producers to other marketing intermediaries. d. takes title to products and resells them. e. manages transportation and warehousing functions. 98. When channel members are linked by legal agreements that specify each member's rights and responsibilities, ____ exists. a. horizontal channel integration b. an administered VMS c. a corporate VMS d. a channel captain e. a contractual VMS 99. Alibaba is a Chinese e-commerce firm similar to Amazon.com. It has increased its power and global influence with strong leadership from its founder, including knowing when to acquire other organizations. For instance, in addition to acting as a platform for buyers to purchase products, it also acquired firms in the delivery and payments industries so it would have more control over the entire process. Alibaba's acquisitions are an example of a. digital distribution. b. channel cooperation. c. horizontal channel integration. d. vertical channel integration. e. full-line forcing. 100. Comfort-Tech management learns that last month's production run of heaters at its Dubuque plant is defective and announces a recall of the specific models produced. To handle the large number of products it expects to receive for replacement of the defective thermostats, Comfort-Tech will probably need to add a ____ to its a. distribution center b. private warehouse c. dispatching shipment system d. public warehouse e. materials handling system

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Chap 14_20e 101. Kashmir Inc. is using a new just-in-time inventory management system that requires ordering smaller quantities of parts more frequently. The success of its business depends significantly on receiving these parts very quickly, so like many other companies using just-in-time, Kashmir Inc. is relying more on the ____ mode of transportation despite its expense. a. railroad b. pipeline c. airway d. truck e. waterway 102. Mecklin Steel Company leases a warehouse in Birmingham, Alabama, to serve Deep South markets that are large enough and stable enough to make a long-term commitment to fixed facilities. This is a a. flexible warehouse. b. dispatching center. c. distribution center. d. private warehouse. e. public warehouse. 103. A manufacturer has decided to improve its inventory management by maintaining low inventory levels and waiting to purchase materials until right before they are needed in production. This inventory management technique is called a. just-in-time (JIT). b. time management. c. inventory minimization. d. economic order quantity. e. reorder point maximization. 104. What is the reorder point if the usage rate is 10 units per day, the order lead time is five days, and the safety stock is 30? a. 50 b. 150 c. 80 d. 200 e. 400

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Chap 14_20e Scenario 14.1 Use the following to answer the questions. Kelly Rose, Inc. markets several different brands, under its own Kelly Rose name label, as well as others. Its primary brands, such as Kelly Rose, Kelly & Ko, and KRC, are sold to wholesalers. These brands are then available through retail department stores such as Kohl's and Macy's. The wholesale-based brands division is positioned as customer-focused and cost-efficient. Its premium brands division includes labels such as Saffie Campbell, Martyn Curry, and Costura Moderno. These premium brands are sold through stores that the Kelly Rose company owns. 105. Refer to Scenario 14.1. Which of the following is most likely the primary factor Kelly Rose, Inc. used when selecting the marketing channel for its Costura Moderno brand? a. Characteristics of the intermediaries b. Product attributes c. Type of organization d. Marketing environmental forces e. Competition 106. An important goal of logistics is maintaining or reducing costs while reducing a. inventory management. b. outsourcing evaluation. c. electronic data interchange. d. order processing. e. cycle time. 107. You have spent the last 20 years of your career in various marketing channel management roles with a variety of companies. One of the things you have learned is that channel conflict can be very destructive to all members of the marketing channel. Which of the following actions would you take to ensure that channel conflict does not occur in your current role? a. Encourage each member of the channel to act in its self-interest. b. Make sure the channel handles a diversified set of competing products. c. Minimize the level of communication among members of the channel so conflicts do not get started. d. Establish clearly-defined roles and responsibilities for each member of the channel. e. Maintain loosely-defined roles and responsibilities for each member of the channel so each feels like they have some independent decision-making flexibility. 108. Marketing channels create four types of utility for consumers including a. place, time, possession, and form. b. location, form, availability, and suitability. c. form, time, location, and promotion. d. marketer, retailer, wholesaler, and producer. e. position, price, possession, and place.

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Chap 14_20e 109. An inventory stockout results in a. an increase in inventory costs. b. an increase in lost sales. c. an increase in net profit. d. an increase in customer loyalty. e. a decrease in prices. 110. The main objective of logistics should be to a. decrease costs while increasing market coverage. b. increase service and market coverage. c. decrease costs while increasing customer satisfaction. d. increase market coverage and channel power. e. balance costs and market coverage. 111. Benjamin is concerned about not having enough air conditioning units in inventory during June, July, and August so he keeps extra inventory to guard against stockouts during this critical period. Benjamin is keeping a. short order lead times. b. just-in-time inventory. c. a controlled usage rate. d. safety stock. e. excessive inventory. 112. When produce companies such as Dole Bananas bypass wholesalers and sell directly to retailers, it is likely to a. create channel conflict between Dole and these wholesalers. b. increase cooperation between Dole and the wholesalers. c. show that Dole is integrating its channel intermediaries. d. create horizontal integration between channel members. e. increase the vertical integration of the channel intermediaries. 113. Vertical channel integration a. results in two or more different management teams for each member of the channel. b. is made possible when a large corporation divests itself of smaller subsidiaries. c. is a shift back to the conventional channel of distribution. d. combines institutions at the same level of operation. e. is made possible by purchasing the operations of a channel member. 114. If a microchip in a computer at the Pentagon failed, which method of transportation would be most appropriate to use to replace the chip immediately if one could get the new chip only from New York City? a. Government vehicle b. Airway c. Waterway d. Truck e. Railroad Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 115. An independent businessperson who is paid a commission to sell complementary products of different producers in an assigned territory without actually taking title of the merchandise is a(n) a. sole intermediary. b. manufacturers' agent. c. producers' broker. d. industrial distributor. e. channel facilitator. 116. Aaron Whitley's company buys machine tools from large producers and sells them to several Midwestern manufacturing companies. The company Aaron works for carries inventories of the tools, which reduces capital requirements for the producers. Aaron's company is an example of a(n) ____ in a distribution channel. a. direct distributor b. manufacturers' agent c. industrial distributor d. producers' agent e. wholesalers' agent 117. Physical distribution activities may be performed by a producer, wholesaler, retailer or a. not performed at all. b. the customer. c. investors in any of the previous three. d. solely through technology. e. they may be outsourced. 118. Under Armour maintains a good deal of control over how its products are promoted, displayed, and sold. Because of this control, Under Armour would be appropriately described as the channel a. intermediary. b. captain. c. allocator. d. terminator. e. price leader. 119. Using a freight forwarder usually a. is not economical for a small firm. b. increases transit time and shipping costs. c. increases transit time and sometimes lowers shipping costs. d. lowers shipping costs for a large firm. e. reduces transit time.

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Chap 14_20e 120. Channel decisions are important to marketers mostly because a. they are relatively flexible allowing for change to occur quickly. b. consumers value reasonable prices delivered through marketing channels. c. they dictate what promotional strategies companies should use. d. many businesses are marketing intermediaries. e. they involve long-term commitments and affect customer accessibility. 121. As her internet quilt and bed linen business grew, Carrie could no longer perform all the distribution activities, so she hired a shipper and an information technology firm to assist with these functions. Carrie is using ____ for logistics for her business. a. producers b. wholesalers c. retailers d. selling agents e. outsourcing 122. A single leader who controls and organizes a marketing channel is called a a. channel champion. b. distribution leader. c. marketing maverick. d. channel captain. e. lead distributor. 123. When three buyers purchase the products of three producers, nine transactions are required. If one intermediary serves both producers and buyers, the number of possible transactions is a. 15. b. 5. c. 18. d. 6. e. 20. 124. Which of the following logistics functions involves design and operation of facilities for storing goods? a. Order processing b. Materials handling c. Transportation d. Warehousing e. Inventory management

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Chap 14_20e 125. Using only some of the available outlets to distribute a product is called a. selective distribution. b. intensive distribution. c. channel conflict. d. vertical channel integration. e. exclusive distribution. 126. WCO Logistics uses _____ technology to track containers through its distribution center in Sacramento, California. Each container has a special tag on it that allows hundreds of containers to be scanned simultaneously, improving the throughput of containers through the center. a. containerization b. EDI c. LED d. RFID e. distribution center Scenario 14.2 Use the following to answer the questions. Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region. Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service product lines—paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can buy a small paper shredding business and market to both large and small business customers. With regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves, or contract that out to a third party. 127. Refer to Scenario 14.2. Clint's suggestion for the uniform rental service was either picking up and delivering the uniforms themselves, or contracting this to a third party. If Star decides to pick up and deliver the uniforms with its own trucks, this is an example of a(n) ____ channel. If Star contracts this action to a third party, it is called ____. a. long; industrial distribution b. direct; industrial distribution c. long; outsourcing d. direct; outsourcing e. exclusive; outsourcing

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Chap 14_20e 128. Because of the significant investment many companies have in the products they sell to customers, they must develop and maintain adequate varieties of products to meet their customers' needs. This is called a. just-in-time. b. order processing. c. inventory management. d. merchandise stocking. e. logistical management. 129. In a corporate VMS, a. customers are excluded. b. marketing channel members are linked by legal agreements. c. marketing channel members are independent. d. all stages of the marketing channel are combined. e. there is dual ownership among channel members. 130. Managers and consultants at Unilever are meeting to discuss better ways to package its products to reduce damage and make loading more efficient. The primary function they are trying to improve is a. warehousing. b. inventory management. c. materials handling. d. cycle time. e. containerization. 131. Granite Springs wants to ship its bottled water with the most flexible schedules and routes of all transportation modes. Granite Springs should use ____ as its transportation mode. a. railroads b. waterways c. pipelines d. trucks e. airways 132. Traditionally, Lamme's Candies have used direct sellers to distribute its products. However, it recently made the decision to allow customers to purchase candles directly from its website as well. This decision is likely to create ____________ with its independent distributors. a. channel relationships b. channel leadership c. channel disintegration d. channel conflict e. channel cooperation

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Chap 14_20e 133. To expand the number of its retail outlets in the Washington, D.C. area, Whole Foods bought out a small chain of organic food stores in northern Virginia. This type of integration is called a. vertical. b. retail. c. horizontal. d. upstream. e. forward. 134. Supplier TXOK Corp. requires all its channel members to purchase all of its products in order to be able to purchase any of its products. This is an example of a. refusal to deal. b. a buying agreement. c. channel stuffing. d. exclusive dealing. e. full-line forcing. 135. Which of the following is likely to employ a longer marketing channel with more intermediaries? a. Jet airplanes b. Watermelon c. Canned peas d. Business computer system e. Automobiles 136. A producer is not likely to receive ____ from an industrial distributor. a. selling activities in local markets b. market information about consumers c. aggressive promotion of its brand d. reduced capital requirements e. a reduced financial burden from customers

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Chap 14_20e Scenario 14.2 Use the following to answer the questions. Star Supplies, Inc. manufactures commercial-grade floor cleaners, such as vacuums and floor polishers. The firm has recently begun manufacturing other janitorial-related product lines, such as paper products and chemical cleaners. Star Supplies distributes its products in two ways. It sells its vacuum, floor polisher, and janitorial supply products to an independent business that takes title to the products and then sells them to various small businesses throughout the region. Also, Star has a list of large businesses that it distributes to directly, on an as-needed basis. These businesses keep very little inventory and purchase janitorial supplies in small quantities. Recently, Star has decided to add two new service product lines—paper shredding and a uniform rental service. Clint Rodriguez, the marketing manager, is conducting a meeting to discuss the ways in which Star can strategically manage these new businesses. Star has the choice of marketing the paper shredding service to their large business clients, by picking up the paper as they drop off the other janitorial supplies, or they can buy a small paper shredding business and market to both large and small business customers. With regard to the uniform rental service, Star can either pick up and deliver the uniforms to the small businesses themselves, or contract that out to a third party. 137. Refer to Scenario 14.2. Currently, Star is using the ____ approach to distributing its janitorial supplies to its large customers. a. intensive b. just-in-time c. segmented d. outsourcing e. exclusive 138. A commonly used computerized means of integrating order processing with production, inventory, accounting, and transportation is a. web-based inventory management. b. just-in-time. c. electronic data interchange. d. universal product codes. e. activity-based management. 139. Honda places several motorcycles in “pods” in order to load them efficiently using forklifts. This system of materials handling is called a. warehousing. b. multi-modal transportation. c. group storage. d. unit loading. e. mechanized handling.

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Chap 14_20e 140. Order handling involves all of the following activities except that the a. credit department approves the purchase. b. order is transmitted to the warehouse. c. availability of the product is verified. d. warehouse is instructed to fill the order. e. customer places a purchase order. 141. Archer Tractor & Fence Supply is trying to optimize its method of getting products to customers. It has added electronic ordering systems for customers and improved the training process for workers in the warehouse who make the products ready for shipment. The improvements Archer has made are to its a. materials handling. b. logistics. c. order processing. d. inventory management. e. warehousing. 142. Large retailers such as Macy's and Walmart are most likely to participate in which of the following channels? a. Producer, industrial distributors, retailers, consumers b. Producer, consumers c. Producer, wholesalers, retailers, consumers d. Producer, retailers, consumers e. Producer, agents, wholesalers, retailers, consumers 143. Fansteel manufactures parts used in jet engines, which it sells to companies such as Boeing. When shipping products to Boeing, Fansteel seals the parts in 8' × 8' × 40' boxes for shipping to decrease loss and damage. This method of materials handling is a. unit loading. b. containerization. c. freight forwarding. d. unitized shipping. e. bonded packaging. 144. Expensive, high-quality products that are purchased infrequently often reach consumers through a. intensive distribution. b. highly-selective distribution. c. sole-source retailers. d. complex marketing channels. e. exclusive distribution.

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Chap 14_20e 145. A local petroleum dealer made an agreement to purchase petroleum from only one supplier. The petroleum dealer was forced into the agreement because the petroleum supplier refused to do business with the dealer unless he agreed to source petroleum solely from that supplier. This is an example of a. refusal to deal. b. restricted sales territories. c. exclusive dealing. d. multichannel distribution. e. tying arrangements. 146. Companies that sell products with high profit margins are more likely to use _______. Companies selling products whose sales are directly related to product availability will most likely use _______. a. exclusive distribution; intensive distribution b. exclusive distributive; selective distribution c. selective distribution; intensive distribution d. selective distribution; exclusive distribution e. intensive distribution; exclusive distribution 147. When Jennifer buys organic produce for her household using a channel with just one intermediary, that intermediary is classified as a a. retailer. b. wholesaler. c. broker. d. functional middleman. e. producer. 148. To prevent channel conflict, producers or other channel members may do all of the following except a. provide competing resellers with different brands. b. define policies for direct sales to avoid potential conflict over large accounts. c. combine reseller markets. d. negotiate territorial issues among regional distributors. e. provide recognition to certain resellers for their importance in distributing to others. 149. Tasha is responsible for the transportation of products sold by Lincoln BioChem, a producer of cooking oils sold to large institutions. Because Tasha needs to schedule transportation with the mode that provides the most flexible schedules and routes, which of the following should she use? a. Trucks b. Waterways c. Air d. Pipelines e. Railroads

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Chap 14_20e 150. Which of the following is most likely to be a product stocked solely by an industrial distributor? a. Tires b. Industrial glues and adhesives c. Roofing nails d. Kitchen countertops e. Office supplies 151. When one company in a marketing channel has the ability to influence another member's goal achievement, the company has a. channel authority. b. channel power. c. marketing leadership. d. a channel captain. e. channel team leader. 152. Wesley is a logistics manager. He is currently developing and maintaining assortments of products that are adequate for customer demand. In which stage in the logistics system is Wesley currently involved? a. Order processing b. Materials handling c. Inventory management d. Transportation e. Warehousing 153. The supply chain includes a. producers, wholesalers, and retailers. b. suppliers, producers, intermediaries, and customers. c. suppliers and suppliers' suppliers. d. all entities that facilitate product distribution. e. buyers, sellers, marketing intermediaries, and agents. 154. Adam Marker is the head of a company that produces computer software for production scheduling. The firm is small and presently does not generate enough volume to justify hiring a sales force. The firm is probably using ____ to maintain contact with the firms using its products. a. wholesalers b. brokers c. agents d. merchants e. retailers

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Chap 14_20e 155. Many companies use more than one marketing channel to distribute their products to the same target market, a tactic called a. multiple channeling. b. strategic channel alliance. c. intensive distribution. d. multichannel distribution. e. market splitting. 156. A goal of logistics is to reduce ____ or how long it takes to complete a process. a. time standards b. processing time c. production d. throughput measure e. cycle time 157. Order processing is defined as a. the receipt and transmission of sales order information. b. the second stage in a physical distribution system. c. the four main tasks. d. the same as order handling. e. electronic processing of information. 158. Freight transportation companies that offer several different shipment methods are called a. megacarriers. b. intermodal transporters. c. freight forwarders. d. shipping experts. e. superfreighters. 159. A problem that can arise with exclusive (and selective) distribution is that a. resellers may not offer sufficient service for the product. b. consumers can find the products elsewhere. c. it is too expensive for products with high-profit margins. d. unauthorized resellers may acquire and sell the product. e. it is ineffective for luxury products. 160. The notion of logistics is a. speed of delivery. b. used solely by manufacturers. c. the activities used to move products from producers to end users. d. primarily the wholesaler's responsibility. e. an assessment of distribution costs. Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 161. Overall channel goals and individual channel member goals CANNOT be achieved together without a. conflict. b. captains. c. leadership. d. cooperation. e. tying agreements. 162. H&M, which produces and retails clothing products in a coordinated channel, is an example of a(n) a. administered vertical marketing system (VMS). b. conventional marketing channel. c. channel network. d. contractual marketing channel. e. corporate vertical marketing system. 163. If a retailer is reviewing its inventory and notices that the order lead time for one of the products it stocks has increased, the retailer should a. decrease its reorder point b. increase its reorder point c. eliminate safety stock d. keep the reorder point the same e. increase the usage rate of the product 164. Starbucks has an agreement with PepsiCo through which Pepsi distributes Starbucks' coffee drink, Frappuccino, to grocery stores and other retail outlets. This is an example of a. a strategic channel alliance. b. exclusive distribution. c. a reciprocal distribution agreement. d. horizontal channel integration. e. channel leadership. 165. When shopping for products, business customers often prefer to deal with _____, while consumers typically buy from _____. a. manufacturers or channel intermediaries; retailers b. channel captains; stores c. online retailers; brick-and-mortar retailers d. retailers; online retailers e. large retailers; small retailers

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Chap 14_20e 166. Possession utility is best described as a. products being available in places where the customers wish to purchase them. b. the customer having access to the product to use now or store and use later. c. having a company's products available when a customer needs them. d. being able to legally own a product despite restrictions on trade. e. getting the products to the consumers in as little time as possible for ownership. 167. ____ adds time and place utility to a product by moving it from where it is made to where it is purchased and used. a. Warehousing b. Containerization c. Distribution d. Materials handling e. Transportation 168. Will is trying to decide which shipping company to use to transport his custom-made furniture to customers. Will is facing a decision about a. order entry. b. order completion. c. just-in-time. d. order delivery. e. order handling. 169. Fragile products that require special handling are more likely to be distributed through a. longer channels. b. shorter channels. c. indirect channels. d. strategic alliances. e. exclusive outlets. 170. To achieve the desired intensity of market coverage, distribution must correspond to a. competitors’ actions. b. the firm’s financial resources. c. the marketing environment. d. behavior patterns of buyers. e. intermediary demands.

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Chap 14_20e 171. Didsbury Paint Manufacturing Company buys the chemicals it needs for producing its products from a chemical producer, Royce Chemicals. In this instance, the chemicals are being distributed to Didsbury through which of the following types of channels? a. Industrial distributor b. Direct distribution c. Retail d. Wholesaler-sponsored e. Producer 172. Wild Birds Unlimited sells wild bird feeders, food, and other products related to backyard wildlife enjoyment through franchises located in shopping centers. If Wild Birds Unlimited makes an agreement with Target to sell some of its private-label Wild Birds Unlimited bird feeders and bird seed products in Target retail locations, this would likely lead to a. horizontal channel integration. b. vertical channel integration. c. channel cooperation. d. channel leadership. e. channel conflict. 173. Huy Fong Foods markets a Sriracha sauce for household use to supermarkets through grocery wholesalers. It markets Sriracha for institutional use through industrial distributors and food brokers. Huy Fong is using a. multichannel distribution. b. industrial distribution. c. strategic channel alliance. d. supply-chain management. e. wholesaler-based distribution system. 174. What function of logistics enables companies to compensate for dissimilar production and consumption rates and stabilize prices and availability of seasonal items? a. Materials handling b. Warehousing c. Transportation d. Inventory management e. Order processing 175. Which of the following is the physical handling of tangible goods, supplies, and resources? a. Inventory management b. Materials handling c. Transportation d. Order processing e. Outsourcing

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Chap 14_20e 176. Woodworks, Inc. markets furniture directly to businesses. This is an example of a(n) ____ channel. a. producer-to-business buyer b. producer-to-industrial-distributor-to-business buyer c. producer-to-agent-to-business buyer d. producer-to-industrial-distributor-to-agent-to-organizational buyer e. producer-to-agent-to-wholesaler-to-business buyer 177. Having products available when customers want them creates a. possession utility. b. place utility. c. time utility. d. form utility. e. feature utility. 178. Without wholesalers and other intermediaries, a. most products would be much less expensive because fewer companies would be handling the product. b. products would be cheaper because the functions of intermediaries would be eliminated. c. products would likely be more expensive due to the use of less efficient channel members. d. products would never be able to make it to the ultimate consumer at any price without passing through intermediaries. e. many products would be more expensive because retailers would expect more profit. 179. GLE specializes in planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet their clients' needs and wants. It also specializes in delivering transportation services for their clients. Due to GLE's efficiency in these areas, many firms outsource their core physical distribution activities to GLE. GLE is most likely to be a(n) a. manufacturers' agent b. industrial distributor c. megacarrier d. third-party logistics firm e. freight forwarder

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Chap 14_20e Scenario 14.1 Use the following to answer the questions. Kelly Rose, Inc. markets several different brands, under its own Kelly Rose name label, as well as others. Its primary brands, such as Kelly Rose, Kelly & Ko, and KRC, are sold to wholesalers. These brands are then available through retail department stores such as Kohl's and Macy's. The wholesale-based brands division is positioned as customer-focused and cost-efficient. Its premium brands division includes labels such as Saffie Campbell, Martyn Curry, and Costura Moderno. These premium brands are sold through stores that the Kelly Rose company owns. 180. Refer to Scenario 14.1. Kelly Rose, Inc. uses which type of channel of distribution for its premium brands? a. A short, direct channel b. A long, direct channel c. Multichannel distribution d. Horizontal integration e. Intensive distribution 181. Which of the following describes a disadvantage of using industrial distributors? a. Industrial distributors possess considerable market information. b. Their marketing exchange relationships are very focused. c. They are unlikely to handle bulky items or items that are slow sellers. d. Industrial distributors sell specific brands aggressively. e. Industrial distributors acquire title to the products and take possession. 182. _______ involves developing and maintaining adequate assortments of products to meet customers’ needs. a. Inventory management b. Materials handling c. Warehousing d. Order management e. Logistics 183. Cassy and James both are buying new iPhones this week. Cassy goes to the Apple store because she wants to actually see the phone before she makes a final decision. James knows that he does not need to see the phone, because he just wants an upgrade from his older version. He simply orders it online from apple.com. Cassy is purchasing her phone through _____, while James is purchasing his through _____. a. an indirect-marketing channel; the most efficient channel of distribution b. the most common type of marketing channel; an indirect channel c. a retailer; a direct-marketing channel d. a business-to-business channel; a direct-marketing channel e. a retail channel; an indirect-marketing channel

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Chap 14_20e 184. Marketing channel members are likely to experience misunderstandings, frustration, and poorly coordinated strategies as a result of a. channel conflict caused by inefficient communication between channel members. b. open communication among the channel members. c. methods of channel coordination designed to reduce ambiguity. d. negotiating territorial issues among regional distributors of a product. e. allowing one member of the channel to take the role of channel captain. 185. Which of the following is an advantage of using an industrial distributor? a. These firms are easy to control because they work directly for the producers. b. Inventory holding costs are minimized because they can store inventory very cheaply. c. They are closer geographically to all of the producers' customers. d. They possess a high level of technical knowledge about their products. e. They help reduce a producer's financial burdens by extending credit to customers. 186. Convenience products typically use a. exclusive distribution. b. selective distribution. c. intensive distribution. d. short marketing channels. e. digital distribution. 187. Which of the following involves planning, implementing, and controlling the efficient and effective flow and storage of products and information from the point of origin to consumption to meet customers’ needs and wants? a. Operations management b. Supply chain management c. Supply management d. Logistics management e. Procurement management 188. A channel that includes both a manufacturers' agent and an industrial distributor is appropriate under which of the following circumstances? a. When the firm wants specialized personnel to follow up the work of the sales force b. When the marketer wishes to enter a new geographic market but does not wish to expand the existing sales force c. When only one or two channels of distribution are available for products d. When the sales force is large and the marketer is thinking of cutting it down e. When customers are highly concentrated in one geographic area

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Chap 14_20e 189. The major levels of intensity at which a company can choose to distribute its products are ____ distribution. a. vertical and horizontal b. cooperative, conflicting, and integrated c. intensive, extensive, and exclusive d. selective, cooperative, and conflicting e. exclusive, selective, and intensive 190. Currently, the courts must evaluate the _______ in establishing restricted territories and the overall effect of doing so on the market. a. number of products available in the product category b. producer’s market share c. producer’s intent d. level of competition in the industry e. intensity of marketing coverage 191. The coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer is called a. supply chain management. b. vertical channel integration. c. horizontal integration. d. industrial distribution. e. marketing channel management. 192. Channel cooperation can do all of the following except a. be more environmentally friendly. b. increase cycle time. c. reduce wasted time. d. reduce wasted energy. e. reduce wasted materials. 193. In a simple economy of five producers and five consumers, there would be ____ transactions possible without an intermediary and ____ transactions possible with one intermediary. a. 10; 25 b. 30; 10 c. 25; 15 d. 16; 8 e. 25; 10

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Chap 14_20e 194. Suppose that Faust Distributing has been told that it cannot carry the beers made by Anheuser-Busch because it also carries the products of the competitor, Miller Brewing Company. Faust is then told that it must drop the Miller brands in order to carry the Anheuser-Busch products. If this were true, Anheuser-Busch would be engaging in which of the following channel management practices? a. Exclusive dealing b. Multichannel distribution c. Tying contracts d. Refusal to deal e. Restricted sales territories 195. In an efficient supply chain, ______ provide direct or indirect input to make the product, and ______ are responsible for delivery of the product and after-market services to ultimate customers. a. downstream firms; upstream firms b. upstream firms; downstream firms c. upstream firms; suppliers d. downstream firms; resellers e. resellers; suppliers 196. If a company's products require differentiation at the point of purchase, it will most likely use a. intensive distribution. b. extensive distribution. c. intermediate distribution. d. exclusive distribution. e. selective distribution. 197. Eliminating a wholesaler from a marketing channel will a. cut costs and lower prices. b. not eliminate the functions performed by that wholesaler. c. eliminate the functions performed by that wholesaler. d. lead to lower costs but higher prices. e. reduce channel conflict. 198. _______ have special expertise in core physical distribution activities such as warehousing, transportation, inventory management, and information technology and can often perform these activities more efficiently. a. Freight forwarders b. Megacarriers c. Manufacturers' agents d. Industrial distributors e. Third-party logistics firms

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Chap 14_20e 199. Miles, sales manager for Enterprise Lumber, tells Julian, the firm's inventory manager, that the firm's failure to have adequate supplies of pressure-treated lumber on hand has cost the firm $175,000 in lost sales. This figure represents which of the following inventory management costs? a. Carrying b. Replenishment c. Stockout d. Safety stock e. Reorder 200. What two modes of transportation are used when containers are shipped by piggyback? a. Railroads and airways b. Trucks and airways c. Pipelines and trucks d. Waterways and railroads e. Railroads and trucks 201. Firestone allows companies like Sears and Discount Tire to distribute and discount its tires. This action significantly increases the possibility of channel ____ with independent Firestone dealers. a. understanding b. power c. leadership d. communication e. conflict 202. Trip is a transportation coordinator for Volvo Cars U.S. In order to move a large order of vehicles from a plant in Sweden to Chicago, he is planning to use both waterways and railroads. The combining and coordinating of these two modes of transportation in order to take advantage of benefits offered by each of the different types of carriers is called a. intermodal transportation. b. transportation piggybacking. c. containerized movement. d. efficiency transportation e. freight forwarding. 203. Compass Minerals needs to transport 20 tons of salt from New Iberia, Louisiana, to St. Louis, Missouri. Which of the following methods would be the cheapest for transporting this cargo? a. Pipelines b. Waterways c. Trucks d. Airways e. Railroads

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Chap 14_20e 204. The best way to reduce overall logistics costs is to a. use a total-cost approach to analyze and evaluate the entire system. b. minimize the costs associated with materials handling and transportation. c. reduce the number of distribution functions that are necessary. d. find the cheapest price for each function and use them to create the system. e. lower the service standards that the company has. 205. Which of the following is a practical option for producers that sell to hundreds of thousands of customers through thousands of retailers? a. Producer-to-business buyer b. Producer-to-industrial-distributor-to-business buyer c. Producer-to-retailer-to-consumer d. Producer-to-agent-to-wholesaler-to-retailer-to-consumer e. Producer-to-wholesaler-to-retailer-to-consumer 206. Although there is no single method for resolving conflict, partnerships can be reestablished if the role of each channel member is clearly defined and followed and channel members agree a. to collude on prices. b. on a single member coordinating all channel activities. c. on means of coordinating channels. d. to combine all stages under a single owner. e. to merge with other firms at the same level of operation. 207. Oscar is in charge of ensuring the successful transportation and storage of his company's products. He monitors the products from the time they leave the factory to when they are dropped off at retailers and purchased by customers. Oscar's job title would most likely be a. inventory manager. b. logistics manager. c. procurement manager. d. supply chain manager. e. operations manager. 208. Which of the following includes activities such as manufacturing, research, sales, advertising, and shipping, as well as involving all entities that facilitate product distribution? a. Channel management b. Inventory management c. Supply chain management d. Logistics management e. Supply management

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Chap 14_20e 209. Assuming everything else is equal, the most cost-efficient way for ConocoPhillips to transport crude oil from remote oil drilling sites in central Alaska to shipping terminals on the Alaskan coast would be a. waterways. b. intermodal transportation. c. tanker trucks. d. railroads. e. pipelines. 210. If Samsung decides to make changes in its marketing channels, the strategic significance is that channel decisions are a. long-term commitments. b. short-term commitments. c. easier to change than prices. d. easier to change than promotion. e. impossible to change. 211. Piggyback, fishyback, and birdyback are terms usually associated with gaining efficiency in shipping through a. cycle time. b. just-in-time. c. intermodal transportation. d. containerization. e. lot sizes. 212. The supply chain begins with______________ and ends with_________________. a. employees; products b. marketing; sales c. production; inventory d. strategy; implementation e. raw materials; customers 213. STT is a manufacturer of very large blades used in energy-producing wind turbines. What is the most expensive logistics function associated with the STT product? a. Warehousing of the product b. Order processing for each blade c. Inventory management of the product d. Transportation of the product e. Materials handling of the product

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Chap 14_20e 214. When considering the best channel to use, all of the following are true with regard to larger firms except they a. can use an extensive product mix as a competitive tool. b. may be better able to negotiate better deals with vendors or other channel members. c. may have more distribution centers. d. may have the resources to develop their own sales force. e. may be better suited to serve customers in a particular region. 215. In an administered VMS, informal coordination brings about a high level of interorganizational management. Nonetheless, a. decision making does not take into account the goals of the system. b. the channel members do not remain autonomous. c. the decision making is not coordinated. d. the channel members remain autonomous. e. the goals of the individual firms are not congruent with the goals of the system. 216. Order processing, inventory management, materials handling, warehousing, and transportation are the activities that define a. wholesaling. b. retailing. c. logistics. d. channel management. e. drop shipping. 217. Organizational buyers are especially partial to direct marketing channels when a. they buy cheap materials in large quantities. b. they try a new product for the first time. c. they are filling an order for a very important customer. d. a modified rebuy type of decision is involved. e. expensive and/or complex equipment is involved. 218. When a single channel member manages an integrated marketing channel to achieve low-cost, effective distribution for satisfying target markets, ____ exists. a. a vertical marketing system b. horizontal channel integration c. channel power d. channel cooperation e. multichannel distribution

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Chap 14_20e 219. What is typically the primary determinant in deciding how materials will be handled? a. Unit loading b. Containerization c. Customer preference d. Cost reduction e. Product characteristics 220. Paper towels and trash-can bags are most likely distributed through ____ and ____. a. selective distribution; multiple channels b. intensive distribution; multichannel distribution c. strategic channel alliances; intensive distribution d. exclusive distribution; a single channel e. multichannel distribution; convenience channels 221. The United States Postal Service works hard to get priority mail from the sender to the recipient as quickly as possible in order to compete with companies such as UPS and FedEx. The postal service is competing with UPS and FedEx in terms of a. cycle time. b. order processing. c. turnaround time. d. shipping cycle. e. transportation tracking. 222. Which of the following exists when the products of one firm are distributed through the marketing channels of another? a. Digital distribution b. Omnichannel retailing c. Multichannel distribution d. Strategic channel alliance e. Industrial agency 223. Companies are increasingly using _______ to respond to changing consumer preferences to be able to buy a product wherever and whenever they desire. a. longer marketing channels b. shorter marketing channels c. reciprocity d. multichannel distribution e. market splitting

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Chap 14_20e 224. ____ may stabilize supply, reduce costs, and increase channel member coordination. a. Channel power b. Channel integration c. Vertical channel integration d. Multichannel distribution e. An industrial distributor 225. Disney sells apparel, cookie jars, puzzles, photo albums, and other items featuring its popular characters directly through its own retail outlets. This is an example of a. channel leadership. b. channel cooperation. c. channel conflict. d. horizontal channel integration. e. vertical channel integration. 226. All of the following products are likely to use the producer-retailer-consumer marketing channel except for a. pharmaceutical drugs. b. U-Pick farm produce. c. Amazon Kindle Fire. d. designer wedding gowns. e. microbrew beers. 227. Pandora and Spotify allow users to listen to music through the internet or other device. Pandora and Spotify are engaging in a. electronic data interchange. b. selective distribution. c. digital distribution. d. multichannel distribution. e. physical distribution. 228. The main reason a manufacturer will prohibit intermediaries from selling its products outside designated sales territories is to a. tighten its control over distribution of its products. b. discourage competition from other manufacturers. c. incorporate selective distribution. d. contain distribution costs. e. punish intermediaries for past behavior.

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Chap 14_20e 229. What links producers to consumers through the purchase and reselling of products or contractual agreements? a. Marketing intermediaries b. Distributors c. Suppliers d. Middle marketers e. Marketing channels 230. Which of the following types of distribution allow distribution and consumption to occur at the same time? a. Digital distribution b. Selective distribution c. Multichannel distribution d. Exclusive distribution e. Intensive distribution 231. Information technology enhances the ______ of the supply chain, allowing all marketing channel members to track the movement of items throughout the supply chain and improve customer service. a. speed b. costs c. transparency d. ethics e. sustainability 232. What is a primary difference between an industrial distributor and a manufacturers' agent? a. A manufacturers' agent does not acquire title nor usually take possession of the products whereas an industrial distributor does. b. A manufacturers' agent is employed by the manufacturers while an industrial distributor is independent. c. An industrial distributor is employed by the manufacturers while a manufacturers' agent is independent. d. A manufacturers' agent rarely adds any value to the marketing channel while an industrial distributor reduces costs significantly. e. An industrial distributor does not form relationships with customers for repeat business whereas a key asset of a manufacturers' agent is his knowledge of his customers. 233. When Merrell introduced its Chameleon hiking shoes, they were available through REI, Dick’s, Bass Pro Shops, and a few other retailers. The Merrell Chameleon hiking shoe was most likely distributed through the _____ of distribution. a. selective level b. extensive level c. intensive level d. exclusive level e. agent form

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Chap 14_20e 234. Tying agreements occur when a a. producer distributes the same product through two or more different channels. b. manufacturer forbids an intermediary to carry products of competing manufacturers. c. supplier furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well. d. producer refuses to deal to channel members that seem unethical or illegitimate. e. manufacturer prohibits intermediaries from selling its products outside designated sales territories. 235. Who or what determine(s) under what circumstances channel management practices violate the principle that the public is best served by protecting competition and free trade and therefore must be restricted? a. Consumers and competitors b. Courts and regulatory agencies c. The Federal Trade Commission d. Consumers e. Competitors 236. Multichannel distribution is characterized as a. illegal under the Robinson-Patman Act. b. distribution channels that typically carry exclusive products, such as Rolex watches. c. marketing environments that are highly competitive. d. manufacturers that forbid an intermediary to carry products of competing producers. e. the use of a variety of marketing channels to ensure maximum distribution. 237. Hernandez Wholesale Plumbing has seen its sales in the Southeast triple in the past two years. Materials handling director Beverly Picard announces plans to the board for an Atlanta facility that will combine shipments received from Hernandez's 25 suppliers for nearly immediate shipment to plumbing stores and contractors in the region. This new facility would be best classified as which of the following? a. Sales office b. Public warehouse c. Field public warehouse d. Distribution center e. Bonded warehouse 238. Bethlehem Steel wants to install technology into its logistics management system that will enable it to gain efficiency and accuracy in inventory tracking, stocking, and electronic notifications. Bethlehem Steel is most likely using a. electronic data interchange. b. radio frequency identification. c. intermodal transportation. d. freight forwarders. e. lean distribution.

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Chap 14_20e 239. In an administered vertical marketing system (VMS), interorganizational relationships are a. achieved by informal coordination. b. formalized through contracts. c. combined under the ownership of a single organization. d. guided by legal agreements. e. achieved by clearly defining the obligations and rights of all channel members. 240. The order-processing task that involves verifying product availability, checking prices and customer credit ratings, and filling orders is a. warehousing. b. order handling. c. information processing. d. materials handling. e. order entry. 241. Which of the following is least likely to be a factor affecting the selection of marketing channels? a. Customer characteristics b. Product attributes c. Product packaging d. Competition e. Environmental forces 242. If Iams forced Meijer's grocery chain to place all of its pet products in the stores' most favorable locations, it would be a. demonstrating sound channel leadership. b. insisting on exclusive exposure. c. exercising channel power. d. minimizing channel conflict. e. creating a coordinate system. 243. Dell makes its computers available through its own stores, its website, and some major retailers. This is an example of a. multichannel distribution. b. vertical integration. c. horizontal integration. d. tying agreements. e. exclusive dealing.

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Chap 14_20e 244. What are the three primary tasks of order processing? a. Order receipt, order delivery, order follow-up b. Order handling, inventory management, order delivery c. Materials handling, warehousing, order delivery d. Order handling, order entry, order delivery e. Order receipt, order checking, order delivery 245. Product and target market characteristics usually determine the type of coverage a product receives. For which of the following products is selective distribution most appropriate? a. Gasoline b. Jaguar automobiles c. Skippy peanut butter d. Laundry detergent e. Organic foods 246. Higher costs in one functional area of a logistics system may be necessary to achieve a. better cycle time. b. lower costs in another. c. flexibility in another. d. consistency. e. lower prices. 247. You are meeting with the new CEO of your company to discuss marketing channel strategies. You are delighted to learn that the CEO actually understands the importance of marketing channels in a firm’s sales success. The CEO tells you that his primary concern is that the chosen marketing channel facilitates the firm’s ability to make products available when customers want them, and in locations where they want them. He leaves it to you to decide on the appropriate marketing channel. Given his primary concern you should make sure the channel you choose is capable of creating lots of a. time and possession utility. b. place and feature utility. c. time and place utility. d. form and possession utility. e. feature and time utility. 248. The driving force behind marketing channel decisions should be a. convenience. b. cost reduction. c. environmental concerns. d. customer satisfaction. e. quality.

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Chap 14_20e 249. Which of the following is the most commonly used channel for distributing business products? a. Producer, agents, industrial distributors, organizational buyers b. Producer, industrial distributors, organizational buyers c. Producer, agents, organizational buyers d. Producer, organizational buyers e. Industrial distributors, organizational buyers 250. For which of the following products would exclusive distribution be most appropriate? a. Gasoline b. Rolls Royce automobile c. Ray-Ban sunglasses d. Bananas e. Harley-Davidson motorcycle 251. Kintetsu World Express is an organization that consolidates shipments from several industrial firms into lot sizes that can be more efficiently transported. What type of transportation company is Kintetsu World Express? a. A freight forwarder b. A forwarding agency c. A transport consolidator d. A specialty transportation company e. An intermodal shipping company 252. McGuire’s is a producer of chemicals used in car detailing and painting. Because of the volatility of their chemical products when exposed to dirt and heat, McGuire's operates its own facilities for storing and shipping its products. McGuire’s facilities are most likely known as a. distribution centers. b. product storehouses. c. public warehouses. d. megawarehouses. e. private warehouses. 253. What advantages do industrial distributors offer? What are some of the disadvantages of using industrial distributors?

254. Under what circumstances is selective distribution a desirable level of market coverage?

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Chap 14_20e 255. Discuss channel cooperation and conflict. How might each one affect distribution channel functions?

256. Wholesalers are often criticized for being inefficient and for causing consumers to pay higher prices than they would if there were no wholesalers. Discuss.

257. How do marketing channel decisions influence the rest of the marketing mix?

258. How do marketing channels increase efficiency in exchange situations?

259. What are the key tasks in supply chain management? How does each of these facilitate supply chain management?

260. What is a marketing intermediary, and what are the activities that marketing intermediaries perform?

261. List the three major levels of market coverage and define each of them.

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Chap 14_20e 262. Explain how electronic data interchange (EDI) and just-in-time (JIT) inventory management might be used in combination to improve logistics effectiveness and efficiency.

263. Identify the various transportation modes and describe in detail two modes of transportation.

264. Compare and contrast horizontal and vertical channel integration.

265. Describe the three forms of vertical marketing systems.

266. What is supply chain management? List the activities involved in it.

267. Explain the legal ramifications of attempts to control distribution functions.

268. Why is the choice of warehouse facilities an important strategic consideration?

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Chap 14_20e 269. Discuss the importance of order processing in the physical distribution system.

270. Name and define the four types of utility created by marketing channels.

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Chap 14_20e Answer Key 1. False 2. True 3. True 4. False 5. False 6. True 7. False 8. True 9. False 10. False 11. True 12. True 13. True 14. True 15. False 16. True 17. False 18. True 19. True 20. False 21. True 22. False 23. True 24. False 25. False 26. True

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Chap 14_20e 27. False 28. True 29. False 30. False 31. True 32. True 33. False 34. False 35. False 36. False 37. True 38. False 39. True 40. True 41. False 42. False 43. False 44. True 45. False 46. False 47. True 48. False 49. False 50. True 51. False 52. True 53. True 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 55. False 56. True 57. True 58. True 59. False 60. True 61. False 62. False 63. False 64. False 65. False 66. True 67. True 68. False 69. True 70. True 71. True 72. True 73. False 74. True 75. False 76. False 77. True 78. True 79. True 80. True 81. False 82. False Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 83. False 84. e 85. a 86. b 87. d 88. d 89. a 90. e 91. d 92. d 93. b 94. a 95. b 96. e 97. b 98. e 99. d 100. d 101. c 102. d 103. a 104. c 105. b 106. e 107. d 108. a 109. b 110. c Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 111. d 112. a 113. e 114. b 115. b 116. c 117. e 118. b 119. e 120. e 121. e 122. d 123. d 124. d 125. a 126. d 127. d 128. c 129. d 130. c 131. d 132. d 133. c 134. e 135. c 136. c 137. b

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Chap 14_20e 138. c 139. d 140. e 141. c 142. d 143. b 144. e 145. c 146. a 147. a 148. c 149. a 150. b 151. b 152. c 153. d 154. c 155. d 156. e 157. a 158. a 159. d 160. c 161. d 162. e 163. b 164. a 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 166. b 167. e 168. d 169. b 170. d 171. b 172. e 173. a 174. b 175. b 176. a 177. c 178. c 179. d 180. a 181. c 182. a 183. c 184. a 185. e 186. c 187. d 188. b 189. e 190. c 191. a 192. b 193. e Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 194. a 195. b 196. e 197. b 198. e 199. c 200. e 201. e 202. a 203. b 204. a 205. e 206. c 207. b 208. c 209. e 210. a 211. d 212. e 213. d 214. e 215. d 216. c 217. e 218. a 219. e 220. b 221. a Copyright Cengage Learning. Powered by Cognero.

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Chap 14_20e 222. d 223. d 224. b 225. e 226. b 227. c 228. a 229. a 230. a 231. c 232. a 233. a 234. c 235. b 236. e 237. d 238. b 239. a 240. b 241. c 242. c 243. a 244. d 245. e 246. b 247. c 248. d

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Chap 14_20e 249. d 250. b 251. a 252. e 253. An industrial distributor is an independent business that takes title to products and carries inventories. Industrial distributors offer sellers several advantages. They can perform the needed selling activities in local markets at a relatively low cost to a manufacturer and reduce a producer’s financial burden by providing customers with credit services. Also, because industrial distributors usually maintain close relationships with their customers, they are aware of local needs and can pass on market information to producers. By holding adequate inventories in local markets, industrial distributors reduce producers’ capital requirements. Using industrial distributors has several disadvantages. They may be difficult to control because they are independent firms. Industrial distributors usually sell standardized items, such as maintenance supplies, production tools, and small operating equipment. Industrial distributors may be difficult to control because they are independent firms. They often stock competing brands, so a producer cannot depend on them to promote its brand aggressively. Furthermore, industrial distributors incur expenses from maintaining inventories and are less likely to handle bulky or slow-selling items, or items that need specialized facilities or extra selling efforts. 254. Selective distribution is desirable when a special effort, such as customer service from a channel member, is important to customers. Shopping products require differentiation at the point of purchase. Selective distribution is often used to motivate retailers to provide adequate service. Dealers can offer higher-quality customer service when products are distributed selectively, such as Apple products, which are only distributed through authorized Apple dealers and Apple stores, and some cosmetics, which are only available in certain department stores. 255. Channel cooperation is vital if each member is to gain something from the other members. Cooperation enables retailers, wholesalers, suppliers, and logistics providers to speed up inventory replenishment, improve customer service, and cut the costs of bringing products to the consumer. Because the supply chain is an interrelated system, the success of one firm in the channel depends in part on other member firms. Without cooperation, neither overall channel goals nor individual member goals can be realized. Thus, marketing channel members should make a coordinated effort to satisfy market requirements. Channel cooperation leads to greater trust among channel members and improves the overall functioning of the channel. Cooperation also leads to more satisfying relationships among channel members. Although all channel members work toward the same general goal—distributing products profitably and efficiently— members sometimes may disagree about the best methods for attaining this goal. If self-interest creates misunderstanding about role expectations, the end result is frustration and conflict for the whole channel. For individual organizations to function together, each channel member must clearly communicate and understand role expectations. Communication difficulties are a potential form of channel conflict because ineffective communication leads to frustration, misunderstandings, and ill-coordinated strategies, jeopardizing further coordination. Many firms use multiple channels of distribution, especially now that most retail firms have an online presence. The internet has increased the potential for conflict and resentment between manufacturers and intermediaries. Channel conflicts also arise when intermediaries overemphasize competing products or diversify into product lines traditionally handled by other intermediaries. When a producer that has traditionally used franchised dealers broadens its retailer base to include other types of retail outlets, for example, conflict can arise with the traditional outlets. Sometimes conflict develops because producers strive to increase efficiency by circumventing intermediaries.

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Chap 14_20e 256. Critics accuse wholesalers of being inefficient and adding to costs. Buyers often think that making the distribution channel as short as possible will decrease the prices for products, but this is not the case. Critics who suggest that eliminating wholesalers will lower prices for customers fail to recognize that this would not eliminate the need for the services the wholesalers provide. Although wholesalers can be eliminated, their functions cannot. Other channel members would have to perform those functions, perhaps not as efficiently, and customers still would have to pay for them. In addition, all producers would deal directly with retailers or customers, meaning that every producer would have to keep voluminous records and hire sufficient personnel to deal with a multitude of customers. In the end, customers might end up paying a great deal more for products because prices would reflect the costs of an inefficient distribution channel. To mitigate criticisms, wholesalers should only perform the marketing activities that are desired, and they must strive to be as efficient and customer focused as possible. 257. Channel decisions are critical because they determine a product’s market presence and accessibility. Without marketing channel operations that reach the right customers at the right time, even the best goods and services will not be successful. Marketing channel decisions have strategic significance because they generally entail long-term commitments among a variety of firms (e.g., suppliers, logistics providers, and operations firms). Once a firm commits to a distribution channel, it is difficult to change. Marketing channels also serve multiple functions, including creating utility and facilitating exchange efficiencies. 258. Marketing intermediaries facilitate exchange efficiencies, often reducing the costs of exchanges by performing certain services and functions. Even if producers and buyers are located in the same city, there are costs associated with exchanges of goods and services. Marketing intermediaries can reduce these expenses by performing services and functions efficiently. They provide valuable assistance because of their access to and control over important resources used in the proper functioning of marketing channels. 259. Supply chain management involves all entities that facilitate product distribution and benefit from cooperative efforts, including suppliers of raw materials and other components to make goods and services, logistics and transportation firms, communication firms, and other firms that indirectly take part in marketing exchanges. The key tasks involved in supply chain management include: Operations management: Organizational and system-wide coordination of operations and partnerships to meet customers’ product needs. Supply management: Sourcing of necessary resources, goods, and services from suppliers to support all supply chain members. Logistics management: All activities designed to move the product through the marketing channel to the end user, including warehousing and inventory management. 260. Marketing intermediaries link producers to other intermediaries or to ultimate consumers through contractual arrangements or through the purchase and resale of products. Marketing intermediaries play key roles in customer relationship management, not only through their distribution activities but by maintaining databases and information systems to help all members of the marketing channel maintain effective customer relationships. These marketing intermediaries facilitate exchanges, set promotional objectives, establish pricing policies, and encourage physical distribution. 261. There are three levels of market coverage: intensive, selective, and exclusive. Different types of products are best handled using different intensities of market coverage. In choosing intensive distribution, producers strive to make a product available to all possible dealers. In selective distribution, only some outlets in an area are chosen to distribute a product that requires more consideration and effort on the part of the consumer before purchase. Exclusive distribution is used for more expensive items and usually gives a single dealer rights to sell a product in a large geographic area.

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Chap 14_20e 262. Whether a company uses a manual or an electronic order-processing system depends on which method provides greater speed and accuracy within cost limits. Manual processing suffices for small-volume orders and can be more flexible in certain situations. Most companies, however, use electronic data interchange (EDI), which uses computer technology to integrate order processing with production, inventory, accounting, and transportation. Within the supply chain, EDI functions as an information system that links marketing channel members and outsourcing firms together. It boosts accuracy, reduces paperwork for all members of the supply chain, and allows them to share information on invoices, orders, payments, inquiries, and scheduling. Many companies encourage suppliers to adopt EDI to reduce distribution costs and cycle times. Efficient inventory management with accurate reorder points is crucial for firms that use a just-in-time (JIT) approach, in which supplies arrive just as they are needed for use in production or for resale. Companies that use JIT (sometimes referred to as lean distribution) can maintain low inventory levels and purchase products and materials in small quantities only when needed. Usually there is no safety stock in a JIT system. Suppliers are expected to provide consistently high-quality products exactly when they are needed. JIT inventory management requires a high level of coordination between producers and suppliers, but it eliminates waste and reduces inventory costs. When a JIT approach is used in a supply chain, suppliers may move operations close to their major customers in order to provide goods as quickly as possible.

263. The basic transportation modes for moving physical goods are railroads, trucks, waterways, airways, and pipelines. Each has distinct advantages. Many companies adopt physical handling procedures that facilitate the use of two or more modes in combination. Trucks provide the most flexible schedules and routes of all major transportation modes in the United States because they can go almost anywhere. Trucks are more expensive and somewhat more vulnerable to bad weather than trains. They are also subject to size and weight restrictions on the loads they carry. Waterways are the cheapest method of shipping heavy or low-value, nonperishable goods. Water carriers offer considerable capacity. The vast majority of international cargo is transported by water at least part of the way. However, many markets are inaccessible by water transportation and must be supplemented by rail or truck. Droughts and floods also may create difficulties for users of inland waterway transportation. 264. Vertical channel integration combines two or more stages of the channel under one management. This may occur when one member of a marketing channel purchases the operations of another member, or simply performs the functions of another member, eliminating the need for that intermediary. Vertical channel integration represents a more progressive approach to distribution in which channel members become extensions of one another as they are combined under a single management. Combining organizations at the same level of operation under one management constitutes horizontal channel integration. An organization may integrate horizontally by merging with other organizations at the same level in the marketing channel. Although horizontal integration permits efficiencies and economies of scale in purchasing, marketing research, advertising, and specialized personnel, it is not always the most effective method of improving distribution. 265. Most vertical marketing systems take one of three forms: corporate, administered, or contractual. A corporate VMS combines all stages of the marketing channel, from producers to consumers, under a single owner. In an administered VMS, channel members are independent, but informal coordination achieves a high level of interorganizational management. A contractual VMS is the most popular type of vertical marketing system. Channel members are linked by legal agreements spelling out each member’s rights and obligations.

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Chap 14_20e 266. Supply chain management refers to the coordination of all the activities involved with the flow and transformation of supplies, products, and information throughout the supply chain to the ultimate consumer. It integrates the functions of operations management, logistics management, supply management, and marketing channel management so that products are produced and distributed in the right quantities, to the right locations, and at the right times. It includes activities like manufacturing, research, sales, advertising, and shipping. Supply chain management involves all entities that facilitate product distribution and benefit from cooperative efforts, including suppliers of raw materials and other components to make goods and services, logistics and transportation firms, communication firms, and other firms that indirectly take part in marketing exchanges. 267. The following practices are among those frequently subject to legal restraint. The courts have deemed restricted sales territories a restraint of trade among intermediaries handling the same brands (except for small or newly established companies). They have also held that exclusive territories can actually promote competition among dealers handling different brands. At present, the producer’s intent in establishing restricted territories and the overall effect of doing so on the market must be evaluated for each individual case. When a supplier (usually a manufacturer or franchisor) furnishes a product to a channel member with the stipulation that the channel member must purchase other products as well, it has negotiated a tying agreement. The courts accept tying agreements when the supplier is the only firm able to provide products of a certain quality, when the intermediary is free to carry competing products as well, and when a company has just entered the market. Most other tying agreements are considered illegal. When a manufacturer forbids an intermediary to carry products of competing manufacturers, the arrangement is called exclusive dealing. The legality of an exclusive-dealing contract is determined by applying three tests. If the exclusive dealing blocks competitors from as much as 15% of the market, the sales volume is large, and the producer is considerably larger than the retailer, then the arrangement is considered anticompetitive. If dealers and customers in a given market have access to similar products or if the exclusive-dealing contract strengthens an otherwise weak competitor, the arrangement is allowed. For nearly a century, courts have held that producers have the right to choose or reject the channel members with which they will do business. Within existing distribution channels, however, suppliers may not legally refuse to deal with wholesalers or dealers merely because these wholesalers or dealers resist policies that are anticompetitive or in restraint of trade. Suppliers are further prohibited from organizing some channel members in refusal-to-deal actions against other members that choose not to comply with illegal policies. 268. Choosing appropriate warehouse facilities is an important strategic consideration because they allow a company to reduce transportation and inventory costs and improve service to customers. The wrong type of warehouse can lead to inefficient logistics and added costs. Warehouses fall into two general categories: private and public. In many cases, a combination of private and public facilities provides the most flexible warehousing approach. 269. Order processing is the receipt and transmission of sales order information. Computerized order processing provides a platform for information management, allowing all supply chain members to increase their productivity. When carried out quickly and accurately, order processing contributes to customer satisfaction, decreased costs and cycle time, and increased profits. Order processing entails three main tasks: order entry, order handling, and order delivery. 270. Marketing channels create four types of utility: time, place, possession, and form. Time utility refers to making products available when the customer wants them. Place utility is making products available in locations where customers wish to purchase them. Possession utility means that the customer has access to the product to use or to store for future use. Possession utility can occur through ownership or through arrangements that give the customer the right to use the product, such as a lease or rental agreement. Channel members sometimes create form utility by assembling, preparing, or otherwise refining the product to suit individual customer needs.

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Chap 15_20e Indicate whether the statement is true or false. 1. Within the same franchising organization, all franchisees pay the same amount for the same services. a. True b. False 2. Agents represent either buyers or sellers on a temporary basis. a. True b. False 3. Most department stores are shopping stores. a. True b. False 4. Wholesalers do not engage in selling to reseller, government, or institutional users. a. True b. False 5. Merchant wholesalers assume risks of ownership. a. True b. False 6. Franchisees do not pay to use the franchisor's name. a. True b. False 7. Online electronics shopping is the fastest growing form of retail. a. True b. False 8. Typical limited-service wholesalers are rack jobbers, truck wholesalers, specialty-line wholesalers, and cashand-carry wholesalers. a. True b. False 9. Most manufacturers' agents prefer to work for one manufacturer at a time to avoid conflicts of interest. a. True b. False 10. Discount stores are distinctive in that they usually are very service oriented. a. True b. False 11. Department stores are characterized by wide product mixes. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 12. The primary product offered by the department stores is convenience. a. True b. False 13. Commission merchants tend to have relatively broad powers concerning prices and terms of sales. a. True b. False 14. A retail store usually can position its image so that it is universally acceptable to all market segments. a. True b. False 15. Retailing includes all transactions in which the buyer intends to consume the product through personal, family, or household use. a. True b. False 16. Factory outlet stores exist to compete with traditional retailers. a. True b. False 17. Direct marketing is the selling of products outside the confines of a retail facility. a. True b. False 18. Cash-and-carry wholesalers draw most of their customers from large retailers and industrial firms. a. True b. False 19. General-line merchandise wholesalers are a type of full-service merchant wholesaler. a. True b. False 20. Nonretail transactions occur occasionally when retailers sell products to other businesses. a. True b. False 21. Distribution of all goods requires wholesaling activities, whether or not a wholesaling institution is involved. a. True b. False 22. Exterior atmospheric elements include the appearance of the storefront, display windows, store entrance, and amount of traffic congestion. a. True b. False

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Chap 15_20e 23. Agents and brokers perform more functions than limited-service wholesalers. a. True b. False 24. Specialty retailers carry a broad product mix with deep product lines. a. True b. False 25. Warehouse clubs are able to offer a broad range of merchandise because their product lines are shallow and their sales volumes high. a. True b. False 26. Wholesalers perform marketing functions only for the retailers below them in the channel of distribution. a. True b. False 27. Wholesaling is the final part of the marketing process in which exchanges are entered into for personal, family, or household purposes. a. True b. False 28. Direct-response marketing is the performance of marketing-related activities by telephone. a. True b. False 29. Most factory outlet shopping centers seek to locate in prime retail, metropolitan areas. a. True b. False 30. Franchisors do not permit their franchisees to modify their menus, hours, or other operating elements to better match local market conditions. a. True b. False 31. A franchise is an arrangement in which a supplier grants dealers the right to sell products in exchange for some type of consideration. a. True b. False 32. Direct selling is the most expensive form of retailing. a. True b. False

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Chap 15_20e 33. Full-service merchant wholesalers are either general merchandise wholesalers or specialty-line wholesalers. a. True b. False 34. Store atmospherics are used to create emotional effects that enhance the probability of purchasing. a. True b. False 35. The classification of wholesalers in the text is based solely on the performance of marketing activities. a. True b. False 36. New store formats and technological advances are helping retailers serve customers better. a. True b. False 37. Catalog marketing is one of the more flexible types of direct marketing. a. True b. False 38. Stores increasingly offer more merchandise on their websites than they stock in stores. a. True b. False 39. Extreme-value stores are a fraction of the size of conventional discount stores. a. True b. False 40. Limited-service wholesalers provide only some marketing services and specialize in a few functions. a. True b. False 41. Supermarkets specialize in selling shopping products. a. True b. False 42. The broker's primary function is to bring the buyer and seller together and assist in negotiating an exchange. a. True b. False 43. The franchisor supplies the labor and capital in the franchise relationship. a. True b. False

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Chap 15_20e 44. Catalog marketing may be used as part of a multichannel strategy along with online and in-store retailing. a. True b. False 45. Franchised outlets are generally less successful than independently-owned businesses. a. True b. False 46. Community shopping centers are also known as strip malls. a. True b. False 47. Wholesalers rarely handle credit for retailers and producers. a. True b. False 48. Mail-order wholesalers are limited-service wholesalers who sell through catalogs to retailers and organizational customers. a. True b. False 49. General-merchandise wholesalers are full-service merchant wholesalers who carry only a few product lines. a. True b. False 50. The coordination of selling efforts within a community shopping center is usually minimal. a. True b. False 51. Dollar General is an example of an extreme-value store. a. True b. False 52. A cash-and-carry wholesaler provides transportation, delivers products directly to customers, and places products on the retailer's shelves. a. True b. False 53. Some purchasing by consumers is an end in itself—for example, when it is done to escape boredom. a. True b. False 54. Virtual fit uses technology that lets shoppers see how a product might look on them. a. True b. False

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Chap 15_20e 55. Less than half of all goods are exchanged through wholesaling institutions. a. True b. False 56. Wholesaling involves all transactions in which products are bought for resale, for use in making other products, or for general business operations. a. True b. False 57. Webrooming occurs when customers look at products in stores and then purchase them online. a. True b. False 58. Selling agents have control over the marketing efforts of manufacturers and may be used in place of a marketing department. a. True b. False 59. Appliances are an example of a major product line commonly carried by discount stores. a. True b. False 60. Warehouse showrooms are able to sell products at low prices by passing some of their marketing functions on to consumers. a. True b. False 61. Retailers form an important link in the marketing channel because they are both producers and customers. a. True b. False 62. Sales offices differ from sales branches in that sales offices may offer credit, deliver goods, and give promotional assistance. a. True b. False 63. An example of a nonstore retailer is a vending machine. a. True b. False

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Chap 15_20e Indicate the answer choice that best completes the statement or answers the question. 64. Off-price retailers feature a. deep discounts, few customer services, and central checkouts. b. sales expertise, wide selections, and low prices. c. overstocks, designer brands, and moderate prices. d. a narrow product range and enormous product availability. e. cash-only sales and few customer services. 65. A significant factor in the rise of multichannel retailing is a. direct selling. b. catalog retailing. c. direct-response marketing. d. online retailing. e. home shopping. 66. ______ permits products to be easily demonstrated and allows for sufficient time to make viewers well informed about the products. a. Telemarketing b. Online retailing c. Vending d. Television home shopping e. Catalog marketing 67. AmerisourceBergen provides a wide assortment of pharmaceutical products to health-care institutions such as hospitals. It also provides technical advice, equipment, and support for health-care institutions throughout the United States. AmerisourceBergen is best classified as a a. full-service wholesaler. b. nonstore retailer. c. drop shipper. d. manufacturers' agent. e. sales office. 68. The primary advantage of vending as a form of retailing is that a. it offers a low-cost, personal method of selling products. b. it provides a continuous service to consumers. c. since vending machines must be serviced frequently, the products they sell are always fresh. d. vending machines require very few repairs. e. it eliminates the need for sales personnel.

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Chap 15_20e 69. Siobhan wants to establish a fashion wholesaling firm. Because of the risks involved in the rapid obsolescence of high-fashion items, Siobhan does not want to establish an organization in which she has title to the garments. Which of the following types of wholesale establishments has she ruled out? a. Merchant wholesaler b. Agent c. Broker d. Functional middleman e. Commission merchant 70. Historically, which of the following was developed in 1927 to supply milk, eggs, and other products for customers replenishing their iceboxes? a. Supermarkets b. Convenience stores c. Discount stores d. Department stores e. Specialty stores 71. Category killers compete primarily on the basis of a. enormous product selection and sales expertise. b. low prices and enormous product availability. c. convenient locations and customer services. d. rock-bottom prices and moderate selections. e. one-stop shopping and product availability. 72. Rafealla Samilpa works for Patron at a location away from the manufacturing plants. She provides wholesale services to wholesalers and retailers , but her facility does not carry inventory. Rafealla works at a a. sales branch. b. manufacturers' agency. c. sales office. d. retail outlet. e. commission brokerage. 73. Which of the following is NOT a factor used to classify wholesalers? a. Whether the wholesaler is owned by the producer b. Whether the wholesaler takes title to the products it handles c. The range of services offered by the wholesaler d. The price range of the products carried by the wholesaler e. The breadth and depth of the product lines carried by the wholesaler

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Chap 15_20e 74. An open-air shopping center that features upscale specialty, dining, and entertainment stores, usually owned by national chains, is generally called a(n) a. regional shopping center. b. neighborhood shopping center. c. community shopping center. d. lifestyle shopping center. e. outlet shopping center. 75. Which of the following services would a wholesaler least likely provide to a manufacturer? a. Assume the risks of selling to poor credit customers b. Look for and coordinate supply sources c. Pay the costs of transporting goods d. Provide up-to-date information on market developments e. Serve as an extension of the manufacturer's sales force 76. Your friend Elias comes to you for advice because of your amazing business prowess. He would like to start his own business, but he is concerned about the high failure rate. If possible, he would like to mitigate his risk somewhat. He also has limited capital and not much business experience. You recommend that Elias consider opening a ____, but you warn him that one disadvantage to doing so is that he would have ____. a. wholesaler; more debt b. retailer; less control c. wholesaler; less time d. franchise; less control e. direct sales organization; limited promotional opportunities 77. Beacons are useful to retailers of all sizes because they a. use virtual reality to enhance the shopping experience. b. allow customers to scan merchandise to receive discounted prices. c. track customers' locations throughout the store. d. allow customers to use their phones to check out. e. send real-time messages and offers to customers. 78. Prija approaches Paul Hendrix, owner of Hendrix Auto Parts, to talk about the possibility of adding a new line of products to his store. Prija tells Paul that the product is a line of high-quality driving sunglasses. She offers to set up the display, service and restock it weekly, and maintain billing and inventory records. She tells Paul that all she needs is a couple of square feet of space. Prija is in the business of serving retailers as a a. general-line wholesaler. b. specialty-line wholesaler. c. rack jobber. d. full-service merchant wholesaler. e. cash-and-carry wholesaler.

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Chap 15_20e 79. ____ provide an effective method of selling small items to customers in remote areas that other wholesalers might find unprofitable to serve. a. Rack jobbers b. Specialty-line wholesalers c. Cash-and-carry wholesalers d. Truck wholesalers e. Mail-order wholesalers 80. Which of the following has a target market of consumers who live within two to three miles of its stores, or within a few minutes’ walking or driving time? a. Lifestyle center b. Neighborhood shopping center c. Community shopping center d. Regional shopping center e. Superregional shopping center 81. Felix works with a group of farmers who provide him with a regular supply of a variety of fresh vegetables. He picks up their produce and has a regular route of grocers and restaurants that purchase quantities of the items he has on any given day. Felix's operation is which type of wholesaler? a. Drop shipper b. General-line c. Truck d. Cash-and-carry e. Specialty-line 82. A large retailer selling food and most routinely purchased consumer products is a a. hypermarket. b. supermarket. c. discount store. d. warehouse club. e. superstore. 83. A retailer engaged in direct marketing would probably select television home shopping over online retailing to sell a new kitchen device because of a. lower costs of selling. b. easier financial transactions. c. superior ability to demonstrate the product. d. superior ability to offer the product at a lower price. e. decreased cycle time.

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Chap 15_20e 84. Laura Spencer sees a lovely pair of earrings on a television network and calls a toll-free number to order them, paying with her credit card. This is an example of a. online retailing. b. television home shopping. c. telemarketing. d. direct selling. e. catalog marketing. 85. What is the primary difference between an agent and a broker? a. An agent gets compensated based on commission while a broker generally charges fees for his services. b. A broker works only for a seller whereas an agent can represent a buyer or a seller. c. An agent represents a company on a permanent basis while a broker is employed temporarily. d. An agent has much more extensive knowledge about the products he deals with than a broker does. e. Brokers have long-term relationships with their customers while an agent's relationships are generally short-lived. 86. Blake’s Bistro is a family restaurant that earns higher revenue when diners finish quickly, opening up their table for a new party. The manager is updating the atmosphere of the restaurant to entice customers to eat quickly and is repainting the interior _____, which is associated with impulsivity, and playing _____ music, which encourages customers to eat quickly and leave. a. blue; soft pop b. red; soft classical c. green; fast pop d. blue; soft classical e. red; fast pop 87. Your firm is a full-service, specialty-line wholesaler, and you own display shelves in discount stores. Your firm is a a. specialty-line wholesaler. b. full-service wholesaler. c. general-line wholesaler. d. merchant wholesaler. e. rack jobber. 88. A retail establishment that offers a variety of product lines that are stocked in significant depth is best classified as a a. warehouse club. b. specialty retailer. c. general-merchandise retailer. d. limited-line retailer. e. category killer.

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Chap 15_20e 89. A channel member that markets all of a manufacturer's goods, has authority over price, promotion, and distribution, but does not take title to the product is a a. general-line wholesaler. b. selling agent. c. commission merchant. d. manufacturers' agent. e. broker. 90. In order to justify direct-response marketing, a product really needs to be priced above a. $50. b. $10. c. $5. d. $20. e. $100. 91. A difference between manufacturers' agents and selling agents is that a. selling agents have little control over the marketing mix of the manufacturers they represent. b. selling agents represent retailers. c. manufacturers' agents do not offer retailers aid in advertising or promotional material. d. selling agents do not have the territorial restrictions that manufacturers' agents do. e. selling agents represent wholesalers. 92. Intermediaries owned by manufacturers that sell products and provide support services to the manufacturers' sales forces are known as a. manufacturers' agents. b. sales branches. c. selling agents. d. sales offices. e. commission merchants. 93. Peter works for a company that buys snacks such as chips, cookies, and candy in bulk from manufacturers. Peter’s company then repackages them and sells them to vending companies that have vending machines at government institutions. Peter most likely works for a(n) _____,while the vending machine company is a(n) _____. a. wholesaler; retailer b. wholesaler; broker c. broker; retailer d. broker; agent e. agent; retailer

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Chap 15_20e 94. You are part of an investment group that is planning to open a warehouse club in your hometown. There are a number of considerations that you will have to address in order for this venture to be successful. Which of the following statements is true regarding warehouse clubs? a. They have not been successful in the United States, but they are popular in Europe. b. They are service-oriented and offer credit and personal assistance. c. They are members-only selling operations. d. The primary product they offer is convenience. e. They accept lower sales volume in exchange for higher margins. 95. The kinds of products being sold and the availability of public transportation are both factors that influence a retailer's decision about a. store atmosphere. b. location. c. retail positioning. d. store image. e. category management. 96. If a retailer needed help with store design and training sales personnel, it would most likely use the services of a a. full-service wholesaler. b. full-price wholesaler. c. rack jobber. d. cash-and-carry wholesaler. e. technical wholesaler. 97. Jaime helps negotiate purchases and sales for wholesaling organizations in the agricultural industry. He receives goods on consignment from sellers and then uses his expertise to negotiate sales in large markets. His services are in high demand because Jaime is especially adept at obtaining the best price possible under market conditions. Jaime is most likely a a. selling agent. b. manufacturers' agent. c. drop shipper. d. commission merchant. e. industrial buyer. 98. Nordstrom, Macy's, and JCPenney are all considered a. department stores. b. discount stores. c. off-price retailers. d. specialty retailers. e. category killers.

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Chap 15_20e 99. All of the following are types of direct marketing except a. catalog marketing. b. direct-response marketing. c. direct selling. d. television home shopping. e. online retailing. 100. Sandpoint Center has two department stores, some specialty stores, and a convenience store. It serves a large geographic area and holds special events to stimulate consumer traffic. Hickory is a ____ shopping center. a. community b. regional c. nontraditional d. neighborhood e. power 101. With respect to inventory, wholesalers can help retailers with all of the following except a. selection. b. storage. c. inventory control. d. transportation. e. production. 102. Ingrid lives in a remote area of Wyoming, where few good roads exist. She runs a small retail store specializing in Western attire. Due to her remote location, Ingrid is most likely to obtain the merchandise for her store from a. rack jobbers. b. general-line wholesalers. c. mail-order wholesalers. d. truck wholesalers. e. specialty-line wholesalers. 103. A merchant wholesaler a. arranges for transfer of goods directly to business and retail customers. b. takes title to goods, assumes risk associated with ownership, and buys and resells products. c. takes title and possession of goods and sells only to retailers. d. does not take title or possession of goods but facilitates exchanges between any parties. e. deals exclusively with business products.

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Chap 15_20e 104. With respect to retailing, what is the "party plan"? a. A sales representative has a party at her home to demonstrate products to a group of friends and associates. b. A party is set up that demonstrates a product and provides free samples of the product to all in attendance. c. An individual is asked to tell two friends about a product, who are in turn each asked to tell two friends, etc., until a sufficient number of people are reached. d. A store has a special sale that resembles a party, and those who come are asked to buy the featured products. e. A consumer acts as a host and invites friends to view merchandise in a group setting, where a salesperson demonstrates the products. 105. Which retail store invests the most in atmospherics? a. Target b. Sears c. Neiman Marcus d. Macy’s e. Kroger 106. The most effective multichannel retail strategies integrate the firm’s goals, products, systems, and technologies a. with their competitor’s. b. seamlessly across all platforms. c. with their suppliers’. d. seamlessly with their brick-and-mortar stores. e. online. 107. By buying in large quantities and delivering to customers in smaller lots, a wholesaler may perform all of the following physical distribution activities except a. inventory planning. b. transportation. c. materials handling. d. unit pricing. e. communication. 108. Online retailing satisfies an increasing expectation among consumers to have ______ to obtain the goods and services they desire at their convenience. a. immediate access b. multiple channels available c. ethical channels available d. fewer intermediaries in the channel e. less effort

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Chap 15_20e 109. Luis operates a store called Fleet Feet Sports, which sells running apparel, shoes, and accessories. Luis enjoys operating Fleet Feet Sports, especially because he has ready access to management expertise and promotional support. He was able to open Fleet Feet Sports with limited capital. However, there are disadvantages Luis faces as well. For him, one of the biggest disadvantages is that he does not have complete control over his operation. Fleet Feet Sports is most likely a a. franchise. b. wholesaler. c. direct seller. d. direct marketer. e. producer. 110. To take advantage of the demand for toys leading up to Christmas, Party City opens _____ called “Toy City” that is only in operation for a few weeks and closes them again after the Christmas shopping season is over. a. temporary storefronts b. warehouse showrooms c. hypermarkets d. pop-up stores e. superstores 111. ____ have been successful because consumers are willing to drive significant distances to save money buying manufacturers' closeouts and irregulars. a. Off-price shopping centers b. Factory outlet malls c. Regional shopping centers d. Upscale shopping centers e. Specialty shopping centers 112. Adara owns and operates a gift and interior store called The Gingerbread House. She works hard to put together beautiful arrangements and displays throughout the store and always features a burning scented candle and light music. She hopes these efforts will encourage her customers to buy more. Adara is focusing on a. atmospherics. b. retail positioning. c. location. d. store image. e. value-pricing. 113. An example of an emerging type of power shopping center might contain a. JCPenney, Sears, some specialty shops, McDonald’s, and Dairy Queen. b. Michael's, Office Depot, T.J. Maxx, and Best Buy. c. Kate Spade, Van Heusen, Corning Ware, and Mikasa outlets. d. Kroger, CVS, and Subway. e. a Supercenter Walmart, Home Depot, and Kroger.

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Chap 15_20e 114. Walmart, Macy's, are Nordstrom are examples of a. manufacturers. b. merchant wholesalers. c. end-users. d. agents. e. retailers. 115. Retailing is best characterized as a. large organizations that carry wide and deep product mixes. b. transactions in which the buyer intends to consume the product through personal, family, or household use. c. arrangements whereby a supplier grants a dealer the right to sell its products. d. transactions in which the purchaser intends to use the product for resale or for business operations. e. exchanges that take place only in a store or service establishment. 116. Stores that buy manufacturers' seconds, overruns, returns, and off-season production and sell these products at below wholesale prices, are called a. category killers. b. off-price retailers. c. specialty retailers. d. hypermarkets. e. discount retailers. 117. A limited-line wholesaler would be expected to carry a ____ product mix. a. wide and deep b. wide and shallow c. narrow and shallow d. wide e. narrow and deep 118. Arjun operates a wholesale company that specializes in providing a wide variety of services to its customers, which are all restaurants. He carries a wide assortment of restaurant equipment and cookware. Arjun's business is a a. mail-order wholesaler. b. rack jobber. c. limited-line wholesaler. d. specialty-line wholesaler. e. limited-service wholesaler.

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Chap 15_20e 119. In some retail stores, ______ improve(s) the dressing room experience by letting customers view clothing in a different light and requesting a clerk bring the item in different colors or sizes without having to leave the dressing room. a. apps b. self-checkout c. beacons d. virtual fit e. smart mirrors 120. Which of the following offer the narrowest range of products? a. General-merchandise wholesalers b. Specialty-line wholesalers c. General-line wholesalers d. Limited-line wholesalers e. Limited-service wholesalers 121. Cleveland accesses Overstock.com’s site on the internet and purchases a business laptop case. This is an example of a. direct selling. b. catalog retailing. c. direct-response marketing. d. online retailing. e. home shopping. 122. The use of the telephone and other nonpersonal media to introduce products to consumers, who then can purchase the products through the mail, telephone, or the internet is called a. direct marketing. b. telemarketing. c. remote purchasing. d. direct-response marketing. e. direct selling. 123. Helena has extensive contacts in the real estate business and brings together buyers and sellers. Although she assumes no risks, she can offer specialized knowledge about real estate. Helena is a a. commission merchant. b. selling agent. c. broker. d. specialty salesperson. e. sales branch agent.

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Chap 15_20e 124. Aynsley is employed by Hallmark Cards, Inc., where her responsibilities include maintaining displays of greeting cards in drugstores and discount stores. Her daily activities include straightening the cards, pulling outdated or slow sellers, and installing new cards. Aynsley is called a(n) a. specialty-line wholesaler. b. full-service stocker. c. in-store maintainer. d. assembler. e. rack jobber. 125. The major types of shopping centers are a. neighborhood, regional, superregional, power, and strip malls. b. community, rural, urban, and traditional business districts. c. outlet, power, lifestyle, superregional, regional, neighborhood, and community. d. outlet malls, lifestyle, strip malls, and shopping malls. e. free-standing, convenience, traditional, and regional. 126. Bobby Winchester has come up with the idea of a system for picking up people's cars while they are at work, washing and waxing them, and returning them for a fee. Having been a big success in his home city, Bobby plans to expand his operation into other cities. The service described here seems best suited to a. vertically-integrated retailing. b. franchising. c. direct-response retailing. d. corporate chain retailing. e. off-price retailing. 127. While traveling for their family vacation, the Browns realize they left their phone charger at home. They purchase a charger in the airport using their credit card, but never interact with a person. What type of retailing did this transaction most likely involve? a. Franchising b. Online retailing c. Direct-response marketing d. Vending e. Direct selling 128. A shopping center containing a Macy's, a Sears, and a JCPenney as well as dozens of specialty shops, restaurants, and entertainment is most likely a a. regional shopping center. b. neighborhood shopping center. c. community shopping center. d. complete business district. e. lifestyle shopping center.

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Chap 15_20e 129. Adrienne asks ten of her friends over to her home to learn about exciting new kitchen products. A salesperson from Pampered Chef makes a presentation and takes the women's orders. This is an example of a. a party plan. b. indirect marketing. c. direct selling club. d. direct-response marketing. e. catalog marketing. 130. Which of the following is an advantage of franchising? a. Limited capital is needed to start b. Franchisor dictates many aspects of business c. Franchise agreement gives control to franchisor d. Franchise agreements are not uniform e. Franchisee pays for assistance from franchisor 131. Which of the following best describes wholesalers? a. Organizations that buy products from producers and sell them to retailers b. Individuals or organizations that purchase products and then resell them to other businesses and consumers c. Organizations or individuals who buy products for resale to government, reseller, producer, and institutional users d. Organizations or entities that buy products from government, reseller, and producer users and sell them to customers in bulk e. Companies that make products that have a general appeal and are resold to retailers for a profit 132. Jack's girlfriend tells him she wants a cashmere sweater for Christmas. Jack decides to go to a store that provides the best possible selection of sweaters. His best choice would be to shop at a ____ store. a. department b. catalog c. discount d. traditional specialty e. convenience 133. An agent that receives goods on consignment from local sellers and negotiates sales in large, central markets is called a. commission merchant. b. sales branch agent. c. selling agent. d. manufacturers' agent. e. broker-agent.

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Chap 15_20e 134. Jim owns and operates a wholesale hardware business that supplies small hardware parts to various manufacturers in the area. He takes title to the hardware and assumes all risks associated with ownership. Jim is a a. rack jobber. b. merchant wholesaler. c. wholesaler agent. d. drop shipper. e. sales branch. 135. Which type of retailer generally accepts lower margins than traditional retailers in exchange for higher sales volume? a. Department stores b. Traditional specialty retailers c. Warehouse showrooms d. Direct marketers e. Discount stores 136. The use of multiple distribution channels that integrate organizations' brick-and-mortar stores with websites, catalogs, and apps where consumers can research products, read other buyers' reviews, and make actual purchases is known as a. multichannel retailing. b. dual retailing. c. multimedia retailing. d. dual distribution. e. multi-wholesaling. 137. Sayid is talking with Raul about purchasing a Wendy's franchise. Raul tells Sayid that one of the major advantages of franchising for him to consider is the a. higher start-up costs. b. greater freedom it provides. c. individuality it offers. d. potentially higher success rate for franchises. e. gross margin it provides. 138. Eva went shopping at a local store called Threadgill’s but found out that if she wanted to take advantage of its low prices, she would have to become a member. Threadgill’s is an example of a a. warehouse club. b. discount store. c. warehouse showroom. d. superstore. e. supermarket.

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Chap 15_20e 139. The primary function of most wholesalers is to a. support the needs of the manufacturers and provide them with market information. b. provide for the unique needs of the individual retailers buying their merchandise. c. provide information system tracking of inventory for the ultimate consumer. d. perform physical distribution of products from manufacturers to retailers. e. develop and share database information about customers. 140. Swag Store is a retailer that sells brand-name and private-brand products at low prices. It is a self-service store. Which of the following is true about Swag Store? a. It is a convenience store. b. It is a department store. c. It is a discount store. d. It is a superstore. e. It is a franchise operation. 141. If a store has areas for men's apparel, women's apparel, housewares, cosmetics, and jewelry and competes mostly on the basis of service, it is most likely a(n) a. niche retailer. b. department store. c. specialty retailer. d. superstore. e. category killer. 142. ______ developed on a large scale in the early 1950s, when postwar production caught up with strong consumer demand for goods. a. Discount stores b. Convenience stores c. Superstores d. Department stores e. Hypermarkets 143. Which of the following gives the marketer an opportunity to demonstrate the product in an environment where it most likely would be used? a. Catalog marketing b. Direct-response marketing c. Direct selling d. Television home shopping e. Online retailing

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Chap 15_20e 144. Elena goes to Walmart and buys some clothing, a Blu-ray disc, and all the groceries she needs for her family. What type of retailer is this particular Walmart? a. Supermarket b. Superstore c. Hypermarket d. Discount store e. Department store 145. Roses is a regional self-service retail store that sells name-brand electronics, tools, housewares, and sporting goods at low prices. Roses is an example of a a. department store. b. discount store. c. warehouse showroom. d. specialty store. e. superstore. Scenario 15.2 Use the following to answer the questions. Lands' End offers clothing and accessories for all members of the typical household. For many years, the products were sold only through catalogs. Later, they were available through the company on its website. In the past few years, Lands' End has partnered with Sears to offer selected Lands' End products inside of Sears retail stores. This move by Lands' End has been criticized by some marketers because it was thought that the Lands' End products were superior in quality to those that are available in Sears stores. Additionally, the products available in Sears stores include Craftsman tools, lawn care equipment, and household appliances, which are not Lands' End types of product lines. This may create mixed messages about Lands' End to prospective customers. 146. Refer to Scenario 15.2. The move to sell Lands’ End products inside of Sears' stores may lead to potential problems with the customer's perception of Lands' End quality, in part due to the functional and psychological picture in the consumer's mind of Sears' stores. This picture is called the ____ of Sears. a. use of in-store technology b. atmospherics c. category management d. store image e. perceptual map 147. All of the following are types of limited-service merchant wholesalers except a. cash-and-carry wholesalers. b. truck wholesalers. c. mail-order wholesalers. d. specialty-line wholesalers. e. drop shippers.

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Chap 15_20e 148. Ann is a manager at a small, independent grocery store. Part of her job is to analyze sales data and information on consumers to determine how much of different competing products she should order for her store and how much shelf space to give to each of the competing brands. Ann is working on a. category management. b. identifying target customers. c. expanding product mix width. d. improving atmospherics. e. updating retail positioning. 149. Bling is a manufacturer of fashion jewelry that is expanding its use of direct marketing. Management has narrowed the options down to two but has not decided whether to use ____ where it would mail potential customers brochures featuring the company’s entire product line or _____ where it would feature a handful of products on QVC or the Home Shopping Network. a. catalog marketing; online marketing b. brand marketing; product marketing c. catalog marketing; television home shopping d. online marketing; telemarketing e. general-line marketing; limited-line marketing 150. Which of the following wholesalers never take actual possession of the goods? a. Drop shippers b. Cash-and-carry wholesalers c. Truck jobbers d. Mail-order wholesalers e. Rack jobbers 151. Zoe is planning to open an upscale dress boutique. She is evaluating ease of movement to and from sites, vehicular traffic, types of stores in the area, and transportation networks. Which strategic retailing issue is she concerned with at the time? a. Location b. Production depth c. Product mix d. Category management e. Retail positioning 152. As discount stores improve their services and atmosphere as well as raise their prices, the distinction between discount stores and ____ is becoming blurred. a. superstores b. supermarkets c. specialty stores d. department stores e. category killers

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Chap 15_20e 153. Tatiana works for a firm that takes title to merchandise, but does not deliver the merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers’ future needs. Tatiana's operation is which type of wholesaler? a. General-merchandise wholesaler b. Specialty-line wholesaler c. Limited-service wholesaler d. Limited-line wholesaler e. Rack jobber 154. Agents and brokers that facilitate and negotiate purchases but do not actually take title to products are also known as a. functional wholesalers. b. commission wholesalers. c. hands-off intermediaries. d. contract negotiators. e. functional middlemen. 155. Trey chooses to have his hunting equipment store in a location away from the main part of town so that he can have a large parking lot and an outdoor range for customers to test out his merchandise. Trey's store is a. in a traditional business district. b. a rural shopping center. c. in a neighborhood shopping center. d. a nontraditional shopping center. e. a free-standing structure. 156. Charlotte and Grace own and operate a small restaurant. On a weekly basis, they go to their local Sam's Wholesale Club to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they purchase and the items' intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery store. Sam's is serving as a ____ wholesaler for these entrepreneurs. a. general-line b. specialty-line c. full-service merchant d. truck e. cash-and-carry 157. Merchant wholesalers who specialize in just a few functions and pass others along to other intermediaries or customers are called a. limited-service wholesalers. b. wholesale service specialists. c. general-line wholesalers. d. specialty-line wholesalers. e. specialty-service wholesalers.

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Chap 15_20e Scenario 15.2 Use the following to answer the questions. Lands' End offers clothing and accessories for all members of the typical household. For many years, the products were sold only through catalogs. Later, they were available through the company on its website. In the past few years, Lands' End has partnered with Sears to offer selected Lands' End products inside of Sears retail stores. This move by Lands' End has been criticized by some marketers because it was thought that the Lands' End products were superior in quality to those that are available in Sears stores. Additionally, the products available in Sears stores include Craftsman tools, lawn care equipment, and household appliances, which are not Lands' End types of product lines. This may create mixed messages about Lands' End to prospective customers. 158. Refer to Scenario 15.2. In comparison to Lands' End, Sears has a product mix that is most likely a. wider but not deeper. b. deeper but not wider. c. wider and deeper. d. narrower and deeper. e. narrower but not deeper. 159. Angelo is preparing the new strategic plan for a large retailer. Several aspects of the retailer are to be evaluated, in order to make plans and set goals. Of all the issues that Angelo can select in developing the new strategic plan, which of the following is the least flexible? a. Store atmosphere b. In store technology c. Retail positioning d. Store image e. Location 160. Walmart has its own fleet of trucks and works directly with producers to take care of the ordering, delivery, and handling of goods. In addition, Walmart works directly with suppliers through its advanced system of inventory control and data processing. Walmart is a. able to eliminate many of the functions typically performed by wholesalers. b. performing many of the critical functions of wholesalers through its own system. c. successfully using wholesalers to run its venerable chain of discount stores. d. using information technology to eliminate the need to perform typical wholesale functions. e. vertically integrated in order to produce and distribute all products itself. 161. A store that offers a wide variety of shoes for men, women, and children would most likely be considered a(n) a. department store. b. specialty retailer. c. category killer. d. off-price retailer. e. warehouse showroom.

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Chap 15_20e 162. Independent intermediaries that represent two or more sellers and usually offer customers complete product lines in a restricted territory are called a. commission merchants. b. manufacturers' agents. c. selling agents. d. truck wholesalers. e. brokers. 163. An arrangement in which a supplier grants a dealer the right to sell products in exchange for some type of consideration is a. selling products on consignment. b. retailing. c. wholesaling. d. licensing. e. franchising. 164. Customers rely on ____ for product availability, breaking larger quantities into smaller ones, technical advice and service, financial assistance, and suitable assortments. a. full-line retailers b. specialty wholesalers c. full-service wholesalers d. commission merchants e. cash-and-carry wholesalers 165. When a retailer advertises a product and makes it available for purchase through telephone or mail orders, the retailer is using a. direct selling. b. television home shopping. c. telemarketing. d. vending. e. direct-response marketing. 166. Facing competition from Walmart as a low-cost retailer, Target has updated its _____ to be a mass merchandiser of inexpensive yet chic goods. To accomplish this, it has entered into design partnerships to offer low-cost goods made by famous designers. a. retail positioning b. target customer c. product mix width d. product mix depth e. atmospherics

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Chap 15_20e 167. Retailers play a major role in creating all of the following except a. possession utility. b. place utility. c. form utility. d. spatial utility. e. time utility. 168. Drop shippers a. take title to but not physical possession of the goods. b. do not take title to or physical possession of the goods. c. take title to and physical possession of the goods. d. do not take title to but take physical possession of the goods. e. are similar to truck wholesalers but provide the extra service of placing products on retailers' shelves. 169. Which type of retail outlet can have up to 200,000 square feet? a. Superstores b. Supermarkets c. Discount stores d. Department stores e. Category killers 170. At lunchtime, Gwyn uses an app on her phone to select and pay for items from Target. After work, she drives to a nearby Target store, where an employee loads the items into her car. This best illustrates a. direct selling. b. catalog retailing. c. online retailing. d. direct-response marketing. e. home shopping. 171. Sam's Club and Costco are examples of a. discounters. b. warehouse showrooms. c. warehouse clubs. d. discount clubs. e. wholesalers.

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Chap 15_20e Scenario 15.1 Use the following to answer the questions. Landry Restaurants, Inc. owns a number of different restaurants, including the Rain Forest Cafe and their recent addition, the T-Rex Cafe. Both the Rain Forest and T-Rex restaurants differentiate themselves from their competitors by offering a unique dining experience. At the Rain Forest Cafe you can dine under a ceiling of lush tropical forest plants while you are viewing the enormous aquarium with exotic fish. Periodically, the rain forest explodes with the sound of waterfalls and birds. Giant stuffed monkeys, parrots, and other jungle creatures are planted within the landscape. The Rain Forest Cafe also contains a gift shop, where customers can purchase Tshirts, hats, and other items emblazoned with the Rain Forest logo. The newer T-Rex Cafe has a similar approach to the uniqueness of the dining experience. The T-Rex Cafe offers guests a hands-on prehistoric experience, including educational, interactive computer screens. Customers can also pan for precious gems and fossils in Discovery Creek or feast on food from the Kitchen of Fire. The T-Rex Cafe also has a gift shop, where customers can purchase items with the T-Rex logo or build their very own stuffed dinosaur, through "Build-a-Dino" by the "Build-a-Bear" franchise. 172. Refer to Scenario 15.1. The Rain Forest Cafe and T-Rex Cafe are usually located in tourist-dense areas or large shopping malls in order to capture walk-by traffic. If the restaurants' primary focus was to obtain customers who are walking by, they would definitely not want which of the following locations? a. strip centers b. free-standing buildings c. regional shopping centers d. the Mall of America e. a traditional business district 173. Exterior and interior characteristics such as layout, displays, color, and lighting are all elements of a store's a. services. b. atmospherics. c. location. d. environment. e. decor. 174. The management at Kohler Inc., a manufacturer of faucets, sinks, tubs, and other plumbing products, thinks that there will soon be a major growth in home remodeling due to rising home prices. The management decides to use ____ in several key cities to provide support services for its sales force in those areas, carry inventory, and offer credit and other services to its retail plumbing customers. a. sales agents b. commission merchants c. broker offices d. sales branches e. facilitating agencies

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Chap 15_20e 175. Which of the following is an example of a category killer? a. JCPenney b. Walmart c. Marshalls d. Sam’s Club e. Home Depot 176. Which of the following is a large-scale, members-only, retailer that combines cash-and-carry wholesaling with discount retailing? a. Warehouse showroom b. Warehouse club c. Catalog showroom d. Category killer e. Hypermarket 177. Location is important to a retailer because a. suppliers charge more to service stores in certain trading areas. b. a desirable location appeals to consumers' emotions. c. location is the major determinant of store image. d. location determines the trading area from which the store must draw its customers. e. convenient location is an essential customer service element. 178. Levitz Furniture locates in huge, low-cost buildings; maintains large, on-premises inventories; and offers minimum service. Levitz is a a. warehouse showroom. b. catalog showroom. c. superstore. d. warehouse club. e. department store. 179. Off-price retailers and category killers are both a. specialty retailers. b. discount stores. c. showrooms. d. general merchandisers. e. department stores. 180. Which of the following perform the fewest functions? a. General-merchandise wholesalers b. Truck wholesalers and cash-and-carry wholesalers c. Limited-line wholesalers d. Rack jobbers and drop shippers e. Agents and brokers Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 181. Morrison Produce, a ____, takes possession of truckloads of tomatoes, arranges for storage, and transports them to auctions to be sold. a. manufacturers’ agent b. selling agent c. commission broker d. commission merchant e. selling broker 182. Bram is planning a distribution strategy for his business. He is considering using direct marketing, direct selling, and vending, which are all examples of ____ retailing. a. off-premise b. portfolio c. nonstore d. off-price e. direct 183. The marketing of products to ultimate consumers through face-to-face sales presentations either at home or the workplace is called a. direct marketing. b. direct-response marketing. c. telemarketing. d. personal selling. e. direct selling. 184. In Grace's hometown, there is a mall with a small Sears store, a Macy's department store, a couple of fast-food restaurants, a few specialty shops, and a convenience store. The mall features seasonal sidewalk sales and boat shows. This mall is most likely a ____ shopping center. a. neighborhood b. national c. regional d. community e. city 185. Which of the following is the performance of marketing-related activities by telephone? a. Online retailing b. Telemarketing c. Television home shopping d. Direct selling e. Direct-response marketing

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Chap 15_20e 186. Selling agents perform every wholesaling activity except a. transporting goods. b. setting prices. c. financing the products. d. taking title to products. e. inventory control. Scenario 15.1 Use the following to answer the questions. Landry Restaurants, Inc. owns a number of different restaurants, including the Rain Forest Cafe and their recent addition, the T-Rex Cafe. Both the Rain Forest and T-Rex restaurants differentiate themselves from their competitors by offering a unique dining experience. At the Rain Forest Cafe you can dine under a ceiling of lush tropical forest plants while you are viewing the enormous aquarium with exotic fish. Periodically, the rain forest explodes with the sound of waterfalls and birds. Giant stuffed monkeys, parrots, and other jungle creatures are planted within the landscape. The Rain Forest Cafe also contains a gift shop, where customers can purchase Tshirts, hats, and other items emblazoned with the Rain Forest logo. The newer T-Rex Cafe has a similar approach to the uniqueness of the dining experience. The T-Rex Cafe offers guests a hands-on prehistoric experience, including educational, interactive computer screens. Customers can also pan for precious gems and fossils in Discovery Creek or feast on food from the Kitchen of Fire. The T-Rex Cafe also has a gift shop, where customers can purchase items with the T-Rex logo or build their very own stuffed dinosaur, through "Build-a-Dino" by the "Build-a-Bear" franchise. 187. Refer to Scenario 15.1. The lush tropical plants and aquarium are part of the ____ of the Rain Forest Cafe. a. on-premise technology b. retail positioning c. store image d. atmospherics e. category management 188. Dawkins Industries wants to hire an intermediary to help with the distribution of its products. Management needs an intermediary that will represent the company as sellers, but also wants to retain control over pricing and promotion decisions. It should most likely hire a a. commission merchant. b. broker. c. manufacturers' agent. d. selling agent. e. limited-service wholesaler.

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Chap 15_20e 189. A shopping center that contains stores owned by manufacturers who make a special effort not to conflict with traditional retailers is a(n) a. strip mall. b. neighborhood shopping center. c. off-price mall. d. lifestyle shopping center. e. factory outlet mall. 190. Safeway and SuperValu are all considered a. superstores. b. convenience stores c. department stores. d. supermarkets. e. food stores. 191. Eric gets a shopping list from his wife. On the list are a potted plant, fresh salmon, vitamins, bread, milk, and a birthday cake. To make just one stop to save time, Eric should go to a(n) a. convenience store. b. category killer. c. specialty store. d. specialty retailer. e. supermarket. 192. Scarbrough's sends its customers booklets containing its product offerings and allows them to place orders on the telephone, through the mail, or online. Scarbrough's is primarily a(n) a. online retailer. b. direct seller. c. catalog marketer. d. direct-response marketer. e. specialty retailer. 193. A retail strategy of managing groups of similar, often substitutable products produced by different manufacturers is called a. category management. b. atmospherics. c. line extensions. d. aggregate management. e. retail positioning.

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Chap 15_20e 194. LuLu is a retailer based in the United Arab Emirates. It is a very large store with departments that include digital, food and grocery, fashion and lifestyle, and home decor and household. LuLu also has an optical shop, a bank, and several fast food restaurants. It owns a variety of its own brands in the grocery categories, such as LuLu corn flakes and LuLu cream cheese spread. The majority of space goes toward grocery products, but it sells everything from nail polish to cameras. LuLu would most likely be classified as a a. supermarket. b. department store. c. hypermarket. d. supercenter. e. discount store. 195. Wholesalers frequently help retailers with developing a marketing strategy, especially as it relates to the ____ component of the marketing mix. a. distribution b. promotion c. product d. price e. big data 196. Michael's, PetSmart, and Staples are all examples of a. discount stores. b. off-price retailers. c. category killers. d. traditional specialty retailers. e. superstores. 197. A narrow product mix with a deep product line would most likely be carried by a. mass merchandisers. b. supermarkets. c. discount stores. d. specialty retailers. e. warehouse showrooms.

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Chap 15_20e Scenario 15.2 Use the following to answer the questions. Lands' End offers clothing and accessories for all members of the typical household. For many years, the products were sold only through catalogs. Later, they were available through the company on its website. In the past few years, Lands' End has partnered with Sears to offer selected Lands' End products inside of Sears retail stores. This move by Lands' End has been criticized by some marketers because it was thought that the Lands' End products were superior in quality to those that are available in Sears stores. Additionally, the products available in Sears stores include Craftsman tools, lawn care equipment, and household appliances, which are not Lands' End types of product lines. This may create mixed messages about Lands' End to prospective customers. 198. Refer to Scenario 15.2. By locating in the Sears' stores, Lands' End can do all of the following, except a. make products available so that customers can see them and touch them. b. facilitate wholesale exchanges. c. create place utility. d. create time utility. e. facilitate consumer exchanges. 199. A manufacturer-owned operation that provides services usually associated with agents is a a. facilitating agency. b. wholesaler. c. sales office. d. sales branch. e. public warehouse. 200. Kendall sells Almay cosmetics on consignment to grocery stores, maintains the display racks, and restocks when necessary. Kendall's job is best described as a a. rack jobber. b. drop shipper. c. general merchandise wholesaler. d. cash-and-carry wholesaler. e. truck jobber. 201. Retailers that sell only to members and feature discount retailing combined with cash-and-carry wholesaling are called a. hypermarkets. b. retail groups. c. warehouse showrooms. d. discount stores. e. warehouse clubs.

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Chap 15_20e 202. Cosima has been a buyer for Harvest Mist, a large cranberry processor, for several years. Believing that she knows a great deal about cranberries, their growers, and processors, she decides to go into business for herself. Cosima wants to assume no risks of spoilage or price fluctuations. She sees herself as simply bringing the growers and processors together. Her new company would be a a. sales agent. b. commission merchant. c. broker. d. sales branch. e. sales office. 203. Which of the following is NOT an advantage of franchising for the franchisee? a. The franchisee can capitalize on the business experience of others. b. When problems arise, the franchisee can obtain guidance and advice from the franchisor. c. Franchised outlets are often more successful than independently-owned businesses with respect to longterm survival. d. The franchisee can participate in national promotional campaigns sponsored by the franchisor. e. The franchisee gives up a certain amount of control when participating in a franchise agreement. 204. Retail facilities located in big, low-cost buildings with large on-premise inventories and minimal services are called a. catalog showrooms. b. category killers. c. warehouse showrooms. d. warehouse clubs. e. display outlets. 205. Wild Birds Unlimited is a chain of small stores that sell a wide variety of bird feeders, wild bird food, and related backyard wildlife enjoyment products. Wild Birds Unlimited would best be described as a(n) a. superstore. b. limited-line wholesaler. c. general-merchandise retailer. d. single-line retailer. e. off-price retailer. 206. What type of wholesaler transports a limited line of products directly to customers for immediate inspection and selection? a. On-site wholesalers b. Cash-and-carry wholesalers c. Rack jobbers d. Truck wholesalers e. Drop shippers

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Chap 15_20e 207. Infinitus Global manufactures and sells herbal health, skin, and beauty products. This Chinese-based company has hundreds of employees, but these employees do not engage in selling the product to end consumers. Instead, individuals not directly employed by Infinitus purchase products from the firm and then resell them to end consumers. Those individuals who are most successful are adept at forming relationships with end consumers, usually through face-to-face interactions. Infinitus receives money from the sales of its products, and the individual receives a commission. Infinitus is most likely a. telemarketer. b. direct selling firm. c. wholesaler. d. direct marketer. e. franchise. 208. Self-service, general merchandise stores such as Kmart are known as a. discount stores. b. warehouse showrooms. c. catalog showrooms. d. superstores. e. specialty retailers. 209. A retailer is an organization that purchases products for the purpose of reselling them to a. other retail organizations. b. the government. c. ultimate consumers. d. wholesalers. e. nonprofit organizations. 210. Which of the following may include special attractions such as amusement parks or skating rinks? a. Convenience shopping centers b. Neighborhood shopping centers c. Community shopping centers d. Regional shopping centers e. Superregional shopping centers 211. A wholesaler that carries a wide product mix but offers only limited depth within product lines is called a a. specialty-line wholesaler. b. limited-service wholesaler. c. rack jobber. d. general merchandise wholesaler. e. general-line wholesaler.

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Chap 15_20e 212. Which of the following offers the widest product mixes and the deepest product lines? a. Category killer b. Outlet mall c. Traditional business district d. Community shopping center e. Superregional shopping center 213. What type of retailing began with Montgomery Ward in the late 1800s? a. Catalog marketing b. Department stores c. Direct selling d. Discount retailing e. Franchising 214. When consumers research products online and then go to an actual store to make their purchase, the practice is known as a. digital retailing. b. showrooming. c. webrooming. d. dual-line retailing. e. digital merchandising. 215. Which of the following has become increasingly unpopular and less appealing? a. Catalog marketing b. Direct-response marketing c. Vending d. Television home shopping e. Telemarketing 216. A small self-service store that is open long hours and carries a shallow product mix in convenient locations is best described as a a. discount store. b. department store. c. convenience store. d. supermarket. e. category killer. 217. A functional and psychological picture in the consumer's mind of a retail store is called a. retail positioning. b. atmospherics. c. store image. d. interior location. e. retail persona. Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 218. Which of the following is a full-service merchant wholesaler? a. Cash-and-carry wholesaler b. General merchandise wholesaler c. Drop shipper d. Mail-order wholesaler e. Truck wholesaler 219. Cesar is getting ready to move to campus for his freshman year of college. To get the products he needs for his dorm room, he goes to a store that sells household goods such as plastic containers, sheets, and towels. The store also sells personal items such as shampoo, deodorant, and toothpaste, as well as food products. Cesar has most likely gone to a a. discount store. b. superstore. c. supermarket. d. department store. e. warehouse club. 220. Which of the following is NOT a common feature of a warehouse club? a. Concrete floors b. Wide aisles c. Good customer service d. Large packages e. Low price per unit 221. The three major types of nonstore retailing are a. direct marketing, direct selling, and vending. b. direct selling, vending, and catalog retailing. c. direct marketing, direct selling, and mail-order. d. vending, direct selling, and telemarketing. e. telemarketing, door-to-door, and mail-order. 222. Jo operates an upscale shop that does both pet grooming and human manicures and pedicures. She is targeting a market segment of people who place great value on their dogs and are concerned with their own appearance, yet pressed for time. No other businesses meet the needs of these consumers. Which strategic issue in retailing does Jo appear to have addressed? a. Store image b. Location c. Store-level retailing technology d. Retail positioning e. Category management

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Chap 15_20e 223. In the Sunday paper, Mary sees a flyer for a collector's edition Nativity set that is available to purchase by filling out and mailing in a form or by calling a 1-800 number. This is an example of a. telemarketing. b. direct-response marketing. c. television home shopping. d. direct selling. e. catalog marketing. 224. Fahad works for a company that markets all of Celextron's products. Fahad's company acts as the marketing department for Celextron, performing all marketing functions without actually taking title to the goods. Fahad's company is a a. commission merchant. b. manufacturers' agent. c. sales branch. d. selling agent. e. full-service wholesaler. 225. What is a potential disadvantage of direct selling? a. Commissions for salespeople are usually low. b. Some customers view direct selling negatively. c. Personal attention tends to be lacking. d. Product demonstrations are difficult in this type of selling. e. Consumers must go out of their way. 226. Snap Inc. and Uniqlo sell their products through vending, which is a. a type of nonstore retailing. b. a specialty line retailer. c. not considered a form of retailing. d. a type of direct selling. e. a form of franchising. 227. What is the primary distinction between superstores and hypermarkets? a. Superstores offer a wider variety of products than hypermarkets. b. Superstores offer low prices while hypermarkets have moderate to high prices. c. Hypermarkets have fewer departments but deeper product lines than superstores. d. Hypermarkets are larger and have more types of goods and services than superstores. e. These two types of retailers carry very different types of products.

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Chap 15_20e 228. After shopping in the same store for nearly two hours, Holly goes to Burger King for a Whopper, while Tess goes to the optical shop to see if her contacts are ready. They engage in these activities without leaving the store in which they have been shopping. They are most likely in a a. convenience store. b. hypermarket. c. department store. d. superstore. e. discount store. 229. Merchant wholesalers can be divided into two basic categories: a. general merchandise and general-line. b. rack jobbers and cash-and-carry. c. commission and fee-based. d. goods and services. e. full-service and limited-service. 230. When products are presented to television viewers, who can purchase them by calling a toll-free number and paying with a credit card, ____ is being used. a. telemarketing b. television marketing c. direct-response marketing d. e-marketing e. television home shopping

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Chap 15_20e Scenario 15.1 Use the following to answer the questions. Landry Restaurants, Inc. owns a number of different restaurants, including the Rain Forest Cafe and their recent addition, the T-Rex Cafe. Both the Rain Forest and T-Rex restaurants differentiate themselves from their competitors by offering a unique dining experience. At the Rain Forest Cafe you can dine under a ceiling of lush tropical forest plants while you are viewing the enormous aquarium with exotic fish. Periodically, the rain forest explodes with the sound of waterfalls and birds. Giant stuffed monkeys, parrots, and other jungle creatures are planted within the landscape. The Rain Forest Cafe also contains a gift shop, where customers can purchase Tshirts, hats, and other items emblazoned with the Rain Forest logo. The newer T-Rex Cafe has a similar approach to the uniqueness of the dining experience. The T-Rex Cafe offers guests a hands-on prehistoric experience, including educational, interactive computer screens. Customers can also pan for precious gems and fossils in Discovery Creek or feast on food from the Kitchen of Fire. The T-Rex Cafe also has a gift shop, where customers can purchase items with the T-Rex logo or build their very own stuffed dinosaur, through "Build-a-Dino" by the "Build-a-Bear" franchise. 231. Refer to Scenario 15.1. The unique dining experiences offered by the Rain Forest Cafe and T-Rex Cafe represent the strategic issue of ____ addressed by the restaurants. a. retail location b. product mix c. retail positioning d. category management e. on-premise technology 232. Manufacturers' agents offer products that are both a. noncompeting and complementary. b. competing and specialized. c. unrelated and noncompeting. d. complementary and competing. e. unrelated and competing. 233. What role does wholesaling play in the marketing channel? Is this role necessary?

234. Identify and describe three kinds of specialty stores.

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Chap 15_20e 235. Compare and contrast department stores and discount stores.

236. In what ways do retailers add value to products?

237. Why is a store's location one of the most important strategic retailing decisions?

238. Compare the services wholesalers provide for producers with the services they provide to retailers.

239. What are the two categories of retail stores based on breadth of products offered, and what types of stores are in each category?

240. Discuss the role of merchant wholesalers. When is a producer most likely to use them?

241. What are the primary advantages and disadvantages of a franchise arrangement for a franchisee?

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Chap 15_20e 242. Discuss some of the functions that full-service wholesalers provide. How do these differ from those that limited-service wholesalers provide?

243. What are the three types of nonstore retailing, and what are some examples of each?

244. What is a store's image, and how does it affect retailing strategy decisions?

245. Discuss the advantages and disadvantages of catalog marketing.

246. What wholesaling activities do selling agents and brokers perform?

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Chap 15_20e Answer Key 1. False 2. False 3. True 4. False 5. True 6. False 7. False 8. False 9. False 10. False 11. True 12. False 13. True 14. False 15. True 16. False 17. True 18. False 19. True 20. True 21. True 22. True 23. False 24. False 25. True 26. False

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Chap 15_20e 27. False 28. False 29. False 30. False 31. True 32. True 33. False 34. True 35. False 36. True 37. False 38. True 39. True 40. True 41. False 42. True 43. False 44. True 45. False 46. False 47. False 48. True 49. False 50. False 51. True 52. False 53. True 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 55. False 56. True 57. False 58. True 59. True 60. True 61. False 62. False 63. True 64. a 65. d 66. d 67. a 68. e 69. a 70. b 71. b 72. c 73. d 74. d 75. b 76. d 77. e 78. c 79. e 80. b 81. c 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 83. c 84. b 85. c 86. e 87. e 88. c 89. b 90. d 91. d 92. b 93. a 94. c 95. b 96. a 97. d 98. a 99. c 100. a 101. e 102. c 103. b 104. e 105. c 106. b 107. d 108. b 109. a 110. d Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 111. b 112. a 113. b 114. e 115. b 116. b 117. e 118. c 119. e 120. b 121. d 122. a 123. c 124. e 125. c 126. b 127. d 128. a 129. a 130. a 131. c 132. d 133. a 134. b 135. e 136. a 137. d

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Chap 15_20e 138. a 139. d 140. c 141. b 142. a 143. c 144. b 145. b 146. d 147. d 148. a 149. c 150. a 151. a 152. d 153. c 154. e 155. e 156. e 157. a 158. c 159. e 160. b 161. b 162. b 163. e 164. c 165. e Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 166. a 167. d 168. a 169. a 170. c 171. c 172. b 173. b 174. d 175. e 176. b 177. d 178. a 179. a 180. e 181. d 182. c 183. e 184. d 185. b 186. d 187. d 188. c 189. e 190. d 191. e 192. c 193. a Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 194. c 195. a 196. c 197. d 198. b 199. c 200. a 201. e 202. c 203. e 204. c 205. d 206. d 207. b 208. a 209. c 210. e 211. d 212. e 213. a 214. c 215. e 216. c 217. c 218. b 219. b 220. c 221. a Copyright Cengage Learning. Powered by Cognero.

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Chap 15_20e 222. d 223. b 224. d 225. b 226. a 227. d 228. b 229. e 230. e 231. c 232. a 233. Wholesaling refers to all transactions in which products are bought for resale, for making other products, or in general business operations. It does not include exchanges with ultimate consumers. Wholesalers provide essential services to both producers and retailers. By initiating sales contacts with a producer and selling diverse products to retailers, wholesalers serve as an extension of the producer’s sales force. Wholesalers keep producers up to date on market developments and pass along manufacturers’ promotional plans to other intermediaries. Using wholesalers gives producers a distinct advantage because the specialized services wholesalers perform allow producers to concentrate on developing and manufacturing products that match customers’ needs and wants. Wholesalers support retailers by assisting with marketing strategy, especially the distribution component. Wholesalers also help retailers select inventory. They are often specialists on market conditions and experts at negotiating final purchases. Effective wholesalers make an effort to understand the businesses of their customers. They can reduce a retailer’s burden of looking for and coordinating supply sources. Furthermore, whereas a manufacturer’s salesperson offers retailers only a few products at a time, independent wholesalers always have a wide range of products available. Thus, through partnerships, wholesalers and retailers can forge successful relationships for the benefit of customers.

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Chap 15_20e 234. Specialty retailers are of three types: traditional specialty retailers, category killers, and off-price retailers. Traditional specialty retailers are stores that carry a narrow product mix with deep product lines. Specialty retailers commonly sell such shopping products as apparel, jewelry, sporting goods, fabrics, computers, and pet supplies. The Limited, Gap, and Foot Locker are examples of retailers offering limited product lines but great depth within those lines. Category killers are very large specialty stores that concentrate on a major product category and compete on the basis of low prices and broad product availability. These stores expand rapidly and gain sizable market shares, taking business away from smaller, higher-cost retail outlets. Examples of category killers include Home Depot (home improvement chain), Staples (office-supply chain), and PetSmart (pet supply chain). Off-price retailers are stores that buy manufacturers’ seconds, overruns, returns, and off-season production runs at below-wholesale prices for resale to consumers at deep discounts. They offer limited lines of national-brand and designer merchandise, usually clothing, shoes, or housewares. Examples of category killers include T.J. Maxx, Marshalls, Stein Mart, and Burlington Coat Factory. Off-price stores charge 20% to 50% less than department stores for comparable merchandise, but offer few customer services. 235. Department stores are large retail organizations characterized by wide product mixes with at least 25 employees. To facilitate marketing efforts and internal management, related product lines are organized into separate departments such as cosmetics, housewares, apparel, home furnishings, and appliances. This arrangement facilitates marketing and internal management. Department stores are distinctly service-oriented. Their total product may include credit, delivery, personal assistance, merchandise returns, and a pleasant atmosphere. Along with large discount stores, department stores are often considered retailing leaders in a community and are generally found in areas with populations of more than 50,000. Discount stores are self-service, general-merchandise outlets that regularly offer brand-name and private-brand products at low prices. Discounters accept lower profit margins than conventional retailers in exchange for high sales volume. To keep inventory turnover high, they carry a wide, but carefully-selected, assortment of products, from appliances to housewares to clothing. Major discount establishments also offer food products, toys, automotive services, garden supplies, and sports equipment. Most discount stores operate in large (50,000 to 80,000 square feet), no-frills facilities. They usually offer everyday low prices, rather than relying on sales events. As conventional discount stores have grown larger and pricier in recent years, low-income and thrifty consumers have turned to extreme-value stores (also known as dollar stores and single-price stores). 236. Retailers add value for customers by providing services and assisting in making product selections. They can also enhance consumers’ perception of the value of products by making buyers’ shopping experiences easier or more convenient, such as providing free delivery or offering an online shopping option. Retailers can facilitate comparison shopping to allow customers to evaluate different options. For example, car dealerships often cluster in the same general vicinity, as do furniture stores. Product value is also enhanced when retailers offer services, such as technical advice, delivery, credit, and repair. Finally, retail sales personnel are trained to be able to demonstrate to customers how products can satisfy their needs or solve problems. Retailers can add significant value to the supply chain, representing a critical link between producers and ultimate consumers by providing the environment in which exchanges occur. Retailers play a major role in creating time, place, and possession utility and, in some cases, form utility. Retailers perform marketing functions that benefit ultimate consumers by making available broad arrays of products that can satisfy their needs.

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Chap 15_20e 237. Making good location decisions is important because, once decided, it is the least flexible variable of the marketing mix. Location dictates the limited geographic trading area from which a store draws its customers. Retailers consider various factors when evaluating potential locations, including location of a firm’s target market within the trading area, kinds of products being sold, availability of public transportation, customer characteristics, and competitors’ locations. In choosing a location, a retailer must obviously consider the rental, leasing, or ownership terms of a potential property as well as the characteristics of the site itself. They research the types of stores in the area and the size, shape, and visibility of the lot or building under consideration. They usually evaluate the relative ease of movement to and from the site, including factors such as pedestrian and vehicular traffic, parking, and transportation. Retailers should look for compatibility with nearby retailers, because stores that complement one another draw more customers with similar product needs for everyone. Some retailers, including Toys “R” Us, Walmart, Home Depot, and many fast-food restaurants, opt for freestanding structures that are not connected to other buildings, but may be located within planned shopping centers. Sometimes, retailers choose to locate in less orthodox settings where competition will be lower and where consumers have limited other options. 238. Wholesalers provide essential services to both producers and retailers. By initiating sales contacts with a producer and selling diverse products to retailers, wholesalers serve as an extension of the producer’s sales force. Wholesalers also provide financial assistance. They often pay for transporting goods, reduce a producer’s warehousing expenses and inventory investment by holding goods in inventory, extend credit and assume losses from buyers who turn out to be poor credit risks, and can be a source of working capital when they buy a producer’s output in cash. Wholesalers keep producers up to date on market developments and pass along manufacturers’ promotional plans to other intermediaries. Using wholesalers gives producers a distinct advantage because the specialized services wholesalers perform allow producers to concentrate on developing and manufacturing products that match customers’ needs and wants. Wholesalers support retailers by assisting with marketing strategy, especially the distribution component. Wholesalers also help retailers select inventory. They are often specialists on market conditions and experts at negotiating final purchases. Effective wholesalers can reduce a retailer’s burden of looking for and coordinating supply sources. Independent wholesalers always have a wide range of products available. Thus, through partnerships, wholesalers and retailers can forge successful relationships for the benefit of customers. 239. Many types of retail stores exist. One way to classify them is by the breadth of products they offer. Two general categories include general-merchandise retailers and specialty retailers. A retail establishment that offers a variety of product lines that are stocked in considerable depth is referred to as a general-merchandise retailer. The types of product offerings, mixes of customer services, and operating styles of retailers in this category vary considerably. The primary types of general-merchandise retailers are department stores, discount stores, convenience stores, supermarkets, superstores, hypermarkets, warehouse clubs, and warehouse showrooms. In contrast to general-merchandise retailers with their broad product mixes, specialty retailers emphasize narrow and deep assortments. Despite their name, specialty retailers do not sell specialty items (except when specialty goods complement the overall product mix). Instead, they offer substantial assortments in a few product lines. There are three types of specialty retailers: traditional specialty retailers, category killers, and off-price retailers.

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Chap 15_20e 240. Merchant wholesalers are independently-owned businesses that take title to goods, assume risks associated with ownership, and generally buy and resell products to other wholesalers, business customers, or retailers. A producer is likely to rely on merchant wholesalers as selling directly to customers would be economically unfeasible. Merchant wholesalers are also useful for providing market coverage, making sales contacts, storing inventory, handling orders, collecting market information, and furnishing customer support. Some merchant wholesalers are even involved in packaging and developing private brands. Merchant wholesalers go by various names, including wholesaler, jobber, distributor, assembler, exporter, and importer. They fall into two broad categories: full service and limited service. 241. Franchising offers several advantages to a franchisee. It enables a franchisee to start a business with limited capital and benefit from the business experience of others. Franchised outlets are generally more successful than independently-owned businesses. Generally speaking, franchises have lower failure rates than independent retail establishments. However, franchise failure rates vary greatly depending on a particular franchise. If business problems arise, a franchisee can obtain guidance and advice from a franchisor at little or no cost. Also, a franchisee receives materials to use in local advertising and can benefit from national promotional campaigns sponsored by the franchisor. Franchise arrangements also have several drawbacks. Franchisees must pay to use a franchisor’s name, products, and assistance. Usually, there is a one-time franchise fee and continuing royalty and advertising fees, often collected as a percentage of sales. Franchisees often must work very hard, putting in 10- to 12-hour days six or seven days a week. In some cases, franchise agreements are not uniform, meaning one franchisee may pay more than another for the same services. 242. Full-service wholesalers perform the widest possible range of wholesaling functions. Customers rely on them for product availability, suitable product assortments, breaking large shipments into smaller ones, financial assistance, and technical advice and service. Full-service wholesalers handle either consumer or business products and provide numerous marketing services to their customers. Although full-service wholesalers often earn higher gross margins than other wholesalers, their operating expenses are also higher because they perform a wider range of functions. Limited-service wholesalers provide fewer marketing services than do full-service wholesalers and specialize in just a few functions. Producers perform the remaining functions or pass them on to customers or other intermediaries. Limited-service wholesalers take title to merchandise, but often do not deliver the merchandise, grant credit, provide marketing information, store inventory, or plan ahead for customers’ future needs. Because they offer restricted services, limited-service wholesalers charge lower rates and have smaller profit margins than do full-service wholesalers. Although limited-service wholesalers are less common than other types, they are important in the distribution of products like specialty foods, perishable items, construction materials, and coal. Limited-service wholesalers are categorized as cash-and-carry wholesalers, truck wholesalers, drop shippers, and mail-order wholesalers. 243. Direct marketing, direct selling, and vending are the three types of nonstore retailing. Direct marketing is the use of telephone, internet, and nonpersonal media to communicate product and organizational information to customers, who can purchase products via mail, telephone, or the internet. Direct marketing can occur through online retailing, catalog marketing, direct-response marketing, telemarketing, and television home shopping. Companies such as Lands’ End, Pottery Barn, and Crate & Barrel sell via catalogs, online, and through retail stores. The Home Shopping Network originated and popularized the television home shopping format. Direct selling is the marketing of products to ultimate consumers through face-to-face sales presentations at home or in the workplace. Product categories that have been highly successful in direct selling include cosmetics and personal-care products, health products, jewelry, accessories, and household products. Vending is the use of machines to dispense products. It is one of the most impersonal forms of retailing and accounts for a small minority of all retail sales.

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Chap 15_20e 244. Atmospherics, the physical elements in a store’s design that appeal to consumers’ emotions and encourage buying, help to create an image and position a retailer. Exterior atmospheric elements include the appearance of the storefront, display windows, store entrances, and degree of traffic congestion. These are particularly important to new customers, who tend to judge an unfamiliar store by its outside appearance. Interior atmospheric elements include aesthetic considerations, such as lighting, wall and floor coverings, dressing facilities, and store fixtures. Color can attract shoppers to a retail display. Many fast-food restaurants use bright colors, such as red and yellow, because these have been shown to make customers feel hungrier and eat faster, which increases turnover. Sound is another important sensory component of atmosphere. A low-end, family dining restaurant might play fast pop music to encourage customers to eat quickly and leave, increasing turnover and sales. A high-end restaurant, on the other hand, will opt to play classical music to enhance the dining experience and encourage patrons to indulge in multiple courses. Many retailers employ scent, especially food aromas, to attract customers. Most consumers expect the scent of a store to be congruent with the products that are sold there. 245. In catalog marketing, an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the internet. Companies such as Lands’ End, Pottery Barn, and Crate & Barrel sell via catalogs, online, and through retail stores in major metropolitan areas. These retailers generally offer considerable product depth for just a few lines of products. Still other catalog companies specialize in products from a single product line. The advantages of catalog retailing include efficiency and convenience for customers because they do not have to visit a store. The retailer benefits by being able to locate in remote, low-cost areas, save on expensive store fixtures, and reduce both personal selling and store operating expenses. On the other hand, catalog retailing is inflexible, provides limited service, and is most effective for a selected set of products. 246. Selling agents market either all of a specified product line or a manufacturer’s entire output. They perform every wholesaling activity except taking title to products. Selling agents usually assume the sales function for several producers simultaneously and some firms may use them in place of a marketing department. They are used most often by small producers or by manufacturers that have difficulty maintaining a marketing department because of such factors as seasonal production. Selling agents generally have no territorial limits and have complete authority over prices, promotion, and distribution. To avoid conflicts of interest, selling agents represent noncompeting product lines. They play a key role in advertising, marketing research, and credit policies of the sellers they represent, at times even advising on product development and packaging. A broker’s primary purpose is to bring buyers and sellers together. Thus, brokers perform fewer functions than other intermediaries. They are not involved in financing or physical possession, have no authority to set prices, and assume almost no risks. Instead, they offer customers specialized knowledge of a particular commodity and a network of established contacts. Brokers are especially useful to sellers of products such as supermarket goods and real estate.

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Chap 16_20e Indicate whether the statement is true or false. 1. One positive aspect of promotion is that it informs consumers about products so they can make more intelligent buying decisions. a. True b. False 2. Selective demand is demand for a certain brand. a. True b. False 3. The absolute dollar outlay for advertising is usually low. a. True b. False 4. When encoding a message, the source should use signs or symbols that are new to the audience. a. True b. False 5. Measuring the effect of advertising on sales is difficult. a. True b. False 6. Certain types of promotion facilitate price competition. a. True b. False 7. The phrase, purchase products, includes the acceptance of ideas and issues. a. True b. False 8. Sales promotion activity occurs more during peak selling periods than in off-peak selling periods. a. True b. False 9. A marketer uses new introductory promotion in the introductory stage of the product life cycle, when there are many competitive brands. a. True b. False 10. Men are more likely to share negative word-of-mouth communication with those they have strong social ties with rather than those with which they have weak social ties. a. True b. False

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Chap 16_20e 11. More stringent laws have made it so that deceptive advertising can no longer occur. a. True b. False 12. Promotion can assist salespeople in finding likely sales prospects. a. True b. False 13. If promotion is successful at stimulating demand, it will tend to increase prices. a. True b. False 14. When a push policy is used in promoting a particular product, the producer promotes the product directly to consumers. a. True b. False 15. Product placement can be used to promote prosocial behavior such as healthy eating habits. a. True b. False 16. Buzz marketing is an attempt to incite publicity and public excitement surrounding a product through a creative event. a. True b. False 17. Promotion to encourage trial uses attempts to retain loyal customers. a. True b. False 18. When an individual goes out and buys a product after having seen or read an advertisement for it, feedback is occurring. a. True b. False 19. If a company has very limited promotional resources, it is most likely to use mainly personal selling. a. True b. False 20. Public relations is a set of tools to be used primarily during crises. a. True b. False 21. Tactile communication is communication through the movement of head, eyes, arms, hands, legs, or torso. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 22. Product placement is a form of advertising that strategically locates products or product promotions within entertainment media to reach the product's target market(s). a. True b. False 23. Public relations is nonpersonal communication in news story form about an organization, or its products, or both, transmitted through a mass medium at no charge. a. True b. False 24. A television advertisement that transmits several types of audio messages and visual materials may be ineffective. a. True b. False 25. Mass media is used more frequently today than in the past. a. True b. False 26. Manolo Blahnik was one of several sponsors of the TV show Sex in the City, with the brand routinely mentioned as a favorite of the main character, Carrie Bradshaw. Manolo Blahnik even custom designed a pair of shoes for The Sex in the City Movie. This is an example of product placement. a. True b. False 27. A small percentage of promotion efforts are deceptive. a. True b. False 28. When a firm uses mass communication, feedback is rapid. a. True b. False 29. A slow internet connection is noise that is present in the communication channel itself. a. True b. False 30. A reseller advertising a manufacturer's products is viewed as strong manufacturer support. a. True b. False 31. Promotion of products tends to keep their prices high. a. True b. False

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Chap 16_20e 32. Integrated marketing communications need not rely on social media for quality information to maintain positive relationships with customers. a. True b. False 33. A communications channel is the vehicle used to transmit the coded message from the source to the receiver. a. True b. False 34. One truth about promotion is that it raises prices. a. True b. False 35. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between the organizations and its stakeholders. a. True b. False 36. Communication is a sharing of meaning. a. True b. False 37. Advertising is a paid form of nonpersonal communication. a. True b. False 38. Feedback does not exist for mass communication. a. True b. False 39. The role of promotion is to communicate. a. True b. False 40. When feedback occurs, the source becomes the receiver. a. True b. False 41. A breakfast cereal maker most likely will not use personal selling to promote its product. a. True b. False 42. Demand for a product category rather than for a specific brand is called primary demand. a. True b. False

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Chap 16_20e 43. While promotion does not create needs, it does capitalize on them. a. True b. False 44. If an organization is large and has a large promotional budget, it should utilize all four promotional methods. a. True b. False 45. Marketers spend more on sales promotion than on advertising, and sales promotion appears to be a fastergrowing area than advertising. a. True b. False 46. New introductory promotion neither emphasizes brand names nor compares brands. a. True b. False 47. Deceptive promotional practices today are common because of a lack of regulation. a. True b. False 48. Rapid feedback enables communicators to quickly improve the effectiveness of their communication. a. True b. False 49. Commercial messages, whether from advertising, personal selling, sales promotion, or public relations, are unlimited in the extent to which they can inform and persuade customers and move them closer to making purchases. a. True b. False 50. The price of a product influences the promotion mix to be used by the producer. a. True b. False 51. Effective promotional programs require management efforts such as planning, organization, implementation, and control. a. True b. False 52. A business usually cannot operate at peak efficiency when sales fluctuate significantly. a. True b. False

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Chap 16_20e 53. Successful marketers that understand the significance of word-of-mouth communication seek out opinion leaders and try to encourage them to try their products in the hope they will spread favorable communication about them. a. True b. False 54. Interference on one's television set during a commercial is an example of noise. a. True b. False 55. An organization's promotion mix is viewed as an unchanging part of the marketing mix. a. True b. False 56. Proxemic communication is communication through touching. a. True b. False 57. The receiver's response to the decoded message is called noise. a. True b. False 58. The geographic distribution of a firm's customers can affect the combination of promotional methods used. a. True b. False 59. When a push policy is used in promotion of a particular product, the producer promotes the product only to the next channel member. a. True b. False 60. Marketers frequently rely on personal selling to improve the effectiveness of other promotion mix elements, especially advertising and sales promotion. a. True b. False 61. Personal selling tends to cost more than advertising. a. True b. False 62. Signs and symbols that can have more than one meaning should be avoided. a. True b. False

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Chap 16_20e 63. The promotional method most commonly used for highly personal items is personal selling. a. True b. False 64. Advertising is one element of the promotion mix that is too expensive for small business firms. a. True b. False 65. Advertising is an inflexible promotional method. a. True b. False 66. Today, technology is allowing marketers to be more precise in targeting individual customers. a. True b. False 67. Promotion that focuses on creating awareness is only important when introducing a new product to the market. a. True b. False 68. A news story about a product is an example of sales promotion. a. True b. False 69. Coupons are a form of sales promotion. a. True b. False 70. If integrated marketing communications works as intended, customers should receive clear and consistent messages. a. True b. False 71. Advertising makes possible immediate feedback from consumers. a. True b. False 72. Channel capacity is determined by the most efficient component of the communication process. a. True b. False

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Chap 16_20e Indicate the answer choice that best completes the statement or answers the question. 73. Valentina recently made a friend from another country who works as a buyer at a large business firm. They get together with a group of friends and have a fun time hanging out. Valentina works at a computer firm, and when she finds out her friend's firm is looking to purchase new computers, she schedules an appointment with her friend. When they get together, Valentina is surprised when her friend quickly kisses her on both cheeks as a form of greeting. She is not sure what to do in return. This type of _________________ is not common in the United States as a form of greeting among new friends or business associates. a. proxemic communication b. kinesic communication c. tactile communication d. integrated marketing communication e. paralinguistic 74. Which of the following is a major goal of integrated marketing communications? a. To better coordinate the firm’s supply chain b. To achieve a specific return on investment c. To dispute competitors’ strengths d. To control the firm’s marketing environment e. To send a consistent message to consumers 75. The two main reasons for criticism of promotional activities are that promotion a. has some flaws, and it is deceptive. b. is deceptive, and it causes prices to rise. c. pervades our daily lives, and it creates needs in us. d. creates needs in us, and it encourages materialism. e. has some flaws, and it pervades our daily lives. 76. Forever 21, a clothing company, communicates to its target customers by advertising in magazines, offering clothing information on its website, creating a periodic online newsletter, and using Instagram and Twitter. These vehicles through which the coded message is transmitted from the source, Forever 21, to the receiver, the prospective customer, are called a. fields of reference. b. decoders. c. encoders. d. relay channels. e. communication channels.

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Chap 16_20e 77. Which of the following is the most important attribute of a ratings website? a. Buzz marketing b. Viral marketing c. Social connections d. Utility e. Credibility 78. Advertising, personal selling, sales promotion, and public relations are called a. promotion mix ingredients. b. marketing mix components. c. characteristics of a product. d. advertising tools. e. nonpersonal communication. 79. _____________ is a paid, nonpersonal communication about an organization and its products transmitted to a target audience through mass media. a. Personal selling b. Sales promotion c. Merchandising d. Advertising e. Public relations 80. Factors such as climate, seasons, and holidays tend to lead to the promotional objective of a. combatting competitive promotional offers. b. facilitating reseller support. c. encouraging product trial. d. retaining loyal customers. e. reducing sales fluctuations. 81. If the push policy is used in promoting a product, the firm a. promotes directly to consumers. b. promotes primarily to the next marketing institution down the marketing channel. c. promotes the product to wholesalers only. d. promotes the product to retailers only. e. will be assured of having an effective promotional mix. 82. Newspaper ads for Cody Pools offer discounted prices during October and discounted cleaning supplies for hot tubs in March. These are examples of which of the following uses of promotion? a. Retaining loyal customers b. Promoting new product uses c. Making salespeople more effective d. Stimulating primary demand e. Reducing sales fluctuations Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 83. During a one-minute television ad for Nike, the National Weather Service interrupts to announce a flash flood warning for surrounding counties. Such an occurrence is an example of ____ in the communication process. a. encoding b. bad luck c. noise d. deflected transmission e. poor implementation 84. Applegate Farms decided to put a much larger share of its promotion budget into ____ because of the heavy reliance it will be placing on coupons in the second quarter. a. advertising b. sales promotion c. public relations d. telemarketing e. personal selling 85. If a product’s target market consists of millions of people, marketers are most likely to focus promotional efforts on a. personal selling and advertising. b. advertising and public relations. c. advertising and sales promotion. d. personal selling and sales promotion. e. public relations and sales promotion. 86. When Betty Crocker introduced its Asian Favorites and Mexican Favorites flavors of its Helper line, it gave special offers to supermarkets to carry the new product and supplemented these offers with consumer advertising. Betty Crocker's primary objective is to a. facilitate reseller support. b. reduce sales fluctuations. c. combat competitive promotional efforts. d. encourage product trial. e. retain loyal customers. 87. Which of the following is not how feedback occurs during interpersonal communication? a. Online registrations b. Touching c. Smiling d. Nodding e. Talking

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Chap 16_20e 88. Promotional efforts designed to reduce the risk to consumers for using a product for the first time seek to a. stimulate primary demand. b. encourage product trial. c. create awareness. d. combat competitive promotional efforts. e. retain loyal customers. 89. The cost of ____ is usually substantially lower than the cost of ____. a. stimulating primary demand; stimulating selective demand b. identifying prospects; encouraging product trial c. retaining existing customers; acquiring new customers d. comparative advertising; new introductory promotion e. personal selling; public relations 90. Public relations a. should be used mostly to counteract any competitive promotions or negative publicity. b. is an element of promotion that should be handled on a continuous basis. c. should be used solely to respond to emergencies that could significantly damage the company's reputation. d. is paid communication that helps enhance a company's image by highlighting its philanthropic efforts. e. is generally not given much weight because the information is generated by the company itself. 91. A sharing of meaning defines a. promotion. b. information. c. noise. d. interference. e. communication. 92. In the ______________, signs or symbols are converted by the receiver into concepts and ideas. a. message creation process b. value creation process c. decoding process d. marketing process e. selling process

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Chap 16_20e 93. You work for a company that is marketing a new line of swimsuits. These swimsuits have a unique style that differs from other swimsuits, and you want to spread awareness among consumers and spark their interest. The swimsuit will be sold in stores nationwide. Probably the best promotion mix elements to use in your integrated marketing communications strategy are a. personal selling and sales promotion. b. advertising and personal selling. c. advertising and sales promotion. d. public relations and sales promotion. e. personal selling and public relations. 94. Head nodding, winking, hand gestures, and arm motions are all forms of ____ communication. a. kinesic b. spacing c. proxemic d. touching e. tactile Scenario 16.1 Use the following to answer the questions. When introducing a new vehicle targeted to the 18-34 age category Toyota used several different methods of communication. First, it did research in several large cities to find out who the opinion leaders were in that age group. By visiting the local nightlife, one or two people in each city were selected and given a new vehicle to drive for two weeks. They were told to share information about this new vehicle with their friends and through social media. After a few weeks, a television campaign was launched with commercials introducing the new vehicle. Toyota also placed ads in magazines that were targeted to the 18-34 age group and used drive-by billboards in the large cities near the nightclub areas. 95. Refer to Scenario 16.1. Suppose that Toyota has decided to contract with the producer of the next James Bond 007 movie to use one of its new vehicles in a chase scene. This would best be an example of a. sales promotion. b. word-of-mouth promotion. c. product placement. d. viral marketing. e. publicity. 96. Which of the following target market characteristics are most important to consider before determining the promotion mix ingredients? a. The market size, geographic distribution, and sociocultural and demographic characteristics b. The cultural diversity and population size c. The age, sex, religion, and race characteristics d. Existing product adoption categories e. Existing levels of price consciousness

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Chap 16_20e 97. Molly Bloom is in charge of advertising for her company and has produced a 30-second television spot to promote one of the company's new products. One of her assistants just out of college believes that the commercial has too much visual and audio information packed into such a small amount of time. The assistant is specifically concerned about limits in the receiver's a. noise. b. coding process. c. encoding. d. channel capacity. e. feedback. 98. When McDonald's uses the Monopoly game in which customers receive game pieces with each visit and try to assemble a set of properties to win prizes, McDonald's is utilizing a. sales promotion. b. advertising. c. guerrilla marketing. d. personal selling. e. public relations. 99. Which of the following can be stimulated by increasing the number of product uses and promoting them through advertising campaigns, as well as through price discounts, free samples, coupons, consumer contests and games, and sweepstakes? a. Primary demand b. Customer retention c. Reseller support d. Cause-related marketing e. Selective demand 100. When LG promotes the benefits and strengths of its LG brand appliances, it is attempting to build a. primary demand. b. new introductory promotion. c. prospects. d. brand awareness. e. selective demand. 101. Abbot Laboratories offers ceramic coffee mugs to its physician customers when it promotes a new drug. This example illustrates Abbot’s use of which one of the following elements of the promotion mix? a. Packaging b. Personal selling c. Sales promotion d. Public relations e. Social marketing

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Chap 16_20e 102. Which promotional method is most likely to be used in a push policy? a. Personal selling b. Public relations c. Advertising d. Publicity e. Sales promotion 103. Promotion helps consumers because it a. costs billions of dollars each year, which stimulates the U.S. economy. b. always stresses wholesome values, which benefits society. c. persuades consumers to make the right choices. d. informs consumers and places them in a position to specify the products that they seek. e. tends to be informative and not persuasive. Scenario 16.2 Use the following to answer the questions. The manufacturers of Laundry Whizz, a new laundry detergent, are developing their promotional plan for the first year. They know they want to use an integrated communications strategy and are considering the use of advertising through TV and magazines, coupons, public relations, sales promotion, and viral marketing. They are not sure when to use each of these methods, however, and have asked for your advice. 104. Refer to Scenario 16.2. If the manufacturers of Laundry Whizz were to partner with Samsung to place a bottle of Whizz in each new washer that is purchased during the first year, this would be an example of a. advertising. b. sales promotion. c. viral marketing. d. personal selling. e. publicity-based public relations. 105. A common form of tactile communication in U.S. business activities is a. hugging. b. kissing. c. handshaking. d. eye contact. e. head nodding.

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Chap 16_20e Scenario 16.2 Use the following to answer the questions. The manufacturers of Laundry Whizz, a new laundry detergent, are developing their promotional plan for the first year. They know they want to use an integrated communications strategy and are considering the use of advertising through TV and magazines, coupons, public relations, sales promotion, and viral marketing. They are not sure when to use each of these methods, however, and have asked for your advice. 106. Refer to Scenario 16.2. The makers of Laundry Whizz considered a new promotional method for their product. A small bottle of Laundry Whizz was placed in the mailbox of college students as they came on campus in the fall. Along with the Laundry Whizz, the students received a coupon for $1.00 off their next purchase. They could receive another coupon for $3.00 off if they went online and emailed five friends at another college, telling them about Laundry Whizz. The friends could then go to a website and print a coupon for $2.00 off their next purchase. The sample bottles given to the college students are an example of ____, while the emails to the five friends are an example of ____. a. sales promotion; advertising b. sales promotion; personal selling c. publicity; sales promotion d. viral marketing; sales promotion e. sales promotion; viral marketing 107. Jasper walks around behind purchasing agent Bella as she looks at the pamphlet describing Global Industrial's new conveyor system. Bella stands up and walks to a table on the other side of her office. Jasper follows, but he does not understand the ____ communication Bella is sending. a. tactile b. proxemic c. kinesic d. verbal e. promotional 108. As their meeting concludes, Jacob rises and thanks Esme for taking the time to come by and explain her firm's new line of industrial fasteners. A handshake, which is best described as a form of _____ communication, concludes the session. a. personal b. sales promotion c. tactile d. proxemic e. paralinguistic

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Chap 16_20e 109. A spokesperson for Quaker oats encourages television audiences to use its oats in the summer by using them to make healthy overnight oats, which are served cold. In this instance, Quaker is using promotion to a. stimulate primary demand. b. offset competitors' promotional efforts. c. facilitate reseller support. d. retain loyal customers. e. reduce sales fluctuations. 110. Often when a company introduces a new product or line extension, its promotion will focus on ____ in order to initiate the product-adoption process. a. creating awareness b. stimulating demand c. retaining loyal customers d. combating competitive promotional efforts e. identifying prospects 111. Advertising can be cost efficient but only if it a. is complemented with sales promotion. b. is recouped by significant sales. c. reaches a large number of people at a high cost per person. d. reaches a small number of people at a low cost per person. e. reaches a vast number of people at a low cost per person. 112. Which of the following seems the most natural fit for product placement? a. Reality television b. Soap operas c. Documentaries d. Dramas e. Situational comedies 113. Product placement in television shows is becoming increasingly important due to a. positive affiliations with highly popular celebrities. b. consumers' greater ability to screen advertisements. c. consumers' tendency to watch television over movies. d. more stringent regulations that limit television advertising. e. consumers' positive opinions toward product placement.

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Chap 16_20e 114. ____ links the purchase of an organization's products to support of philanthropic organizations favored by the target market. a. Promotion b. Cause-related marketing c. Charity-related promotion d. Selective demand promotion e. Charitable nonprofit marketing 115. Which of the following are personal informal exchanges of communication that customers share with one another about products, brands, and companies? a. Guerrilla communication b. Word-of-mouth communication c. Buzz marketing d. Viral marketing e. Online chat room communication 116. In one corner of its magazine advertisement for office copiers, Ricoh places a small box asking for the names and addresses of individuals or companies seeking more information. Ricoh has included this box to facilitate ____ for this communication. a. decoding b. feedback c. encoding d. perceptual attention e. noise reduction 117. If promotion does not do its job of stimulating demand, then the a. price of the promoted product is likely to increase. b. price of the promoted product will remain reasonably stable. c. price of the promoted product will decrease. d. cost of promotion will decline. e. cost will remain about the same. 118. To have some of its cereals highlighted in an advertisement mailed out by Kroger grocery stores, Kellogg agreed to pay a portion of Kroger’s costs associated with the advertising mailer. Kellogg’s payment is designed to a. facilitate reseller support. b. encourage product trial. c. retain loyal customers. d. identify prospects. e. reduce sales fluctuations.

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Chap 16_20e 119. Communication that builds and maintains favorable relationships by informing and persuading one or more audiences to view an organization more positively and to accept its product is the role of a. marketing campaign. b. feedback capacity. c. promotion. d. channel capacity. e. integrated marketing exchange. 120. Laws, government regulations, and industry self-regulation ______________ deceptive promotion. a. have done nothing to decrease b. have caused an increase in c. have eliminated all d. have helped decrease e. have created new forms of 121. ______ is an attempt to incite publicity and public excitement surrounding a product through a creative event while ______ is a strategy to get consumers to share a marketer’s message. a. Buzz marketing; word-of-mouth communication b. Viral marketing; buzz marketing c. Buzz marketing; viral marketing d. Word-of-mouth communication; viral marketing e. Personal selling; word-of-mouth communication 122. Each communication channel has a limit on the volume of information it can handle effectively. This limit is called a. transmission capacity. b. feedback limits. c. encoding capacity. d. noise. e. channel capacity. 123. Firehouse Subs is conducting a contest in which customers are asked to name a new sub. The winner gets a free sub each day for one year and an appearance in one of the company’s TV commercials. This contest illustrates Firehouse Sub’s use of the ____ elements of the promotion mix. a. advertising b. personal selling c. sales promotion d. public relations e. packaging

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Chap 16_20e 124. United Airlines began offering sales on flights to South America and Europe. It started promoting these lowercost flights heavily on television and in print. Not to be outdone, Delta Airlines started offering its own sales at prices even lower than United Airlines. This refutes which of the following criticisms of promotion? a. Promotion loses money for businesses. b. Promotion facilitates price competition. c. Promotion is deceptive. d. Promotion increases prices. e. Promotion creates needs. 125. The use of a pull policy may require heavy expenditures for a. advertising and sales promotion. b. public relations and distribution. c. personal selling and public relations. d. distribution and advertising. e. sales promotion and personal selling. 126. By promoting the fact that avocados are good for you and can be used to make tasty snacks, the California Avocado Grower’s Exchange attempted to stimulate a. primary demand. b. secondary demand. c. selective demand. d. inelastic demand. e. demand elasticity. 127. Rosalie is a sales consultant for Avon Cosmetics. This illustrates a. advertising. b. primary demand stimulation. c. public relations. d. personal selling. e. sales promotion.

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Chap 16_20e Scenario 16.1 Use the following to answer the questions. When introducing a new vehicle targeted to the 18-34 age category Toyota used several different methods of communication. First, it did research in several large cities to find out who the opinion leaders were in that age group. By visiting the local nightlife, one or two people in each city were selected and given a new vehicle to drive for two weeks. They were told to share information about this new vehicle with their friends and through social media. After a few weeks, a television campaign was launched with commercials introducing the new vehicle. Toyota also placed ads in magazines that were targeted to the 18-34 age group and used drive-by billboards in the large cities near the nightclub areas. 128. Refer to Scenario 16.1. Toyota's act of giving the opinion leaders a new vehicle for two weeks is best described as an example of a. advertising. b. personal selling. c. sales promotion. d. buzz marketing. e. viral marketing. 129. Which of the following forms of communication is the most adaptive and flexible? a. Nonpersonal b. Web-based c. Advertising d. Face-to-face e. Digital 130. Communication can be viewed as a circular process because a. during feedback, the receiver can be viewed as the source of the message while the original source becomes the receiver. b. the message goes from encoding by the source to decoding by the receiver. c. during a personal selling situation, both verbal and nonverbal feedback can be very fast and immediate. d. channel capacity is determined by the least efficient component. e. the message goes from person to person.

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Chap 16_20e 131. Hermione just managed a major event for the local zoo. She put an advertisement in the local newspaper. However, she was disappointed by how few people showed up. She couldn't understand because the paper is highly popular among locals. Hermione decided to survey its large pool of zoo members to try and see what went wrong. After looking at the responses, as well as copies of the newspaper that had the ad, she realized that on the same page as the zoo ad was an even larger advertisement promoting an upcoming concert. This ad was higher up on the page and dwarfed the zoo ad. She believes most people who read that page were distracted by the large, colorful concert advertisement. In this case, the responses to Hermione’s survey are ________, while the distraction caused by the larger, more colorful ad on the same page could be characterized as _______. a. feedback; the coding process b. the receiver; the marketing channel c. feedback; noise d. the marketing channel; decoding e. encoding; noise 132. During the decoding process, the a. intensity of the transmission becomes stronger. b. receiver attempts to convert signs or symbols into concepts and ideas. c. source attempts to convert signs or symbols into concepts and ideas. d. source converts meaning into a series of signs or symbols that represent ideas or concepts. e. receiver filters noise from the feedback. 133. Research has shown that consumers visit websites, blogs, and online forums to receive electronic word-ofmouth communication about goods, services, and companies primarily because the sites a. reduce risk and save search effort. b. provide images of the products. c. contain advertising messages. d. rely on the general public as reviewers. e. allow for anonymous communication. 134. Promotion can help keep prices lower because a. demand for the product does not increase. b. promotion of prices intensifies price competition. c. promotion of prices leads to nonprice competition. d. promotion tends to reduce consumers' price sensitivity. e. promotion tends to stabilize a product's price elasticity of demand.

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Chap 16_20e 135. If DHL decided to outsource all of its marketing efforts to the TAZ Advertising Agency, which specializes in advertising, sales promotion activities, and public relations, DHL would likely be striving to practice a. one-stop shopping. b. primary demand stimulation. c. new introductory promotional efforts. d. competitive promotional programming. e. integrated marketing communications. Scenario 16.2 Use the following to answer the questions. The manufacturers of Laundry Whizz, a new laundry detergent, are developing their promotional plan for the first year. They know they want to use an integrated communications strategy and are considering the use of advertising through TV and magazines, coupons, public relations, sales promotion, and viral marketing. They are not sure when to use each of these methods, however, and have asked for your advice. 136. Refer to Scenario 16.2. The makers of Laundry Whizz have decided to go to several different colleges and have a contest for the dirtiest shirt. While at the colleges, they will set up several washing machines near the campus bookstore, demonstrating the power of Laundry Whizz to get these dirty shirts clean. Each contestant in the dirtiest shirt contest will receive a coupon for a free bottle of Laundry Whizz. The winner of the contest will receive a $100 gift card for the college bookstore along with social media recognition. This method of promotion is an example of ____, and is used to stimulate ____ demand. a. viral advertising; primary b. sales promotion; selective c. sales promotion; primary d. product placement; selective e. product placement; primary 137. Virtual realities are still relatively new, but more people are gaining a familiarity with this technology. Competitors are beginning to emerge. Oculus Rift decides it is time to start releasing promotion that markets the advantages of its virtual reality headset compared to competitors. Oculus Rift is attempting to build a. new introductory demand. b. selective demand. c. competitive demand. d. comparative demand. e. primary demand. 138. As Hana prepares the script for a radio commercial for her boutique, she is engaging in the ____ stage of the communication process. a. encoding b. sourcing c. decoding d. sending e. receiving Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 139. Pepsi-Cola has just released a new line of sparkling water called bubly. To encourage customers to start adopting the new brand, Pepsi-Cola should engage in promotions that focus on a. retaining loyal customers. b. creating awareness. c. stimulating demand. d. identifying prospects. e. combating competitive promotional efforts. 140. Tabitha is driving to work on I-95 and notices a billboard for new salads at Wendy’s. She reads the message and sees the pictures of the new salads. In this case, Tabitha is the ____ and Wendy’s is the ____ of this communication. a. receiver; source b. audience; promoter c. coder; decoder d. communicatee; communicator e. feedback; noise 141. Communication through the use of annual reports, event sponsorships, and news stories is referred to as a. advertising. b. personal selling. c. sales promotion. d. publicity. e. public relations. 142. Which of the following strives to convince current users that they have made the right brand choice and may advise them on how to get more satisfaction from the product? a. New introductory promotion b. Public relations c. Personal selling d. Reinforcement advertising e. Cause-related marketing 143. The strategic location of products or product promotions within entertainment media content to reach the product’s target market is known as product a. showcasing. b. display. c. placement. d. incorporation. e. endorsement.

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Chap 16_20e 144. Slow feedback, high absolute-dollar outlay, and difficulty in measuring effects on sales are disadvantages of which promotion mix ingredient? a. Advertising b. Public relations c. Sales management d. Sales promotion e. Personal selling 145. Which of the following is the best example of the promotional objective of combating competitive promotional efforts? a. Joy advertises that its dish soap has more suds than Dawn and other leading dish soaps. b. Joe Boxer and Kmart collaborate to promote Joe Boxer's lines of clothing and housewares. c. The Pork Council advertises pork as the "other white meat" and a healthier alternative to beef. d. After Ford promotes the towing capacity of its F-series trucks, Chrysler soon emphasizes the towing capacity of its Dodge trucks. e. Hyundai offers 10-year/100,000-mile warranties on its vehicles in order to give customers confidence in its brand name and automotive offerings. 146. When a marketer makes an effort in promotion to point out the strengths and benefits of a specific brand, it is an attempt to build ____ demand. a. primary b. secondary c. selective d. economic e. competitive 147. You are the marketing manager for a company that makes and markets designer sunglasses. Recently, your boss suggested to you that the company should try to get its sunglasses worn by more actors and actresses in movies. He asked you to look into what it would take to make that happen. Which of the following promotion activities is your boss referring to with this idea? a. Advertising b. Personal selling c. Public relations d. Product sponsorship e. Product placement

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Chap 16_20e 148. Cullen Production makes low-priced, convenience products that are widely available. It is most likely to focus its promotion efforts on a. public relations. b. personal selling. c. viral marketing. d. advertising. e. sales promotion. 149. Paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation is a. personal promotion. b. advertising. c. personal selling. d. public relations. e. individual promotion. 150. When Hershey introduced Hershey’s Cookie Layer Crunch, it promoted directly to consumers and told them to ask for the product at their favorite stores. This is an example of a ____ policy. a. impulsion b. push c. customer promotional d. pull e. channel promotional 151. __________ is anything that reduces an integrated marketing communication’s clarity and accuracy. a. Feedback b. Channel capacity c. Noise d. Communication channel e. Coding process 152. Crisis management plans should be developed and implemented to mitigate potentially damaging effects of unfavorable coverage, which best relates to a. product promotion. b. personal selling. c. advertising. d. public relations. e. sales promotion.

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Chap 16_20e 153. Staples’ use of email to carry its advertising messages to its business customers is which component of the communication process? a. Encoding process b. Decoding process c. Communication channel d. Sharing of meaning e. Noise minimization 154. Anything that reduces the accuracy and clarity of communication is called a. distraction. b. feedback. c. infraction. d. discordance. e. noise. 155. Jax owns a sporting goods company that has now expanded to 200 stores across the country. His main form of marketing is advertising in different magazines. In Vermont and New York, he advertises in skiing magazines. In California he advertises in surfing magazines. In Colorado and Utah, Rex advertises in magazines focused on hiking. On the other hand, Jax is also trying to get professional golfing associations to purchase some of his highend golfing equipment. In this case, rather than advertising Jax meets with representatives from these organizations personally. Jax is most likely selecting promotion mix factors based on a. characteristics of the product. b. promotional resources, objectives, and policies. c. characteristics of the target market. d. costs and availability of promotional methods. e. push and pull channel policies. 156. To maximize promotional effectiveness, marketers must strive to a. become directly involved rather than indirectly involved. b. obtain information about the marketing environment through their MIS. c. realize the needs of their target market and try to meet them. d. properly plan, implement, coordinate, and control communications. e. use promotion during the growth stage of the product's life cycle. 157. Shondra owns a carpet-cleaning firm. If her objective is to produce immediate sales of her services, her firm’s promotion mix should probably stress a. advertising and sales promotion. b. advertising and personal selling. c. advertising and public relations. d. sales promotion and personal selling. e. sales promotion and public relations.

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Chap 16_20e 158. Some promotional programs are unsuccessful because marketers fail to generate awareness of a. marketing issues among significant marketing executives. b. critical issues among a significant portion of target market members. c. critical issues among a significant portion of the general population. d. product benefits among consumers who lack the authority to buy. e. product benefits among consumers who lack the willingness to spend. 159. Your company is planning to launch a new line of women’s athletic apparel in the next six months. To spark some enthusiasm in the market for your new products, you are working with an outside agency on the advertisements that will run during some popular sporting events. Which of the following should be the primary objective for these promotional ads? a. Encourage product trial b. Create awareness c. Reward current customers d. Identify prospects e. Retain loyal customers 160. The Kia Soul automobile is currently positioned as a vehicle for young adults. Kia’s message to the target market is that it is exciting, youthful, and trendy. However, Max and his friends who are 20-somethings just like the music and the hamster spokescharacters. They don’t care about the car itself. The message that Kia originally encoded and the meaning Max and his friends ultimately decoded a. probably contain circular feedback. b. may be different because of noise. c. are usually exactly the same. d. rarely are similar because of feedback. e. are collectively termed the communications channel. 161. Red Bull sponsored Red Bull Stratos, a space-diving project in which skydiver Felix Baumgartner sky dived from the Earth's stratosphere. The move fit well with Red Bull's affiliation with extreme sports. This would best be an example of a. stunt marketing. b. television advertising. c. electronic word-of-mouth marketing. d. product placement. e. buzz marketing. 162. Promotion tends to a. create needs. b. capitalize on existing needs. c. be deceptive. d. increase prices. e. avoid focusing on people's needs.

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Chap 16_20e 163. _______ offers the potential benefits of cost efficiency, repetition, and adding product value, while _____ is one of its disadvantages. a. Public relations; uncontrollability b. Advertising; slow feedback c. Personal selling; cost d. Sales promotion; slow feedback e. Advertising; media cost 164. ______ is used extensively for consumer durables, whereas consumer convenience items are promoted mainly through ______. a. Personal selling; public relations and sales promotion b. Advertising; sales promotion and personal selling c. Advertising; personal selling and public relations d. Sales promotion; advertising and personal selling e. Personal selling; advertising and sales promotion 165. Samsung has been relatively happy with sales of its Galaxy S9 phone. However, when Apple came out with the newest iPhone X, Samsung released advertisements marketing all of the features and benefits its Galaxy phone has to offer. Samsung's promotional objective is to a. combat competitive promotional efforts. b. identify prospects. c. stimulate primary demand. d. create awareness. e. retain loyal customers. 166. Your friend Ji-yoo is highly critical of marketing. She claims that promotion creates needs among people so that they are unsatisfied with what they have. Because you are knowledgeable in marketing, you tell your friend Jiyoo that promotion doesn't _________, but it does ________. a. create needs; create materialism b. exploit needs; satisfy needs c. encourage dissatisfaction; provide satisfaction d. exploit needs; make them more important e. create needs; capitalize on them 167. Integrated marketing communications allow an organization to coordinate and manage its promotional efforts to a. boost sales. b. reduce promotional expenses. c. transmit consistent messages to its current and potential customers.. d. be more competitive. e. transmit its values.

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Chap 16_20e 168. If Pizza Hut uses digital media along with more traditional newspaper ads to create a more synchronized and consistent message for customers, it is most likely engaging in a. personal selling. b. communication feedback. c. the entire promotion mix. d. public communications management. e. integrated marketing communications. 169. The process of putting one's thoughts (meaning) into signs (symbols) is called a. decoding. b. noise. c. recoding. d. transmission. e. the coding process. 170. Organizations that sell products to business buyers are most likely to focus their promotion efforts on a. advertising. b. word-of-mouth communication. c. public relations. d. sales promotion. e. personal selling. 171. All of the following are reasons a company would likely emphasize advertising in its promotion mix except a. The company’s promotion budget is extensive b. The size of the product’s target market consists of millions of consumers c. The company’s products are seasonal in nature d. The company’s customers are dispersed across a vast region e. The company has chosen exclusive distribution for its products 172. Primary demand is defined as a. demand for a product category. b. demand for a new product. c. consumer awareness of a product category. d. stimulating demand for any products. e. demand for a particular brand. 173. Generally, promotion mixes for companies with extremely limited promotional budgets tend to concentrate on a. advertising. b. publicity. c. sales promotions. d. personal selling. e. distributor incentives. Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 174. Some critics, including consumer groups and government officials, suggest that certain products should not be promoted because they a. cost too much. b. are illegal. c. are potentially harmful. d. do not last. e. are not competitive. 175. Word-of-mouth communication seems to be most effective for a. mature and more expensive products. b. new-to-market and more expensive products. c. new-to-market and less expensive products. d. mature and less expensive products. e. declining and more expensive products. 176. Radio and television signals as well as ink on the paper of a magazine or newspaper are all considered a. communication noise. b. communication links. c. communication resources. d. communication channels. e. decoding sources. 177. Product placement is the strategic location of products a. in television commercials. b. in print advertisements. c. within entertainment media content. d. on billboards in busy intersections. e. on store shelves. 178. If a firm's promotional budget were extremely limited, for which of the following reasons would it be more likely to rely on personal selling as its main promotional tool? a. People are more likely to believe a human being than a print ad. b. TV and radio ads are not feasible for smaller companies. c. It can achieve more sales through business customers than through individual consumers. d. It is easier to measure a salesperson's effects on sales than advertising's effects on sales. e. The firm is charging a higher price to cover the expensive salaries of its salespeople. 179. Channel capacity is determined by the a. most efficient component of the communication process. b. least efficient component of the communication process. c. source. d. receiver. e. meanings of the message. Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 180. Xander is preparing the promotional plan for Wenger Swiss Gear backpacks in early May. This promotion will be executed in the month of August and will be a paid form of nonpersonal communication. It will be communicated to a target audience through mass media. Xander is using the ______ form of promotion. a. advertising b. public relations c. sales promotion d. personal selling e. social media 181. ____ is a broad set of communication efforts used to create and maintain favorable relationships between a company and its stakeholders. a. Stakeholder management b. Personal selling c. Integrated marketing communications d. Sales promotion e. Public relations 182. Before the release of the newest iPhone by Apple Inc., an Apple juice brand used an actor dressed up like an apple to hold a sign encouraging those waiting in line to try its juice. The brand thought this would be a creative event that would spark an interest in Apple iPhone fans as they stood waiting in line with little else to do. This is an example of a. buzz marketing. b. viral marketing. c. electronic marketing. d. publicity. e. product placement. 183. You are working with a sales management consultant on ways to improve your company’s sales performance. Your company sells high-end consumer products. You and the consultant agree your promotional activities need to include more direct interaction with your customers. Based on this information, which of the elements of promotion should you emphasize more? a. Advertising b. Sales promotions c. Personal selling d. Public relations e. Packaging

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Chap 16_20e 184. When Dr. Kracker introduces a new cracker product, it offers free samples in HEB and other grocery stores. These efforts have a primary promotional objective of a. encouraging product trial. b. stimulating primary demand. c. identifying prospects. d. creating awareness. e. reducing sales fluctuations. 185. Vicky works for a promotional consultant who develops sweepstakes, games, coupons, and rebate plans for various marketers. Vicky is developing which of the following? a. Advertising techniques b. Sales promotion techniques c. Publicity tools d. Personal selling techniques e. Direct marketing techniques 186. Although a radio announcer can read several hundred words a minute, a one-minute advertising message should not exceed 150 words because most announcers cannot articulate words into understandable messages at faster rates. This illustrates the ____ consideration in effective communication. a. transmission capacity b. feedback limits c. encoding capacity d. noise e. channel capacity 187. A person, group, or organization that has a meaning it intends and attempts to share with a receiver or an audience is a a. communications channel. b. source. c. relay channel. d. decoder. e. sender. 188. When encoding the message, the source should use signs that have a. new and exciting meanings. b. different meanings to different people. c. contemporary jargon. d. meanings that the target market will understand. e. broad interpretations.

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Chap 16_20e 189. Which is the best example of noise that originates with the communications channel in the communication process? a. Portia has been studying English for two years and does not understand the symbolism being used in a commercial. b. Shunda mishears a word in a commercial because of the spokesperson’s accent. c. A mother fails to hear a new commercial for diapers because her new baby is crying. d. Ellen can’t load web pages to do research because her Wi-Fi is down. e. Kwame simply tunes out pop-up ads on the internet so that they don't even enter his awareness. 190. Old Spice created a series of online videos on YouTube through its “The Man Your Man Could Smell Like” campaign in which the main character responded to viewer questions. These entertaining videos were shared by thousands of people, spreading the message created by Old Spice. This is an example of a. personal selling. b. sales promotion. c. viral marketing. d. advertising. e. public relations. 191. For many consumers, the pages near the back of magazines with dozens of very small black and white advertisements exceed their a. channel capacity. b. threshold of awareness. c. decoding abilities. d. transmission limitations. e. noise limit. 192. Alicia is concerned about the effectiveness of Jeroboam, Inc.'s promotional messages and is seeking an approach with immediate feedback. Alicia is most likely to achieve this through a. television advertising. b. newspaper advertising. c. public relations. d. sales promotion. e. personal selling. 193. When ASICS gives a portion of its profits to prostate cancer research for every pair of blue-themed GelCumulus shoes sold, it is engaging in a. primary demand stimulation. b. a marketing campaign. c. charity marketing. d. charitable IMC. e. cause-related marketing.

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Chap 16_20e 194. A direct-response information form found in a magazine advertisement that allows customers to send for more information has a primary objective of a. encouraging product trial. b. retaining loyal customers. c. stimulating demand. d. creating awareness. e. identifying prospects. 195. Selective demand is demand for a a. general type of product. b. particular brand. c. new product. d. competitor's product. e. product category 196. Kinesic communication is an element in which type of promotional method? a. Advertising b. Public relations c. Personal selling d. Packaging e. Sales promotion 197. When a salesperson varies the physical distance between himself and a customer he is using a. kinesic communication. b. personal selling. c. tactile communication. d. comfort relations. e. proxemic communication. 198. An activity and/or material that offers added value or incentive to resellers, salespeople, or consumers is a. advertising. b. personal selling. c. public relations. d. sales promotion. e. packaging. 199. For communication to occur, both the sender and receiver of information must a. share the same decoding process. b. use the same media. c. have a common understanding of the meaning of symbols, words, and pictures used to transmit information. d. use technology. e. minimize noise. Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 200. Scout is watching the six o'clock news as she prepares dinner. As commercial breaks come on, Scout’s dinner preparation would be considered ____ in the communication process. a. field of experience b. feedback c. noise. d. decoding blocker. e. interference. 201. Marketers of seasonal products tend to emphasize a. personal selling. b. word-of-mouth communication. c. public relations. d. sales promotion. e. advertising. 202. A consumer contest is an example of a. personal selling. b. sales promotion. c. social media. d. direct selling. e. public relations. 203. The receiver's response to a message is ____ for the source. a. feedback b. the communications channel c. noise d. channel capacity e. decoding 204. Anika works at a toy manufacturer. Recently, the company has had to issue a massive recall because parts of a toy have been found to be a choking hazard for small children. A national newspaper published an article that is highly critical of the firm. Anika tries to handle the backlash from the recall and bad press, but her firm has no policies in place that provide her with guidance in this situation. She consults with Emmett, a crisis communication expert at a local college. Emmett suggests that Anika's company develop crisis communication policies to deal with these negative _____________ issues in the future. a. sales promotion efforts b. integrated marketing communication c. product placement d. public relations e. viral marketing

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Chap 16_20e 205. New introductory promotion is most likely to be used during the ____ stage of the product life cycle. a. maturity b. decline c. growth d. introduction e. regression 206. If a manufacturer decides to use a push policy to promote its products, it is most likely to focus its efforts on a. business customers. b. ultimate consumers. c. resellers. d. other producers. e. institutional users. 207. Mass media advertising is used less frequently today because of a. its high cost and lower effectiveness in reaching some target markets. b. its low cost and effectiveness in reaching some target markets. c. the rise of social media. d. its limited effectiveness in reaching target markets. e. integrated marketing communications. 208. In the GEICO advertisement that claims, "15 minutes can save you 15% or more," GEICO is the communication a. receiver. b. transmitter. c. decoder. d. source. e. noise. 209. One of the biggest problems associated with ____ as an element of promotion is the high absolute dollar outlay often required. a. personal selling b. advertising c. public relations d. sales promotion e. packaging

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Chap 16_20e 210. Toasties offers customers a card that allows them to have a free sandwich for every seven that have been purchased and provides various discounts throughout the year. The primary promotional objective of programs such as this is a. encouraging product trial. b. retaining existing customers. c. stimulating primary demand. d. combating competitive promotional offers. e. reducing sales fluctuations. 211. Which of the following types of promotion informs potential customers about a product and what it is? a. Reminder b. Competitive c. Comparative d. New introductory e. Repetitive 212. Holden is reading a magazine ad for a new cologne. In the ad, he sees little more than a photo of a man riding horseback on a beach, and the name of the new cologne, Valor. In this situation, Holden is a ___, one who ___. a. sender; encodes b. receiver; decodes c. source; encodes d. receptor; decodes e. channel member; decodes Scenario 16.2 Use the following to answer the questions. The manufacturers of Laundry Whizz, a new laundry detergent, are developing their promotional plan for the first year. They know they want to use an integrated communications strategy and are considering the use of advertising through TV and magazines, coupons, public relations, sales promotion, and viral marketing. They are not sure when to use each of these methods, however, and have asked for your advice. 213. Refer to Scenario 16.2. Since Laundry Whizz is a new product, which of the following promotional methods would you least recommend? a. Magazine ads b. Viral marketing c. Television commercials d. A price-reduction sales promotion e. Public relations

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Chap 16_20e 214. A new soft drink company took out a national advertisement announcing its new butterscotch-flavored soda. However, while people in one part of the country recognized they were talking about a soft drink, others believed it was an ice cream drink. Still, others use the term to refer to something mixed with alcoholic drinks. Therefore, there was much confusion about the term and what it means. The mistake here lies with the a. channel of communication. b. marketing channel. c. noise. d. source. e. audience. 215. The coordination of promotion and other marketing efforts for maximum informational and persuasive impact defines a. communication. b. integrated marketing communications. c. tactile communication. d. kinesic communication. e. proxemic communication. 216. Which is the best example of noise that originates with the receiver in the communication process? a. Celine drives through a tunnel, and her radio signal becomes very weak. b. Emily has been studying English for two years and does not understand the symbolism being used in a commercial. c. Aroon simply tunes out pop-up ads on the internet so that they don't even enter his awareness. d. Because of poor printing, Nawar cannot read an advertisement in her local newspaper. e. A mother fails to hear a new commercial for diapers because her new baby is crying. 217. Personal selling is used most commonly in the B2B market as well as in the B2C market for a. mass-market products. b. low-price products. c. high-end products. d. personal services. e. raw materials. 218. Why is face-to-face communication more flexible in comparison with digital, web-based, or telephone communications when marketing a new or existing product?

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Chap 16_20e 219. What are the differences in trying to stimulate primary demand versus selective demand?

220. Compared to advertising, what are the major advantages and limitations of personal selling?

221. How does sales promotion differ from promotion in general?

222. Identify and describe the four major promotion mix elements.

223. Explain the communication process.

224. Explain what product placement is and discuss its growing popularity within entertainment media.

225. Discuss the impact that social media has had on the strategy for promotion.

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Chap 16_20e 226. Why is public relations an important form of communication about a company? Discuss negative public relations, and give an example.

227. In what ways can promotion be used to reduce sales fluctuations?

228. Identify the major objectives of promotion.

229. What is integrated marketing communications? Explain its purpose.

230. Discuss the major factors that affect the selection of promotion mix elements.

231. Select three criticisms of promotion, and provide defenses to refute them.

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Chap 16_20e Answer Key 1. True 2. True 3. False 4. False 5. True 6. True 7. True 8. False 9. False 10. False 11. False 12. True 13. False 14. False 15. True 16. True 17. False 18. True 19. True 20. False 21. False 22. True 23. False 24. True 25. False 26. True

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Chap 16_20e 27. True 28. False 29. True 30. False 31. False 32. False 33. True 34. False 35. True 36. True 37. True 38. False 39. True 40. True 41. True 42. True 43. True 44. False 45. True 46. True 47. False 48. True 49. False 50. True 51. True 52. True 53. True 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 55. False 56. False 57. False 58. True 59. True 60. False 61. True 62. True 63. False 64. False 65. False 66. True 67. False 68. False 69. True 70. True 71. False 72. False 73. c 74. e 75. e 76. e 77. e 78. a 79. d 80. e 81. b 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 83. c 84. b 85. c 86. a 87. a 88. b 89. c 90. b 91. e 92. c 93. c 94. a 95. c 96. a 97. d 98. a 99. e 100. e 101. c 102. a 103. d 104. b 105. c 106. e 107. b 108. c 109. e 110. a Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 111. e 112. a 113. b 114. b 115. b 116. b 117. a 118. a 119. c 120. d 121. c 122. e 123. c 124. d 125. a 126. a 127. d 128. d 129. d 130. a 131. c 132. b 133. a 134. b 135. e 136. b 137. b

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Chap 16_20e 138. a 139. b 140. a 141. e 142. d 143. c 144. a 145. d 146. c 147. e 148. d 149. c 150. d 151. c 152. d 153. c 154. e 155. c 156. d 157. a 158. b 159. b 160. b 161. e 162. b 163. b 164. e 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 166. e 167. c 168. e 169. e 170. e 171. e 172. a 173. d 174. c 175. b 176. d 177. c 178. d 179. b 180. a 181. e 182. a 183. c 184. a 185. b 186. e 187. b 188. d 189. d 190. c 191. a 192. e 193. e Copyright Cengage Learning. Powered by Cognero.

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Chap 16_20e 194. e 195. b 196. c 197. e 198. d 199. c 200. c 201. e 202. b 203. a 204. d 205. d 206. c 207. a 208. d 209. b 210. b 211. d 212. b 213. d 214. d 215. b 216. c 217. c

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Chap 16_20e 218. During face-to-face communication, such as personal selling sales promotions, verbal and nonverbal feedback can be immediate. Instant feedback lets communicators adjust messages quickly to improve the effectiveness of their communications. For example, when a salesperson realizes through feedback that a customer does not understand a sales presentation, the salesperson adapts the presentation to make it more meaningful to the customer. This is why face-to-face communication is the most adaptive and flexible, especially compared to digital, web-based, or telephone communications. In interpersonal communication, feedback occurs through talking, touching, smiling, nodding, eye movements, and other body movements and postures. 219. When an organization is the first to introduce an innovative product, it tries to stimulate primary demand—demand for a product category rather than for a specific brand of product—through new introductory promotion. New introductory promotion informs potential customers about the product: what it is, what it does, how it can be used, and where it can be purchased. Because new introductory promotion is used in the introductory stage of the product life cycle, meaning there are no competing brands, it neither emphasizes brand names nor compares brands. To build selective demand, demand for a specific brand, a marketer employs promotional efforts that point out the strengths and benefits of a specific brand. Building selective demand also requires singling out attributes important to potential buyers. Selective demand can be stimulated by differentiating the product from competing brands in the minds of potential buyers. Selective demand can also be stimulated by increasing the number of product uses and promoting them through advertising campaigns, as well as through price discounts, free samples, coupons, consumer contests and games, and sweepstakes. In addition, selective demand can be stimulated by encouraging existing customers to use more of the product. 220. Personal selling has both advantages and limitations when compared with advertising. Advertising is general communication aimed at a relatively large target audience, whereas personal selling involves more specific communication directed at one or several individuals. Reaching one person through personal selling costs considerably more than through advertising, but personal selling efforts often have greater impact on customers. Personal selling also provides immediate feedback, allowing marketers to adjust their messages to improve communication. Such interaction helps them determine and respond to customers’ information needs. 221. Sales promotion is an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers. Examples include free samples, games, rebates, sweepstakes, contests, premiums, and coupons. Sales promotion should not be confused with promotion; sales promotion is just one part of the comprehensive area of promotion. Marketers spend more on sales promotion than on advertising, and sales promotion appears to be a faster-growing area than advertising. 222. The four possible elements of a promotion mix are advertising, personal selling, public relations, and sales promotion. Advertising is a paid nonpersonal communication about an organization and its products transmitted to a target audience through mass media, including television, radio, the internet, newspapers, magazines, video games, direct mail, outdoor displays, and signs on mass transit vehicles. Personal selling is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. The phrase purchase products is interpreted broadly to encompass acceptance of ideas and issues. Personal selling is most extensively used in the business-to-business market. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. Maintaining a positive relationship with one or more stakeholders can affect a firm’s current sales and profits, as well as its long-term survival. Sales promotion is an activity or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers.

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Chap 16_20e 223. Communication begins with a source. A source is a person, group, or organization with a meaning it attempts to share with an audience. A source could be an electronics salesperson wishing to communicate the attributes of 4K television to a buyer in the store or a TV manufacturer using television ads to inform thousands of consumers about its products. A receiver is the individual, group, or organization that decodes a coded message, and an audience is two or more receivers. To transmit meaning, a source must convert the meaning into a series of signs or symbols representing ideas or concepts. This is called the coding process, or encoding. When coding meaning into a message, the source must consider certain characteristics of the receiver or audience. To share a coded meaning with the receiver or audience, a source selects and uses a communications channel, the medium of transmission that carries the coded message from the source to the receiver or audience. Transmission media include printed words (newspapers and magazines), broadcast media (television and radio), and digital communication. In the decoding process, signs or symbols are converted into concepts and ideas. Seldom does a receiver decode exactly the same meaning the source intended. When the result of decoding differs from what was coded, noise exists. The receiver’s response to a decoded message is feedback to the source. The source usually expects and normally receives feedback, although perhaps not immediately. During feedback, the receiver or audience provides the original source with a response to the message. Feedback is coded, sent through a communications channel, and decoded by the receiver, the source of the original communication. Thus, communication is a circular process. 224. A growing technique for reaching consumers is the selective placement of products within the context of television programs viewed by the target market. Product placement is a form of advertising that strategically locates products or product promotions within entertainment media to reach the product’s target markets. Apple is considered to be an expert at product placement. For instance, it partnered with Netflix to have several of its iPads and iPhones in the TV series House of Cards. Such product placement has become more important due to the increasing fragmentation of television viewers who have ever-expanding viewing options and technology that can screen advertisements (e.g., digital video recorders such as TiVo). A study found that 60 percent of respondents download or use digital video recorders so they can skip over the commercials. In-program product placements have been successful in reaching consumers as they are being entertained. Reality programming in particular has been a natural fit for product placements, because of the close interchange between the participants and the product. 225. Electronic word of mouth is particularly important to consumers staying abreast of trends. Blogs and online news sites play an essential role in propagating electronic word-of-mouth communications about everything from gossip to politics to consumer goods. They provide consumers with information on trends, reviews of products, and other information on what is new, exciting, and fashionable for consumers. These sites have become so influential in introducing consumers to new products and shaping their views about them that marketers are increasingly monitoring them to identify new trends; some firms have even attempted to influence users’ votes on their favorite items. Marketers must increasingly court bloggers, who wield growing influence over consumer perception of companies, goods, and services. Social media has been used successfully for promotion through viral marketing. Viral marketing is a strategy to get consumers to share a marketer’s message, often through e-mail or online video, in a way that spreads dramatically and quickly.

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Chap 16_20e 226. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. Maintaining a positive relationship with one or more stakeholders can affect a firm’s current sales and profits, as well as its long-term survival. Public relations uses a variety of tools, including annual reports, brochures, event sponsorship, and sponsorship of socially responsible programs aimed at protecting the environment or helping disadvantaged individuals. The goal of public relations is to create and enhance a positive image of the organization. Other tools arise from the use of publicity, which is a component of public relations. Publicity is nonpersonal communication in news-story form about an organization or its products, or both, transmitted through a mass medium at no charge. Unpleasant situations and negative events, such as product tampering or an environmental disaster, may generate unfavorable public relations for an organization. For instance, Abercrombie & Fitch faced a public relations nightmare after previous comments from its CEO surfaced indicating that the company did not make clothes for heavier, older, or uncool people. This caused a considerable backlash for consumers offended by the CEO’s comments. To minimize the damaging effects of unfavorable coverage, effective marketers have policies and procedures in place to help manage any public relations problems. Public relations should not be viewed as a set of tools to be used only during crises. To get the most from public relations, an organization should have someone responsible for public relations either internally or externally and should have an ongoing public relations program. 227. Demand for many products varies from one month to another because of such factors as climate, holidays, and seasons. A business, however, cannot operate at peak efficiency when sales fluctuate rapidly. Changes in sales volume translate into changes in production, inventory levels, personnel needs, and financial resources. When promotional techniques reduce fluctuations by generating sales during slow periods, a firm can use its resources more efficiently. Promotional techniques are often designed to stimulate sales during sales slumps. During peak periods, a marketer may refrain from advertising to prevent stimulating sales to the point at which the firm cannot handle all of the demand. On occasion, a company advertises that customers can be better served by coming in on certain days. 228. The eight major promotional objectives are (a) create awareness; (b) stimulate demand; (c) encourage product trial; (d) identify products; (e) retain loyal customers; (f) facilitate reseller support; (g) combat competitive promotional efforts; and (h) reduce sales fluctuations. 229. Integrated marketing communications refer to the coordination of promotion and other marketing efforts to ensure maximum informational and persuasive impact on customers. Coordinating multiple marketing tools to produce this synergistic effect requires a marketer to employ a broad perspective. A major goal of integrated marketing communications is to send a consistent message to customers.

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Chap 16_20e 230. Marketers vary the composition of promotion mixes for many reasons. Although a promotion mix can include all four elements, frequently, a marketer selects fewer than four. Many firms that market multiple product lines use several promotion mixes simultaneously. The size of an organization’s promotional budget affects the number and relative intensity of promotional methods included in a promotion mix. If a company’s promotional budget is extremely limited, the firm is likely to rely on personal selling because it is easier to measure a salesperson’s contribution to sales than to measure the sales effectiveness of advertising. An organization’s promotional objectives and policies also influence the types of promotion selected. If a company’s objective is to create mass awareness of a new convenience good, such as a breakfast cereal, its promotion mix probably leans heavily toward advertising, sales promotion, and possibly public relations. Size, geographic distribution, and demographic characteristics of an organization’s target market help dictate the methods to include in a product’s promotion mix. If the size is limited, the promotion mix will probably emphasize personal selling, which can be very effective for reaching small numbers of people. Personal selling is more feasible if a company’s customers are concentrated in a small area than if they are dispersed across a vast region. When the company’s customers are numerous and dispersed, regional or national advertising may be more practical. Distribution of a target market’s demographic characteristics, such as age, income, or education, may affect the types of promotional techniques a marketer selects, as well as the messages and images employed. Generally, promotion mixes for business products concentrate on personal selling, whereas advertising plays a major role in promoting consumer goods. Marketers of highly seasonal products often emphasize advertising—and sometimes sales promotion as well—because off-season sales generally will not support an extensive year-round sales force. A product’s price also influences the composition of the promotion mix. High-priced products call for personal selling, because consumers associate greater risk with the purchase of such products and usually want information from a salesperson. For low-priced convenience items, marketers use advertising rather than personal selling. Another consideration in creating an effective promotion mix is the stage of the product life cycle. Intensity of market coverage is still another factor affecting the composition of the promotion mix. A product’s use also affects the combination of promotional methods. Costs of promotional methods are major factors to analyze when developing a promotion mix. National advertising and sales promotion require large expenditures. Another consideration that marketers explore when formulating a promotion mix is availability of promotional techniques. Despite the tremendous number of media vehicles in the United States, a firm may find that no available advertising medium effectively reaches a certain target market. Another element that marketers consider when planning a promotion mix is whether to use a push policy or a pull policy. With a push policy, the producer promotes the product only to the next institution down the marketing channel. A firm that uses a pull policy promotes directly to consumers to develop strong consumer demand for its products. It does so primarily through advertising and sales promotion.

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Chap 16_20e 231. Even though promotional activities can help customers make informed purchasing decisions, social scientists, consumer groups, government agencies, and members of society in general have long criticized promotion. The student may pick any three of these six criticisms: One common criticism of promotion is that it is deceptive and unethical. Laws, government regulations, and industry self-regulation have helped to decrease most intentionally deceptive promotion; customers may be unintentionally misled because some words have diverse meanings. The vast majority of promotion is not deceptive. Promotion is also criticized for raising prices, but in fact it can lower them. When promotion stimulates demand, higher production levels may result in lower per-unit production costs, which keeps prices lower; when demand is not stimulated, however, prices increase owing to the added costs of promotion. Promotion fuels price competition, which helps keep prices lower. Some critics of promotion claim that it manipulates consumers by persuading them to buy products they do not need, hence creating “artificial” needs. Many marketers capitalize on people’s needs by basing their promotional appeals on these needs; however, marketers do not actually create these needs. If there were no promotion, people would still have basic needs such as food, clothing, transportation, social, and physiological needs. Another frequent criticism of promotion is that it leads to materialism. Because promotion creates awareness and visibility for products, it may contribute to materialism in the same way that movies, sports, theater, art, and literature may contribute to materialism. If there were not promotion, it is likely that there would still be materialism among some groups, as evidenced by the existence of materialism among some ancient groups of people. Every year, firms spend billions of dollars for promotion. The question is whether promotion helps customers enough to be worth the cost. Customers learn about products through promotion, allowing them to learn about products and make more intelligent buying decisions. Promotion helps create competition.. Finally, some critics of promotion, including consumer groups and government officials, suggest that certain products should not be promoted at all. Some critics suggest that promotion of possibly unhealthy products should not be allowed at all; others argue that as long as it is legal to sell such products, promoting those products should be allowed. In a society with commercial freedom of speech, there will always be diverse opinions.

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Chap 17_20e Indicate whether the statement is true or false. 1. The advertising platform consists of the basic issues and selling points that an advertiser wishes to include in the campaign. a. True b. False 2. Radio copy should consist of short, familiar terms. a. True b. False 3. Reminder advertising is not applicable to new products. a. True b. False 4. The arbitrary approach to setting an advertising budget often results in inappropriate spending of the firm's resources. a. True b. False 5. Almost all advertising campaigns are aimed at producing immediate sales. a. True b. False 6. A layout includes only the illustrations used in an advertisement. a. True b. False 7. Relative to the cost of advertising, the cost of publicity is high. a. True b. False 8. Advertising objectives should be stated in clear, precise, and measurable terms. a. True b. False 9. Advertising agencies often have more highly skilled people than the advertising departments of firms. a. True b. False 10. To be unbiased, a member of a consumer jury should not be a current user of the advertised product. a. True b. False

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Chap 17_20e 11. The choice of media influences the content and form of the message. a. True b. False 12. Event sponsorship can provide companies with a considerable amount of free media coverage. a. True b. False 13. The advertising budgets for industrial products are usually large relative to the sales of the products. a. True b. False 14. Media planning is a complex task requiring thorough analysis of the target audience, perhaps through sophisticated computer models. a. True b. False 15. A public relations audit is used to assess an organization's image among its publics or to evaluate the effect of a specific public relations program. a. True b. False 16. Advertisements that promote goods and services are called advocacy advertisements. a. True b. False 17. Salespeople’s perception of brand advertising is negatively related to their effort and performance. a. True b. False 18. A cost comparison indicator (such as CPM) should not be used to compare the cost and impact of a television commercial with the cost and impact of a newspaper advertisement. a. True b. False 19. If a company is perceived positively by the public, employee morale is often higher. a. True b. False 20. A public relations audit identifies changes in public opinion affecting the organization. a. True b. False

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Chap 17_20e 21. Normally, if an advertising agency contracts for $200,000 of television time, it would receive a commission of $30,000 from the television station. a. True b. False 22. The advertising platform is the foundation on which campaign messages are built. a. True b. False 23. A feature article is longer than a news release and is written for a particular publication. a. True b. False 24. The type of posttest an advertiser uses is affected by the type of advertising objectives set by the advertiser. a. True b. False 25. The effectiveness of an advertising campaign can be measured only after the completion of the campaign, when results are tabulated. a. True b. False 26. Small and medium-sized firms never use advertising agencies to produce campaigns for them. a. True b. False 27. To assume that sales create advertising is incorrect. a. True b. False 28. One way an advertising agency assists a firm is that it takes care of all the grunt work in order to give its clients time to do the creative work on the campaign. a. True b. False 29. A feature article is likely to be more informative than a news release. a. True b. False 30. Product advertising is often used to stimulate demand directly. a. True b. False

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Chap 17_20e 31. In unaided recall testing, respondents are shown the actual advertisement and are asked whether they recognize it. a. True b. False 32. Publicity is usually very costly financially for a firm because the firm needs to spend money convincing the media to promote their newsworthy events. a. True b. False 33. Pioneer advertising attempts to stimulate demand for a specific brand. a. True b. False 34. The signature is not part of the verbal portion of an advertisement. a. True b. False 35. Reinforcement advertising tells current users how to get the most satisfaction from the brand they have chosen. a. True b. False 36. In very small firms, an advertising agency is usually responsible for advertising. a. True b. False 37. Public relations is rarely used by nonprofit organizations to achieve their goals. a. True b. False 38. An effective approach for dealing with potential unfavorable public relations resulting from a negative event is to discourage news coverage. a. True b. False 39. Advertising departments may use independent research organizations or freelance specialists for some of their projects. a. True b. False 40. In a comparative advertisement, advertisers point out that their brand has characteristics that are superior to those of competing brands, but they do not actually mention the brand names of competitors. a. True b. False

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Chap 17_20e 41. Advertising is paid nonpersonal communication transmitted through mass media. a. True b. False 42. If a restaurant, known for its delicious food and fun entertainment, does not serve alcohol, it is displaying advocacy advertising. a. True b. False 43. Native advertising is called “native” because it is meant to resemble the content itself. a. True b. False 44. When sales go up, advertising should be increased; when sales decline, advertising should be decreased. a. True b. False 45. Regardless of resources, nature of product, or type of target market, all firms use the same number of steps in the exact order when developing an advertising campaign. a. True b. False 46. Because ad agencies often get commissions on media purchases, firms can obtain some agency services at moderate prices. a. True b. False 47. Public relations, unlike advertising, is not particularly useful for promoting an organization's image. a. True b. False 48. Lack of control over the content and timing of public relations is a limitation in using publicity-based public relations tools. a. True b. False 49. A marketer's advertising platform should consist of issues that are important to consumers. a. True b. False 50. Comparative advertisements mention the actual names of competing brands. a. True b. False

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Chap 17_20e 51. Public relations efforts are directed primarily toward external stakeholders such as customers and the media. a. True b. False 52. Ad agencies usually work jointly with the firms to develop the ad campaigns. a. True b. False 53. When an advertiser defines objectives on the basis of sales, the objectives focus on increasing absolute dollar or unit sales, increasing sales by a certain percentage, or increasing the firm's market share. a. True b. False 54. Business organizations are the only major users of advertising. a. True b. False 55. If a commercial advertisement compares one brand of laundry detergent to another brand, this is a type of competitive advertising. a. True b. False 56. Public relations is communication in news story form about an organization, its products, or both that is transmitted through a mass medium at no charge. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 57. Diego was in a group considered to be actual or potential purchasers of a new mountain bike produced by TwoWheel Sports. He and the other consumers were shown three different advertisements and asked to judge several dimensions of each one. Diego participated in a(n) a. posttest consumer group. b. panel of advertising experts. c. consumer jury. d. customer ad panel. e. ad preview group. 58. The main problem with using the objective-and-task approach to setting an advertising budget is that a. it takes the view that sales create advertising rather than advertising creates sales. b. it often results in overspending or underspending of the firm's resources. c. it does not achieve full potential in terms of stimulating demand. d. the marketer may experience difficulty when trying to estimate accurately the level of effort needed to achieve goals. e. it is difficult to determine the objectives of the campaign. Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 59. Why should a benchmark statement be included in advertising objectives? a. Shareholders want to see where a company is in relation to competition. b. It is useful in determining whether retailers have increased their sales over the year. c. It gives an indication of how the advertising message is best presented. d. Without a reference point, it is difficult to determine to what degree objectives have been accomplished. e. Objectives become more easily attainable when such a statement is included. 60. An advantage of the arbitrary approach for determining the advertising appropriation is that it is a. objective. b. unique. c. accurate. d. effective. e. expedient. 61. A single page of typewritten copy that has 300 words or less and describes a company event or product is called a a. press story. b. feature article. c. captioned paragraph. d. news release. e. publicity bulletin. 62. When respondents are shown a list of various products, brands, and company names and then asked about advertisements they have seen lately, researchers are conducting a(n) a. unaided recall test. b. pretest. c. recognition test. d. aided recognition test. e. aided recall test. 63. Jonathan is aware of the growth in digital media advertising, particularly to certain target markets. The use of advertising on digital devices can alienate young consumers. Jonathan has uncovered recent research stating that young consumers are more likely to be receptive to advertising appearing on their digital devices if the source is _____; _____ has been given, and the messages are ______. a. known; a coupon; exciting b. trusted; permission; relevant or entertaining c. liked; permission; monetarily beneficial d. trusted; a discount; exciting e. known; a discount; humorous

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Chap 17_20e 64. Which of the following would most likely fall under the responsibility of an advertising agency? a. Copywriting and artwork b. Public relations services c. Advertising appropriation d. Legal services e. Developing advertising objectives 65. In small firms, one or two individuals typically handle advertising activities and tend to rely on ______ for copywriting, artwork, and media scheduling advice. a. an advertising agency b. local media c. an advertising department d. a freelance specialist e. national media 66. Which of the following statements applies to media planning? a. Characteristics of the product are the most important consideration in selecting the media for a campaign. b. The message content affects the types of media used for an advertising campaign. c. The location of the advertising target is irrelevant in media planning. d. Total media dollars spent on advertising have decreased over the last 30 years. e. Regardless of the message to be conveyed, newspapers are one medium that is appropriate for almost any circumstances. 67. The media plan determines a. how many people in the target audience will be exposed to the message. b. how much the campaign will cost. c. the content of the message. d. who will prepare the advertisements. e. the layout of the message. 68. ______ attempts to stimulate demand for a specific brand by promoting the brand’s features, uses, and advantages, perhaps through direct or indirect comparison with rival brands. a. Native advertising b. Advocacy advertising c. Pioneer advertising d. Competitive advertising e. Primary demand advertising

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Chap 17_20e 69. When developing an advertising campaign, benchmarks need to be included in the a. campaign platform. b. evaluation of the advertising effectiveness. c. statement of advertising objectives. d. media plan. e. budget. 70. An advertising platform is the a. basic issue or selling point that an advertiser wishes to include in an advertising campaign. b. objective of the advertising campaign, stated in precise and measurable terms. c. form in which the basic issues of the campaign should be presented. d. broad objectives of the advertising campaign. e. consumer advertising research conducted. 71. The owner of a professional baseball team asks the account representative of an advertising agency to develop an advertising campaign to bring more teenagers to the ballpark. At this point, the account representative logically begins to discuss establishing ______ for the campaign. a. the target audience b. a budget c. a media plan d. advertising objectives e. advertising directives 72. Anique presents an identification card at the supermarket checkout and has a microcomputer attached to her TV. Information from both of these is sent to a research facility. Anique is providing a. family behavior recording. b. individual consumer jury. c. single-source data. d. advertisement exposure data. e. detailed market research. 73. A consumer jury is a a. group of consumers who have purchased the product before who evaluate its effectiveness. b. panel of existing or potential buyers of the advertised product brought together to pretest an advertising message. c. panel of buyers who review and evaluate an advertising message after it has been circulated in certain regions. d. group of consumers who determine whether or not other consumers have been treated fairly by companies. e. panel of consumer experts who rank the effectiveness of advertisements.

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Chap 17_20e 74. Astrid is considering advertising her new restaurant on the radio to attract more customers. She knows that in order to attract listeners' attention on the radio, it will be important for her to a. use a high level of repetition. b. buy a really long time slot to get all the information in. c. be both informal and conversational in tone. d. use a quick speaker to attract attention to the commercial. e. say the restaurant's name and location three separate times. 75. Kent works in the public relations department of his company. He sends a news release about a new product offering to several newspapers and television stations. Kent knows from past experience that even when the media use his news releases, they often release the information at inopportune times. They will also sometimes cut out what Kevin believes are the most important points to make the news fit. However, Kent accepts these disadvantages because free publicity offers the advantage of a. credibility. b. target market awareness. c. timeliness. d. accuracy. e. feasibility. 76. Matheus and Jen are discussing the media plan for the opening of their new bar/laundromat called Harvey Washbangers. He tells her that while he agrees that ____ has a tremendous impact, he does not feel that the upfront costs for such a campaign are in the modest budget that presently exists. a. online b. outdoor c. television d. direct mail e. newspaper 77. Spencer Scarbrough of Scarbrough's department stores tells his marketing director that he is tired of the constant price-centered advertising by the firm's agency. "We have the best customer service in town, and I feel that is what we should be hanging our hats on," he states. This statement is most appropriate for use in which of the following stages of campaign development? a. Determining the appropriations b. Creating the platform c. Identifying the target audience d. Defining objectives e. Developing the media plan

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Chap 17_20e 78. When a copywriter and an artist combine the copy with the visual material for a television commercial, it usually is done through use of a a. parallel format. b. commercial layout. c. layout procedure. d. storyboard. e. visual-impact process. 79. The effectiveness of an advertising campaign can be measured a. only after the campaign has been carried out completely and results have been tabulated. b. only before the campaign begins, to prevent unnecessary expenditures. c. during the campaign to determine whether more or less funds should be allocated, but not after the campaign. d. several weeks after the beginning of the campaign to determine whether the campaign is headed in the right direction. e. before, during, and after the campaign through the use of pretests, inquiries, and posttests. 80. Ake works for a national sporting goods store in the marketing department. He wants to place advertisements in sports magazines that target teenagers. He notices that the sports preferences of teenagers tend to differ in different parts of the country. In one geographic area, for instance, teens are highly into skating culture. Along the coast, however, many teenagers are more interested in surf culture. Because these target markets differ, Ake should probably try to place advertisements in ______ of magazines. a. special editions b. ad inserts c. regional issues d. national issues e. geographic editions 81. Carrie, who works in the marketing department at a consumer electronics firm, is part of a team assigned to develop an advertising campaign for the firm's newest electronic product. Carrie and her team have decided that they will take out advertisements in certain magazines that best reach their target market. Carrie will also advertise heavily on the firm's website and social media pages. Finally, they agree that they should take out 30second television advertisements that will run for two weeks on a pulsing schedule. At what stage are Carrie and her team in the development of the advertising campaign? a. Creating the advertising platform b. Defining the advertising objectives c. Determining the advertising appropriation d. Developing the media plan e. Creating the advertising message

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Chap 17_20e 82. ____ provide businesses with copywriters, artists, production coordinators, media experts, researchers, and other highly skilled specialists. a. Public relation firms b. Media companies c. Advertising agencies d. Production companies e. Promotion experts 83. The first stage in the development of any advertising campaign is a. creating the message. b. setting the budget. c. identifying the advertising target audience. d. defining the advertising objectives. e. creating the advertising platform. 84. Your company CEO is a very socially conscious individual who believes in prudently utilizing the resources of the company to promote causes that are good for the environment and society-at-large. She recently asked you to work with the firm’s outside ad agency to develop an advertising campaign that articulates the company’s concern about climate change. Which of the following types of advertising will you pursue to meet her expectations? a. Competitive advertising b. Comparative advertising c. Pioneer advertising d. Reminder advertising e. Advocacy advertising 85. Scenario 17.1 Use the following to answer the questions. The Toyota Corporation is developing its promotional plan for the coming year and is considering several types of advertising to communicate its messages. Toyota will likely advertise its vehicle, the RAV4, on TV, on its website, in major national magazines, and through Facebook. It is possible that the ads could focus on the features of the RAV4 and its most likely competitor, the Honda CR-V. Other forms of advertising that can be considered are ads that feature all of the Toyota brands in a single ad, while mentioning only the Toyota brand and its company's strengths. Finally, Toyota will probably continue to advertise updates of its cash cow brands, the Camry and the hybrid versions of its SUVs. Refer to Scenario 17.1. If the ads include both the RAV4 and the Honda CR-V, they would be examples of a. institutional advertising. b. public relations. c. product advertising. d. comparative advertising. e. competitive advertising. Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 86. During the duration of an advertising campaign, Verizon ran television advertisements at a steady rate throughout the week and intensified its message with newspaper advertising in many major newspapers in the Sunday paper. Verizon used a(n)____ media schedule. a. flighting b. continuous c. pulsing d. alternating e. multimedia 87. _______________ is digital advertising that matches the appearance and purpose of the content in which it is embedded. a. Native advertising b. Institutional advertising c. Comparative advertising d. Content advertising e. Advocacy advertising 88. An advertising platform should consist of issues of product characteristics or features that are important to consumers and a. are not available in competing products. b. can be seen easily in a photograph. c. are familiar concepts to those in the target market. d. competitive products have as well. e. are reasonably inexpensive to develop. 89. The total amount of money a marketer allocates for advertising for a specific time period is the a. marketing budget. b. advertising appropriation. c. advertising accumulation. d. promotion grant. e. finances for advertising. 90. Barron is responsible for the promotions and public relations of his firm, which produces rubber tires. A recent development in technology may change the way in which the rubber for tires is produced, allowing it to be sourced from the roots of dandelion plants. Barron would like to have a story run on the evening news or in the local newspaper about this development, but he knows that this story is likely to be rejected by media personnel because the material is a. too long. b. written at too high a reading level. c. submitted by an organization that the media does not like. d. not persuasive enough. e. not newsworthy.

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Chap 17_20e 91. A car dealership is altering how it determines its advertising appropriation. It is moving from an approach where it sets its budget based on projected revenue for the coming year to one in which it identifies the cost required to meet certain goals. It is switching from the _____ approach to the _____ approach. a. competitive-matching; arbitrary b. percentage-of-sales; competitive-matching c. competitive-matching; objective-and-task d. percentage-of-sales; objective-and-task e. arbitrary; competitive-matching 92. A list of the exact magazines, newspapers, and television stations in which an advertisement will appear, along with the dates and times, is a(n) a. advertising plan. b. media plan. c. media audit. d. advertising media appropriation. e. media platform. 93. The identification of an advertisement's sponsor is the a. copy. b. signature. c. trademark. d. layout. e. subheadline. 94. Zeke is developing a print advertisement for GEICO. He knows that the ______ is a critical component of the copy because _____. a. headline; it determines the final layout design b. headline; it is often the only part of the advertisement that is read c. artwork; it takes up the most space d. tagline; it links the copy to the signature e. slogan; it links the artwork to the signature 95. The Ford Agency places $2,500 in radio spots and $17,500 in television spots for Darnell Insurance in June. For its efforts this month, the agency "traditionally" would receive ____ in compensation. a. $2,500 b. $10,000 c. $1,000 d. $5,500 e. $3,000

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Chap 17_20e 96. Malik works for F1 where his responsibilities include maintaining favorable relationships between the organization and its stakeholders. Malik is most likely employed in a. sales. b. advertising. c. human resources. d. public relations. e. digital media marketing. 97. An advertiser that wanted to use a medium that allows for good reproduction quality, a long life to its message, demographic selectivity, and the ability to provide detailed information would likely choose a. direct mail. b. television. c. radio. d. outdoor advertising. e. magazines. 98. Little Caesars is considering using magazine advertising. The company wants to reach as many people as possible, but due to budget constraints, Pizza Hut must reach consumers as efficiently as possible. What can Little Caesars use to evaluate various magazines? a. A cost comparison indicator b. The total circulation of the magazines c. A list of the costs of a one-page ad in various magazines d. The advertising appropriations for each magazine e. An index of advertisement exposure 99. The maker of Huggies diapers is developing a media plan that involves trying to expose its target audience to its new advertisement about ten times. This is advertising a. reach. b. repetition. c. frequency. d. targeting. e. exposure. 100. The advertising department for the Valvoline Corporation is working on a print advertisement for a new product. At this point, the layout contains a phrase to attract attention, an additional phrase to provide an explanation, an illustration to show the product, and a paragraph to explain the advantages and benefits of the product. What other important copy element should be included? a. Headline b. Subheadline c. Signature d. Artwork e. Body copy

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Chap 17_20e 101. You and your marketing team are conducting a series of focus groups with potential customers of a new product your firm is launching next year. The purpose of these focus groups is to find out what potential customers consider most important in the selection and use of this new product. Which of the following steps in the advertising campaign development process are you performing with this activity? a. Defining the advertising objectives b. Determining the advertising appropriation c. Developing the media plan d. Creating the advertising platform e. Identifying and analyzing the target audience 102. Which of the following lists forms of competitive advertising? a. Pioneer, comparative, reminder b. Reminder, repetitive, reinforcement c. Comparative, reminder, reinforcement d. Institutional, product, comparative e. Product, pioneer, reminder 103. Scenario 17.2 Use the following to answer the questions. The State Farm Group includes several companies. Probably the most well-known company in the group is the State Farm Insurance company, the largest auto and home insurer in the United States. State Farm Insurance provides protection for approximately 78 million policies on auto, fire, life, and health services. It is also a leading insurer of homes and autos in Canada. Another company in the State Farm group is the State Farm Bank, which was opened in 2000, beginning State Farm's entry into the financial services field. However, the State Farm Bank is not a traditional bank, in that it has no branch offices and its services are provided through State Farm agents, a call center, the mail, and on the internet. It currently serves over 1.9 million bank accounts. Refer to Scenario 17.2. If State Farm were to decide that its previous method of appropriating the advertising budget was ineffective, it could decide to allocate 2%n of its total annual sales to advertising. However, one problem with this method is that a. it makes the bookkeeping too difficult. b. it is tied too closely to sales forecasts. c. a sales decline leads to an increase in the advertising appropriation. d. a drop in sales would cause a drop in the advertising budget. e. competitors may have different advertising objectives.

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Chap 17_20e 104. During which stage of the product life cycle is pioneer advertising most appropriate? a. Introduction b. Growth c. Maturity d. Recession e. Decline 105. Which of the following is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its customers, suppliers, employees, shareholders, the media, educators, potential investors, government officials, and society in general? a. Advertising b. Public relations c. A press strategy d. Personal selling e. Publicity 106. Maya Stuhlbarg, director of marketing for Rheinhold Industrial Products, complains to her advertising director that the continuing slump in orders has apparently been perpetuated by the firm's failure to have the necessary advertising expenditures. Based on this information, Rheinhold is most likely using the ____ approach to determine its advertising expenditures. a. percent-of-sales b. objective-and-task c. competition-matching d. arbitrary e. judgmental 107. If an advertising campaign is aimed at increasing brand awareness and consumers' knowledge of a product's features, the advertising objective should be stated in terms of a. market share. b. dollar sales. c. unit sales. d. communication. e. long-run goals. 108. The limitations in using publicity-based public relations tools stem primarily from the fact that a. marketers alter the length of publicity releases. b. publicity is never properly managed by media personnel. c. media personnel consider only unfavorable messages as newsworthy. d. it is time-consuming to convince media personnel that the information is newsworthy. e. media personnel control the content of the communication.

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Chap 17_20e 109. ______ advertising supports organizational images, ideas, and political issues while ______ advertising touts the uses, features, and benefits of goods and services. a. Reminder; competitive b. Publicity; pioneer c. Institutional; reminder d. Advocacy; product e. Institutional; product 110. Which of the following is an image with a brief description that can be used to illustrate new or improved products? a. Feature article b. News release c. Captioned photograph d. Advertising materials e. Speech 111. To determine how much money to spend on advertising, marketers for a new brand of caffeinated energy drink decided that they wanted the advertising to create awareness of the new flavor in 80% of the energy drink market within six months of introduction. The marketers then determined how much it would cost to reach this goal. This is an example of which one of the following approaches to determining advertising budgets? a. Objective-and-task b. Percent of sales c. Competition matching d. Arbitrary allocation e. Past-year comparison 112. TJMaxx, an off-price retailer featuring clothing and housewares, communicates in news story form about its organization and its efforts to support local children's hospitals. This information is transmitted through mass media at no charge and is therefore called a. news reporting. b. public relations. c. mass communications. d. free advertising. e. publicity. 113. Advertising that aims to create a more favorable view of a company as a whole in the eyes of various stakeholders is called ____ advertising. a. institutional b. product c. organizational d. pioneer e. advocacy

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Chap 17_20e 114. The percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period of time is the definition of a. frequency. b. exposure. c. reach. d. media profile index. e. frequency proportion. 115. ______ can be considered a public relations tool because what a company executive says publicly at meetings or to the media can affect the organization’s image. a. Event sponsorships b. Speeches c. News releases d. Annual reports e. Corporate identity materials 116. Sony is releasing a new version of its CyberShot digital camera. As part of the launch, it has submitted a 2,500word story to Popular Photography, a magazine for camera users. This is a public relations tool known as a. publicity. b. a news release. c. a captioned photo. d. a feature article. e. event sponsorship. 117. Marcus wonders whether the creative idea of using the character called "Timmy Tortoise" as an image for marketing a new line of running shoes will be successful. He should suggest to his account representative that a(n) ____ be used to pretest the campaign. a. storyboard b. survey c. experiment d. GSR test e. consumer jury 118. Chou has been given the responsibility of determining the advertising appropriation for her firm's newest advertising campaign. At first, she thinks that determining the advertising objectives and breaking them into tasks is the best way. However, Chou notices that past sales have been relatively constant, she multiplies the firm's past sales by a standard percentage based on what her firm usually spends on advertising. Chou is using the ______ approach. The problem of this approach is that it assumes ________. a. objective-and-task; the effort required is minimal b. objective-and-task; advertising creates sales c. percent-of-sales; advertising creates sales d. objective-and-task; sales create advertising e. percent-of-sales; sales create advertising Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 119. Scenario 17.2 Use the following to answer the questions. The State Farm Group includes several companies. Probably the most well-known company in the group is the State Farm Insurance company, the largest auto and home insurer in the United States. State Farm Insurance provides protection for approximately 78 million policies on auto, fire, life, and health services. It is also a leading insurer of homes and autos in Canada. Another company in the State Farm group is the State Farm Bank, which was opened in 2000, beginning State Farm's entry into the financial services field. However, the State Farm Bank is not a traditional bank, in that it has no branch offices and its services are provided through State Farm agents, a call center, the mail, and on the internet. It currently serves over 1.9 million bank accounts. Refer to Scenario 17.2. When deciding on its advertising allocation for the coming year, State Farm Insurance could choose to spend the same amount as Safe Auto, another auto insurance company, or it could allocate an amount that is 10% of last year’s premiums. If State Farm uses the same amount as Safe Auto, this method of advertising appropriation is known as the ____ approach; if State Farm uses the amount based on last year’s premiums, the method would be _____. a. competition-matching; percent-of-sales b. arbitrary; competition-matching c. competition-matching; objective-and-task d. arbitrary; objective-and-task e. objective-and-task; percent-of-sales 120. If during an advertising campaign a certain portion of advertising runs continuously, and then during specific periods additional advertising is used to intensify the level of communication, a(n) ____ media schedule is being used. a. interval b. alternating c. flighting d. continuous with emphasis e. pulsing 121. Brands that are promoted through comparative advertising are most likely to be a. market leaders. b. brands that are attempting to compete with market leaders. c. primarily services rather than tangible goods. d. attempting to compete on a nonprice basis. e. competing in a less competitive market.

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Chap 17_20e 122. Which of the following is used to assess an organization’s image among the public or to evaluate the effect of a specific public relations program? a. Environmental monitoring b. Public relations audit c. Consumer jury d. Social audit e. Communications audit 123. When Mini Cooper ran an advertising campaign featuring the slogan, "Texting and Driving Don’t Mix," it was using a. competitive advertising. b. public relations. c. product advertising. d. public service awareness. e. advocacy advertising. 124. An ad's ____ is designed to attract readers' attention and develop interest so that they will read the entire advertisement. a. signature b. layout c. headline d. artwork e. subheadline 125. You are a brand manager for a major retailer, and you just completed developing a series of advertisements with the help of your outside ad agency. You are excited about the ads and you are anxious to get the marketing vice president’s opinion of the ads. Unfortunately, the vice president does not believe the ads will be effective. She wants you to do some type of effectiveness evaluation of the ads before the company spends a lot of money running them. Which of the following evaluation techniques should you use? a. A consumer jury b. A recognition test c. An unaided recall test d. An aided recall test e. Any type of post test

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Chap 17_20e 126. When Subaru’s advertising campaign mentions the Subaru Forester being named a 2018 IIHS Top Safety Pick, it is using _______ advertising. a. reminder b. reinforcement c. competitive d. defensive e. institutional 127. Some of the posttest methods for measuring advertising effectiveness are based on how well consumers remember advertising and include (1) recognition tests and (2) recall tests. What is the basic difference between these two approaches? a. The actual ads are shown in the former but not in the latter. b. The former method relies on memory alone, and the latter shows the actual ads. c. One uses a consumer jury; the other uses random individuals. d. The respondents are given class clues in the latter but not in the former. e. One is used primarily by the government, and the other is used by private businesses. 128. The advertising campaign for Colgate toothpaste lets consumers know about its newest flavor, and also mentions its history as an established brand. The ad also mentions Colgate’s advantages and benefits. Colgate’s advertising would be classified as a. repetitive. b. reminder. c. pioneer. d. competitive. e. reinforcement. 129. Kellogg’s used a panel of consumers to evaluate its Kashi Heart to Heart cereal campaign featuring children who read the cereal box and try to persuade their parents to watch their cholesterol. These consumers judged the advertisements prior to the execution of the advertising campaign. This is an example of a(n) a. pretest. b. inquiry test. c. recognition test. d. recall test. e. posttest. 130. Advertising agencies typically receive a. large fees from the companies whose ads they develop and place. b. a 15% commission from the company whose product they are helping advertise. c. a 10% commission from the advertising company and 10% from the media they use. d. a 25% commission paid by the media from which it makes purchases. e. a 15% commission paid by the media from which it makes purchases.

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Chap 17_20e 131. After the target audience for an advertising campaign has been identified and analyzed, marketers should then proceed by a. creating the advertising platform. b. determining the financial resources available. c. defining the advertising objectives. d. developing a media plan. e. creating an advertising message. 132. Maya is determining the media plan for her tax accounting business. She is currently selecting an advertising medium and is looking for a medium that is not expensive, allows for a short lead time, has a large reach, and provides frequent communication. Based on these, Maya should avoid a. direct mail. b. television. c. radio. d. outdoor advertising. e. magazines. 133. Pioneer advertising is most likely to be used during which of the following product life-cycle stages? a. Maturity b. Growth c. Decline d. Introduction e. Runout 134. Li Wei is responsible for developing the promotional campaign for Club Ride’s new line of bicycle clothing for seniors. He will be writing advertising campaign objectives that are aimed at making the target customers' attitudes more favorable toward Club Ride, which should be stated in ____ terms. a. communication b. sales c. demand d. market e. information 135. Artwork, a major part of most advertisements, consists of the a. illustration and the signature. b. illustration and the layout. c. illustration and type of print used in the headlines. d. layout and the signature. e. method by which all the components are put together.

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Chap 17_20e 136. If a company calls a meeting to announce a major news event, this is known as a a. media call. b. press conference. c. news release. d. press release. e. public service announcement. 137. An advertising campaign is typically developed by an individual or a few persons within the firm, an advertising department within the organization, or a. an advertising agency. b. a group of media specialists. c. a group of multiskilled managers. d. a "special projects" group. e. freelance advertising consultants. 138. As Mateo reads the copy for South Beach Hotel's upcoming magazine ad in Miami Style, he worries that no one will spend the time to read all the details of the facilities his resort has to offer. Wanting to have the greatest impact, Mateo focuses his creative efforts on the a. copy. b. body. c. text. d. signature. e. headline. 139. One approach to measuring the effectiveness of publicity-based public relations is to a. request the TV station record its name and dates of when the news item was broadcast. b. count the number of exposures in the media. c. hire a clipping service. d. conduct a readership survey. e. conduct a content analysis. 140. Hanes is launching a new advertising campaign. Within the first six months of the campaign, the media planners want the new advertisement’s _____ to be 25% of the target market and the _____ to be four times. a. reach; frequency b. goal; multiplier c. exposure; repetition d. range; rate e. impact; recurrence

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Chap 17_20e 141. Dial Soap's advertising slogan "Aren't you glad you use Dial? Don't you wish everybody did?" exemplifies the use of ____ advertising. a. reinforcement b. offensive c. comparative d. institutional e. defensive 142. The verbal portion of an advertisement, including headlines, body, and signature, is called the a. artwork. b. copy. c. storyboard. d. layout. e. script. 143. The target audience for an advertising campaign is the a. information base on which to develop the campaign. b. geographic distribution of persons. c. people toward whom the advertisements are directed. d. overall goal of the advertising campaign. e. sales objective to be achieved by the campaign. 144. Public relations focuses on a. boosting product sales. b. enhancing the image of the total organization. c. reaching the firm’s target market. d. improving employee morale. e. diminishing the image of rival firms. 145. Which of the following is the most important consideration when choosing an event to sponsor? a. That the product and the event are easily associated b. The length and location of the event c. When the event occurs d. Whether or not the event is a national event e. The specific name of the event 146. What is the primary justification marketers use for conducting recognition and recall tests? a. Researchers find that recalling an advertisement has a strong link to purchasing a product. b. People have unfavorable views of advertising and are unlikely to purchase advertised products. c. Consumers tend to enjoy participating in these tests and are likely to purchase the products as a result. d. People are more likely to buy a product they have seen advertised than one they have not seen advertised. e. There is a strong link between advertisement recall/recognition and word-of-mouth communication. Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 147. Soft drink companies advertise that their products beat the competition in national "taste tests," and they refer to the rival brands by name. This type of advertising is best described as a. pioneer. b. competitive. c. comparative. d. defensive. e. selective. 148. Scenario 17.1 Use the following to answer the questions. The Toyota Corporation is developing its promotional plan for the coming year and is considering several types of advertising to communicate its messages. Toyota will likely advertise its vehicle, the RAV4, on TV, on its website, in major national magazines, and through Facebook. It is possible that the ads could focus on the features of the RAV4 and its most likely competitor, the Honda CR-V. Other forms of advertising that can be considered are ads that feature all of the Toyota brands in a single ad, while mentioning only the Toyota brand and its company's strengths. Finally, Toyota will probably continue to advertise updates of its cash cow brands, the Camry and the hybrid versions of its SUVs. Refer to Scenario 17.1. Advertisements such as the one proposed above for the Camry and hybrid SUVs are most likely an example of a. product advertising. b. comparative advertising. c. competitive advertising. d. institutional advertising. e. reminder advertising. 149. The basic issues or selling points that an advertiser wants to include in an advertising campaign is/are the a. advertising objectives. b. target audience objectives. c. media plan. d. advertising message. e. advertising platform. 150. Malia works for a consumer packaged goods firm in the marketing department. She is trying to assess the effectiveness of a recent public relations campaign to improve the image of her firm, and, therefore, its sales. She is trying to determine which news releases her firm sent out were actually published in newspapers. What should she do to get that measurement? a. Hire a clipping service b. Conduct a listenership survey c. Request the TV station record its name and dates of when the news item was broadcast d. Conduct a readership survey e. Conduct a content analysis

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Chap 17_20e 151. A marketer that wanted to include detailed information in advertisements would most likely use a. radio. b. television. c. outdoor displays. d. magazines. e. mass transit. 152. When individuals' behaviors are tracked from television sets to checkout counters using equipment provided by the marketer, this is known as a. family behavior recording. b. single-source data. c. individual consumer jury. d. advertisement exposure data. e. detailed market research. 153. The greatest benefit of using event sponsorship is that it a. enhances personal selling efforts. b. provides excellent support for advertisements. c. can provide large amounts of free media coverage. d. is cost-free. e. neutralizes the effects of unfavorable public relations. 154. After the advertising budget is determined, the next step in creating an advertising campaign is a. creating the advertising message. b. creating the advertising platform. c. evaluating the advertising objectives. d. executing the campaign. e. developing the media plan. 155. A tool that allows an advertiser to compare the costs of several media vehicles within a specific medium relative to the number of persons reached by each vehicle is called a(n) a. cost comparison indicator. b. media comparison selector. c. unit-price selector. d. cost/person index. e. vehicle/price indicator.

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Chap 17_20e 156. Suppose Liberty Mutual Insurance stated, "We want our advertising to increase our customer base for home and automobile insurance 10 percent by the end of the fiscal year." This would be considered a(n) a. target audience goal. b. advertising platform. c. percent-of-sales approach. d. advertising objective. e. media plan goal. 157. Which of the following is NOT an advantage of using publicity-based public relations tools? a. Control by media personnel of the content and timing of messages b. Credibility c. Strong news value d. Follow-up word-of-mouth communications e. A favorable perception of being endorsed by the media 158. A schedule in which advertisements run for set periods of time, alternating with periods in which no ads are run is known as a. continuous. b. skipping. c. pulsing. d. flighting. e. intervals. 159. Which of the following is the best example of native advertising? a. The Old Spice Man uses humor to promote Old Spice so the campaign goes viral on the internet. b. Ben & Jerry's takes out an advertisement describing how their ice cream does not use GMOs and supports the humane treatment of cows. c. Fidelity Investments sponsors an article on the Forbes website that discusses whether to accept an employer's buyout offer. d. Red Bull sponsors the space jump of daredevil Felix Baumgartner as a way to generate publicity. e. Coca-Cola acts as the primary sponsor of this year's Special Olympics. 160. The cost per thousand (CPM) indicator shows a. the cost to expose 1,000 people to a television commercial. b. the cost to expose 1,000 people to a one-page magazine advertisement. c. the return on investment marketers get for their advertising dollar. d. the cost to expose a million people to any type of advertisement. e. how one media source compares to a different source for reaching target markets.

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Chap 17_20e 161. Universal decided to run its new commercials for all of its theme parks several times a day for three weeks and then not at all for two weeks. It will then run the commercials again for three more weeks. Universal is using a ____ schedule for its advertising. a. flighting b. varying c. continuous d. pulsing e. interval 162. Logos, business cards, stationery, signs, and promotional materials that make firms immediately recognizable comprise their a. publicity tools. b. sales promotion materials. c. corporate identity materials. d. advertising materials. e. personal selling tools. 163. The two major types of product advertising are a. institutional and advocacy. b. pioneer and competitive. c. competitive and comparative. d. advocacy and competitive. e. informative and comparative. 164. The _____ design element of an advertisement is used to attract attention, communicate an idea quickly, or communicate ideas that are difficult to put into words; the ____ is the physical arrangement of the illustration, headline, subheadline, body copy, and the signature. a. illustration; layout b. headline; layout c. layout; design d. layout; storyboard e. signature; layout 165. Recognition and recall tests are posttest methods based on a. mail surveys. b. memory. c. inquiries. d. preferences. e. in-depth interviews.

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Chap 17_20e 166. Measuring effectiveness during a campaign is usually accomplished by using a. pretests. b. posttests. c. consumer juries. d. inquiries. e. sales force surveys. 167. Scenario 17.1 Use the following to answer the questions. The Toyota Corporation is developing its promotional plan for the coming year and is considering several types of advertising to communicate its messages. Toyota will likely advertise its vehicle, the RAV4, on TV, on its website, in major national magazines, and through Facebook. It is possible that the ads could focus on the features of the RAV4 and its most likely competitor, the Honda CR-V. Other forms of advertising that can be considered are ads that feature all of the Toyota brands in a single ad, while mentioning only the Toyota brand and its company's strengths. Finally, Toyota will probably continue to advertise updates of its cash cow brands, the Camry and the hybrid versions of its SUVs. Refer to Scenario 17.1. Toyota's television advertisements for the RAV4 are examples of a. publicity. b. institutional advertising. c. product advertising. d. comparative advertising. e. pioneer advertising. 168. Scenario 17.2 Use the following to answer the questions. The State Farm Group includes several companies. Probably the most well-known company in the group is the State Farm Insurance company, the largest auto and home insurer in the United States. State Farm Insurance provides protection for approximately 78 million policies on auto, fire, life, and health services. It is also a leading insurer of homes and autos in Canada. Another company in the State Farm group is the State Farm Bank, which was opened in 2000, beginning State Farm's entry into the financial services field. However, the State Farm Bank is not a traditional bank, in that it has no branch offices and its services are provided through State Farm agents, a call center, the mail, and on the internet. It currently serves over 1.9 million bank accounts. Refer to Scenario 17.2. Cal Ripken, Jr., and State Farm teamed up to promote State Farm's national teen driver safety program. The marketing division at State Farm produced a one-page document that described the partnership, which was then published in several national newspapers and on the internet. The document from State Farm is an example of ____, while the publication in the newspapers is an example of ____. a. public relations; publicity b. public relations; a news release c. publicity; advocacy advertising d. a news release; publicity e. publicity; a news release Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 169. Jada is interested in measuring the effectiveness of her firm's public relations campaigns. She would like to perform a content analysis of the firm's messages as well as a readership survey. Jada is most likely performing a a. social audit. b. communications audit. c. public relations audit. d. advertising audit. e. environmental audit. 170. Which of the following is the most commonly used type of publicity-based public relations tool? a. News release b. Captioned photograph c. Feature article d. Press conference e. Letter to the editor 171. Kaito works in the communications division of a large toy manufacturer. Recently, his company was forced to issue a nationwide recall after it was discovered that the supplier of some of the parts used in making the toys had used lead paint. The news has spread like wildfire, and rumors have begun to replace facts. Kaito has been constantly busy answering questions from the media, assuring the public that the company is taking appropriate action, fielding calls from government officials, and more. He has come up with a statement acknowledging the incident on the corporate Facebook page and its website. He is also helping the CEO craft a response. Kaito has learned the difficult lesson that a. government regulators always fine firms when they have to issue a massive recall. b. managers spend more resources responding to negative word of mouth than positive word of mouth. c. it is impossible for managers to develop an adequate response to a major crisis event. d. the company's response will not be able to quell the misinformation regarding a crisis event. e. it is impossible to develop a crisis management plan because nobody knows the type of crisis or when it will occur. 172. Which of the following is NOT a public relations tool? a. Feature article b. Company magazine c. News release d. Annual report e. Product sample

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Chap 17_20e 173. The University of Iowa runs a series of ads throughout the Midwest on how friendly and helpful its faculty, staff, and students are as well as how outstanding its academic programs are. This type of promotion would best be characterized as a. public relations. b. product advertising. c. advocacy advertising. d. institutional advertising. e. comparative advertising. 174. A content analysis of an organization's messages, readability studies, and readership surveys are all tools used to conduct a(n) a. consumer survey. b. public relations audit. c. environmental audit. d. communications audit. e. social audit. 175. Reinforcement advertising is primarily targeted at a. new potential target markets. b. users of competitors' brands and products. c. anyone who uses that type of product. d. all the stakeholders of an organization. e. the current users of a particular product. 176. Which of the following statements is true about public relations? a. Publicity is not part of public relations. b. The most common publicity-based tool is the press conference. c. Marketers cannot control whether the media choose to publish their public relations material. d. Publicity-based public relations do not have limitations. e. Event sponsorship is not an effective public relations tool. 177. Lucia is working on developing a magazine advertisement for Orange Therapy, a health and fitness club. She knows what she wants the advertisement to say and the illustrations she wants to use, but she is having a tough time putting it all together. Lucia is having trouble determining the a. storyboard. b. artwork. c. copy. d. presentation. e. layout.

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Chap 17_20e 178. When a company promotes its position on a public issue, this is specifically referred to as ____ advertising. a. institutional b. product c. advocacy d. issue e. competitive 179. _____________ identifies changes in public opinion affecting an organization. a. A public relations audit b. A financial audit c. A communications audit d. A social audit e. Environmental monitoring 180. The step in developing an advertising campaign that directly precedes campaign execution is a. defining advertising objectives. b. creating the advertising platform. c. evaluating advertising effectiveness. d. developing a media plan. e. creating the advertising message. 181. If researchers at Johnson & Johnson developed a cure for prostate cancer, the best way to announce this to the public and get wide media coverage would be through a a. captioned paragraph. b. press release. c. feature article. d. sponsorship. e. press conference. 182. An evaluation performed before an advertising campaign begins is a a. consumer exam. b. posttest. c. recognition test. d. pretest. e. recall test. 183. ____ is a broad set of communication activities used to create and maintain favorable relations between the organization and its stakeholders. a. Advertising b. Selling c. A press strategy d. Public relations e. Publicity Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 184. The media planner’s primary goal is to a. reach everyone in the target market. b. spend as little as possible. c. achieve the appropriate message reach and frequency for the target audience while staying within budget. d. reach the largest number of people in the advertising target that the budget will allow. e. use as many media as possible. 185. If Walmart were to base its advertising appropriation on the amount that Target spends, it would be using the ____ approach. a. objective-and-task b. percent-of-sales c. industry-standard d. arbitrary e. competition-matching 186. Mr. Gatti's wants to get free publicity and be associated with a worthy cause that resonates with consumers. It wants to achieve this with relatively little investment. It should engage in a. press conferences. b. television advertising. c. event sponsorship. d. writing feature articles. e. elebrity endorsement. 187. The last stage in the development of any advertising campaign is a. creating the advertising platform. b. developing the media plan. c. creating the advertising message. d. evaluating the effectiveness of advertising. e. defining the advertising objectives. 188. Tectron Products Company advertises a specific product heavily, and Initech wants to offset the effects of that advertising. In this case, Initech would most likely employ ____ advertising. a. competitive b. pioneer c. institutional d. primary e. native

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Chap 17_20e 189. The three general types of media schedules are a. pulsing, alternating, and continuous. b. short, medium, and long-term. c. flighting, continuous, and repetitive. d. pulsing, continuous, and flighting. e. light, heavy, and alternating. 190. Advertising appropriations are largest for which type of product? a. Business products b. Convenience goods c. Shopping products d. Specialty goods e. Infrequently purchased goods 191. You are the head of marketing for a major oil company based in the United States. Recently, your company was involved in a major oil spill off the coast of Alaska where millions of barrels of crude oil were accidentally released into the Gulf of Alaska. The negative publicity for your company has been fast and furious since the spill occurred. However, your company took a very proactive approach in managing the disaster and the resulting publicity. Now your CEO wants to assess how effective the company has been in repairing its image. Which of the following would you recommend to the CEO? a. A communications audit b. A customer survey c. A public relations audit d. A press conference e. A social audit 192. An ad for a multivitamin that claims, "We still bring you everything you need to get through your day in one vitamin," would most likely be considered ____ advertising. a. reinforcement b. competitive c. comparative d. reminder e. institutional 193. Describe the various methods used to evaluate the advertising effectiveness after a campaign.

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Chap 17_20e 194. What is an advertising platform? What is the best way to develop a platform?

195. Identify and describe four publicity-based public relations tools.

196. What is public relations and for what purposes is it used?

197. What are the components of a print ad? What are the functions of each component?

198. What approaches can be used to evaluate the effectiveness of public relations programs?

199. How should an organization deal with negative publicity?

200. Discuss how event sponsorship can be used as a public relations tool.

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Chap 17_20e 201. What are the major differences between sales-based and communications-based advertising objectives?

202. What are the advantages of using an advertising agency to develop an advertising campaign?

203. Describe the major types of advertising and discuss how they differ.

204. What are the major components of a media plan? What factors must be considered as the media plan is implemented?

205. What are the important issues to consider when developing advertising objectives?

206. Compare the competition-matching approach with the arbitrary approach in determining an advertising appropriation. Which method might more easily lead to overspending or underspending on the appropriation?

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Chap 17_20e Answer Key 1. True 2. True 3. True 4. True 5. False 6. False 7. False 8. True 9. True 10. False 11. True 12. True 13. False 14. True 15. True 16. False 17. False 18. True 19. True 20. False 21. True 22. True 23. True 24. True 25. False 26. False

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Chap 17_20e 27. True 28. False 29. True 30. True 31. False 32. False 33. False 34. False 35. True 36. False 37. False 38. False 39. True 40. False 41. True 42. False 43. True 44. False 45. False 46. True 47. False 48. True 49. True 50. True 51. False 52. True 53. True 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 55. True 56. False 57. c 58. d 59. d 60. e 61. d 62. e 63. b 64. a 65. b 66. b 67. a 68. d 69. c 70. a 71. d 72. c 73. b 74. c 75. a 76. c 77. b 78. d 79. e 80. c 81. d 82. c Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 83. c 84. e 85. d 86. c 87. a 88. a 89. b 90. e 91. d 92. b 93. b 94. b 95. e 96. d 97. e 98. a 99. c 100. c 101. d 102. c 103. d 104. a 105. b 106. a 107. d 108. e 109. e 110. c Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 111. a 112. e 113. a 114. c 115. b 116. d 117. e 118. e 119. a 120. e 121. b 122. b 123. e 124. c 125. a 126. c 127. a 128. b 129. a 130. e 131. c 132. e 133. d 134. a 135. b 136. b 137. a

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Chap 17_20e 138. e 139. b 140. a 141. a 142. b 143. c 144. b 145. a 146. d 147. c 148. e 149. e 150. a 151. d 152. b 153. c 154. e 155. a 156. d 157. a 158. d 159. c 160. b 161. a 162. c 163. b 164. a 165. b Copyright Cengage Learning. Powered by Cognero.

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Chap 17_20e 166. d 167. c 168. d 169. b 170. a 171. b 172. e 173. d 174. d 175. e 176. c 177. e 178. c 179. e 180. e 181. e 182. d 183. d 184. d 185. e 186. c 187. d 188. a 189. d 190. b 191. c 192. d

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Chap 17_20e 193. Evaluation of advertising effectiveness after the campaign is called a posttest. Advertising objectives often determine what kind of posttest is appropriate. If the objectives’ focus is on communication—to increase awareness of product features or brands or to create more favorable customer attitudes—the posttest should measure changes in these dimensions. Advertisers sometimes use consumer surveys or experiments to evaluate a campaign based on communication objectives. These methods are costly, however. In posttests, generalizations can be made about why advertising is failing or why media vehicles are not delivering the desired results. Posttest methods based on memory include recognition and recall tests. Such tests are usually performed by research organizations through surveys. In a recognition test, respondents are shown the actual advertisement and asked whether they recognize it. If they do, the interviewer asks additional questions to determine how much of the advertisement each respondent read. When recall is evaluated, respondents are not shown the actual advertisement but instead are asked about what they have seen or heard recently. Recall can be measured through either unaided or aided recall methods. In an unaided recall test, respondents identify advertisements they have seen recently but are not shown any clues to help them remember. A similar procedure is used with an aided recall test, but respondents are shown a list of products, brands, company names, or trademarks to jog their memories. 194. An advertising platform consists of the basic issues or selling points that an advertiser wishes to include in the advertising campaign. A single advertisement in an advertising campaign may contain one or several issues from the platform. Although the platform sets forth the basic issues, it does not indicate how to present them. An advertising platform should consist of issues important to customers. One of the best ways to determine those issues is to survey customers about what they consider most important in the selection and use of the product involved. Selling features must not only be important to customers, they should also be strongly competitive features of the advertised brand. Research is the most effective method for determining what issues to include in an advertising platform, but customer research can be expensive. Because the advertising platform is a base on which to build the advertising message, marketers should analyze this stage carefully. It has been found that, if the message is viewed as useful, it will create greater brand trust. Campaigns will ultimately fail if the advertisements communicate information that consumers do not deem important when selecting and using the product. 195. Publicity is a part of public relations. Publicity is communication in news-story form about the organization, its products, or both, transmitted through a mass medium at no charge. Publicity is a very important aspect of public relations. Publicity can be used to provide information about goods or services; to announce expansions or contractions, acquisitions, research, or new-product launches; or to enhance a company’s image. The most common publicity-based public relations tool is the news release, sometimes called a press release, which is usually a single page of typewritten copy containing fewer than 300 words and describing a company event or product. A news release gives the firm’s or agency’s name, address, phone number, and contact person. Companies sometimes use news releases when introducing new products or making significant announcements. A feature article is a manuscript of up to 3,000 words prepared for a specific publication. A captioned photograph is a photograph with a brief description explaining its contents. Captioned photographs are effective for illustrating new or improved products with highly visible features. There are several other kinds of publicity-based public relations tools. For example, a press conference is a meeting called to announce major news events. Media personnel are invited to a press conference and are usually supplied with various written materials and photographs.

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Chap 17_20e 196. Public relations is a broad set of communication efforts used to create and maintain favorable relationships between an organization and its stakeholders. An organization communicates with various stakeholders, both internal and external, and public relations efforts can be directed toward any and all of them. A firm’s stakeholders can include customers, suppliers, employees, shareholders, the media, educators, potential investors, government officials, and society in general. The response to a PR blunder is also important. Organizations that delay their response or that are dishonest with stakeholders are likely to make a bad situation worse. Public relations can be used to promote people, places, ideas, activities, and even countries. It is often used by nonprofit organizations to achieve their goals. Public relations focuses on enhancing the image of the total organization. Assessing public attitudes and creating a favorable image are no less important than direct promotion of the organization’s products. Because the public’s attitudes toward a firm are likely to affect the sales of its products, it is very important for firms to maintain positive public perceptions. In addition, employee morale is strengthened if the public perceives the firm positively. Although public relations can make people aware of a company’s products, brands, or activities, it can also create specific company images, such as innovativeness or dependability. By getting the media to report on a firm’s accomplishments, public relations helps the company maintain positive public visibility. Some firms use public relations for a single purpose; others use it for several purposes. 197. Components of a print ad include a headline, a subheadline, body copy, signature, and illustration. Copy is the verbal portion of an advertisement and may include headlines, subheadlines, body copy, and a signature. Not all advertising contains all of these copy elements. The headline is critical because often it is the only part of the copy that people read. It should attract readers’ attention and create enough interest to make them want to read the body copy or visit the website. The subheadline, if there is one, links the headline to the body copy and sometimes serves to explain the headline. Body copy for most advertisements consists of an introductory statement or paragraph, several explanatory paragraphs, and a closing paragraph. The signature identifies the advertisement’s sponsor. It may contain several elements, including the firm’s trademark, logo, name, and address. The signature should be attractive, legible, distinctive, and easy to identify in a variety of sizes. Illustrations are often photographs but can also be drawings, graphs, charts, and tables. Illustrations are used to draw attention, encourage audiences to read or listen to the copy, communicate an idea quickly, or convey ideas that are difficult to express. Illustrations can be more important in capturing attention than text or brand elements, independent of size. They are especially important, because consumers tend to recall the visual portions of advertisements better than the verbal portions. 198. A public relations audit is used to assess an organization’s image among the public or to evaluate the effect of a specific public relations program. A communications audit may include a content analysis of messages, a readability study, or a readership survey. One approach to measuring the effectiveness of publicity-based public relations is to count the number of exposures in the media. To determine which releases are published in print media and how often, an organization can hire a clipping service, a firm that clips and sends news releases to client companies. Counting the number of media exposures does not reveal how many people have actually read or heard the company’s message or what they thought about the message afterward. However, measuring changes in product awareness, knowledge, and attitudes resulting from the publicity campaign helps yield this information. To assess these changes, companies must measure these levels before and after public relations campaigns. Although precise measures are difficult to obtain, a firm’s marketers should attempt to assess the impact of public relations efforts on the organization’s sales. For example, critics’ reviews of films can affect the films’ box office performance.

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Chap 17_20e 199. First and foremost, the organization should try to prevent potential negative incidents and events through safety programs, inspections, training, and effective quality control procedures. Experts insist that sending consistent brand messages and images throughout all communications at all times can help a brand maintain its strength even during a crisis. However, because negative events can strike even the most cautious firms, an organization should have plans in place to handle them when they do occur. They need to establish policies and procedures for reducing the adverse impact of news coverage of a crisis or controversy. In most cases, organizations should expedite news coverage of negative events rather than try to discourage or block them. If news coverage is suppressed, rumors and other misinformation may replace facts and create public scrutiny. An unfavorable event can balloon into serious problems or public issues and become very damaging. By being forthright with the press and public and taking prompt action, a firm may be able to convince the public of its honest attempts to deal with the situation, and news personnel may be more willing to help explain complex issues to the public. Dealing effectively with a negative event allows an organization to lessen, if not eliminate, the unfavorable impact on its image. Experts generally advise companies that are dealing with negative publicity to respond quickly and honestly to the situation and to keep the lines of communication with all stakeholders open. Digital media has enhanced the organizational ability to communicate with key stakeholders and develop dialogues on current issues. 200. Event sponsorship, in which a company pays for part or all of a special event, like a benefit concert or a tennis tournament, is another public relations tool. Examples are Coca-Cola’s sponsorship of the FIFA World Cup and Special Olympics. Sponsoring special events can be an effective means of increasing company or brand recognition with relatively minimal investment. Event sponsorship can gain companies considerable amounts of free media coverage. An organization tries to ensure that its product and the sponsored event target a similar audience and that the two are easily associated in customers’ minds. 201. If an advertiser defines objectives on the basis of sales, the objectives focus on increasing absolute dollar sales or unit sales, increasing sales by a certain percentage, or increasing the firm’s market share. Even though an advertiser’s long-run goal is to increase sales, not all campaigns are designed to produce immediate sales. Some campaigns aim to increase product or brand awareness, make consumers’ attitudes more favorable, heighten consumers’ knowledge of product features, or create awareness of positive, healthy consumer behavior, such as nonsmoking. If the goal is to increase product awareness, the objectives are stated in terms of communication. A specific communication objective might be to increase new product feature awareness, such as increased travel point rewards on a credit card from 0% to 40% in the target audience by the end of six months. 202. Most large corporations employ an advertising agency to develop advertising campaigns. When an organization uses an advertising agency, the firm and the agency usually develop the advertising campaign jointly. How much each participates in the campaign’s total development depends on the working relationship between the firm and the agency. Ordinarily, a firm relies on the agency for copywriting, artwork, technical production, and formulation of the media plan. Advertising agencies assist businesses in several ways. An agency, especially a large one, can supply the services of highly skilled specialists—not only copywriters, artists, and production coordinators but also media experts, researchers, and legal advisers. Agency personnel often have broad advertising experience and are usually more objective than a firm’s employees about the organization’s products. Because an agency traditionally receives most of its compensation from a 15% commission paid by the media from which it makes purchases, firms can obtain some agency services at low or moderate costs.

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Chap 17_20e 203. Advertising can be classified as institutional or product advertising. Institutional advertising promotes organizational images, ideas, and political issues. It can be used to create or maintain an organizational image. Institutional advertisements may deal with broad image issues, such as organizational strengths or the friendliness of employees. They may also aim to create a more favorable view of the organization in the eyes of noncustomer groups, such as shareholders, consumer advocacy groups, potential shareholders, or the general public. When a company promotes its position on a public issue, institutional advertising is referred to as advocacy advertising. There are two types of product advertising: pioneer and competitive. Pioneer advertising focuses on stimulating demand for a product category by informing potential customers about the product’s features, uses, and benefits. Competitive advertising attempts to stimulate demand for a specific brand by promoting the brand’s features, uses, and advantages, sometimes through indirect or direct comparisons with competing brands. Other forms of competitive advertising include reminder and reinforcement advertising. Reminder advertising tells customers that an established brand is still around and still offers certain characteristics, uses, and advantages. Reinforcement advertising assures current users that they have made the right brand choice and tells them how to get the most satisfaction from that brand. A newer form of advertising is known as native advertising. Native advertising is digital advertising that matches the appearance and purpose of the content in which it is embedded. 204. A media plan sets forth the exact media vehicles to be used and the dates and times the advertisements will appear. The plan determines how many people in the target audience will be exposed to the message. The method also determines, to some degree, the effects of the message on those specific target markets. To formulate a media plan, the planners select the media for the campaign and prepare a time schedule for each medium. The media planner’s primary goal is to reach the largest number of people in the advertising target that the budget will allow. A secondary goal is to achieve the appropriate message reach and frequency for the target audience while staying within budget. Reach refers to the percentage of consumers in the target audience actually exposed to a particular advertisement in a stated period. Frequency is the number of times these targeted consumers are exposed to the advertisement. The rise in digital marketing is creating a dramatic shift for advertising agencies. Whereas competition came mostly from other agencies before, today, professional ad agencies face competition from amateur ad makers along with technology companies. Digital marketing is not reduced to one medium, but can include platforms such as social networks, e-books, iPads, geotargeting, and mobile apps. Agencies that choose to embrace new advertising media are facing challenges in adapting but are finding increased profits along the way. Big data can open the door to reaching the most desirable customers and have a positive effect on sales. The content of the message sometimes affects media choice. The cost of media is an important but troublesome consideration. Planners try to obtain the best coverage possible for each dollar spent. Media are selected by weighing the various advantages and disadvantages of each. Like media selection decisions, media scheduling decisions are affected by numerous factors, such as target audience characteristics, product attributes, product seasonality, customer media behavior, and size of the advertising budget. 205. Advertising objectives guide campaign development, and therefore advertisers should define objectives carefully. Advertising objectives should be stated clearly, precisely, and in measurable terms. Quantifiable metrics allow advertisers to evaluate advertising success at the end of the campaign in terms of whether objectives have been met. To provide precision and measurability, advertising objectives should contain benchmarks and indicate what the advertiser hopes to accomplish. If the goal is to increase sales, the advertiser should state the current sales level (the benchmark) and the amount of sales increase sought through advertising. An advertising objective should also specify a time frame so that advertisers know exactly how long they have to accomplish the objective.

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Chap 17_20e 206. The competition-matching approach is one of the ways to determine advertising appropriation. Marketers following this approach try to match their major competitors’ appropriations in absolute dollars or to allocate the same percentage of sales for advertising that their competitors do. Although a marketer should be aware of what competitors spend on advertising, this technique should not be used alone because the firm’s competitors probably have different advertising objectives and different resources available for advertising. Many companies and advertising agencies review competitive spending on a quarterly basis, comparing competitors’ dollar expenditures on print, radio, and television with their own spending levels. Competitive tracking of this nature occurs at both the national and regional levels. At times, marketers use the arbitrary approach, which usually means a high-level executive in the firm states how much to spend on advertising for a certain period. The arbitrary approach often leads to underspending or overspending. Although hardly a scientific budgeting technique, it is expedient.

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Chap 18_20e Indicate whether the statement is true or false. 1. The aim of a motivational program is to create a working environment in which sales personnel can achieve their goals. a. True b. False 2. Trade selling requires that salespeople recognize potential buyers' needs and give them necessary information. a. True b. False 3. When sales goals are stated in terms of profit, they usually call for an increase in the proportion of the firm’s sales relative to the total number of products sold by all businesses in that industry. a. True b. False 4. Some support personnel, such as trade salespeople, may perform order-taking functions in addition to support functions. a. True b. False 5. It is never good to ask customers questions while giving the sales presentation, as the customer may raise objections that the salesperson cannot overcome. a. True b. False 6. Sporadic recruiting is more desirable than continuous recruiting because of the expense involved in the process. a. True b. False 7. Sales promotion activities are always supplementary to personal selling and advertising. a. True b. False 8. Even though salespeople do not use the exact same sales methods, they do go through the same general selling process. a. True b. False 9. A salesperson's performance is often compared with the performance of other salespeople operating under similar conditions. a. True b. False

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Chap 18_20e 10. Personal selling is generally the most expensive element in the promotion mix. a. True b. False 11. One of the best ways to overcome a prospect's objections is to anticipate them and to deal with them before the prospect has an opportunity to mention them. a. True b. False 12. Personal selling is the worst way to form relationships with customers. a. True b. False 13. The factors used to evaluate a salesperson's performance are based on the sales objectives set by the sales manager for that salesperson. a. True b. False 14. Most marketers depend on one-sale customers for long-run survival. a. True b. False 15. Using referrals falls under the approach step in the personal selling process. a. True b. False 16. The most effective sales promotion efforts are highly interrelated with other promotional activities. a. True b. False 17. Selling teams are created primarily for particular short-term situations. a. True b. False 18. Decisions regarding sales promotion do not affect advertising decisions. a. True b. False 19. Inside salespeople support personnel or take orders, follow up on deliveries, and provide technical information. a. True b. False 20. Following up involves listening to a customer's response after finishing the presentation and overcoming those objections. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 21. During team selling, the engineers are usually the ones who take the lead because of the specialized products being sold. a. True b. False 22. Developing a list of potential customers is called prospecting. a. True b. False 23. One objective of consumer sales promotion techniques is to encourage patronage for a specific retail store. a. True b. False 24. The preapproach is the first step in the personal selling process. a. True b. False 25. A disadvantage of the merchandise allowance is its expense. a. True b. False 26. Locating prospects, educating customers, and building goodwill are functions performed by inside salespeople. a. True b. False 27. Cooperative advertising refers to advertisements promoting a product and identifying participating retailers that sell the product. a. True b. False 28. Premium money is appropriate for promoting products sold through self-service. a. True b. False 29. Scan-back allowances link trade spending directly to product movement at the retail level. a. True b. False 30. Relationship selling is used especially in consumer marketing. a. True b. False 31. Listening on the part of a salesperson is a major component in making a presentation. a. True b. False

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Chap 18_20e 32. A salesperson with a larger territory will have the advantage of being able to achieve more sales than salespeople with smaller territories. a. True b. False 33. The two types of selling activities under the sales structure are current-customer sales and new-business sales. a. True b. False 34. Salespeople should know the sales objectives of the firm in order to know what they are expected to accomplish. a. True b. False 35. Current customers are sources of leads for finding prospective customers. a. True b. False 36. A marketer's selection of sales promotion techniques is influenced by the state of the competitive environment. a. True b. False 37. The approach step is an important step for gathering information about a buyer's needs and objectives. a. True b. False 38. To equalize the workload, a sales manager divides a geographic market into sales territories of equal size according to land area. a. True b. False 39. Demonstrations in retail stores are not used widely because they are expensive. a. True b. False 40. Generally, consumer sweepstakes are more popular than consumer contests. a. True b. False 41. Because salespeople are an expense to the company, yet they are the ones who generate revenues for the company, management must strive to achieve optimality in the size of its sales force. a. True b. False

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Chap 18_20e 42. A combination compensation plan is the most effective method for motivating sales personnel to escalate their selling efforts. a. True b. False 43. Two major categories of sales promotion methods are consumer and trade. a. True b. False 44. Following up is the part of the sales presentation in which hidden objections are discovered. a. True b. False 45. Training programs designed for experienced company salespeople generally are oriented toward product information. a. True b. False 46. Among others, management recruits from within the firm or from recommendations of individuals by current employees. a. True b. False 47. The focus of personal selling is shifting from selling a specific product to building long-term relationships with customers by finding solutions to their needs, problems, and challenges. a. True b. False 48. Sales promotion objectives should be consistent with the organization's overall objectives and its marketing objectives. a. True b. False 49. Many consumers redeem coupons only for products they normally buy. a. True b. False 50. The use of sampling is declining. a. True b. False 51. If possible, the salesperson should handle objections only when they arise. a. True b. False

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Chap 18_20e 52. Selection of the right type and proportion of salespeople is important because it is a one-time decision that affects the company's ability to generate sales and profits. a. True b. False 53. Generally, a salesperson's performance is judged by comparing it with predetermined standards rather than by comparing it with the performance of other salespeople. a. True b. False 54. Cents-off offers are likely to be used for products in the growth stage. a. True b. False 55. The missionary salesperson's primary purpose is to sell to the producer's customers. a. True b. False 56. Effective sales force motivation is achieved through a continual organized set of activities performed by the company's sales management. a. True b. False 57. A salesperson can perform only the functions of a specific type of salesperson. a. True b. False 58. Sales promotion activities are generally used in conjunction with other promotional efforts. a. True b. False 59. Buying allowances are effective promotional techniques because they result in profits for resellers. a. True b. False 60. In the cold canvass technique, the salesperson calls on potential customers without their prior consent. a. True b. False 61. Maximization of selling time and minimization of non-selling time are the major goals of routing and scheduling decisions. a. True b. False

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Chap 18_20e 62. Generally, sales promotion attempts to influence consumers to purchase products but is not normally aimed at resellers. a. True b. False 63. If possible the salesperson should have the prospect view, touch, or test the product during the presentation. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 64. As a promotional strategy, using coupons strives to achieve all of the following except to a. show how a product is used. b. increase sales volume quickly. c. introduce new package sizes. d. prompt trial usage of a new product. e. attract repeat users. 65. While anticipating objections and countering them before they are asked is a good idea, one negative consequence of doing so is that the salesperson may a. annoy the customer. b. mention objections the customer had not thought of. c. take too long in trying to sell the product, and the customer may stop listening. d. not emphasize its features and benefits enough. e. begin to lie about the product. 66. Amy’s Ice Cream offers its customers a stamp card that allows them to receive a free ice cream after they have filled an entire card. This is an example of a a. free sample. b. rebate. c. frequent-user incentive. d. premium. e. consumer contest. 67. Kevin Esposito, a salesperson for O’Malley Office Products, develops a list of potential customers and evaluates them on the basis of their ability, willingness, and authority to purchase copy machines. This process is called a. customer search. b. preapproach. c. customer evaluation. d. customer pre-approval. e. prospecting.

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Chap 18_20e 68. _______ are support salespeople, usually employed by a manufacturer, who assist the producer’s customers in selling to their own customers. a. Trade salespeople b. Technical salespeople c. Missionary salespeople d. Outside salespeople e. Inside salespeople 69. During his presentation to Mrs. Lupo about a high-end gourmet oven, Jack asks, "Would you prefer black or stainless steel?" This is an example of a a. referral. b. recommendation. c. follow up. d. trial close. e. closing argument. 70. Managers should be careful to craft sales contests that support _______ as well as motivate salespeople. a. sales promotion b. new products c. a competitive orientation d. a strong shareholder orientation e. a strong customer orientation 71. Zoe is a salesperson in the sales division of HP. Today Zoe is focused on researching a list of potential sales leads. Zoe wants to look at these sales leads and determine how likely they are to buy from the company, the type of products they will likely need, and whether they have a sales history with the firm. She also wants to determine who the key decisions makers are in the buying decision-making process at these sales leads so she can identify who will have the most influence. In the process of her research, Zoe makes extensive use of the firm's CRM system to forecast sales and manage leads. Zoe is most likely at which stage of the personal selling process? a. Prospecting b. Preapproach c. Approach d. Making the presentation e. Following up 72. Jade has learned that listening to customers, learning about their needs, and communicating with them over a prolonged period of time is key toward making large business sales. Jade is most likely using a. team selling. b. relationship selling. c. customer lifetime value. d. supportive selling. e. customer knowledge management. Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 73. After compiling a list of potential customers, a salesperson must a. evaluate whether each prospect is able, willing, and authorized to buy the product. b. determine whether or not each prospect is really in his target market. c. find and analyze information about each prospect's specific needs and current brand choices. d. develop a presentation for each of the potential customers on his list. e. contact each of the prospects to get an initial feel for how likely they are to purchase his products. 74. A salesperson will be better able to determine the prospect's specific needs by a. listening carefully to questions and comments and watching reactions during the sales presentation. b. waiting until after the sale to see how the client is enjoying the use of the product. c. doing extensive research before the approach and making the sales presentation without adjustment. d. using trial closings throughout the sales presentation. e. making a very thorough and detailed sales presentation about the products and services being offered. 75. Collin travels around to various established customers to see what new office supplies they need. His customers have come to depend on him to check their supplies. Collin is part of the a. outside sales force. b. inside sales force. c. missionary sales force. d. support personnel. e. technical sales force. 76. Personal selling goals include finding prospects, convincing prospects to buy, and a. monitoring new products being developed. b. being aware of competitors' sales activities. c. seeking one-sale customers. d. avoiding repeat transactions. e. keeping customers satisfied. 77. Jim is a salesperson for Axalta. His college degree is in engineering, with a minor in physical science. Jim is most likely a(n) a. trade salesperson. b. missionary salesperson. c. technical salesperson. d. chemicals order taker. e. support to the sales staff. 78. The ____ stage of the personal selling process is when the salesperson asks the prospect to buy the product. a. proposal b. closing c. overcoming objections d. approach e. trial Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 79. Rihanna will sometimes take orders from customers, but her primary job is to assist retailers with restocking shelves, setting up displays, providing in-store demonstrations, and giving out free samples. Rihanna is most like a a. trade salesperson. b. team salesperson. c. technical salesperson. d. inside salesperson. e. consultative salesperson. 80. Scenario 18.1 Use the following to answer the questions. Jafrum, Inc. is a wholesale supplier of motorcycle accessories, clothing, and tools to various motorcycle retail stores around the country. Jafrum does not manufacture these items, but sells them to other retailers and also sells its merchandise through its website. Larry Thompson is one of the salespeople for Jafrum, and is responsible for obtaining new customers, increasing sales to current customers, and visiting the retail stores throughout the country. Recently, he has been given the sales objective from Jafrum's management to increase sales dollars by 15% in the coming year by adding new customers. Larry's current compensation is a base salary of $1,000 per month, plus 5% of all sales over $100,000. His salary last year totaled $42,000. Management has given Larry the choice of going to a compensation plan where he will earn 15% of all sales, but no draw. Refer to Scenario 18.1. Larry is developing his list of potential new retail customers by accessing the yellow pages online. Here he finds the contact information for every motorcycle store in the 48 contiguous states and eliminates those who currently are his customers. Larry is involved in which step of the personal selling process? a. Prospecting b. Preapproach c. Overcoming objections d. Closing e. Following up 81. Aleksander is a sales representative for Alcatel. He has reviewed a prospect's account and credit history, identified product needs, and gathered the appropriate literature he needs. Aleksander feels he is ready for the ____ step of the personal selling process. a. objections b. presentation c. approach d. preapproach e. sales-planning

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Chap 18_20e 82. Which of the following is least likely to be directly involved in actually making sales? a. Outside salesperson b. Current-customer salesperson c. Inside salesperson d. New-business salesperson e. Support sales personnel 83. Which of the following involves a salesperson joining with people from the firm’s financial, engineering, and other functional areas? a. Trade selling b. Missionary selling c. Technical selling d. Relationship selling e. Team selling 84. Individuals compete for prizes based on analytical or creative skill in _____, while they compete solely on chance in ______. a. consumer sweepstakes; consumer games b. consumer games; consumer sweepstakes c. consumer contests; consumer sweepstakes d. consumer contests; consumer games e. consumer games; consumer contests 85. When deciding on sales promotion methods to employ, marketers take several factors into consideration. Which factor below is least likely to affect decisions regarding sales promotion methods? a. Package characteristics b. Product characteristics c. Target market characteristics d. Types of resellers e. Competitive forces in the environment 86. Before contacting a prospect, a salesperson for an industrial cleaning equipment company analyzes information about the prospects' product needs, feelings about brands, and personal characteristics. This process is called a. prospecting. b. preapproach. c. approaching the customer. d. presentation. e. follow-up.

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Chap 18_20e 87. The greatest amount of responsibility for providing customer satisfaction falls on the shoulders of a. chief executive officers. b. salespeople. c. sales managers. d. quality control experts. e. marketing directors. 88. Developing a relationship on the first visit is becoming increasingly important in the _____________ stage of the personal selling process. a. prospecting b. preapproach c. approach d. making the presentation e. overcoming objections 89. Gage works for an electronics firm. The firm has had a few product flops but Gage thinks that its newest product will be highly successful. Gage's job is to try and convince retailers to carry it. Gage tells retailers that if they choose to carry the product, the company will mention them in their advertisements so interested consumers know where to go to find the product. Gage is using _____ as an incentive to resellers. a. a dealer listing b. a dealer loader c. a merchandise allowance d. cooperative advertising e. a premium 90. Which of the following is an example of a trade sales promotion method? a. Frequent-user incentives b. Point-of-purchase displays c. Retailer coupons d. Free merchandise e. Money refunds 91. Janice works for a company that sells rotisseries for chicken and other foods. She answers phone calls from customers who see ads in trade magazines and call to order the product. Janice is considered a(n) a. outside salesperson. b. inside salesperson. c. support person. d. missionary salesperson. e. trade salesperson.

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Chap 18_20e 92. Inside salespersons generally focus on _______, whereas outside salespersons are more ______. a. building relationships; supportive b. taking orders and following up; consultative c. locating prospects and building goodwill; supportive d. locating prospects and building goodwill; consultative e. team selling; relationship building 93. A missionary salesperson is usually employed by a. a retailer. b. a wholesaler. c. either a retailer or a producer. d. a manufacturer. e. an independent intermediary. 94. Yusef has just finished compiling a list of potential customers and evaluating their ability, willingness, and authority to buy. He knows his next step in the personal selling process is to a. approach. b. preapproach. c. make the presentation. d. prospect. e. overcome objections. 95. When coupons are returned, they help manufacturers determine whether a. retailers issued enough of them. b. they had a long enough expiration cycle. c. they boosted product recall. d. they reached the intended target market. e. they were used only for products consumers would have bought anyway.

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Chap 18_20e 96. Scenario 18.2 Use the following to answer the questions. The Presto Company manufactures several types of household appliances, including blenders, waffle makers, and home deep fryers. Presto sells its products to retail stores such as Kohl's, Macy's, and J.C.Penney's, through its own sales force. Marilyn Wilson is one of Presto's salespeople, and is responsible for stores headquartered in Region 1 of the United States. Marilyn has just come from a monthly meeting where she has been informed about the new stovetop grill that will be part of next season's lineup. Presto's marketing department has developed a promotional plan for the new grill and outlined that plan for the sales staff in the meeting. The promotional plan for the next 60 days will include television commercials that demonstrate the new grill, in-store rebates, and a customer contest for the best-grilled sandwich recipe. In addition, Marilyn and other members of the sales force will be given a free grill for their own home use so they can become more familiar with the product. Presto is also offering a free trip to New York City for their staff salesperson who has the highest dollar in sales to his or her stores. To encourage the retail stores to push this product, Presto will offer the retail store a $5 discount for each grill that the store purchases after the 60-day promotion is over. Refer to Scenario 18.2. Presto appears to be using ____ to educate its sales force. a. formal sales training b. on-the-job training c. negative motivation d. territorial meetings e. recruiting training 97. Personal selling is changing in today’s marketplace due to several factors. Which of the following is NOT a factor that impacts today’s promotion through personal selling? a. The difficulty in keeping customers because they are fickle b. New technology provides up-to-date information in the field c. The way in which customers gain information about a company or product d. Social CRM allows companies to discover and engage customers e. Electronic sales presentations through social media technology 98. A salesperson finds and analyzes information about each prospect's specific product needs, current use of and feeling about brands, and personal characteristics during a. prospecting. b. the approach. c. presentation preparation. d. overcoming objections. e. the preapproach.

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Chap 18_20e 99. Jeremy is a salesperson for IBM. In his position, he is primarily responsible for seeking repeat sales. Jeremy is most likely focused on a. new-business selling. b. missionary selling. c. current-customer selling. d. team selling. e. trade selling. 100. Elias, a sales representative, is returning from a week on the road. One of his activities this week is to develop ____, which are designed to identify the customers called on and to present detailed information about interaction with those clients. a. sales invoices b. feedback notices c. expense reports d. call reports e. recall files 101. When Coach agrees to pay Dillard’s a certain proportion of the cost of providing television advertising emphasizing Coach purses, Coach is offering a. premium money. b. cooperative advertising. c. a dealer loader. d. a buying allowance. e. a merchandise allowance. 102. Which of the following is the best example of a well-stated sales objective? a. Companywide sales should increase by 25%. b. Each salesperson should increase his or her client group by 10%. c. Each salesperson should bring in $25,000 in new sales by November 15. d. The sales force should increase the market share in all markets by December 1. e. Each salesperson should increase the number of calls they make by 20%. 103. Company sales records, commercial databases, newspaper announcements, and public records are all sources used for a. surveying. b. screening. c. researching. d. preapproaching. e. prospecting.

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Chap 18_20e 104. Nikki is the owner of a group of women’s clothing stores located throughout the Midwestern United States. Recently, she made a large purchase from a leading clothing manufacturer and was given ____, which is a gift to a retailer who purchases a specified quantity of merchandise. a. a dealer loader b. a premium c. push money d. a merchandise allowance e. a buy-back allowance 105. Coupons have questionable success as an incentive for consumers to try a new brand or product for all of the following reasons except a. About three-fourths of coupons are redeemed by people already using the brand on the coupon. b. Because so many manufacturers offer them, consumers have learned not to buy without some incentive, whether that pertains to a coupon, a rebate, or a refund. c. Brand loyalty among heavy coupon users has diminished. d. Coupons reward current product users, win back former users, and encourage purchases in larger quantities. e. Many consumers will redeem coupons only for products they would buy anyway. 106. A television advertisement for Miracle-Gro lawn fertilizer indicates that the product is available at Home Depot and Lowe’s. This form of sales promotion is called a(n) a. cooperative advertising. b. dealer listing. c. push money. d. dealer loader. e. advertising allowance. 107. Which of the following statements is true about team selling? a. It is not appropriate for expensive, complex, high-tech business products. b. Teams typically consist of a sales rep and a marketing rep. c. Teams do not include representatives from finance. d. It is appropriate for expensive, complex, high-tech business products. e. Teams usually include someone from human resources. 108. A salesperson should try to close the sale a. at the end of the sales presentation. b. during the preapproach. c. about halfway through the sales presentation. d. after overcoming the biggest objection. e. several times during the sales presentation.

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Chap 18_20e 109. ____ are offers of cash to customers who purchase a specific product, and ____ are offers of cash to customers who purchase a specific quantity of a specific product. a. Rebates; reimbursements b. Cents-off; refunds c. Rebates; premiums d. Buy-back allowances; money refunds e. Rebates; money refunds 110. Xavier's company has launched a new product line, and he is put in charge of sales. He decides his first step will be to find potential customers in the company's sales records. Xavier is a. prospecting. b. screening. c. researching. d. preapproaching. e. preparing. 111. While sales contests can motivate employees at all levels to participate, a disadvantage of this method of sales promotion is that a. they are often too complicated. b. they are not taken seriously by the employees. c. people often discontinue their positive behavior after the contest is over. d. many point-of-purchase display materials are needed to implement a contest. e. people often feel they are not being recognized enough. 112. Camila, Rick’s sales manager, points out to him that his last shopper in the housewares department didn't seem interested or involved as he explained the new food processor to her. Camila suggests that Rick use a(n) ____ as part of his presentation next time. a. video b. information pamphlet c. demonstration d. trial close e. overcoming objections approach 113. Increasingly, inside salespersons manage _______ and outside salespersons are more _______. a. new-business sales; focused on current customers b. relationships; focused on providing support c. digital approaches to sales; relationship oriented d. team selling; face-to-face oriented e. end-use consumer sales; focused on selling to retailers

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Chap 18_20e 114. Research shows that one referral is as valuable as a. 6 filled out information request forms. b. 12 filled out information request forms. c. 100 cold calls. d. 12 cold calls. e. 6 cold calls. 115. Carina's job is to find new customers for her company's telecommunication services. She encourages existing customers to add more services and finds customers who are completely new to the company. Carina would best be classified as a(n) a. team salesperson. b. order generator. c. missionary salesperson. d. technical salesperson. e. outside salesperson. 116. Wally is a purchasing agent for Kraft. He is currently negotiating with his suppliers to receive a _______, which is a temporary price reduction to resellers for purchasing specified quantities of a product. a. push money allowance b. merchandise allowance c. buying allowance d. buy-back allowance e. scan-back allowance 117. Which of the following would be least likely to be considered a support salesperson? a. Detail rep b. Missionary salesperson c. Trade salesperson d. Creative seller e. Technical salesperson 118. A new soap manufacturer wants to get its product into national retail stores. It recently developed a product that executives think will be able to compete against top brands such as Dove and Dial. However, they know that retailers are often skeptical of carrying new products when their success is not known. The soap manufacturer therefore offers a price reduction to the retailers for each case of soap they buy. The soap manufacturer is most likely using a a. dealer loader. b. buying allowance. c. merchandise allowance. d. scan-back allowance. e. buy-back allowance.

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Chap 18_20e 119. You are a senior analyst in the worldwide sales and finance group at an auto parts company that is based in Detroit, Michigan. Your boss has given you a project to answer the following questions: How many sales calls must the company make per year to effectively serve its customers? What is the average number of sales calls each sales rep in the company makes in a year? Based on this project request, which element of the sales force management process is your boss focused on? a. Establishing sales force objectives b. Determining the sales force size c. Recruiting and selecting salespeople d. Training sales personnel e. Compensating salespeople 120. Customer density and distribution are important factors in a. prospecting. b. motivating salespeople. c. creating sales territories. d. compensating salespeople. e. establishing sales force objectives. 121. Although 80% of clients are willing to give referrals, __ are ever asked. a. 100% b. 80% c. 60% d. 40% e. 20% 122. The difference between consumer sales promotion methods and trade sales promotion methods is a. with consumer sales promotion, marketers try to persuade retailers to carry their products. b. with trade sales promotion, marketers focus on trading with consumers. c. consumer and trade sales promotions aim at retailers, but only trade sales promotions aim at wholesalers. d. consumer sales promotions focus on getting consumers to buy their products, whereas trade sales promotions focus on getting wholesalers and retailers to carry the product and/or to market it more aggressively. e. trade sales promotions attempt to persuade people to buy at particular stores, whereas consumer sales promotions focus on persuading people to buy particular products. 123. A dealer loader is a. additional compensation to salespeople from the manufacturer to promote a line of goods. b. an agreement in which a producer offers free merchandise to a retailer. c. an advertisement that promotes a product and identifies retailers who sell the product. d. a gift to a retailer who purchases a specified quantity of merchandise. e. a temporary price reduction to resellers for purchasing a certain quantity of merchandise. Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 124. Ah Lam is making a sales presentation to a retailer that may be willing to carry her line of soaps. During the presentation, she will handle any objections as they come up. This is because when she anticipated and countered potential objections in prior presentations, she found that she a. came across as being dishonest. b. seemed to annoy the potential client. c. forgot to highlight the soap’s benefits and features. d. raised objections that the prospect otherwise would not have thought of. e. made the presentation too long. 125. Scenario 18.1 Use the following to answer the questions. Jafrum, Inc. is a wholesale supplier of motorcycle accessories, clothing, and tools to various motorcycle retail stores around the country. Jafrum does not manufacture these items, but sells them to other retailers and also sells its merchandise through its website. Larry Thompson is one of the salespeople for Jafrum, and is responsible for obtaining new customers, increasing sales to current customers, and visiting the retail stores throughout the country. Recently, he has been given the sales objective from Jafrum's management to increase sales dollars by 15% in the coming year by adding new customers. Larry's current compensation is a base salary of $1,000 per month, plus 5% of all sales over $100,000. His salary last year totaled $42,000. Management has given Larry the choice of going to a compensation plan where he will earn 15% of all sales, but no draw. Refer to Scenario 18.1. Larry selects several motorcycle stores that are not currently his customers. He then obtains and analyzes information about the current brands of motorcycle accessories they stock, their sales trends, and credit history. Larry is engaged in which of the following? a. Prospecting b. The preapproach c. Approaching the customer d. Making the presentation e. Overcoming objections 126. To increase sales of Special K cereals, Kellogg's offered a free container of strawberries to customers who bought the large-size box. This form of sales promotion is called a a. premium. b. coupon. c. cents-off offer. d. free sample. e. money refund.

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Chap 18_20e 127. What is one method sales managers use to balance territorial workloads and earning potential? a. Compare current sales with previous sales b. Use a combination compensation plan c. Pay salespeople with larger territories higher commissions d. Assign salespeople the same-sized territories e. Use differential commission rates 128. A support salesperson who usually advises customers on product characteristics and application, system design, and installation procedures is a(n) a. trade salesperson. b. new-business salesperson. c. tech support worker. d. missionary salesperson. e. technical salesperson. 129. The fact that customers may buy “forward,” or buy large amounts that keep them supplied for many months, is a drawback of a. cooperative advertising. b. buying allowances. c. push money. d. dealer loaders. e. scan-back allowances. 130. When better market conditions prevail or when company growth occurs, a company may suffer if it a. lowered its sales force objectives. b. recruited additional salespeople. c. decided to use a combination compensation plan. d. provided additional training for its sales force. e. cut back the size of its sales force. 131. Which of the following statements is NOT true about recruiting and training a sales force? a. The source of recruits used by a manager depends on the type of salesperson required. b. The more expensive steps of the selection process should occur near the end. c. The sales manager should analyze the traits of the firm’s successful and ineffective salespeople. d. Marketers agree on a generally accepted set of traits for being an effective salesperson. e. Companies that want to reduce sales force turnover are likely to have a strict recruiting process. 132. A major disadvantage of personal selling is that it a. is not remembered as well by customers as advertising messages are. b. cannot easily adjust the message to satisfy a customer's information needs. c. is very expensive per contact. d. does not provide immediate feedback. e. is not compatible with other promotional activities. Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 133. On a break between classes, Jasmine checks her smartphone and enters her contact information on the Publishers Clearing House site. She doubts that she will win $10 million, but she never passes up a chance to participate in a a. lottery. b. consumer contest. c. game of chance. d. sales contest. e. sweepstakes. 134. In establishing sales promotion objectives, a marketer should always a. concentrate on activities that will increase consumer demand. b. focus on consumers. c. focus on resellers. d. be defensive in the methods used. e. align objectives with the organization's overall objectives. 135. When a salesperson asks the customer to buy the product several times throughout the sales presentation in an effort to uncover hidden objections, it is called a. order taking. b. new-business selling. c. trial closing. d. order getting. e. overcoming objections. 136. At one time, Wheaties offered two free golf balls with the purchase of a twin pack of Wheaties cereal featuring Tiger Woods. This is an example of a a. consumer prize. b. rebate. c. premium. d. free sample. e. free merchandise. 137. The final stage of the selling process is a. closing. b. trial closing. c. presentation. d. following up. e. overcoming objections.

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Chap 18_20e 138. Which of the following gives marketers the greatest freedom to adjust a message to satisfy customers’ information needs? a. Advertising b. Sales promotion c. Personal selling d. Publicity e. Public relations 139. Vanessa works as a salesperson and spends most of her time focusing on existing accounts, calling people to follow up on previous sales to see if they are interested in making an additional purchase. Vanessa’s job function is best described as a. missionary sales. b. current-customer sales. c. order taking. d. new-business sales. e. trade sales. 140. The purpose of the ____ stage in personal selling is to determine customers' problems and questions about using the product. a. prospecting b. approach c. overcoming-objections d. follow-up e. closing 141. Which of the following statements is NOT true about training salespeople? a. Some firms put new employees into the field immediately, before any formal training. b. Sales training for experienced personnel is often scheduled when sales activities are not too demanding. c. Training programs for experienced salespeople usually emphasize product information or new technology. d. Ethics training can be used to improve employee satisfaction and help prevent misconduct. e. Training programs for new sales personnel are never more than two weeks long. 142. If Alexia wants to provide its resellers with a secondary incentive to stimulate repurchases after an initial consumer coupon campaign for its latest frozen food product, it can offer resellers a sum of money for each unit purchased. This type of sales promotion is a a. buying allowance. b. count-and-recount allowance. c. dealer loader. d. buy-back allowance. e. coupon follow-up campaign.

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Chap 18_20e 143. Sales force objectives are generally established for a. the organization as a whole only. b. the total sales force and for each salesperson. c. each salesperson but not the whole sales force. d. each department or division of the company. e. inside salespeople but not outside salespeople. 144. A company may determine how many sales calls per year it needs to serve customers effectively and divide that by the average number of sales calls made by one salesperson in order to a. recruit appropriate salespeople. b. set sales force calling objectives. c. compensate salespeople fairly. d. train its salespeople. e. determine sales force size. 145. Which of the following is most likely to stimulate customer loyalty? a. Coupons b. Sweepstakes c. Frequent-user incentives d. Samples e. Premiums 146. ____ are items offered free or at minimal cost as a bonus for purchasing a product. a. Rebates b. Premiums c. Samples d. Merchandise allowances e. Coupons 147. As Quest tries to decide how to introduce its new line of breakfast bars, it considers all the advantages and disadvantages of the various consumer sales promotion methods. After careful consideration, Quest decides to use ____, which are the most widely used form of consumer sales promotion. a. free samples b. rebates c. point-of-purchase displays d. coupons e. cents-off offers

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Chap 18_20e 148. John is preparing to evaluate one of his sales representatives, Tessa. His evaluation of her performance for the prior year led to his conclusion that she often lacked key product information at sales presentations. At their upcoming session, he will most likely do which of the following? a. Decrease the size of her territory b. Increase her sales quotas c. Terminate her d. Recommend that she attend a training program e. Ignore this problem given that her sales results were good 149. Last month, Sarah won a hot-air balloon ride and dinner for two for being the top revenue-producing mortgage loan officer at her company. This contest exemplifies a company's efforts at a. motivating salespeople. b. compensating salespeople. c. providing training for the sales force. d. increasing performance in all sales territories. e. promoting salesperson performance. 150. ______ that generates loyal long-term customers is likely to be extremely profitable in repeat sales as well as the money saved in trying to find new customers. a. Team selling b. Relationship selling c. Missionary selling d. Creative selling e. Tactical selling 151. Signs, counter pieces, racks, and self-service cartons are all forms of a. in-store attention grabbers. b. demonstrations. c. retail media. d. premiums. e. point-of-purchase displays. 152. Any marketing tactic used to stimulate wholesalers and retailers to carry a producer's products and market those products more aggressively is a a. trade sales promotion method. b. point-of-purchase material. c. consumer sales promotion method. d. merchandise allowance. e. dealer loader.

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Chap 18_20e 153. Which of the following is NOT an advantage of using coupons? a. Coupons reward current product users, win back former users, and encourage purchases in larger quantities. b. Because so many manufacturers offer them, consumers have learned not to buy without some incentive, whether that pertains to a coupon, a rebate, or a refund. c. When they are returned, coupons help a manufacturer determine whether it reached the intended target market. d. The larger the coupon’s cash offer, the better the recognition generated. e. Print advertisements with coupons are often more effective at generating brand awareness than print ads without coupons. 154. Andre is a sales manager for a wholesale auto parts company. To motivate his sales force to increase their sales to retailers, he has created a _____ where he will give the salesperson with the most dollar sales in the next month a two-night stay at a nearby resort hotel. a. sales sweepstakes b. sales contest c. cooperative incentive program d. compensation plan e. commission plan 155. Paula’s Choice Skincare offers regular customers $10 off their next order when they refer a friend to the company by sharing that person’s email. When Paula’s Choice engages in this activity, it is in which of the following stages of the personal selling process? a. Preapproaching b. Prospecting c. Following up d. Presenting e. Approaching 156. Stana's client group has been gradually shrinking and she is looking for new prospective clients. She has decided to spend a couple of days approaching potential customers without any prior consent. Stana's method of approach is known as a. referral approach. b. ambulance chasing. c. door-to-door selling. d. cold canvassing. e. repeat contact.

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Chap 18_20e 157. Scenario 18.2 Use the following to answer the questions. The Presto Company manufactures several types of household appliances, including blenders, waffle makers, and home deep fryers. Presto sells its products to retail stores such as Kohl's, Macy's, and J.C.Penney's, through its own sales force. Marilyn Wilson is one of Presto's salespeople and is responsible for stores headquartered in Region 1 of the United States. Marilyn has just come from a monthly meeting where she has been informed about the new stovetop grill that will be part of next season's lineup. Presto's marketing department has developed a promotional plan for the new grill and outlined that plan for the sales staff in the meeting. The promotional plan for the next 60 days will include television commercials that demonstrate the new grill, in-store rebates, and a customer contest for the best-grilled sandwich recipe. In addition, Marilyn and other members of the sales force will be given a free grill for their own home use so they can become more familiar with the product. Presto is also offering a free trip to New York City for their staff salesperson who has the highest dollar in sales to his or her stores. To encourage the retail stores to push this product, Presto will offer the retail store a $5 discount for each grill that the store purchases after the 60-day promotion is over. Refer to Scenario 18.2. Presto's use of a free trip to New York is an example of ____, while the $5 discount to its retail stores is an example of ____. a. a trade allowance; a buy-back allowance b. a buying allowance; a dealer loader c. a dealer loader; a buy-back allowance d. a sales contest; a buy-back allowance e. a sales contest; a buying allowance 158. Which of the following is true about sales promotion? a. It is often used to replace advertising and personal selling because of its effectiveness. b. It is the least expensive of all promotional efforts and is used to replace personal selling. c. It encompasses all promotional activities other than personal selling, advertising, and public relations. d. It is the most expensive of all promotional efforts and is therefore rarely utilized as promotion. e. It has become more important to target sales promotion at consumers than at resellers. 159. Magda works at Mars in the marketing department. Recently, Mars developed a new chocolate bar that the company is excited about. Magda's job is to try to increase awareness of the product, get people to try it, and obtain desirable distribution at retail stores. Which consumer sales promotion method should Magda select based on these criteria? a. Money refunds b. Point-of-purchase displays c. Demonstrations d. Frequent-user incentives e. Free samples

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Chap 18_20e 160. Parker is a sales representative for Kashi. Each week he uploads his plans for visiting clients out in the field to a routing and scheduling decisions system. Parker knows that one of the primary goals of routing and scheduling decisions in personal selling is to a. determine the sequence in which customers will be called on. b. use existing transportation facilities. c. minimize non-selling time. d. determine duration of sales calls. e. provide salespeople with an opportunity to plan their own routes and schedules. 161. Deacon is a sales representative for Microsoft. He works in a B2B environment trying to sell software products to offices. He works to build long-term associations with his customers by regularly communicating with them. He spends a lot of time listening to their needs and provides support after the sale. Which type of selling is Deacon engaged in? a. Order taking b. Team selling c. Technical selling d. Missionary selling e. Trade selling 162. Effective motivation of a sales force is best achieved through a. annual retreats at resort locations open to families. b. emphasizing sales force objectives and their connection to compensation. c. an organized set of activities performed continuously. d. motivation meetings when sales have declined. e. daily pep talks before the sales force makes sales calls. 163. Misha generally makes cold calls on businesses to look for new prospects. He has many satisfied customers, but like many salespeople, he does not frequently utilize one of the best ways to find new prospects, which is through a. friends and coworkers. b. customer referrals. c. trade shows. d. past sales. e. online databases. 164. _______ is an activity or material, or both, that acts as a direct inducement, offering added value or incentive for the product, to resellers, salespeople, or consumers a. Public relations b. Personal selling c. Advertising d. Sales promotion e. Publicity

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Chap 18_20e 165. Which of the following statements is true about salespeople? a. They are often the knowledge experts for their firm. b. They should always focus on the sale and not the relationship. c. They should start selling as soon as they meet a new prospect. d. They do not need to be experts on the benefits of their products. e. They should not waste time focusing on competitors’ actions. 166. Scenario 18.2 Use the following to answer the questions. The Presto Company manufactures several types of household appliances, including blenders, waffle makers, and home deep fryers. Presto sells its products to retail stores such as Kohl's, Macy's, and J.C.Penney's, through its own sales force. Marilyn Wilson is one of Presto's salespeople and is responsible for stores headquartered in Region 1 of the United States. Marilyn has just come from a monthly meeting where she has been informed about the new stovetop grill that will be part of next season's lineup. Presto's marketing department has developed a promotional plan for the new grill and outlined that plan for the sales staff in the meeting. The promotional plan for the next 60 days will include television commercials that demonstrate the new grill, in-store rebates, and a customer contest for the best-grilled sandwich recipe. In addition, Marilyn and other members of the sales force will be given a free grill for their own home use so they can become more familiar with the product. Presto is also offering a free trip to New York City for their staff salesperson who has the highest dollar in sales to his or her stores. To encourage the retail stores to push this product, Presto will offer the retail store a $5 discount for each grill that the store purchases after the 60-day promotion is over. Refer to Scenario 18.2. Which of the following are consumer sales promotion methods that Presto is using for the new stovetop grill? a. Television commercials and the customer contest b. Television commercials and the in-store rebate c. The customer contest and the in-store rebate d. The sales force contest and the in-store rebate e. The sales force contest and the customer contest

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Chap 18_20e 167. Scenario 18.1 Use the following to answer the questions. Jafrum, Inc. is a wholesale supplier of motorcycle accessories, clothing, and tools to various motorcycle retail stores around the country. Jafrum does not manufacture these items, but sells them to other retailers and also sells its merchandise through its website. Larry Thompson is one of the salespeople for Jafrum, and is responsible for obtaining new customers, increasing sales to current customers, and visiting the retail stores throughout the country. Recently, he has been given the sales objective from Jafrum's management to increase sales dollars by 15% in the coming year by adding new customers. Larry's current compensation is a base salary of $1,000 per month, plus 5% of all sales over $100,000. His salary last year totaled $42,000. Management has given Larry the choice of going to a compensation plan where he will earn 15% of all sales, but no draw. Refer to Scenario 18.1. Currently, Larry's compensation is based on the ____ plan; however, he is considering changing to the ____ plan. a. straight salary; salary plus commission b. straight commission; straight salary c. salary plus commission; straight commission d. salary plus bonus; straight bonus e. straight bonus; straight commission 168. Tamika is a retail salesperson for Pottery Barn in Portland. She is most likely classified as a. an outside salesperson. b. support personnel. c. a trade salesperson. d. an inside salesperson. e. a technical salesperson. 169. ___________ is an advertisement promoting a product and identifying the names of participating retailers that sell the product. a. A cooperative advertisement b. Push money c. A dealer loader d. Premium money e. A dealer listing

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Chap 18_20e 170. Alan is a sales manager at CSC. He is analyzing sales reports and interviewing key personnel in his department to find out what traits and activities his most successful salespeople share in common. He also wants to determine some of the traits that unsuccessful salespeople have had so he knows what to avoid. Alan plans to use this to develop a set of requirements for future salespeople, as well as to be aware of potential weaknesses that could lead to failure. Alan is most likely performing these activities because he is a. determining sales force size. b. establishing sales force objectives. c. compensating salespeople. d. recruiting and selecting salespeople. e. motivating salespeople. 171. The primary disadvantage of using ______ is that they may have a low response rate and thus a limited impact on sales. a. money refunds b. rebates c. coupons d. cents-off offers e. premiums 172. Penny promotes pharmaceuticals to pharmacies and doctors’ offices. She is best categorized as a. an inside salesperson. b. support personnel. c. a trade salesperson. d. a missionary salesperson. e. a technical salesperson. 173. The focus of personal selling is shifting from selling a specific product to a. CRM selling. b. building long-term relationships with customers. c. enhancing the firm’s image. d. team selling. e. building relationships with vendors. 174. Lanie tells her sales manager that she will be devoting more effort to ____ in the coming weeks, as her list of potential customers has dwindled below the level of 30 firms recommended by the selling plan. a. approaching customers b. preapproaching c. closing the sale d. following up e. prospecting

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Chap 18_20e 175. Which of the following are the most important factors affecting the routing and scheduling of sales calls? a. Geographic size and shape of a sales territory b. Number and distribution of customers within the territory c. Sales call frequency and duration d. Geographic size of sales territory and sales call frequency e. Distribution of customers within the territory and sales call frequency 176. Faith is a salesperson for American Eagle Outfitters. Her compensation is based on a set salary plus a commission based on sales. Faith’s compensation is based on a a. straight salary compensation plan. b. combination compensation plan. c. cafeteria plan. d. straight commission compensation plan. e. salary plus bonus program. 177. Salespeople strive to match their influencing tactics to the prospect. Most prospects respond to a. information exchange and deadlines. b. information exchange and promises. c. information exchange and recommendations. d. inspirational appeals and recommendations. e. inspirational appeals and ingratiation. 178. Paid personal communication that attempts to inform and persuade customers to purchase products in an exchange situation is called a. advertising. b. sales promotion. c. personal selling. d. publicity. e. public relations. 179. A sales rep’s actual sales relative to sales potential are relevant to the sales manager in which of the following phases of the sales management process? a. Managing sales territories b. Motivating salespeople c. Retaining salespeople d. Training salespeople e. Controlling and evaluating sales force performance

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Chap 18_20e 180. Celia is beginning her week as a sales representative for Initech. She decides to start the day by developing a list of potential customers, which is called a. preapproaching. b. surveying. c. scouting. d. prospecting. e. screening. 181. You are an experienced and very successful sales rep for a major consumer products company. You are having lunch with a group of newly hired sales reps who just got their assigned sales territories. This is a very ambitious group of new hires, which is evidenced by the fact that they offered to buy you lunch if you would let them pick your brain about successful sales tactics. Which of the following personal selling success tips will you share with the new hires? a. Don’t waste your time building a database of potential prospects. b. Start selling as soon as you meet the prospect for the first time. c. Don’t waste too much time on your sales presentation because it is not really important. d. Be thorough in your preapproach by doing your homework on your prospects. e. Never try using a trial close. 182. If used on an ongoing basis, _____________ can reduce the price for customers who would buy at the regular price and may also cheapen a product's image. a. cents-off offers b. rebates c. money refunds d. premiums e. consumer sweepstakes 183. The salesperson must attract and hold the prospect's attention, stimulate interest, and spark a desire for the product during the a. prospecting. b. preapproach. c. follow up. d. approach. e. sales presentation. 184. Pharmaceutical firms often employ _______________ to inform doctors and hospitals about new drugs and market their benefits. a. team salespeople b. inside salespeople c. trade salespeople d. technical salespeople e. missionary salespeople Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 185. Which of the following is NOT true when making the sales presentation? a. The salesperson should focus on anticipating questions and answering them before they're asked. b. The salesperson must spark interest in the product. c. The salesperson should not only talk but also listen to the customer. d. The salesperson should involve the customer by having him or her hold, touch, or use the product. e. A salesperson should not sound like he or she is just reading a script (i.e., he or she should be flexible and respond to the customers' comments). 186. In order to show consumers how well its blenders work and to stimulate sales, Vitamix often sets up temporary booths in stores where they have someone using the blender in a variety of ways. This is an example of a. point-of-purchase material. b. a demonstration. c. a premium. d. a free sample. e. a merchandise allowance. 187. Praveen is an experienced salesperson who has worked for the same company for 20 years. When he is informed that he must attend a training seminar the following Tuesday, he believes it will most likely be about a. the company. b. his customers' companies. c. basic selling methods. d. new-product information. e. prospecting. 188. Which of the following is the most precise, enabling marketers to focus on the most promising sales prospects? a. Advertising b. Public relations c. Sales promotion d. Personal selling e. Publicity 189. Dan leads his company's clients through the installation procedure of their new industrial equipment. He also helps answer their questions about product characteristics and system design both before and after their purchases. Dan is a a. trade salesperson. b. missionary salesperson. c. technical salesperson. d. systems engineer. e. order taker.

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Chap 18_20e 190. You are the head of sales training for a major financial services firm in New York City. You are conducting a sales training class for a group of new sales trainees. You are a strong believer in using a structured approach to personal selling. Based on this information, which of the following personal selling process steps are you going to tell the trainees to perform first? a. Develop a database of potential customers. b. Develop an engaging sales presentation. c. Practice closing the sale. d. Develop a prospect follow-up checklist. e. Analyze information about potential customers’ needs. 191. ______ is a sum of money that a producer gives to a reseller for each unit the reseller buys after an initial promotional deal is over. a. Cooperative advertising b. A merchandise allowance c. A buying allowance d. A buy-back allowance e. Push money 192. Recruiting and selection of salespeople should include enough steps to yield the information needed to make accurate selection decisions. However, the stages of the process should be sequenced so that the more expensive steps are a. near the beginning. b. always completed before anything else. c. near the end. d. paid by the prospects rather than the company. e. never reached. 193. Hector Acosta has been hired as sales manager at a new firm and is trying to come up with a sales force compensation method. He would like to have selling expenses relate directly to sales resources, an aggressive sales force, and minimization of non-selling tasks. What compensation method(s) would best fulfill his requirements? a. Combination b. Straight salary c. Straight salary plus generous fringe benefits d. Straight commission e. Salary plus a bonus

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Chap 18_20e 194. During the personal selling process, a salesperson, if possible, should handle objections when a. they arise. b. the salesperson begins the trial close. c. the sales presentation is approximately half completed. d. the customer appears to be unhappy or agitated. e. the salesperson begins the sales presentation. 195. Priya works for Tyson Foods and she frequently sets up special displays and distributes samples of Tyson products to customers in supermarkets. Priya would best be classified as a(n) a. trade salesperson. b. technical salesperson. c. inside salesperson. d. product salesperson. e. missionary salesperson. 196. The step of the personal selling process in which a salesperson contacts a potential customer is called a. making the presentation. b. cold calling. c. the preapproach. d. the approach. e. prospecting. 197. Hanna is an engineer at Aerobus. She has been asked to participate in part of a presentation to government representatives in convincing them to buy Aerobus's new aerospace product. Hanna's job is to provide technical information and possibly explain the product's benefits. However, she will not be in charge of the presentation. Hanna is most likely engaging in a. relationship selling. b. trade sales promotion. c. preapproaching the client. d. team selling. e. inside selling. 198. Which of the following involves building mutually beneficial long-term associations with a business customer through regular communications over prolonged periods of time? a. Inside selling b. Missionary selling c. Outside selling d. Team selling e. Relationship selling

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Chap 18_20e 199. Which of the following is the most expensive sales promotion method? a. Free samples b. Demonstrations c. Rebates d. Coupons e. Premiums 200. If a manager tries to form territories with equal sales potential, the territories will usually be unequal in geographic size; this will cause the salespeople with larger territories to a. develop larger income potentials. b. have to work longer and harder to generate a certain sales volume. c. work about the same amount, since potential is the same. d. have much larger sales than those salespeople with smaller territories. e. be limited to a smaller income potential. 201. Nizie Garcia works for a cosmetics manufacturer and is responsible for ensuring that retailers have adequate quantities of products when they need them. However, she is directing much of her effort toward helping the retailers promote the products. She would be characterized as belonging to which group of salespeople? a. Trade salespeople b. Outside sales force c. Advisory salespeople d. Technical salespeople e. Missionary salespeople 202. Which of the following is additional compensation offered by the manufacturer to retailer salespeople as an incentive to push a line of goods? a. Cooperative advertising b. Buying allowances c. Merchandise allowances d. Dealer loaders e. Premium money 203. All of the following are key areas of sales force management except a. compensating salespeople. b. coordinating sales promotion efforts. c. recruiting salespeople. d. training sales personnel. e. motivating sales personnel.

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Chap 18_20e 204. Sales objectives can do all of the following except a. serve as a deterrent both to salespeople and their clients. b. give the sales force direction and purpose. c. serve as a standard for evaluating salesperson performance. d. let the sales force know what is expected of them. e. help to control the sales force. 205. Hunts uses various techniques such as coupons, free samples, and consumer contests to encourage consumers to try its products. All of these marketing activities are considered a. trade sales promotion methods. b. consumer incentives. c. consumer sweepstakes. d. buying allowances. e. consumer sales promotion methods. 206. The stage of the personal selling process in which the salesperson attempts to make a favorable impression, gather information about the customer's needs and objectives, and build a rapport with the prospective customers is called a. prospecting. b. preapproach. c. approach. d. making the presentation. e. overcoming objections. 207. Which of the following is a reason why the use of sales promotion has increased dramatically? a. Customers are more responsive to advertising. b. Brand loyalty is increasing. c. Retailers are demanding greater promotional efforts from manufacturers to boost profits. d. Retailers are placing a stronger emphasis on long-term results versus short-term results. e. Customers are less responsive to personal selling. 208. Janelle is the manager of Human Resources for Salesforce.com. She is currently reviewing the sales force compensation method used at Salesforce.com to determine if there is a better way to manage compensation. Janelle knows that the ____ method is easy to administer, yields more predictable selling expenses, and provides sales managers with a large degree of control over salespeople. a. straight commission b. salary plus bonus c. salary and commission d. straight commission and combination e. straight salary

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Chap 18_20e 209. You are conducting interviews for new sales representatives for your manufacturing firm. You are primarily looking for candidates that you feel can be successful at assisting your wholesaling customers sell to their customers. Which of the following types of sales representatives are you looking for primarily? a. Outside sales force reps b. Inside sales force reps c. Trade sales reps d. Technical sales reps e. Missionary sales reps 210. Myrna is attending an Arbonne free facial event her friend Sam is putting on. After the free facial, Myrna agrees to buy some of the products she likes. Before she makes her payment, Sam gives her a form. The form says that if Myrna writes down the names and numbers of five friends that Sam can call, she will receive 10% off her next Arbonne purchase. At which stage is Sam in the personal selling process regarding the form she is asking Myrna to fill out? a. Prospecting b. Preapproach c. Approach d. Closing e. Follow up 211. When a manufacturer rewards retailers based on the number of pieces moved through their scanners, this sales promotion method is known as a a. merchandise allowance. b. count-and-recount allowance. c. buy-back allowance. d. scan-back allowance. e. scan-count allowance. 212. Nathan tells his wife, Milena, that his last sales call of the day at Global Dynamics was a disaster. He explains that he never really figured out what the purchasing agent was looking for. Alison, a sales trainer for another firm, hands Nathan a book on a. listening skills. b. overcoming objections. c. prospect evaluation. d. product demonstrations. e. closing.

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Chap 18_20e 213. ____________ requires that salespeople recognize potential buyers' needs and give them the necessary information. a. Team selling b. Creative selling c. Missionary selling d. Relationship selling e. Technical selling 214. Which of the following statements is NOT true about the follow-up step of the personal selling process? a. The salesperson should contact the customer to see if there are any problems with the product. b. Following up aids the salesperson in creating a solid relationship with the customer. c. The salesperson can try to determine the customer’s future needs. d. The follow-up helps create loyalty on the part of the buyer. e. Salespeople should only follow up with dissatisfied customers. 215. Which of the following is a reason why sales promotion has increased over the past 30 years? a. Resellers are more interested in long-term performance than short-term profitability. b. Heightened concerns about value have made customers more responsive to promotional offers. c. It is unanimously agreed that sales promotion is more effective than advertising. d. Sales promotion is less expensive and often makes up the entire integrated marketing communications strategy. e. Consumers and resellers have begun to place more importance on quality over value. 216. Objectives for the entire force are normally stated in terms of all of the following except a. sales. b. market share. c. profit. d. dollar sales volume. e. unit sales volume. 217. Which of the following fosters cooperation during an initial sales promotion effort and stimulates repurchase afterward? a. Push money b. Scan-back allowances c. Buy-back allowances d. Buying allowances e. Cooperative advertising

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Chap 18_20e 218. Explain how a salesperson's performance can be evaluated.

219. Identify four consumer and four trade sales promotion techniques, and describe each one.

220. Identify and discuss the general steps in the personal selling process.

221. List the major types of salespeople and indicate how they differ.

222. Explain the major issues to consider when developing a sales training program.

223. Identify and describe several ways to motivate sales personnel.

224. Describe consumer sales promotion and trade sales promotion, and then explain how they differ.

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Chap 18_20e 225. List three major types of sales force compensation methods. What are the advantages and disadvantages of each?

226. How has the expenditure of promotional dollars on advertising, consumer sales promotion methods, and trade sales promotion methods changed in recent years?

227. Identify and discuss some of the key objectives in using sales promotion.

228. Differentiate between team selling and relationship selling.

229. What is the rationale for having sales force objectives, and how are they developed?

230. How can sales personnel use technology to achieve the goals of personal selling?

231. Identify the major features of effective sales force compensation plans.

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Chap 18_20e 232. Discuss the major factors to consider when designing sales territories.

233. Discuss the purpose of coupons in sales promotion.

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Chap 18_20e Answer Key 1. True 2. False 3. False 4. True 5. False 6. False 7. False 8. True 9. True 10. True 11. True 12. False 13. True 14. False 15. False 16. True 17. False 18. False 19. True 20. False 21. False 22. True 23. True 24. False 25. False 26. False

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Chap 18_20e 27. False 28. False 29. True 30. False 31. True 32. False 33. True 34. True 35. True 36. True 37. True 38. False 39. True 40. True 41. True 42. False 43. True 44. False 45. True 46. True 47. True 48. True 49. True 50. False 51. True 52. False 53. False 54. False Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 55. False 56. True 57. False 58. True 59. True 60. True 61. True 62. False 63. True 64. a 65. b 66. c 67. e 68. c 69. d 70. e 71. b 72. b 73. a 74. a 75. a 76. e 77. c 78. b 79. a 80. a 81. c 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 83. e 84. d 85. a 86. b 87. b 88. c 89. a 90. d 91. b 92. b 93. d 94. b 95. d 96. a 97. a 98. e 99. c 100. d 101. b 102. c 103. e 104. a 105. d 106. b 107. d 108. e 109. e 110. a Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 111. c 112. c 113. c 114. d 115. e 116. c 117. d 118. b 119. b 120. c 121. e 122. d 123. d 124. d 125. b 126. a 127. e 128. e 129. b 130. e 131. d 132. c 133. e 134. e 135. c 136. c 137. d

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Chap 18_20e 138. c 139. b 140. d 141. e 142. d 143. b 144. e 145. c 146. b 147. d 148. d 149. a 150. b 151. e 152. a 153. b 154. b 155. b 156. d 157. d 158. c 159. e 160. c 161. c 162. c 163. b 164. d 165. a Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 166. c 167. c 168. d 169. e 170. d 171. a 172. d 173. b 174. e 175. a 176. b 177. c 178. c 179. e 180. d 181. d 182. a 183. e 184. e 185. a 186. b 187. d 188. d 189. c 190. a 191. d 192. c 193. d Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e 194. a 195. a 196. d 197. d 198. e 199. a 200. b 201. a 202. e 203. b 204. a 205. e 206. c 207. c 208. e 209. e 210. a 211. d 212. a 213. b 214. e 215. b 216. a 217. c

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Chap 18_20e 218. Salespeople are often judged along several dimensions. Sales managers evaluate many performance indicators, including average number of calls per day, average sales per customer, actual sales relative to sales potential, number of new-customer orders, average cost per call, and average gross profit per customer. To evaluate a salesperson, a sales manager may compare one or more of these dimensions with predetermined performance standards. However, sales managers commonly compare a salesperson’s performance with that of other employees operating under similar selling conditions or the salesperson’s current performance with past performance. Sometimes, management judges factors that have less direct bearing on sales performance, such as personal appearance, product knowledge, and ethical standards. One concern is the tendency to reprimand top sellers less severely than poor performers for engaging in unethical selling practices. 219. Students can pick any four items from each section (consumer sales promotion and trade sales promotion). Some consumer sales promotion methods are coupons, cents-off offers, money refunds, rebates, frequent-user incentives, point-of-purchase materials and demonstrations, free samples, premiums, consumer contests, consumer games, and consumer sweepstakes. Coupons: Coupons reduce a product’s price and aim to prompt customers to try new or established products, increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. Cents-off offers: With cents-off offers, buyers pay a certain amount less than the regular price shown on the label or package. Money refunds: With money refunds, consumers submit proof of purchase and are mailed a specific amount of money. Usually, manufacturers demand multiple product purchases before consumers qualify for money refunds. Rebates: With rebates, the consumer is sent a specified amount of money for making a single product purchase. Rebates are generally given on more expensive products than money refunds and are used to encourage customers. Shopper, loyalty, and frequent-user incentives: Many firms develop incentive programs to reward customers who engage in repeat (frequent) purchases. Point-of-purchase materials: Point-of-purchase (POP) materials include outdoor signs, window displays, counter pieces, display racks, and self-service cartons. Demonstrations: Demonstrations are excellent attention-getters. Manufacturers offer them temporarily to encourage trial use and purchase of a product or to show how a product works. Free samples: Marketers use free samples to stimulate trial of a product, increase sales volume in the early stages of a product’s life cycle, and obtain desirable distribution. Premiums: Premiums are items offered free or at a minimal cost as a bonus for purchasing a product. Consumer contests: In consumer contests, individuals compete for prizes based on their analytical or creative skills. This method can be used to generate retail traffic and frequency of exposure to promotional messages. Consumer games: In consumer games, individuals compete for prizes based primarily on chance—often by collecting game pieces like bottle caps or a sticker on a carton of French fries. Consumer sweepstakes: Entrants in a consumer sweepstakes submit their names for inclusion in a drawing for prizes. Sweepstakes are employed more often than consumer contests and tend to attract a greater number of participants. Some of trade sales promotion methods are buying allowances, buy-back allowances, scan-back allowances, merchandise allowances, cooperative advertising and dealer listings, free merchandise and gifts, premium money, and sales contests. Buying allowances: A buying allowance is a temporary price reduction offered to resellers for purchasing specified quantities of a product. Buy-back allowances: A buy-back allowance is a sum of money that a producer gives to a reseller for each unit the reseller buys after an initial promotional deal is over. Scan-back allowances: A scanback allowance is a manufacturer’s reward to retailers based on the number of pieces moved through the retailers’ scanners during a specific time period. Cooperative advertising: Cooperative advertising is an arrangement in which a manufacturer agrees to pay a certain Copyright Cengage Learning. Powered by Cognero.

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Chap 18_20e amount of a retailer’s media costs for advertising the manufacturer’s products. Dealer listings: Dealer listings are advertisements promoting a product and identifying participating retailers that sell the product. Merchandise allowance: A merchandise allowance is a manufacturer’s agreement to pay resellers certain amounts of money for providing promotional efforts like advertising or point-of-purchase displays. Free merchandise: Manufacturers sometimes offer free merchandise to resellers that purchase a stated quantity of products. Gifts: A dealer loader is a gift to a retailer that purchases a specified quantity of merchandise. Premium money: Premium money (push money) is additional compensation offered by the manufacturer to salespeople as an incentive to push a line of goods. Sales contest: A sales contest is designed to motivate distributors, retailers, and sales personnel by recognizing outstanding achievements. 220. Personal selling process consists of seven steps: prospecting, preapproach, approach, making the presentation, overcoming objections, closing the sale, and following up. Prospecting: Developing a database of potential customers is called prospecting. Salespeople seek names of prospects from company sales records, trade shows, commercial databases, newspaper announcements (of marriages, births, deaths, and so on), public records, telephone directories, trade association directories, and many other sources. Preapproach: Preapproach involves identifying key decision makers, reviewing account histories and problems, contacting other clients for information, assessing credit histories and problems, preparing sales presentations, identifying product needs, and obtaining relevant literature. Approach: The approach—the manner in which a salesperson contacts a potential customer—is a critical step in the sales process. Making the Presentation: During the sales presentation, the salesperson must attract and hold the prospect’s attention, stimulate interest, and spark a desire for the product. Salespeople who carefully monitor the selling situation and adapt their presentations to meet the needs of prospects are associated with effective sales performance. Salespeople should match their influencing tactics, such as information exchange, recommendations, threats, promises, ingratiation, and inspirational appeals, to their prospects. Overcoming Objections: An effective salesperson usually seeks out a prospect’s objections in order to address them. If they are not apparent, the salesperson cannot deal with them, and the prospect may not buy. One of the best ways to overcome objections is to anticipate and counter them before the prospect raises them. However, this approach can be risky, because the salesperson may mention objections that the prospect would not have raised. If possible, the salesperson should handle objections as they arise. Closing: Closing is the stage in the personal selling process when the salesperson asks the prospect to buy the product. During the presentation, the salesperson may use a trial close by asking questions that assume the prospect will buy. Following up: After a successful closing, the salesperson must follow up the sale. In the follow-up stage, the salesperson determines whether the order was delivered on time and installed properly, if installation was required. He or she should contact the customer to learn if any problems or questions regarding the product have arisen.

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Chap 18_20e 221. There are inside salespeople, outside salespeople, and support personnel. Inside salespeople support personnel or take orders, follow up on deliveries, and provide technical information. An outside sales force is also important. Usually their sales calls are more consultative and are built on developing long-term relationships. Some salespeople concentrate on current-customer sales. Sales personnel who concentrate on current customers call on people and organizations that have purchased from the firm before. These salespeople seek more sales from existing customers by following up on previous sales. New-business sales personnel locate prospects and convert them into buyers. Support personnel facilitate selling but usually are not involved solely with making sales. They engage primarily in marketing industrial products, locating prospects, educating customers, building goodwill, and providing service after the sale. The three most common kinds of support personnel are missionary, trade, and technical salespeople. 222. Whether the training program is complex or simple, developers must consider what to teach, whom to train, and how to train them. A sales training program can concentrate on the company, its products, or selling methods. Ordinarily, new sales personnel require comprehensive training, whereas experienced personnel need both refresher courses on established products and training regarding new-product information and technology changes. Sales training may be done in the field, at educational institutions, in company facilities, and/or online using webbased technology. For many companies, online training saves time and money and helps salespeople learn about new products quickly. Sales managers might even choose to use online platforms. The choice of methods and materials for a particular sales training program depends on type and number of trainees, program content and complexity, length and location, size of the training budget, number of trainers, and a trainer’s expertise. 223. Effective sales force motivation is achieved through an organized set of activities performed continuously by the company’s sales management. Enjoyable working conditions, power and authority, job security, and opportunity to excel are effective motivators, as are company efforts to make sales jobs more productive and efficient. Sales contests and other incentive programs can also be effective motivators. These can motivate salespeople to increase sales or add new accounts, promote special items, achieve greater volume per sales call, and cover territories more thoroughly. In smaller firms lacking the resources for a formal incentive program, a simple but public “thank you” and the recognition from management at a sales meeting, along with a small-denomination gift card, can be very rewarding. Recognition programs that acknowledge outstanding performance with symbolic awards, such as plaques, can be very effective when carried out in a peer setting. The most common incentive offered by companies is cash, followed by gift cards and travel. Cash rewards are easy to administer, are always appreciated by recipients, and appeal to all demographic groups. In addition, recipients who are allowed to select the merchandise experience a sense of control, and merchandise awards can help build momentum for the sales force.

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Chap 18_20e 224. Consumer sales promotion methods encourage or stimulate consumers to patronize specific retail stores or try particular products. Consumer sales promotion methods initiated by retailers often aim to attract customers to specific locations, whereas those used by manufacturers generally introduce new products or promote established brands. Some of the consumer sales promotion methods are coupons, cents-off offers, money refunds and rebates, frequent-user incentives, point-of-purchase displays, demonstrations, free samples, premiums, consumer contests and games, and consumer sweepstakes. Trade sales promotion methods attempt to persuade wholesalers and retailers to carry a producer’s products and market them more aggressively. Marketers use trade sales methods for many reasons, including countering the effect of lower priced store brands, passing along a discount to a price-sensitive market segment, boosting brand exposure among target consumers, or providing additional incentives to move excess inventory or counteract competitors. These methods include buying allowances, buy-back allowances, scan-back allowances, merchandise allowances, cooperative advertising, dealer listings, free merchandise, dealer loaders, premium or push money, and sales contests. The difference between trade sales and consumer sales promotion methods is that consumer sales promotion methods encourage or stimulate consumers to patronize specific retail stores or try particular products, while trade sales promotion methods attempt to persuade wholesalers and retailers to carry a producer’s products. 225. The three major types of sales compensation methods are straight salary compensation plan, straight commission compensation plan, and combination compensation plan. There are many advantages of the straight salary compensation plan. It gives salespeople security and sales managers control over salespeople. It is easy to administer and yields more predictable selling expenses. There are also a few disadvantages of the straight salary compensation plan. It provides no incentive, necessitates closer supervision of salespeople, and during sales declines, selling expenses remain constant. One of the advantages of the straight commission compensation plan is that it provides maximum amount of incentive. By increasing commission rate, sales managers can encourage salespeople to sell certain items. Another advantage is that selling expenses relate directly to sales resources. There are also a few disadvantages to the straight commission compensation plan. Salespeople have little financial security. Sales managers have minimum control over sales force. It may cause salespeople to give inadequate service to smaller accounts, and selling costs are less predictable. Some of the advantages of combination compensation plan are provision of certain level of financial security, some incentive, and movement of sales force efforts in profitable direction. The disadvantages of combination compensation plan are less predictability of selling expenses and chances of difficulty in administering. 226. The use of sales promotion has increased dramatically over the past 30 years, primarily at the expense of advertising. This shift in how promotional dollars are used has occurred for several reasons. Heightened concerns about value have made customers more responsive to promotional offers, especially price discounts and point-of-purchase displays. Thanks to their size and access to checkout scanner data, retailers have gained considerable power in the supply chain and are demanding greater promotional efforts from manufacturers to boost retail profits. Declines in brand loyalty have produced an environment in which sales promotions aimed at persuading customers to switch brands are more effective. Finally, the stronger emphasis placed on improving short-term performance results calls for greater use of sales promotion methods that yield quick (although perhaps short-lived) sales increases.

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Chap 18_20e 227. Marketers often use sales promotion to facilitate personal selling, advertising, or both. Sales promotion can increase sales by providing extra purchasing incentives. Many opportunities exist to motivate consumers, resellers, and salespeople to take desired actions. Some kinds of sales promotion are designed specifically to stimulate resellers’ demand and effectiveness, some are directed at increasing consumer demand, and some focus on both consumers and resellers. Regardless of the purpose, marketers must ensure that sales promotion objectives are consistent with the organization’s overall objectives, as well as with its marketing and promotion objectives. When deciding which sales promotion methods to use, marketers must consider several factors, particularly product characteristics (price, size, weight, costs, durability, uses, features, and hazards) and target market characteristics (age, gender, income, location, density, usage rate, and shopping patterns). How products are distributed and the number and types of resellers may determine the type of method used. The competitive and legal environment may also influence the choice. 228. Team selling involves the salesperson joining with people from the firm’s financial, engineering, and other functional areas. Team selling is advantageous in situations calling for detailed knowledge of new, complex, and dynamic technologies like jet aircraft and medical equipment. It can be difficult, however, for highly competitive salespersons to adapt to a team selling environment. Relationship selling, also known as consultative selling, involves building mutually beneficial long-term associations with a customer through regular communications over prolonged periods of time. Relationship selling involves finding solutions to customers’ needs by listening to them, gaining a detailed understanding of their organizations, understanding and caring about their needs and challenges, and providing support after the sale. 229. To manage a sales force effectively, sales managers must develop sales objectives. Sales objectives tell salespeople what they are expected to accomplish during a specified time period. They give the sales force direction and purpose and serve as standards for evaluating and controlling the performance of sales personnel. Sales objectives should be stated in precise, measurable terms; specify the time period and geographic areas involved; and be achievable. Sales objectives are usually developed for both the total sales force and individual salespeople. Objectives for the entire force are normally stated in terms of sales volume, market share, or profit. Volume objectives refer to dollar or unit sales. When sales goals are stated in terms of market share, they usually call for an increase in the proportion of the firm’s sales relative to the total number of products sold by all businesses in that industry. When sales objectives are based on profit, they are generally stated in terms of dollar amounts or return on investment. Sales objectives, or quotas, for individual salespeople are commonly stated in terms of dollar or unit sales volume. Other bases used for individual sales objectives include average order size, average number of calls per time period, and ratio of orders to calls.

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Chap 18_20e 230. Customer information sharing through social media, mobile and web applications, and electronic sales presentations are influencing the nature of personal selling. Technology and social media provide an unprecedented level of transparency and communication between the salesperson and customers. Many firms are using social media technology to reach business customers as well. “Social CRM” (customer relationship management) presents opportunities to manage data for discovering and engaging customers. Digital technology has become such an important part of our lives that it is not uncommon for salespersons to access their CRM systems through their smartphones. Internal consumer data can help salespeople understand and collaborate with customers in ways that did not exist in the past. Using websites to manage orders and product information, track inventory, and train salespeople can save companies time and money. Twitter is a relatively new tool that can be used to post product information and updates, obtain prospects, recruit new salespeople, and communicate with salespeople. Facebook is another valuable tool that can supplement and support face-to-face contacts. On Facebook, salespeople can carry on conversations very similar to traditional face-to-face social networks. Mobile technology and applications provide salespeople with opportunities to offer service and connect with customers. CRM technology enables improved service, marketing and sales processes, and contact and data management and analysis. CRM can help facilitate the delivery of valuable customer experiences and provide the metrics to measure progress and sales successes. 231. In a straight salary compensation plan, salespeople are paid a specified amount per time period, regardless of selling effort. This sum remains the same until they receive a pay increase or decrease. Although this method is easy to administer and affords salespeople financial security, it provides little incentive for them to boost selling efforts. In a straight commission compensation plan, salespeople’s compensation is determined solely by sales for a given period. A commission may be based on a single percentage of sales or on a sliding scale involving several sales levels and percentage rates. Although this method motivates sales personnel to escalate their selling efforts, it offers them little financial security, and it can be difficult for sales managers to maintain control over the sales force. In a combination compensation plan, salespeople receive a fixed salary plus a commission based on sales volume. Some combination programs require that a salesperson exceed a certain sales level before earning a commission; others offer commissions for any level of sales. 232. When deciding on territories, sales managers must consider size, geographic shape, routing, and scheduling. Several factors enter into the design of a sales territory’s size and geographic shape. First, sales managers must construct territories that allow sales potential to be measured. Sales territories often consist of several geographic units, such as census tracts, cities, counties, or states, for which market data are obtainable. Sales managers usually try to create territories with similar sales potential, or requiring about the same amount of work. If territories have equal sales potential, they will almost always be unequal in geographic size. The geographic size and shape of a sales territory are the most important factors affecting the routing and scheduling of sales calls. Next in importance is the number and distribution of customers within the territory, followed by sales call frequency and duration. Those in charge of routing and scheduling must consider the sequence in which customers are called on, specific roads or transportation schedules to be used, number of calls to be made in a given period, and time of day the calls will occur. 233. Coupons reduce a product’s price and aim to prompt customers to try new or established products, increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. Savings are deducted from the purchase price. Coupons are the most widely used consumer sales promotion technique. Print advertisements with coupons are often more effective at generating brand awareness than print ads without coupons. Coupons reward current product users, win back former users, and encourage purchases in larger quantities.

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Chap 19_20e Indicate whether the statement is true or false. 1. Marketing mix variables are highly interrelated. a. True b. False 2. If Seth and Noah each own their own gas station, and they get together to set agreed-upon prices, this is an example of deceptive pricing. a. True b. False 3. Ideally, pricing decisions have little relation to a firm's marketing objectives. a. True b. False 4. The point at which marginal revenue equals marginal cost is the breakeven point. a. True b. False 5. Demand depends only on the price of the product. a. True b. False 6. Profit margins for marketing channel members must be considered when determining the price of a product. a. True b. False 7. Setting prices for business customers is very similar to setting prices for consumers. a. True b. False 8. Barter is the oldest form of exchange. a. True b. False 9. The firm should produce the quantity at which marginal revenue and marginal cost are equal. a. True b. False 10. Marketers have more difficulty adjusting their prices than they do any other marketing mix variable. a. True b. False 11. Marginal revenue is the change in total revenue that occurs when a firm sells an additional unit of product. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 12. Price is the most easily adjusted ingredient in the marketing mix. a. True b. False 13. Profits for a firm are computed as follows: Profits = Total Revenue - Fixed Costs. a. True b. False 14. In setting price, it is wise to analyze competitors' prices. a. True b. False 15. F.O.B. factory denotes the price of the products at the factory. If the price is quoted as F.O.B. shipping, then shipping costs are paid by the seller. a. True b. False 16. The idea behind prestige demand is that many prestige products seem to sell better at a high price than at a low price. a. True b. False 17. Transfer pricing involves the sale of a product to another unit within the same organization. a. True b. False 18. Monopolies are the most likely type of firm to engage in price wars. a. True b. False 19. The legality of uniform geographic pricing has been challenged, and so its use has been abandoned. a. True b. False 20. Organizational goals have little to do with pricing decisions. a. True b. False 21. Predatory pricing involves having the ability to set prices so excessively high that only the highest income consumers can afford them. a. True b. False

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Chap 19_20e 22. T o avoid the appearance of price fixing, marketers must develop independent pricing policies and set prices in ways that do not even hint at collusion. a. True b. False 23. Channel member expectations play no part in a firm's pricing decisions. a. True b. False 24. Product demand usually becomes more elastic over time because more substitutes are found. a. True b. False 25. Fixed costs vary with the number of units produced or sold. a. True b. False 26. Producers commonly provide discounts off list prices to intermediaries. a. True b. False 27. Electricity is an example of a product that is price elastic. a. True b. False 28. Nonprice competition can be used to establish brand loyalty. a. True b. False 29. The purpose of the pricing concept is to quantify and express the value of items in a market exchange. a. True b. False 30. Costs are a major issue when establishing price. a. True b. False 31. A customer looking for the lowest price on a mattress without concern for the quality of the mattress or the status gained by buying and using a certain brand is a price-conscious customer. a. True b. False 32. A firm can survive in the long run only if its products are sold below cost. a. True b. False

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Chap 19_20e 33. Elastic demand is usually a result of the lack of substitute products. a. True b. False 34. For most products, the quantity demanded goes up as the price goes down. a. True b. False 35. Nonprice competition does not permit unique product features, higher product quality, and customer service. a. True b. False 36. If demand is elastic, a change in price causes a parallel change in total revenue. a. True b. False 37. Price is a major component of the profit equation. a. True b. False 38. Pricing decisions can be based on determining whether the demand for a product is price elastic or price inelastic. a. True b. False 39. A seller can change prices quickly in a price-competition situation. a. True b. False 40. Pricing whereby the buyer absorbs all or part of the freight costs is freight absorption pricing. a. True b. False 41. Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition. a. True b. False 42. A customer's interpretation and response to a price depends on what the customer receives from a purchase compared to what he or she gives up to make a purchase. a. True b. False 43. Comparison of various prices and various breakeven points will tell the marketer exactly what price to charge. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 44. An organization that uses pricing to increase its market share would likely set the brand’s price below those of competing brands of similar quality. a. True b. False 45. W hile giving trade discounts is a relatively standard practice, discounts tend to vary between industries. a. True b. False 46. Price is the value that is exchanged for products in a marketing transaction. a. True b. False 47. Factors affecting pricing decisions can include demand, distribution, and the way in which the product is promoted. a. True b. False 48. The more experience the customer has with a product, the more he or she relies on external reference prices. a. True b. False 49. Price competition is a very flexible marketing strategy. a. True b. False 50. Nonprice competition allows a company to increase its brand's unit sales through means other than changing the brand's price. a. True b. False 51. Pricing decisions should be based on the marketer's previous marketing strategies for other successful products and on intuition. a. True b. False 52. A firm that competes on a price basis is unable to change prices frequently. a. True b. False 53. Knowing the number of units necessary to break even is important in setting the price. a. True b. False

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Chap 19_20e 54. Total costs are influenced by quantities sold. a. True b. False 55. Changes in buyers' attitudes, other components of the marketing mix, and uncontrollable environmental factors can influence demand. a. True b. False 56. Noncumulative discounts are one-time reductions in prices based on the number of units purchased, the dollar value of the order, or the product mix purchased. a. True b. False 57. Customers always interpret a higher price to mean higher quality. a. True b. False 58. Sellers using nonprice competition are not concerned with prices charged by competitors. a. True b. False 59. Demand is best determined by a top management committee. a. True b. False 60. Price elasticity of demand measures the sensitivity of demand to changes in price. a. True b. False 61. Brand uniqueness is not important in nonprice competition. a. True b. False 62. Price should be defined in terms of money only. a. True b. False 63. Price is a crucial marketing mix component. a. True b. False 64. P redatory pricing is difficult to prove. a. True b. False

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Chap 19_20e 65. Lower-priced products are more likely than higher-priced ones to require personal selling. a. True b. False 66. The major disadvantage of using price competition is that it takes a long time to implement the changes in price. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 67. Scenario 19.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 19.2. BASF has decided to offer discounts to its business customers in the form of the following: For each order of $100,000 or more during the next 90 days, the buyer will receive a rebate of 5%. This type of pricing would be an example of ____ discounts. a. allowance b. cumulative c. seasonal d. noncumulative e. cash 68. The General Auto Insurance advertises its automobile insurance as "For a great low rate you can get online, go to The General and save some time!" General is engaging in a. nonprice competition. b. demand-based pricing. c. cost-based pricing. d. price differentiation. e. price competition. 69. Hopper Industries determines that for its air compressors the following results are achieved at a price of $250: total costs = $250,000; variable costs per unit = $100; fixed costs = $175,000. Given these figures, Hopper would break even at ____ units. a. 1,167 b. 1,000 c. 1,750 d. 2,500 e. 700 Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 70. Veronica is shopping for a new pair of athletic shoes. Since she is concerned about both the price and the quality aspects of a product, Veronica is most likely a ___ consumer. a. price-conscious b. prestige-sensitive c. value-conscious d. price-conscious and prestige-sensitive e. quality-conscious 71. To gain market share, when Kia first entered the U.S. car market it did so with a comparatively low pricing strategy. One of the negative side effects of making this pricing decision is a. a negative impact on consumers' perceptions of quality. b. difficulty lowering the prices later. c. a high return on investment level affecting tax balances owed. d. poor survival chances. e. higher developmental costs. 72. Price is a key element in the marketing mix because it relates most directly to a. the size of the sales force. b. the speed of an exchange. c. quality controls. d. the generation of total revenue. e. brand image. 73. Travis Kellogg is a sales representative for Xerox and his territory includes St. Louis and the surrounding suburbs. One of his accounts is Cintas, which offers a wide range of products to businesses. Travis was working with the Cintas division manager, Kiera Valentine, to gain her approval to purchase a networked printer and copier for the local office. The price of the printer/copier including installation would be $5,490, but Kiera has a spending limit of $5,000. She and Travis try to negotiate how Xerox can get the order and Kiera can get the printer but stay within her division’s budget. Eventually, they agreed to a deal of $5,000 for the printer/copier, plus Cintas would deliver and maintain welcome mats or rugs in Xerox’s St. Louis office. Travis and Kiera successfully utilized _____ to facilitate the exchange. a. bartering b. money c. credit d. negotiation e. trade

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Chap 19_20e 74. Vanessa Hodges, who works for Cisco as a district manager and travels frequently for business, is always dressed in a stylish suit with high heels. She’s an avid reader of fashion blogs and magazines and shops the high-end stores in New York City, Boston, Chicago, or Los Angeles whenever she’s in those locations as part of her corporate travel. Vanessa’s favorite brand of shoe is Christian Louboutin, which features a distinctive red sole. Although the shoes cost over $900 per pair, Vanessa has several pairs and believes they are the most stylish and comfortable dress shoe. She also likes the subtle feature of the red soles, which are very distinctive and signify that the shoes are expensive and made by the famous French designer. Which of the following best describes Vanessa’s purchasing style for the Christian Louboutin shoes? a. Prestige-sensitive b. Value-conscious c. Price-conscious d. Quality-conscious e. Efficiency-conscious 75. A price developed in the consumer's mind through experience with the product is called a(n) a. external reference price. b. value-price guideline. c. frame of reference. d. internalized price. e. internal reference price. 76. Average fixed cost declines as a. market share increases. b. price decreases. c. price increases. d. output decreases. e. output increases. 77. The Tommy Bahama Company utilizes a special strategy to sell its ECO-shirt line. Its basic promotional tool is the discount. These discounts offered to middlemen for performing certain channel activities are referred to as ____ discounts. a. trade b. cumulative c. noncumulative d. cash e. quantity

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Chap 19_20e 78. Sonya is a product manager for The Container Store, a retailer of storage containers, closet systems, and more. Sales have been declining in the past nine months and her management team is pressuring her to compete based on price discounts. However, Sonya is aware of the dangers associated with engaging in price competition. She knows that competitors can also change prices quickly and aggressively, which can result in a(n) ____ that will be harmful to both companies. a. reduction in cost b. price war c. competitive game d. industry collapse e. advertising battle 79. The Aerie is an upscale lounge that caters to young professionals who enjoy drinks after work in a casual and comfortable setting. The Aerie has a specialty cocktail menu with items that its owner and head bartender, Alec Valentine, created. All cocktails on the specialty menu are $15 each and include a variety of alcohol or liquors and are “hand-crafted.” Alec has priced his cocktails so that he earns a 70% profit margin on each sale. Thus, the total costs to prepare each specialty cocktail are 30% of the retail price. Last month, Alec sold 1,250 specialty cocktails. How much profit did Alec’s Aerie business earn on the sale of specialty cocktails? a. $13,125 b. $5,625 c. $6,500 d. $11,500 e. $10,725 80. Which of the following acts does NOT directly affect pricing decisions? a. Sherman Antitrust Act b. Federal Trade Commission Act c. Wheeler-Lea Act d. Clayton Act e. Simpson-Marshall Act 81. W hich of the following statements is true about marginal analysis? a. F ixed costs vary with changes in the number of units sold. b. T otal cost is the sum of average fixed costs and average variable costs times the quantity produced. c. A verage variable cost equals variable cost times number of units sold. d. A verage fixed cost increases as the number of units produced increases. e. M arginal cost equals fixed costs minus variable costs.

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Chap 19_20e 82. Reductions for transportation and other costs related to the physical distance between buyer and seller are known as a. base-point pricing. b. freight absorption pricing. c. price zoning. d. location pricing. e. geographic pricing. 83. You are the general manager of the machining products division of a diversified manufacturing company in Des Moines, Iowa. You primarily produce machining products for sale to wholesalers around the world. However, you periodically get requests from other divisions in your company to purchase your products. You treat these purchase requests the same as a purchase request from a non-affiliated entity. You sell your machining products to other internal divisions at a price that is equivalent to a market-based cost. This is an example of which of the following types of business pricing? a. F reight absorption pricing b. U niform geographic pricing c. T ransfer pricing d. Z one pricing e. B ase-point pricing 84. The ____ prohibits price fixing among firms in an industry. a. Sherman Antitrust Act b. Federal Trade Commission Act c. Wheeler-Lea Act d. Robinson-Patman Act e. Clayton Act 85. If Umbro faces a standard demand curve that exists for most products, as it raises the price of its soccer balls, the a. quantity demanded goes down. b. demand remains constant. c. quantity demanded increases. d. demand increases initially, and then drops. e. breakeven increases. 86. Premium-priced products are usually marketed through a. complex marketing channels. b. intensive or selective distribution. c. exclusive or intensive distribution. d. exclusive distribution only. e. selective or exclusive distribution. Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 87. Suppose that the frozen foods division of Amy’s purchases food trays and boxes from the packaging division. The form of pricing used to charge the frozen foods division is called a. zone pricing. b. base-point pricing. c. business-unit pricing. d. transfer pricing. e. F.O.B. factory pricing. 88. To determine the breakeven point in units, divide the fixed costs by a. total costs. b. variable costs times price. c. price minus variable costs. d. price per unit. e. total revenue minus fixed costs. 89. Price is considered to be the variable in the marketing mix that is a. least flexible. b. most flexible. c. most difficult. d. first to be decided. e. last to be decided. 90. Barbara is a marketing consultant who specializes in small businesses. Her current client is very interested in estimating the costs for the coming year, in order to find the breakeven point. Barbara knows this is an important financial statistic because below the breakeven point, the firm is operating a. with fixed costs only. b. with minimal variable costs. c. with no revenue. d. with minimal profit. e. at a loss. 91. What assumption does breakeven analysis make that limits its overall usefulness? a. It focuses on how to achieve a price objective. b. It assumes a company wants to gain a certain market share. c. It relies on demand for a product being inelastic. d. It focuses only on competitive factors and not costs. e. It assumes demand is elastic for the product.

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Chap 19_20e 92. If a company increased its price from $100 to $120 and the quantity demanded fell by 40%, the price elasticity of demand for this product is a. -4. b. 1/2. c. −1/2. d. −2. e. 4. 93. A measure of sensitivity of demand in relation to changes in price is a. a demand curve. b. a prestige graph. c. marginal analysis. d. price elasticity of demand. e. quantity elasticity. 94. Suppose Clarks is introducing a new line of men's shoes. The designer believes that the target market for these shoes comprises men who are very status-conscious. In keeping with this assessment, department stores selling the shoes should a. charge a price based on their cost. b. charge prices consistent with their existing ties. c. discount the ties. d. negotiate the price with individual tie shoppers. e. use price symbolically. 95. Which of the following products is most likely to have an inverted C-shaped demand curve? a. Visit to the dentist b. Eternity perfume c. Starbucks coffee d. Pillsbury cake mix e. Ford Escape 96. Suppose a competitor says that Walmart's everyday low prices are really a type of predatory pricing. Walmart contends that its efficient operations and strong relationships with suppliers, as well as a number of other factors, allow it to keep prices lower than competitors all of the time. A judge determines that Walmart is not guilty of predatory pricing. If Walmart's competitor wanted to prove it was guilty of predatory pricing, what would it have to do? a. Show that Walmart was undercutting competitors to sell off excess inventory b. Demonstrate that Walmart did not really have the lowest prices of all retailers c. Prove that the prices were set low in order to drive out competitors d. Maintain that Walmart's pricing strategy placed other firms at a disadvantage e. Prove that Walmart was using price differentials to charge customers different prices

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Chap 19_20e 97. Dividing fixed costs by the number of units produced yields a. marginal cost. b. average total costs. c. average variable costs. d. average fixed costs. e. the breakeven point. 98. When a customer is considering the purchase of a product in a less-familiar product category, that individual is likely to rely more heavily on a. internal reference prices. b. symbol prices. c. high value products. d. discounted reference prices. e. external reference prices. 99. Both the Federal Trade Commission Act and the Wheeler-Lea Act prohibit a. freezing prices. b. independent pricing policies. c. deceptive pricing. d. price fixing. e. price differentials. 100. Myrna's company just purchased $600 worth of supplies from Staples. The terms for payment are 2/10 net 30. If Myra's firm pays in the next week, it will pay ___________. If Myrna's company waits three weeks to pay Staples, it will pay _____________. a. $600; $630 b. $588; $600 c. $540; $588 d. $540; $600 e. $588; $630 101. A company trying to position itself as value oriented should NOT a. set prices that are reasonable relative to product quality. b. use premium pricing for its products. c. set prices similar to those of its competitors. d. use any advertising for its products. e. consider costs when determining the price of products.

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Chap 19_20e 102. If Norwegian Cruise Lines increased the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Norwegian's demand would be a. steady. b. inelastic. c. elastic. d. prestige. e. marginal. 103. Marketers generally view ____ as the minimum price a product can be sold for. a. fixed costs b. variable costs c. profits d. fixed and variable costs e. moderate losses 104. If a firm currently produces 2,500 products per month and decides to produce 2,501, it will incur a. more fixed costs. b. higher average fixed costs. c. fewer variable costs. d. a marginal cost. e. higher average variable costs. 105. The percentage change in quantity demanded caused by a percentage change in price is much greater for products with a. unyielding demand. b. inelastic demand. c. elastic demand. d. recreational demand. e. derived demand. 106. For most products, a(n) ____ relationship exists between the price of a particular product and the quantity demanded. a. inelastic b. inverse c. positive d. unknown e. elastic

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Chap 19_20e 107. A certain location of Hamish's restaurant has annual fixed costs of $200,000. If an average tab at the restaurant is $60 and the variable costs per tab is $20, how many groups of customers must Hamish's serve per year in order to break even? a. 2,000 b. 5,000 c. 10,000 d. 3,333 e. 2,500 108. The owner of Big Jim’s Motorcycles is opening a new retail location. Which of the following is most likely to be a fixed cost for Big Jim’s Motorcycles? a. Retail personnel salaries b. Advertising on Facebook c. Building rent d. Electricity e. Transportation of sold bikes 109. The fact that a gas station in Texas pays less for fuel than a gas station in Maine from a producer in Louisiana suggests that refineries are using which of the following pricing methods? a. Price differentiation b. Base-point pricing c. Freight absorption pricing d. Transfer pricing e. Zone pricing 110. A concession in price in business markets to achieve a desired goal is called a(n) a. allowance. b. objective-oriented discount. c. cash discount. d. trade discount. e. cumulative discount. 111. Trading products is the oldest form of exchange, and is commonly known as a. credit. b. buying. c. purchasing. d. barter. e. pricing.

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Chap 19_20e 112. Which of the following statements about nonprice competition is false? a. Companies that use nonprice competition do not need to keep track of their competitor's prices. b. A company must be able to distinguish its brand through some unique feature in order to successfully engage in nonprice competition. c. A firm using nonprice competition can build loyalty to both its company and its products. d. When using nonprice competition, a company should promote the distinguishing characteristics of its brand. e. Buyers must view the distinguishing characteristics of a product offered through nonprice competition as being important. 113. What does the demand curve for a prestige product look like? a. It is a straight line where the quantity sold continues to increase as the price of each product increases. b. It is a curve where the highest and the lowest prices yield the greatest quantity sold and mid-range prices produce the fewest sales. c. It forms a curve where the greatest quantity sold comes at a medium price, and the quantities fall as the price increases or decreases. d. It forms a straight vertical line because of the prestige of the product, and quantity sold will remain stable regardless of the price. e. It slopes from left to right at a very mild slope; that is, as quantity increases, price decreases slowly. 114. ____________ are reductions off the list price given by a producer to an intermediary for performing certain functions. a. T rade discounts b. Q uantity discounts c. C umulative discounts d. N on-cumulative discounts e. C ash discounts 115. If Florida Gas and Electric increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be a. elastic. b. minimal. c. minor elasticity. d. variable. e. inelastic. 116. What equation shows organizations the relationship between price and profit? a. Total Variable Costs + Total Fixed Costs = Sales − Profit b. Price = Profit per Item × Number of Units Sold c. (Price × Quantity Sold) − Total Costs = Profits d. (Price − Profits) × Total Costs = Sales e. Total Costs = (Price × Quantity Sold) − Profits Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 117. Which of the following prohibits price discrimination that lessens competition among resellers? a. Sherman Antitrust Act b. Robinson-Patman Act c. Lanham Trademark Act d. Federal Trade Commission Act e. Wheeler-Lea Act 118. Morgan Stokes, a division 3 collegiate volleyball player, wears a lot of athletic apparel such as shorts, yoga pants, tights, and tops. She loves having the latest styles and colors but likes to save money too. Morgan has discovered that she can purchase the top quality brands such as Nike and Under Armour at Academy Sports + Outdoors. The store is not as large as Dick’s Sporting Goods, but Morgan believes the selection, price point, and level of quality is very competitive. She enjoys purchasing name-brand items at 25% to 30% savings compared to Dick’s Sporting Goods. Which of the following best describes Morgan and her selection of Academy as her preferred store for sports apparel? a. Value-conscious b. Price-conscious c. Prestige-sensitive d. Efficiency-conscious e. Quality-conscious 119. You are reading the quarterly financial report of one of your competitors. You expected to see their total sales revenue decline because they had a large price increase during the quarter. You were certain that the price increase would lead to an equivalently large decrease in their total sales revenue. To your surprise, their total sales revenue actually increased in the quarter. Based on this information, which of the following explanations could explain why the competitor’s total sales revenue increased? a. T he demand for the company’s products is inelastic, so total revenue declines when prices are raised. b. T he demand for the company’s products is elastic, so total revenue declines when prices are raised. c. T he demand for the company’s products is elastic, so unit sales increase when prices are raised. d. T he demand for the company’s products is inelastic, so total sales revenue increases when prices are raised. e. T he demand for the company’s products is elastic, so fixed costs increase when prices are raised. 120. Which of the following statements is true about customers’ interpretation and response to price? a. A n internal reference price is a comparison price provided by others such as friends and relatives. b. A n external reference price is a price developed in the buyer’s mind through experience with the product. c. P restige-sensitive customers are concerned about both the price and quality aspects of a product. d. A t times, customers interpret a higher price as higher product quality. e. C ustomers do not consider the resources required to maintain a product after purchase.

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Chap 19_20e 121. What type of discount is given to a business purchaser for performing activities such as transporting, storing, and selling? a. Quantity b. Cash c. Geographic d. Service e. Trade 122. Scenario 19.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 19.2. BASF is considering the problem of actual distance in delivering its product from the plant in Germany to some of its customers in China. Which pricing strategy would help overcome this problem? a. Geographic b. Transfer c. Commercial d. Transit e. Factory 123. Fairmont Austin drops the price of a suite from $264 to $234 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ____ product. a. reverse-demand b. inferior c. standard d. secondary-demand e. prestige 124. The amount of profit a channel member expects depends on a. the amount of discounts for large orders provided by the producers. b. the number of channel support activities provided by the producers. c. what the intermediary could earn if it were handling a competing product instead. d. the type of distribution channels involved. e. the amount of effort required to carry the product.

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Chap 19_20e 125. Which of the following is true about price competition? a. A major advantage of price competition is flexibility. b. P rice competition allows the marketer to build brand loyalty. c. P rice wars do not result from price competition. d. I n price competition, marketers distinguish their brands with unique product features. e. I n price competition, marketers distinguish their brands with promotion and packaging. 126. Marketers can determine whether a product is price elastic by a. analyzing fixed and variable costs as prices change. b. analyzing total costs as prices change. c. analyzing total revenues as prices change. d. assessing market share as prices change. e. assessing competitors’ actions as prices change. 127. Toyota managers know that if they cut the price on its small sport utility vehicle, the RAV4, Honda and Ford follow suit with the prices on their small sport utility vehicles. Toyota managers rarely take this step, knowing that price cuts are unlikely to give them an advantage in a(n) a. perfect competition. b. pure competition. c. monopolistic competition. d. monopoly. e. oligopoly. 128. Scenario 19.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 19.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this would be an example of ____ pricing. a. transfer b. geographic c. F.O.B destination d. F.O.B. factory e. base-point

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Chap 19_20e 129. If Tom’s of Maine wants to maximize profit on its toothpaste, it should operate at the point where a. total costs and total revenues are equal. b. marginal revenue is at its highest level. c. marginal revenue exceeds marginal cost. d. marginal revenue equals marginal cost. e. demand is most elastic. 130. Dell introduces a new voice-activated personal computer that does not require a keyboard. Dell charges the high price of $2,500 per unit, thus generating large profits because it has a 20% market share. Dell's major problem in the future will most likely be a. survival. b. competition. c. cash flow. d. return on investment. e. profit. 131. Diamond Pet Foods is a large pet food manufacturer. If the strategic goal for Diamond in the coming year was to ___________ in North America, it should use temporary price reductions. a. increase the number of competitors b. gain market share c. decrease volume sold d. increase revenue per item e. decrease the number of competitors 132. Mike is developing a business plan for a new type of bicycle cleat. He is interested in finding the point at which the costs of producing the cleat will equal the revenue earned from selling the product. Mike is interested in finding the a. elasticity of demand. b. breakeven point. c. variable costs. d. price elasticity. e. the sum of fixed costs. 133. At the breakeven point, a. the money a company brings in from selling products equals the amount spent producing the products. b. the total fixed costs are exactly equal to the total variable costs. c. profits are exactly equal to the difference between revenue and total variable costs. d. the marginal revenue of a product is exactly equal to the marginal cost of producing one more unit. e. the marginal cost curve and the average cost curve will be identical for a particular product.

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Chap 19_20e 134. The Sherman Antitrust Act prohibits price fixing. Price fixing is a. a n attempt to establish high prices by becoming the market leader. b. t he use of false or misleading statements or practices to persuade buyers that a product is a better deal than it really is. c. t he practice of employing price differentials that tend to injure competition by giving one or more buyers a competitive advantage. d. a n agreement among competing firms to raise, lower, or maintain prices for mutual benefit. e. t he intent to set a product's price so low that rival firms cannot compete and therefore withdraw from the marketplace. 135. Dividing the percentage change in quantity demanded by the percentage change in price gives the a. prestige demand curve. b. breakeven point. c. marginal cost curve. d. price sensitivity curve. e. price elasticity of demand. 136. Which of the following is most likely to have an inelastic demand curve? a. Automobile b. Vacation c. Nonelective surgery d. Recreational vehicle e. Computer 137. Sara buys a new dress at Marshalls that has a price tag with "Compare at $150.00. Our Price $89.99." This is an example of the use of a. internal referencing. b. cumulative discounts. c. seasonal discounts. d. base-point pricing. e. an external reference price.

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Chap 19_20e 138. Scenario 19.1 Use the following to answer the questions. Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. Refer to Scenario 19.1. If Concession Supply increased its price by 10% and experienced only a 2% decrease in the demand for hotdogs, the demand would be a. inelastic. b. common. c. prestige. d. elastic. e. marginal. 139. A graph of the quantity of products marketers expect to sell at various prices if other factors remain constant is a a. price graph. b. supply curve. c. price/quantity graph. d. marginal revenue curve. e. demand curve. 140. Suppose that the watchband division of Timex sells completed watchbands to the finished watch division. The finished watch division is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing. a. zone b. actual full cost c. market-based cost d. cost plus investment e. standard full cost 141. If a product has an inelastic demand and the manufacturer raises its price, a. total revenue will increase. b. quantity demanded will decrease. c. the demand schedule will shift. d. the demand will become more inelastic. e. total revenue will decrease.

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Chap 19_20e 142. M arginal analysis involves examining a. w hat happens to a firm's costs and revenues when production is changed by one unit. b. w hat happens to a firm’s revenues when one more product is sold. c. w hat happens to a firm’s costs when one more unit is produced. d. t he difference between marginal revenue and total revenue. e. t he difference between marginal cost and total cost. 143. You and a partner are planning to open an extreme value store in your hometown. You plan to sell the majority of the items in the store for one dollar unit price. You have seen this concept work well in other cities, and you believe the demographics of your hometown are a good fit for this retail concept. Which of the following types of customers are you expecting to frequent your store? a. Price-conscious customers b. Wholesalers c. Other retailers d. Prestige-sensitive customers e. Value-conscious customers 144. Louis is reading the online report of the tuition and fees he owes for this semester of college. Since he has signed up for online banking, he pays the amount immediately. The amount Louis just paid is considered to be a. his expenses. b. his charges. c. his bill. d. the price. e. the exchange valuations. 145. When marketers emphasize price as an issue and match or beat the prices of other companies, they are using a. price competition. b. nonprice competition. c. comparative pricing strategies. d. demand-based pricing. e. supply-based pricing. 146. Catherine is out shopping with her friends for the day. While evaluating a decision to purchase a handbag, she says, "People notice when you buy the most expensive brand of a product." Catherine is most likely a _____ consumer. a. price-conscious b. quality-conscious c. value-conscious d. status-conscious e. prestige-sensitive

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Chap 19_20e 147. If the product price is $100, average variable cost $40 per unit, and the total fixed costs are $120,000, what is the breakeven point? a. 500 units b. 2,000 units c. 1,200 units d. 300 units e. 3,000 units 148. Which of the following statements is true about the factors that affect pricing decisions? a. I n the long term, a firm may sell products below cost to match competition. b. M arketers should set prices that are consistent with the organization’s goals and mission. c. P ricing decisions should not influence activities associated with the other marketing mix variables. d. P rice is not linked to elements of the distribution variable of the marketing mix. e. C osts should not be an issue when establishing price. 149. Price is a. money paid in a transaction. b. not important to buyers. c. of limited interest to sellers. d. the most inflexible marketing mix decision variable. e. the value that is exchanged for products in a marketing transaction. 150. When marginal cost is equal to marginal revenue, the firm should a. produce more to increase profits. b. produce less to decrease total costs. c. stop producing additional units to maximize profits. d. provide discounts to encourage purchases. e. intensify distribution to increase sales. 151. Which of the following statements about price elasticity is false? a. Steak is an example of a product that has an elastic demand for most people, because when price goes up quantity demanded goes down proportionally. b. Elasticity of demand is the relative responsiveness of a change in quantity demanded to changes in price. c. If marketers can determine price elasticity, then setting prices at optimum levels is much easier. d. When price is raised on a product that has an inelastic demand, then total revenue will decrease. e. A product like electricity has an inelastic demand.

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Chap 19_20e 152. An attorney general in Minnesota filed a lawsuit against a well-known pharmacy. According to the attorney general, the pharmacy had prices listed on store shelves that were different than the prices charged at the register, resulting in consumers having to pay more. This would most likely be an example of a. price fixing. b. price discrimination. c. predatory pricing. d. deceptive pricing. e. price wars. 153. If a retailer orders a quantity of merchandise to be delivered to his store in Albuquerque and is quoted a price that does not include shipping charges, the retailer is paying a(n) ____ price. a. F.O.B. destination b. F.O.B. factory c. transfer d. postage-stamp e. base-point 154. The degree to which the price of a product enhances a customer's satisfaction with the purchase experience and with the product after the purchase is part of their a. response. b. reference. c. interpretation. d. price satisfaction. e. price-consciousness. 155. For most firms in the United States, demand curves are a. upward sloping to the right. b. completely horizontal. c. completely vertical. d. C-shaped. e. downward sloping to the right. 156. Dunlop managers notice that when the number of tires the company sells increases from 1,000,000 to 1,000,001, total revenue rises $35. The $35 represents the firm's a. average revenue. b. marginal revenue. c. price elasticity. d. average variable revenue. e. average total cost.

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Chap 19_20e 157. If Kate Spade offers to reduce the price of its women's handbags when retailers buy more than 100 pieces, the designer is offering a ____ discount. a. quantity b. cash c. seasonal d. trade e. transfer 158. Scenario 19.1 Use the following to answer the questions. Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. Refer to Scenario 19.1. To break even, Concession Supply should sell ____ cases of hot dogs per day at Wrigley Field. a. 13 b. 120 c. 40 d. 200 e. 60 159. The types of prices that appear most often in ads are ___, while the types of prices that occur least often in ads are ____ prices. a. reference; comparison b. discount; cost-plus c. bargain; premium d. comparison; cost-plus e. sale; reference 160. Which of the following is NOT a discount provided to business customers? a. Trade b. Cumulative c. Cash d. Seasonal e. Differentiated

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Chap 19_20e 161. Steve Bauman is the owner of a company that manufactures metal doors that are utilized by retail outlets in shopping malls or higher crime areas where the retailer wants to provide additional security to prevent breakins. Steve is developing a new model that provides greater metal strength, is lighter, and is more attractive when in a closed position. He’s interested in determining the breakeven point in order to establish minimum goals for the first month of production. Steve estimates that his fixed costs to produce the new model will be $60,000. He plans to sell the doors to retailers at a list price of $249. Variable costs are estimated to be $95. How many units will his business need to sell in order to reach the breakeven point? a. 390 units b. 337 units c. 241 units d. 632 units e. 154 units 162. Which of the following statements is true about breakeven analysis?

a. T he breakeven point can only be stated in terms of sales revenue. b. A t the breakeven point, the firm’s fixed costs are greater than its variable costs. c. A t the breakeven point, the firm’s fixed costs are less than its variable costs. d. A t the breakeven point, the firm’s sales price per unit equals its variable cost per unit. e. A t the breakeven point, the firm’s sales revenue equals the sum of its fixed and variable costs. 163. When Buick buys batteries from Delco (both of which are divisions of General Motors), ____ pricing occurs. a. base-point b. zone c. transfer d. uniform geographic e. F.O.B. factory 164. One advantage of nonprice competition is that a. a firm can react quickly to competitive efforts. b. market share becomes less important. c. a firm can build customer loyalty. d. marketing efforts are completely eliminated. e. pricing is no longer a factor.

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Chap 19_20e 165. The Hawkins Candy Company is a small business located in the northeastern United States. The owner of Hawkins Candy is calculating the projected costs for the coming year. There is rent for the building; salaries for the retail employees; raw materials of sugar, chocolate, and other ingredients; wrappers for packaging of individual pieces of candy; boxes; and radio advertising. Hawkins’ ______ are most likely to be the raw materials of sugar, chocolate, and other ingredients, as well as the wrappers. a. sunk costs b. variable costs c. total costs d. fixed costs e. marginal costs 166. Harriet Wells is a sales representative for Benjamin Moore and her territory includes approximately 120-mile radius of her “home” retail store. Her customers are contractors and subcontractors as well as facility managers of office complexes, apartment buildings, hospitals, and other businesses that might have commercial painting needs. Harriet uses her company vehicle and spends about five hours each day in her car visiting her customers and prospecting for new business. Because her territory is so large, Harriet puts about 200 miles on her car each day, which consumes a lot of gasoline. She tries to be economical when choosing gas stations, but it doesn’t really matter how much the gas costs, she pays the price. In this case, demand for gasoline is _________. a. inelastic b. elastic c. unitary d. variable e. fixed 167. At what point does a firm maximize profit? a. The point at which marginal cost equals marginal revenue b. The point at which the firm sells its product at the highest price c. The breakeven point plus the adjusted marginal cost d. The point at which marginal profits equal marginal revenue e. The point at which marginal cost equals marginal profits 168. Millie Dolls have become a major competitor of doll companies like Mattel. When the company produces 1,500 dolls, it incurs $6,000 in costs. When it produces 1,501 dolls, the costs go up to $6,004. This $4 difference is an example of a. total cost. b. fixed cost. c. average variable cost. d. marginal cost. e. average total cost.

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Chap 19_20e 169. Since Viking has decided to use nonprice competition for its upscale appliances, it distinguishes its brand through all but which of the following? a. Distinctive product features b. Exceptional service c. Rebates d. Variety and selection e. Product quality and style 170. A product under nonprice competition would most likely NOT succeed in the market if a. a new advertising campaign is established for it. b. it is easy to duplicate. c. it is packaged differently from similar products. d. it is priced near the competitors' price. e. its quality has been upgraded. 171. Provisions of the Robinson-Patman Act, as well as those of the ____, limit the use of price differentials. a. Simpson-Marshall Act b. Federal Trade Commission Act c. Wheeler-Lea Act d. Clayton Act e. Sherman Antitrust Act 172. Under which competitive market structure are firms most likely to engage in nonprice competition? a. Oligarchy b. Oligopoly c. Perfect competition d. Monopolistic competition e. Pure competition 173. The el Rey del Mar Golf Club found that with annual fixed costs of $60,000, its breakeven point is 2,000 members when the membership charge is $60 per person per year. What is the variable cost per person for el Rey del Mar? a. $45 b. $50 c. $30 d. $25 e. $40

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Chap 19_20e 174. Brews and ‘Cue is a bar with a country and western atmosphere. In addition to the bar, Brews and ‘Cue sells barbecue meats, sandwiches, and meals. Woody, the owner of the business, has recently implemented temporary price reductions through clearance sales, discounts, and nightly drink specials. What is Woody most likely trying to do? a. Raise cash quickly b. Decrease costs c. Increase profitability d. Run off the competition e. Create a value image 175. What a price means or what it communicates to customers is called a. reference. b. response. c. internalization. d. interpretation. e. signaling. 176. Sophia Robbins, of Midwest Novelties, reduces the price of games sold to Grissom's Entertainment by 10% to allow for expenses associated with Grissom's promoting the games to consumers. This is an example of a ____ discount. a. quantity b. cash c. seasonal d. trade e. complimentary 177. Suppose managers at Case IH have determined the costs associated with producing combine harvesters are equal to the price that they charge for the combines. This indicates that Case IH is producing at the ____ point. a. breakeven b. marginal revenue less than marginal cost c. profit margin d. competitive price e. profit maximizing 178. Which factor is least likely to affect pricing decisions? a. Competitive prices b. Legal and regulatory issues c. Organizational and marketing objectives d. Customers' interpretation and response e. Shifting stock values

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Chap 19_20e 179. Chronic price wars often benefit ______ in the short run, but they tend to ______in the long run. a. consumers; harm wholesalers b. organizations; benefit consumers c. consumers; weaken organizations d. retailers; benefit consumers e. manufacturers; benefit consumers 180. To engage in price competition successfully, a firm should have a. a wider product mix. b. a deeper product mix. c. a broader distribution network. d. the lowest costs relative to its competitors. e. less advertising. 181. Gloria Ruiz works for the San Antonio Spurs organization and is responsible for managing ticket sales. She knows that ticket price and season ticket packages are related to consumers’ interest in purchasing tickets and she tries to price individual tickets and packages at the level where ticket sales and profitability are maximized for the Spurs home games. Gloria typically tests the _______ of demand by creating special events or special sales where she adjusts the price of tickets so she can determine the best price that maximizes profitability for the organization. a. price elasticity b. quantity c. feasibility d. sensitivity e. fluctuation 182. Which of the following is true about nonprice competition? a. A major advantage of nonprice competition is flexibility. b. Nonprice competition does not allow the marketer to build brand loyalty. c. Price wars may result from nonprice competition. d. In nonprice competition, marketers distinguish their brands with unique product features. e. In nonprice competition, marketers do not use promotion.

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Chap 19_20e 183. You are a senior sales and marketing analyst for a major retailing firm in Idaho. The marketing manager just stopped by your office with a very frustrated look on her face. She tells you that she is confused as to why, every time the company raises the sales price of its products, total revenue for the company declines. Based on this information, which of the following explanations do you give her for why this situation occurs? a. The demand for the company’s products is inelastic, so total revenue declines when prices are raised. b. The demand for the company’s products is elastic, so total revenue declines when prices are raised. c. The demand for the company’s products is elastic, so unit sales increase when prices are raised. d. The demand for the company’s products is inelastic, so unit sales increase when prices are raised. e. The demand for the company’s products is elastic, so fixed costs increase when prices are raised. 184. Advertisements for Suave shampoos emphasize that other shampoos may cost more but don't work any better than Suave. In this example, Suave is competing on the basis of a. product attributes. b. product performance. c. product price. d. available selection. e. product packaging. 185. Scenario 19.2 Use the following to answer the questions. The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 19.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a chosen point nearest the buyer, this would be an example of ____ pricing. a. factory plus b. dispersion c. base-point d. freight absorption e. uniform geographic 186. Buyers who focus on purchasing products that signify prominence and status are a. value-conscious consumers. b. price-conscious consumers. c. socially-elite buyers. d. prestige-sensitive buyers. e. status-conscious consumers.

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Chap 19_20e 187. Price wars tend to be disadvantageous to retailers. Why, therefore, would a retailer want to lower prices and take the chance of inciting a price war? a. T o reduce long-term costs b. T o raise profit margins c. T o develop a sustainable advantage d. T o enter a new market e. T o boost market share 188. If a company provides price differentials that harm competition by giving one or more buyers a competitive advantage, it is committing a. price discrimination. b. price-consciousness. c. price incrimination. d. price competition. e. price fixing. 189. For most consumers, there is an assumed relationship between a. price and quality. b. value and cost. c. internal and external reference prices. d. value and price consciousness. e. prestige prices and value. 190. Which of the following is true about price? a. P rice has no psychological impact on customers. b. P rice always takes the form of money paid. c. P rice relates directly to variable costs. d. M arketers do not use price symbolically. e. I t is the only marketing mix variable that can be changed quickly to respond to shifts in demand. 191. A deduction from list price for purchasing large quantities aggregated over a stated period of time is a a. noncumulative quantity discount. b. additive cash discount. c. cumulative quantity discount. d. cumulative discount allowance. e. additive quantity reduction.

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Chap 19_20e 192. To maintain market share and revenue in an increasingly price-sensitive market, companies have focused on quality, used labor-saving technologies, and used efficient manufacturing processes. These tactics have provided gains in productivity that have translated into ____ for the consumer. a. higher costs for the company and higher prices b. higher costs for the company and lower prices c. lower costs for the company and lower prices d. lower costs for the company and higher prices e. no change in the costs for either the company or 193. Sellers that emphasize distinctive product features to encourage brand preferences among customers, rather than price, are practicing a. product competition. b. nonprice competition. c. brand differentiation. d. price competition. e. competitor differentiation. 194. Gil orders 16 dozen fishing lures from Good Day Fishing for $375. When he gets the invoice, he is furious that $25 in freight charges has been tacked onto his bill because he thought the price included freight costs. Gil should have been certain that the order terms were a. F.O.B. origin. b. F.O.B. factory. c. C.O.D. d. 2/10, n/30. e. F.O.B. destination. 195. Scenario 19.1 Use the following to answer the questions. Concession Supply sells hotdogs, buns, and nacho ingredients to several major league ballparks across the country. Currently, Concession Supply has the following pricing information for one case of hotdogs sold at Wrigley Field: Total fixed costs = $1,200, Selling price = $16, and Variable costs = $6. Refer to Scenario 19.1. What is the breakeven point in dollar sales volume? a. $1,200 b. $1,440 c. $3,000 d. $1,920 e. $1,600

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Chap 19_20e 196. Monopolies usually keep their prices at a level that generates a reasonable, but not excessive, return primarily because a. they want to avoid new competitors entering their market. b. they want to avoid government regulations on their pricing. c. they try to satisfy the demands of value-conscious consumers. d. firms can increase market share more rapidly this way. e. customers will discontinue use of these products if prices rise. 197. Nancy Harrington recently opened a clothing boutique catering to women aged 20 to 60 who are seeking ontrend fashions at an economical price point. Nancy focuses on customer service and offers her customers personal styling advice, closet audits, and a generous return policy. She’s developing quite a following and has found that social media is a great way to market her business and showcase new arrivals. Because she orders limited numbers of items in a size range, customers know they must call or stop by the shop if they see something posted on Instagram or Facebook that they’d like to buy. Nancy sells most of her clothing at full price and only offers a “sale” twice each year. Nancy was recently asked to speak with a marketing class about pricing and how to run a profitable business. She was reviewing some information to prepare for the class and wanted to emphasize to the students the importance of identifying fixed costs, variable costs, marginal costs, and marginal revenue as well as their relationship to profitability. Nancy planned to demonstrate that profits will be at their highest when a. marginal cost equals marginal revenue. b. fixed cost is less than marginal revenue. c. variable cost is less than fixed costs. d. marginal revenue equals fixed costs. e. marginal cost is less than marginal revenue. 198. If the terms of a business exchange are 2/10 net 30, this means that the transaction a. involves a cumulative discount if paid in 30 days. b. involves a noncumulative discount. c. offers a discount if the buyer lives within a ten-mile radius. d. price does not include the cost of freight. e. involves a cash discount if paid within ten days. 199. The purpose of ______ discounts is to help the seller maintain steady production throughout the year. a. quantity b. cash c. trade d. seasonal e. complimentary

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Chap 19_20e 200. What are the terms of F.O.B. pricing?

201. What are the implications of a downward-sloping demand curve?

202. How would pricing decisions differ for a business in an oligopolistic market structure as opposed to a monopolistic market structure?

203. Why is the marginal revenue of a product important to the marketer?

204. How can transfer pricing be calculated? Give three alternatives.

205. If fixed costs = $6,000, selling price = $10, and variable costs per unit = $5, what is the breakeven point in units and in dollar sales volume?

206. Identify and describe the major factors that affect pricing decisions.

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Chap 19_20e 207. Explain what is meant by price elasticity of demand.

208. Compare and contrast price and nonprice competition. Give examples of firms that compete on a price basis and on a nonprice basis.

209. What are reference prices and how do customers use them? What is the difference between internal and external reference prices?

210. What are the differences among value-conscious, price-conscious, and prestige-sensitive customers?

211. Identify and describe the major types of discounts used for business markets. Then explain the reasons for using each type.

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Chap 19_20e Answer Key 1. True 2. False 3. False 4. False 5. False 6. True 7. False 8. True 9. True 10. False 11. True 12. True 13. False 14. True 15. False 16. True 17. True 18. False 19. False 20. False 21. False 22. True 23. False 24. True 25. False 26. True

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Chap 19_20e 27. False 28. True 29. True 30. True 31. True 32. False 33. False 34. True 35. False 36. False 37. True 38. True 39. True 40. False 41. True 42. True 43. False 44. False 45. True 46. True 47. True 48. False 49. True 50. True 51. False 52. False 53. True 54. True Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 55. True 56. True 57. False 58. False 59. False 60. True 61. False 62. False 63. True 64. True 65. False 66. False 67. b 68. e 69. a 70. c 71. a 72. d 73. a 74. a 75. e 76. e 77. a 78. b 79. a 80. e 81. b 82. e Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 83. c 84. a 85. a 86. e 87. d 88. c 89. b 90. e 91. c 92. d 93. d 94. e 95. b 96. c 97. d 98. e 99. c 100. b 101. b 102. c 103. d 104. d 105. c 106. b 107. b 108. c 109. e 110. a Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 111. d 112. a 113. c 114. a 115. e 116. c 117. b 118. a 119. d 120. d 121. e 122. a 123. e 124. c 125. a 126. c 127. e 128. d 129. d 130. b 131. b 132. b 133. a 134. d 135. e 136. c 137. e

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Chap 19_20e 138. a 139. e 140. c 141. a 142. a 143. a 144. d 145. a 146. e 147. b 148. b 149. e 150. c 151. d 152. d 153. b 154. a 155. e 156. b 157. a 158. b 159. c 160. e 161. a 162. e 163. c 164. c 165. b Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 166. a 167. a 168. d 169. c 170. b 171. d 172. d 173. c 174. a 175. d 176. d 177. a 178. e 179. c 180. d 181. a 182. d 183. b 184. c 185. c 186. d 187. e 188. a 189. a 190. e 191. c 192. c 193. b Copyright Cengage Learning. Powered by Cognero.

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Chap 19_20e 194. e 195. d 196. b 197. a 198. e 199. d 200. Geographic pricing involves reductions for transportation costs or other costs associated with the physical distance between buyer and seller. Prices may be quoted as F.O.B. (free-onboard) factory or destination. An F.O.B. factory price indicates the price of the merchandise at the factory before it is loaded onto the carrier, and thus excludes transportation costs. The buyer must pay for shipping. An F.O.B. destination price means the producer absorbs the costs of shipping the merchandise to the customer. This policy may be used to attract distant customers. Although F.O.B. pricing is an easy way to price products, it is sometimes difficult to administer, especially when a firm has a wide product mix or when customers are widely dispersed. Because customers will want to know about the most economical method of shipping, the seller must be informed about shipping rates. 201. Most firms face downward-sloping demand curves for their products. In other words, they must lower their prices to sell additional units. This situation means that each additional unit of product sold provides the firm with less revenue than the previous unit sold. Marginal revenue decreases as price decreases and quantity sold increases. Marginal revenue (MR) is the change in total revenue that arises from the sale of an additional unit of a product. Eventually, marginal revenue will reach zero, and the sale of additional units actually causes the firm to lose money. 202. When adjusting prices, a marketer must assess how competitors will respond. Will competitors change their prices and, if so, will they raise or lower them? The structure that characterizes the industry to which a firm belongs affects the flexibility of price setting. Because of reduced pricing regulation, for instance, firms in the telecommunications industry have moved from a monopolistic market structure to an oligopolistic one, which has resulted in significant price competition. The automotive and airline industries exemplify oligopolies, in which only a few sellers operate and barriers to competitive entry are high. Companies in such industries can raise their prices in the hope that competitors will do the same. When an organization cuts its price to gain a competitive edge, other companies are likely to follow suit. This happens frequently in the credit card industry. However, generally there is very little advantage gained through price cuts in an oligopolistic market structure because competitors will often follow suit. A market structure characterized by monopolistic competition has numerous sellers with product offerings that are differentiated by physical characteristics, features, quality, and brand images. The distinguishing characteristics of its product may allow a company to set a different price from its competitors. However, firms in a monopolistic competitive market structure are likely to practice nonprice competition.

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Chap 19_20e 203. Marginal analysis examines what happens to a firm’s costs and revenues when production changes by one unit. Both production costs and revenues must be evaluated. Marginal revenue is the change in total revenue that arises from the sale of an additional unit of a product. Most firms face downward-sloping demand curves for their products. This situation means that each additional unit of product sold provides the firm with less revenue than the previous unit sold, and marginal revenue decreases as price decreases and quantity sold increases. Eventually, marginal revenue will reach zero, and the sale of additional units actually causes the firm to lose money. Before the firm can determine whether a unit will be profitable, it must calculate costs and revenue, because profit equals revenue minus cost. If MR is the increase in revenue generated by the sale of a single additional unit of a product, and MC is the additional cost a single unit adds to a firm, subtracting MR from MC will tell us whether the unit is profitable. Any unit for which MR exceeds MC adds to a firm’s profits, and any unit for which MC exceeds MR subtracts from profits. 204. Transfer pricing occurs when one unit in an organization sells a product to another unit. The price is determined by one of the following methods: • Actual full cost: calculated by dividing all fixed and variable expenses for a period into the number of units produced. • Standard full cost: calculated based on what it would cost to produce the goods at full plant capacity. • Cost plus investment: calculated as full cost, plus the cost of a portion of the selling units' assets used for internal needs. • Market-based cost: calculated at the market price less a small discount to reflect the lack of sales effort and other expenses. The choice of transfer pricing method depends on the company’s management strategy and the nature of the units’ interactions. An organization must also ensure that transfer pricing is fair to all units involved in the transactions. 205. Knowing the number of units necessary to break even is important in setting the price. If a product priced at $10 per unit has an average variable cost of $5 per unit, the contribution to fixed costs is $5. If total fixed costs are $6,000, the breakeven point in units is determined as follows: breakeven point = fixed costs/per unit contribution to fixed costs breakeven point = fixed costs/(price - variable costs) breakeven point = $6,000/($10 - $5) breakeven point = 1,200 units To calculate the breakeven point in terms of dollar sales volume, the seller multiplies the breakeven point in units by the price per unit. In the preceding example, the breakeven point in terms of dollar sales volume is 1,200 (units) times $10, or $12,000.

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Chap 19_20e 206. Establishing prices involves selecting a basis for pricing: cost, demand, and/or competition. The appropriate pricing basis is affected by the type of product, the market structure of the industry, the brand’s market share position relative to competing brands, and customer characteristics. An organization generally considers at least two, or perhaps all three, dimensions. Firms must weigh many different factors when setting prices, including costs, competition, customer buying behavior and price sensitivity, manufacturing capacity, and product life cycles. Marketers should set prices that are consistent with the organization’s goals and mission. For example, a retailer trying to position itself as being value oriented may wish to set prices that are quite reasonable relative to product quality. The types of pricing objectives a marketer uses obviously have considerable bearing on the determination of prices. For instance, an organization that uses pricing to increase its market share would likely set the brand’s price below those of competing brands of similar quality to attract competitors’ customers. Clearly, costs must be an issue when establishing price. A firm may temporarily sell products below cost to match competition, generate cash flow, or even increase market share, but in the long run, it cannot survive by selling its products below cost. All marketingmix variables are highly interrelated. Pricing decisions can influence evaluations and activities associated with product, distribution, and promotion variables. When making price decisions, a producer must consider what members of the distribution channel expect. A channel member certainly expects to receive a profit for the functions it performs. When making pricing decisions, marketers should address a vital question: How will our customers interpret our prices and respond to them? Interpretation in this context refers to what the price means or what it communicates to customers. Does the price mean “high quality” or “low quality” or “great deal,” “fair price,” or “rip-off”? A marketer needs to know competitors’ prices so it can adjust its own prices accordingly. This does not mean a company will necessarily match competitors’ prices; it may set its price above or below theirs. However, for some organizations, matching competitors’ prices is an important strategy for survival. Legal and regulatory issues influence pricing decisions. To curb inflation, the federal government can invoke price controls, freeze prices at certain levels, or determine the rates at which firms may increase prices. 207. Price elasticity of demand provides a measure of the sensitivity of consumer demand for a product or product category to changes in price. Elasticity is formally defined as the percentage change in quantity demanded relative to a given percentage change in price. For a product with highly elastic demand, a relatively small increase in price results in a huge change in quantity sold. Non-essential items or those with ready substitutes tend to have more elastic demand. If marketers can determine the price elasticity of demand for a product, setting a price is easier. By analyzing total revenues as prices change, marketers can determine whether a product is price elastic. Total revenue is price multiplied by quantity. If demand is elastic, a shift in price causes an opposite change in total revenue: An increase in price will decrease total revenue, and a decrease in price will increase total revenue. The following formula determines the price elasticity of demand: price elasticity of demand = % change in quantity demanded/ % change in price. 208. When engaging in price competition, a marketer emphasizes price as an issue and matches or beats competitors’ prices. To compete effectively on a price basis, a firm should be the low-cost seller of the product. If all firms producing the same product charge the same price for it, the firm with the lowest costs is the most profitable. Firms that stress low price as a key marketing-mix element tend to market standardized products. A seller competing on price may change prices frequently, or at least must be willing and able to do so. Best Buy, for instance, had to be willing to adopt price-matching policies in order to compete with online competitors. Nonprice competition occurs when a seller decides not to focus on price and instead emphasizes distinctive product features, service, product quality, promotion, packaging, or other factors to distinguish its product from competing brands. Thus, nonprice competition allows a company to increase its brand’s unit sales through means other than changing the brand’s price. Mars, for example, markets not only Snickers and M&M’s but also has an upscale candy line called Ethel’s Chocolate. With the tagline “eat chocolate, not preservatives,” Ethel’s Chocolate competes on the basis of taste, attractive appearance, and hip packaging, and thus has little need to engage in price competition.

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Chap 19_20e 209. Reference pricing means pricing a product at a moderate level and positioning it next to a more expensive model or brand in the hope that a customer will use the higher price as a reference point (i.e., a comparison price). Because of the comparison, the customer is expected to view the moderate price more favorably than he or she would if the product were considered in isolation. When interpreting and responding to prices, how do customers determine if the price is too high, too low, or about right? In general, they compare prices with internal or external reference prices. An internal reference price is a price developed in the buyer’s mind through experience with the product. It reflects a belief that a product should cost approximately a certain amount. For the product categories with which we have less experience, we rely more heavily on external reference prices. An external reference price is a comparison price provided by others, such as retailers or manufacturers. Some grocery and electronics stores, for example, will show other stores’ prices next to their price of a particular good if their price is lower than the competitor’s price. 210. Buyers can be characterized according to their degree of value consciousness, price consciousness, and prestige sensitivity. Marketers who understand these characteristics are better able to set pricing objectives and policies. Value-conscious consumers are concerned about both price and quality of a product. During uncertain economic periods, customers become more value and price conscious and tend to limit discretionary spending. Price-conscious individuals strive to pay low prices. They want the lowest prices, even if the products are not of the highest quality. Amazon.com has long been known for a willingness to sacrifice profit margins in favor of offering the lowest prices. Prestige-sensitive buyers focus on purchasing products that signify prominence and status. For instance, Patek Philippe & Co. is known for its high-quality watches and has been a premier watchmaker worldwide for more than 160 years. 211. T he major types of discounts include: trade, quantity, cash, seasonal discounts, and allowances. Trade discounts are taken off the list prices and are offered to marketing intermediaries. This is done to attract and keep effective resellers by compensating them for performing certain functions, such as transportation, warehousing, selling, and providing credit. Quantity discounts are given to customers who buy in large quantities because a seller’s per-unit selling cost is usually lower for larger purchases. A cash discount is an incentive offered for prompt payment. It encourages customers to buy large quantities when making purchases and, in case of cumulative discounts, encourages customer loyalty. A seasonal discount is a price reduction to buyers who purchase out of season. It helps a seller to maintain steadier production during the year and allows a marketer to use resources more efficiently by stimulating sales during offpeak periods. An allowance is a reduction in price to achieve a desired goal. Trade-in allowances are price reductions granted for turning in used equipment when purchasing new equipment. Promotional allowances ensure that dealers participate in advertising and sales support programs.

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Chap 20_20e Indicate whether the statement is true or false. 1. Differential pricing means different buyers pay different prices for the same quality and quantity of product. a. True b. False 2. Cost-based pricing strategies result in a flat dollar amount or percentage being added to the cost of the product. a. True b. False 3. Periodic discounting is often predictable so consumers may wait to make purchases until they can benefit from the price reductions. a. True b. False 4. The way marketers use pricing in the marketing mix will affect the final price. a. True b. False 5. Pricing objectives should be considered overall goals to aid the organization in its long-range plans. a. True b. False 6. Grocery stores use negotiated pricing strategies. a. True b. False 7. Cost-plus pricing is popular in periods of rapid inflation. a. True b. False 8. A marketer is usually in a better position to establish prices when it knows the prices charged for competing brands. a. True b. False 9. Due to the ease of comparison shopping through the internet, many marketers are focusing on the value of their products in communications with customers. a. True b. False 10. The role played by attitudes toward price in the overall evaluation of the marketing mix is a minor concern in identifying the target market. a. True b. False

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Chap 20_20e 11. Grocery stores that position their less expensive, private brands next to more expensive, well-known manufacturer brands on the shelf are using the concept of reference pricing. a. True b. False 12. The importance of price depends on the type of product, the type of target market, and the purchase situation. a. True b. False 13. High-end luxury products that will be priced high do not need to evaluate their competitor's prices. a. True b. False 14. Prestige pricing is used when a higher price is consistent with buyers' attitudes toward the quality or image of a product. a. True b. False 15. Markup pricing is not used often by marketers because establishing a percentage markup greatly increases the complexity of the decision-making process. a. True b. False 16. W hen determining the markup, it is important to know whether it is based on cost or selling price. a. True b. False 17. Demand-based pricing strategies are easy to use. a. True b. False 18. Two types of new-product pricing are price skimming and product-line pricing. a. True b. False 19. A major reason why retailers use markup pricing is that it is convenient. a. True b. False 20. The way that pricing is used in the marketing mix will influence the determination of the final price. a. True b. False 21. It is usually easy to obtain an accurate price list for a competitor's products. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 20_20e 22. Random discounting means discounting various products on a systematic basis. a. True b. False 23. Captive pricing, premium pricing, bait pricing, and price lining are all strategies aimed at maximizing the profits of an entire product line rather than an individual product. a. True b. False 24. Some stores employ comparison shoppers to learn what prices their competitors are charging. a. True b. False 25. Companies use dynamic pricing to balance out supply and demand. a. True b. False 26. Demand establishes an effective price maximum above which customers are unlikely to buy the product. a. True b. False 27. The use of price skimming discourages competitors from entering a market. a. True b. False 28. A company wanting to maximize profits from its new product would use product-line pricing. a. True b. False 29. Competition-based pricing is important if competing products are almost homogeneous or if price is the key variable in the marketing strategy. a. True b. False 30. A marketer must choose whether to use short- or long-term pricing objectives and it can employ just one pricing objective. a. True b. False 31. The objective of profit maximization is rarely operational because its achievement is difficult to measure. a. True b. False 32. Cost-based pricing results in a high price when demand is high and a low price when demand is low. a. True b. False Copyright Cengage Learning. Powered by Cognero.

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Chap 20_20e 33. Price skimming is designed to yield maximum unit sales volume. a. True b. False 34. A pricing strategy is a course of action designed to achieve pricing and marketing objectives. a. True b. False 35. A psychological price is designed to encourage purchases on the basis of rational response rather than on the basis of emotional reactions. a. True b. False 36. A firm that considers costs and revenue secondary to competitors' prices when setting its own prices is using a competition-based pricing strategy. a. True b. False 37. A marketer uses only one pricing objective to avoid organizational confusion. a. True b. False 38. A marketing manager who anticipates a short product life cycle may favor a status quo pricing objective. a. True b. False 39. Another name for bundle pricing is multiple-unit pricing. a. True b. False 40. The effectiveness of demand-based pricing often depends on a marketer's ability to determine all the costs associated with the product. a. True b. False 41. Knowing the target market's evaluation of price allows the marketer to know how much emphasis to place on price and how to price a product relative to competition. a. True b. False 42. Markup can be stated as a percentage of the cost or as a percentage of the selling price. a. True b. False

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Chap 20_20e 43. An early-bird special offered by a restaurant during off-peak hours is an example of the secondary-market pricing strategy. a. True b. False 44. The local florist advertises a discount on arrangements during the month of April because the anniversary of the store's opening is in April. This is an example of special-event pricing. a. True b. False 45. The six stages of setting prices should always be followed if prices are to be set correctly. a. True b. False 46. The use of market share as a pricing objective oversimplifies the value of price in contributing to profits. a. True b. False 47. One of the biggest challenges of a market share pricing objective is that it oversimplifies the contribution of price to profits. a. True b. False 48. The government frequently uses competition-based pricing in granting defense contracts. a. True b. False 49. One drawback of cost-plus pricing for the buyer is that the seller may increase costs to secure a larger profit base. a. True b. False 50. In some cases, prices are assigned to goods on the basis of nothing more than custom. a. True b. False 51. Penetration pricing is one new-product pricing approach that provides the most flexible introductory price. a. True b. False 52. A price-leader approach is a pricing approach most often used in supermarkets to attract consumers by giving them special low prices on a few items. a. True b. False

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Chap 20_20e 53. A low price may boost demand for the product, but a high price will hurt profit margins and may instill in customers a perception that the product is of low quality. a. True b. False Indicate the answer choice that best completes the statement or answers the question. 54. Elif and Nick recently purchased a 25-year-old home and are currently undergoing a kitchen remodel, which includes replacing countertops, cabinets, and kitchen appliances. They are shopping for appliances and visited several retailers to compare prices and determine which brands best met their requirements. One retailer is offering the GE brand refrigerator, cooktop, built-in oven, dishwasher, and warming drawer for $5,999, while another retailer has a set of LG appliances that includes a larger refrigerator, range/oven combination, dishwasher, and wine cooler for $5,450. Elif and Nick are meeting with their kitchen designer to finalize their plans for the kitchen and think that either one of these packages will fit their requirements. The appliance retailers are utilizing a ______ pricing strategy. a. bundle b. reference c. skimming d. premium e. multiple-unit 55. The manager at HomeGoods puts a sign up next to a Samsung audio system that reads, "Only $99.99! $60 less than at Best Buy." This is an example of what type of pricing strategy? a. Random discounting b. Periodic discounting c. Comparison discounting d. Penetration pricing e. Everyday low pricing 56. Aldi and Lidl stores have been expanding their footprint across the United States, opening new locations and competing against traditional discount and grocery store chains, such as Walmart, Target, Kmart, Kroger, and Publix. Both Aldi and Lidl hope to capture a large proportion of the dollars consumers spend on grocery and general merchandise items and have responded to consumer desires for value and convenience of a smaller store. What type of pricing objective are these stores utilizing? a. Market share b. Return on investment c. Profit d. Survival e. Product quality

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Chap 20_20e 57. Scenario 20.1 Use the following to answer the questions. Suppose that Maui Jim is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical sunglasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Maui Jim lines that are sold through specialty stores. In determining the price for this sunglass line, Maui Jim wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. Given Maui Jim's plan for positioning the new sunglass line, it should use a ____ strategy when introducing its new product. a. promotional b. penetration c. price-skimming d. reference e. secondary-market 58. Which type of pricing objective can reduce a firm's risk by helping to stabilize demand for its products? a. Status quo b. Market share c. Survival d. Cash flow e. Return on investment 59. Most pricing objectives based on ____ are achieved by trial and error because not all cost and revenue data are available when prices are set. a. market share b. cash flow c. return on investment d. survival e. product quality 60. When Ariella logs on to Dell's website, she sees a notebook model priced well below $600. As she continues through the site to view the other options, she realizes the first one she saw was the cheapest model available, but she of course wants more features. Dell is utilizing a. everyday low pricing. b. price lining. c. periodic discounting, d. penetration pricing. e. bait pricing.

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Chap 20_20e 61. When a cable television company uses bundling to combine phone, cable TV, and broadband internet access into a package with a single price, it is attempting to influence a consumer's perception of price to make a product's price more attractive and reduce "sticker shock." This is an example of using a ____ pricing strategy. a. everyday low pricing b. cost-based c. demand-based d. competitive e. psychological 62. All of the following are forms of psychological pricing except a. customary pricing. b. prestige pricing. c. reference pricing. d. odd-even pricing. e. price skimming. 63. Paperclips is an office supplies company that has just adjusted its price levels so that it can increase its sales volume to match its expenses. Paperclips is most likely employing a____ objective. a. product quality b. cash flow c. return on investment d. survival e. profit 64. For differential pricing to be effective, the market must consist of a. a single segment with homogeneous price sensitivities. b. multiple segments in different countries. c. multiple segments with different price sensitivities. d. both consumer and business segments. e. multiple segments with homogeneous price sensitivities. 65. Markup is measured either as a percentage of ____ or a percentage of ____. a. selling price; cost b. cost; profit c. revenue; contribution margin d. resources used; cost e. demand; competition

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Chap 20_20e 66. If Braun introduced a new electric razor that sonically removes hair and priced it first at $175 and then at $150 before reducing the price to $100, the firm's initial pricing strategy is known as a. penetration pricing. b. psychological pricing. c. price lining. d. price skimming. e. odd-even pricing. 67. The pricing strategy that assumes that demand is relatively inelastic over certain price ranges is called a. price lining. b. odd-even pricing. c. price skimming. d. prestige pricing. e. customary pricing. 68. Services that are performed by lawyers, dentists, or doctors are typically priced using ____; sometimes these prices are not based on the amount of time that is spent in each situation, but are based on a flat fee regardless of the difficulty involved. a. traditional pricing b. professional pricing c. everyday low pricing d. price lining e. customary pricing 69. Lyft uses a pricing strategy based on real-time market conditions. It charges less in periods of low demand and more during periods of high demand. Sometimes these prices double or triple during periods of high demand. Lyft argues that these higher prices motivate more drivers to pick up passengers, thus increasing the supply of drivers needed to handle the additional demand. This demand-based pricing strategy is an example of a. special-event pricing. b. penetration pricing. c. dynamic pricing. d. prestige pricing. e. reference pricing. 70. The three primary bases for developing prices are a. profit, demand, and competition. b. supply, demand, and marketing objectives. c. demand, competition, and cost. d. markup, cost, and cost-plus. e. negotiation, bidding, and demand-based.

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Chap 20_20e 71. Scenario 20.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. Refer to Scenario 20.2. Glenwood's new pricing strategy is an example of ____ pricing. a. competition-based b. cost-based c. customary d. bundle e. demand-based 72. If an organization sets prices to recover research and development expenses and establish a premium quality image for its product, it would be using a ____ pricing objective. a. survival b. return on investment c. market share d. product quality e. cash flow 73. Showing a product's price along with its previous price, the price of a competing brand, or the price at another retail outlet is called a. competition-based pricing. b. reference pricing. c. comparison discounting. d. captive pricing. e. psychological pricing. 74. A retailer of Degree antiperspirant prices it at $4.00; it costs the retailer $3.50. What is the approximate markup as a percentage of selling price? a. 3.5% b. 14.3% c. 12.5% d. 49% e. 20%

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Chap 20_20e 75. Marketers must take steps to make sure that the pricing objectives they set are consistent with the organization's ____ objectives and ____ objectives. a. advertising; marketing b. overall; marketing c. marketing; promotional d. overall; promotional e. overall; revenue 76. When Aisha and Darius are planning their honeymoon, their travel consultant tells them that if they buy a special package, their trip to Paris will include meals, tickets to the theater, and a rental car in addition to airfare and a hotel. This is an example of the use of a. multiple-unit pricing. b. bundle pricing. c. prestige pricing. d. price lining. e. price packaging. 77. Pricing objectives should be stated explicitly, stated in measurable terms, and specify a a. cost level that allows the firm to maximize profit. b. time frame for achieving them. c. sales volume needed to match organizational expenses. d. targeted ROI. e. desired market share. 78. Reference pricing is a. listing the manufacturer's suggested retail price on the price tag along with the store's lower price. b. mentioning the price that other retailers charge for the same product on the display for the product. c. using a consumer's internal perceptions of what the appropriate price should be to help price a firm's products. d. pricing a product at a moderate level and positioning it next to a more expensive model or brand. e. using prices in advertising so that customers will have a point of reference when they come to the retail store. 79. If a local Texaco gasoline station looks at nearby Valero stations’ prices as the primary source of determining its own prices, Texaco is using a. price fixing, which considers competition to be less important than costs. b. price fixing, which considers costs to be less important than competitor’s prices. c. market share pricing, which considers competition to be the ultimate pricing goal. d. competition-based pricing, which considers profit to be the ultimate pricing goal. e. competition-based pricing, which considers costs to be less important than competitor’s prices.

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Chap 20_20e 80. After selecting a pricing strategy, what is the next step in the establishment of prices? a. D eveloping pricing objectives b. Determining a specific price c. A ssessing the target market's evaluation of price d. S electing a basis for pricing e. E valuating competitors' prices 81. All of the following are pricing strategies used by companies establishing prices of multiple products within a product line except a. premium pricing. b. price lining. c. captive pricing. d. bait pricing. e. penetration pricing. 82. Moon is setting a price for her store's newest item. She purchased the item for $45 and decides to sell it for $54 using markup pricing. If she wanted to calculate the markup as percentage of cost, it would be ______________. If she wanted to calculate the markup as the percentage of the selling price, it would be ______________. a. 16.7%; 20% b. 33%; 25% c. 20.5%; 15.6% d. 20%; 16.7% e. 15%; 10.5% 83. A Kohl's manager designs the casual clothing department such that one of Kohl's private label pairs of jeans, priced at $44.99, is positioned next to a national brand of jeans, such as Levis, priced at $59.99. What is the manager attempting to accomplish? a. Everyday low pricing strategy b. Odd-even pricing strategy c. Prestige pricing strategy d. Special-event pricing strategy e. Reference pricing strategy 84. The pricing of Origins makeup, which is considerably higher than brands such as Cover Girl, Revlon, and Maybelline, is used to communicate ____, which is the company's primary pricing objective. a. market share b. product quality c. status quo d. profitability e. cash flow

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Chap 20_20e 85. Which of the following statements is true about the determination of a specific price for a product? a. P rice elasticity is not relevant when determining a specific price. b. I t occurs in the fifth stage of the price-setting process. c. O nly fixed costs should be considered when setting the specific price. d. W hen no government controls exist, pricing is a flexible way to adjust the marketing mix. e. D emand is not a consideration when establishing a specific price. 86. When products in an industry are relatively homogeneous and price is a key purchase consideration, a. competition-based pricing becomes more important. b. demand-based pricing dominates pricing decisions. c. firms tend to use secondary-market pricing. d. cost-based methods like markup pricing are dominant. e. customary pricing is often used. 87. Aloft Hotels, Inc. has an objective of achieving a 25% return from its overall sales. This is an example of a ____ pricing objective. a. market share b. cash flow c. return on investment d. profit e. status quo 88. When Frito-Lay introduced its Stax brand of potato chips. These chips were meant to compete directly against Pringles. The intent was to gain market share quickly. During the first few months they were on the market, Stax retailed for 69 cents. What type of pricing strategy is Frito-Lay likely using? a. Price-skimming b. Captive pricing c. Periodic discounting d. Penetration pricing e. Bait pricing 89. JCPenney pays $16.50 for a six-ounce bottle of cologne and sells it for $25.95. Its markup as a percentage of cost is approximately ____% for this product. a. 64 b. 36 c. 18 d. 57 e. 45

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Chap 20_20e 90. If Bubly sets its twelve-pack price to match the price charged by LaCroix, Bubly is using which of the following pricing methods? a. Demand-based b. Cost-based c. Reference pricing d. Competition-based e. Price leader 91. Odd-even pricing is a. a cost-based strategy. b. competition based. c. a rarely used technique. d. a psychological pricing strategy. e. a form of unethical pricing. 92. _____________ is pricing a product at a moderate level and positioning it next to a more expensive model or brand. a. R eference pricing b. O dd-even pricing c. C ustomary pricing d. P restige pricing e. P rofessional pricing 93. The primary reason that retailers favor rigid markups is a. competitors. b. convenience. c. costs. d. nonprice competition. e. price competition. 94. Products such as light bulbs, canned soft drinks, and ice cream sandwiches are usually priced using ______, which usually results in a ______. a. multiple-unit pricing; lower per unit price b. reference pricing; lower per unit price c. multiple-unit pricing; more convenient package d. bundle pricing; lower per unit price e. bundle pricing; more convenient package

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Chap 20_20e 95. A market share objective a. is not recommended when sales for the total industry are declining. b. is not especially useful when sales for the total industry are increasing. c. is not especially useful when sales for the total industry are flat. d. is useful primarily in an industry where total sales are increasing. e. can be used effectively whether total industry sales are rising or falling. 96. Adidas is establishing a ______ pricing objective to maintain or increase its product's sales in relation to total industry sales. a. return on investment b. survival c. product quality d. market share e. status quo 97. If a product is priced based on how many or how few people want it at a particular time and place, ____ pricing is being used. a. markup b. demand-based c. competitive d. peak e. differential 98. Organizations that opt to set ______ run the risk of de-emphasizing price as a competitive tool, potentially leading to a climate of nonprice competition, like that in which professionals such as accountants and attorneys often operate. a. profit objectives b. market share objectives c. status quo objectives d. product quality objectives e. return on investment objectives 99. The fact that senior citizens are charged a lower price at movie theaters than younger adults is an example of ____ pricing. a. price-line b. promotional c. professional d. differential e. psychological

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Chap 20_20e 100. Which of the following would be used in setting the price of a new product if considerable competition is expected? a. Psychological pricing b. Penetration pricing c. Odd-even pricing d. Price skimming e. Prestige pricing 101. If Albertsons Market advertise 2-liter bottles of Coca-Cola for 89 cents to generate store traffic so that shoppers will purchase other items at regular prices, the grocer is using a. reference pricing. b. a price leader. c. special-event pricing. d. comparison discounting. e. professional pricing. 102. What type of pricing strategy is used in a situation where the seller has an ethical responsibility not to overcharge the client and the fees do not relate directly to the time and/or effort spent in specific cases? a. Price lining b. Prestige pricing c. Professional pricing d. Customary pricing e. Psychological pricing 103. Which of the following pricing objectives sets prices to recover cash as quickly as possible? a. Market share b. Profit c. Cash flow d. Return on investment e. Product quality 104. When determining markup as a percentage of cost, divide the markup amount by a. price. b. cost. c. quantity. d. revenue. e. 100.

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Chap 20_20e 105. Maintaining or increasing market share a. can be achieved even if industry sales are flat or decreasing. b. is an infrequently used pricing objective in most industries. c. depends on the overall growth of the total industry. d. is a profit-related objective based on price. e. is directly tied to leading an industry in product quality. 106. Scenario 20.2 Use the following to answer the questions. Glenwood Pet Hospital is considering implementing a new pricing strategy for its veterinarian services. After reviewing the previous three years' revenue, Glenwood finds that most of its customers bring their pets in for the required annual vaccinations and then only if the animal is ill. Glenwood's objective is to generate more income per customer on an annual basis. The hospital has previously priced its services by charging a flat fee for the office visit, a fee for each vaccine, and a fee for each type of examination beyond the basic office visit. Most customers pay the flat office fee and a fee for a rabies vaccine. Glenwood is now considering a new plan where the pet owner would pay one fee that would cover an office visit, the required rabies vaccine, and additional vaccines that prevent heartworm, kennel-cough, and fleas. Glenwood hopes to encourage the pet owners to view their pet's health as part of a prevention program, rather than a one-time annual visit. Refer to Scenario 20.2. Glenwood is considering a markup pricing basis. Glenwood incurs a cost of $45 for each office visit. If Glenwood were to add a markup of 33.3% of the costs, its price would be ____. a. $79 b. $65 c. $55 d. $78 e. $60 107. Which pricing objective de-emphasizes price and can lead to a climate of nonprice competition in an industry? a. Status quo b. Return on investment c. Market share d. Survival e. Cash flow 108. When Texas Instruments first introduced its line of graphing calculators, it set the price quite high; it has lowered the price as competitors have entered the market. The pricing strategy initially used by Texas Instruments is called a. customary pricing. b. odd-even pricing. c. penetration pricing. d. price skimming. e. prestige pricing.

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Chap 20_20e 109. Ted is excited because he has obtained the price list of his company's major competitor. His supervisor, Santiago, is also optimistic. However, he has much more experience in the industry than Ted and cautions him that just because they have access to their competitor's price list a. doesn't mean the list has not been completely fabricated. b. doesn't mean their firm will be able to match their competitor's prices. c. doesn't mean that knowing competitor prices is important. d. doesn't entail actually using the price list when establishing prices. e. doesn't mean they reflect the actual prices at which competitive products are sold. 110. Which of the following bases for pricing is most commonly used by retailers? a. Negotiated pricing b. Markup pricing c. Demand-based pricing d. Cost-plus pricing e. Differential pricing 111. Consumers may view relatively expensive products to have great value if the products a. are popular on Instagram and Snapchat. b. have great customer service. c. have great warranties. d. have desirable features or characteristics. e. are the best that money can buy. 112. The "White Sale" that many department stores have every year a few weeks after Christmas is an example of a. psychological pricing. b. everyday low pricing. c. periodic discounting. d. random discounting. e. captive pricing. 113. LG management decided to use skimming as a pricing strategy for its newest line of high-definition television (HDTV) sets. It should be aware that this strategy does NOT a. generate capital to cover research and development costs. b. discourage competitors from entering the market. c. provide flexibility in the introductory base price. d. protect the firm from covering costs if prices are set too low. e. reduce the stress that may be placed on the firm's production capabilities.

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Chap 20_20e 114. When a seller's costs are usually determined during or after a product is made and then a specified percentage or dollar amount is added to the cost to establish a price, an organization is using ____ pricing. a. markup b. demand-based c. differential d. cost-plus e. expense-based 115. Euan is planning three sales during the third quarter of the year at Party City. The first is at a week before Easter, the second is the week before Halloween, and the third is Black Friday. These sales would be considered to be a. psychological pricing. b. calendar discounting. c. sales promotion pricing. d. special-event pricing. e. captive pricing. 116. During the hot, humid months of July and August, Pinewood Links Golf Course, located in Georgia, offers weekday rates of $13 for a round of golf with a cart. During the rest of the year, the weekday rates are between $25 and $35. This is an example of the use of a. cost-based pricing. b. premium pricing. c. competition-based pricing. d. demand-based pricing. e. random discounting. 117. Which of the following characteristics is unique to pricing more so than other variables of the marketing mix? a. Challenging b. T ruthfulness c. Flexibility d. C onsistency e. C larity 118. GlaxoSmithKline wants to price its newest medication product so that it earns a 35% return on investment. It chose this pricing objective because of the significant amount of resources it spent on research and development. What is one challenge of using return on investment as a pricing strategy? a. It typically involves trial and error. b. It gives only a partial estimate. c. It oversimplifies the contribution of price to profits. d. It is an unsustainable pricing strategy. e. Its achievement is difficult to measure.

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Chap 20_20e 119. A product is a price leader when a. it is sold at the highest price. b. its price maximizes profits. c. an increase or decrease in price leads to increased revenue or lower costs. d. it is sold at less than cost in the hope that sales of other products will increase. e. its price leads the industry in sales. 120. To attract customers into a store, Kroger advertises its milk at less than cost, hoping that customers will purchase other groceries as well. This pricing strategy is called a. price lining. b. special-event pricing. c. differential pricing. d. comparison discounting. e. price leader pricing. 121. When an organization sets a number of prices for selected groups of merchandise, this is commonly referred to as a. prestige pricing. b. price lining. c. customary pricing. d. odd-even pricing. e. ethical pricing. 122. Executives in Japan decided to price Lexus luxury cars in the United States at $55,000 while pricing them at $66,000 in their own country. This is an example of a. secondary-market pricing. b. price skimming. c. bait pricing. d. demand-based pricing. e. random discounting. 123. Which of the following is true about the target market’s evaluation of price? a. T he importance of price depends on the unemployment rate. b. T he importance of price depends on the type of product. c. T he importance of price does not depend on the target market. d. T he target market’s perception of value combines a product’s price and size attributes. e. T he target market’s perception of value combines a product’s price and availability attributes.

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Chap 20_20e 124. Running a big sale in order to generate enough cash to pay creditors can occur in a situation in which a firm's primary pricing objective is a. keeping the status quo. b. profit. c. survival. d. market share. e. product quality. 125. A problem associated with ____ is that consumers can predict when prices will be lowered and delay purchases until that time. a. random discounting b. penetration pricing c. reference pricing d. everyday low pricing e. periodic discounting 126. Glenn is shopping for a new coat at Marshalls and finds a North Face down jacket that he really likes. He knows that the North Face brand is considered to be high quality and that it’s usually very expensive. He’s pleasantly surprised to see the price—the “suggested retail price” is $199 and Marshalls’ price is $99. Glenn decides to purchase the coat even though it’s a little more expensive than he originally thought he’d spend on the jacket. What type of pricing strategy is Marshalls using to price the North Face jacket and other merchandise? a. Comparison discounting b. Price leaders c. Special-event pricing d. Odd-even pricing e. Internal reference pricing 127. You are the marketing manager for a multistate auto dealership in the southeast United States. It is that time of year when your company experiences a model year change. You are putting the final touches on your pricing strategy to facilitate this change in your inventory of autos. Which of the following pricing strategies will you use to facilitate this model year change? a. Negotiated pricing b. Secondary-market pricing c. Differential pricing d. Random discounting e. Periodic discounting

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Chap 20_20e 128. Scenario 20.1 Use the following to answer the questions. Suppose that Maui Jim is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical sunglasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Maui Jim lines that are sold through specialty stores. In determining the price for this sunglass line, Maui Jim wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. If Maui Jim selected the prices for its new sunglasses to be $100, $125, or $150, this would most likely be an example of using ____ pricing to enhance its distinctive positioning strategy. a. product-line b. odd-even c. professional d. promotional e. penetration 129. Theatergoers in the Midwest were pleasantly surprised when they arrived at the cinema to see the latest release and learned that a price reduction had just gone into effect. The Wehrenberg Theater chain, which is the oldest theater company and operates in 15 Midwest locations, decided to drop matinee prices from $7.75 to $4.50 per person and reduce evening prices from $9.75 to $7.50 per person. The price decrease is a result of decreased traffic at the theater and a trend for consumers to use Netflix or Hulu to watch movies. The Starplex Cinemas operating in the same communities as Wehrenberg followed suit and reduced their prices to attract consumers as well. The two movie theater chains are utilizing the ______ pricing basis. a. competition-based b. markup c. cost-based d. cost-plus e. market-based 130. Target released a promotional campaign with the tagline, "Expect more. Pay less." Which of the following pricing strategies is Target most likely using? a. P sychological pricing b. P romotional pricing c. P roduct-line pricing d. D ifferential pricing e. N ew-product pricing

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Chap 20_20e 131. A product that has more features than those of its competition, or that is perceived to be of higher quality, warrants using which type of pricing strategy? a. Custom pricing b. Special-event pricing c. Premium pricing d. Price lining e. Bait pricing 132. Scenario 20.1 Use the following to answer the questions. Suppose that Maui Jim is considering a new line of sunglasses that would be sold in major department stores. The new line would be positioned as a more distinctive brand than the typical sunglasses sold through department stores, and would be priced higher than other brands in the store, but a lower price line than the current Maui Jim lines that are sold through more specialty stores. In determining the price for this sunglass line, Maui Jim wants to gather information about all brands sold in department stores and about customers' perceptions of those brands. Refer to Scenario 20.1. Maui Jim's plan of gathering information about the other brands sold in department stores, including their prices, would most likely be used in a ____ basis for pricing. a. cost b. competition c. demand d. customer e. market 133. A price-skimming strategy assumes that a. the initial demand is highly elastic. b. the product is efficient. c. it will be difficult to recoup development costs. d. all consumers have homogeneous tastes. e. the initial demand is highly inelastic. 134. If a business decides to reduce its prices once in a while on an unsystematic basis, it is using a. psychological pricing. b. random discounting. c. everyday low pricing. d. periodic discounting. e. price skimming.

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Chap 20_20e 135. Marisol recently put her house on the market at an asking price of $260,000. She realizes, however, that in order to sell the house, she may have to use a. demand-based pricing. b. reference pricing. c. negotiated pricing. d. cost-based pricing. e. professional pricing. 136. Pricing the basic product in a product line low while pricing products that go with the basic product at a higher level is called a. premium pricing. b. bait pricing. c. captive pricing. d. price skimming. e. price lining. 137. Some grocery stores collect data on competitive prices a. by calling their competitors. b. on a quarterly basis. c. through stores' purchase data. d. from their resellers. e. by using comparison shoppers. 138. Which of the following is a requirement for setting pricing objectives? a. The objectives should be short-term oriented. b. There should be only one pricing objective. c. An evaluation of competitors' prices should be made. d. The cost structure should be identified. e. The objectives should be explicitly stated.

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Chap 20_20e 139. You are a brand manager for a large chain of grocery stores. You have been working overtime for the last two weeks to prepare for your pricing objectives meeting with the head of sales and marketing. You walk into the meeting with a high degree of confidence in the strategy that you have for setting the pricing objectives for your brand category for the upcoming year. You are speechless when the marketing head tells you that no changes in the pricing objectives will be made for your brand category. He says he believes it is most prudent to leave the existing pricing objectives as they are for the upcoming year. Which of the following statements is the best explanation for the marketing head’s decision to leave the existing pricing objectives in place with no change? a. A status quo pricing objective can reduce a firm’s risks by helping stabilize demand for its products. b. The company intends to focus on product quality instead of pricing to win market share. c. The company expects its market share to increase if it leaves its pricing objectives the same. d. Profit maximization is not an objective in the upcoming year. e. The company is not concerned about cash flow. 140. The federal government often uses ____ pricing when it grants defense contracts. a. markup b. differential c. breakeven d. cost-plus e. competition-based 141. In its advertisement, Timberland gives a close-up of one of its boots to show its fine craftsmanship. At the bottom of the advertisement is "Est. 1973," followed by the phrase "Best Then. Better Now." What type of pricing objective is Timberland using? a. Survival b. Return on investment c. Market share d. Cash flow e. Product quality 142. Competition-based pricing is a. used when costs and revenues are secondary to competitors' prices. b. not useful as a method of increasing market share. c. not useful if the competing products are homogeneous. d. not able to increase sales. e. used when competing products are heterogeneous.

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Chap 20_20e 143. Which of the following pricing strategies often results in a retailer losing money on the product? a. Price leader b. Psychological discounting c. Penetration pricing d. Special-event pricing e. Ethical pricing 144. Doug is trying to come up with a pricing strategy for his store. He greatly admires Walmart and is considering adopting an everyday low pricing strategy. However, he is concerned because he believes that consumers might then view his products as being of low quality. At what stage of the process is Doug currently at as he is trying to establish prices? a. Step 1: Development of pricing objectives b. Step 2: Assessment of the target market's evaluation of price c. Step 3: Assessment of competitor's prices d. Step 4: Selection of a basis for pricing e. Step 5: Determination of a specific price 145. Maintaining a certain market share, meeting competitors' prices, maintaining a favorable image, and achieving price stability are all associated with a ____ pricing objective. a. product quality b. market share c. survival d. profit e. status quo 146. Price leaders, comparison discounting, and special-event pricing are applications of a. psychological pricing. b. professional pricing. c. product-line pricing. d. bait pricing. e. promotional pricing. 147. If Acer uses _____ pricing for its newest Chromebook, it is probably most interested in obtaining market share; and it is assuming a. premium pricing; that no other competitors are likely to enter the market soon. b. price-skimming; that no other competitors are likely to enter the market soon. c. premium pricing; it needs to recoup R & D costs as soon as possible. d. penetration pricing; that no other competitors are likely to enter the market soon. e. penetration pricing; that other competitors could enter the market easily.

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Chap 20_20e 148. Hotels strive to price rooms to maximize resources by quickly adapting to changes in demand. Part of this involves anticipating consumer behavior and calculating a number of different factors, including demand for rooms during a particular time period, likely length of stay, types of rooms likely to be requested, etc. They want to be able to sell rooms at the right price to the right people. This pricing strategy is an example of a. yield management. b. penetration pricing. c. price skimming. d. differential pricing. e. special-event pricing. 149. Charlotte Russe, a women’s clothing retailer, employs a commonly used cost-based pricing method called a. value pricing. b. cost-plus pricing. c. cost discounting. d. differential pricing. e. markup pricing. 150. What type of pricing objective would an organization use if it were in a favorable position and desired nothing more? a. Return on investment b. Cash flow c. Profit d. Status quo e. Survival 151. ____________ is setting the price lower than competing brands in order to enter a market and quickly gain a significant market share. a. Price skimming b. Premium pricing c. Penetration pricing d. Bait pricing e. Captive pricing 152. Department stores such as Kohl’s and Macy’s are interested in learning how much their competitors are charging for similar merchandise. Which of the following practices would these retailers most likely utilize to identify competitors’ prices? a. Employing comparative shoppers who systematically collect data on prices at competing stores b. Stealing price lists from a display at a trade show c. Hiring sales representatives from competitors' companies and asking them to share price information d. Pretending to be a buyer and soliciting pricing information from the competitor e. Look at price comparison websites

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Chap 20_20e 153. When establishing prices, a marketer's first step is to a. determine demand. b. develop pricing objectives. c. select a pricing policy. d. evaluate competitors' prices. e. determine a pricing method. 154. For custom-made equipment or commercial construction projects, which pricing method is most likely used? a. Keystone b. Premium c. Differential d. Markup e. Cost-plus 155. Amtrak is considering two pricing strategies for its service. One is to price its train tickets so that it is less expensive to travel on weekends than during the week when there is heavy business travel, which illustrates _____ pricing. The second is to price its train tickets so that the further away the travel date, the greater the discount, which is best described as _____. a. demand-based; secondary market pricing b. demand-based; differential pricing c. demand-based; periodic discounting d. cost-plus; secondary markup e. cost-plus; periodic discounting 156. Epson sells some of its color printers for about $100, but the refill cartridges cost over $30 each. Epson's pricing strategy would be best labeled as a. bait pricing. b. captive pricing. c. customary pricing. d. price lining. e. complementary pricing. 157. ______ does not necessarily take into account supply and demand, but it is straightforward and easy to implement. a. Markup pricing b. Cost-plus pricing c. Cost-based pricing d. Dynamic pricing e. Competition-based pricing

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Chap 20_20e 158. The newest version of a product like Crutchfield headphones is likely to use _____, while the new version of Monster Energy is likely to use _____ . a. penetration pricing; price skimming b. price skimming; psychological pricing c. psychological pricing; penetration pricing d. price skimming; penetration pricing e. price skimming; promotional pricing 159. Jolene works at SparkleTrend, a new makeup brand. Her company has decided that they want to lead the makeup industry in product quality. They have assessed the market and determined that women will associate higher-priced makeup with being higher in quality. What is the next step that Jolene's company must do? a. Determine the pricing objective b. Select a pricing strategy c. Determine a specific price d. Select a basis for pricing e. Evaluate competitors' prices 160. If Kashi wants to gain a large market share quickly with its new line of reduced-fat snack crackers, it should use a. penetration pricing. b. random discounting. c. captive pricing. d. price skimming. e. everyday low pricing. 161. What are some of the objectives a firm might hope to achieve when setting prices?

162. Explain the difference between cost-plus and markup pricing.

163. How are pricing objectives similar to a corporation's overall goals? How are they different?

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Chap 20_20e 164. What is bundle pricing? Give three examples, each one from a different industry.

165. Describe, compare, and contrast the three major bases for setting prices.

166. Compare and contrast price skimming and penetration pricing.

167. How might a marketer find information about a competitor's prices? Why is this information important?

168. What are some issues to consider when determining a specific price?

169. How can a marketer use product quality as a pricing objective to influence purchasing decisions?

170. Identify and describe the four types of product-line pricing.

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Chap 20_20e 171. Explain differential pricing and then describe the four major types.

172. Identify and describe seven types of psychological pricing.

173. Under what conditions would a marketer most likely use a price leader strategy?

174. Describe the six steps of the process that marketers can use to establish prices.

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Chap 20_20e Answer Key 1. True 2. True 3. True 4. True 5. True 6. False 7. True 8. True 9. True 10. False 11. True 12. True 13. False 14. True 15. False 16. True 17. False 18. False 19. True 20. True 21. False 22. False 23. True 24. True 25. True 26. True

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Chap 20_20e 27. False 28. False 29. True 30. False 31. True 32. False 33. False 34. True 35. False 36. True 37. False 38. False 39. False 40. False 41. True 42. True 43. True 44. True 45. False 46. False 47. False 48. False 49. True 50. True 51. False 52. True 53. False 54. a Copyright Cengage Learning. Powered by Cognero.

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Chap 20_20e 55. c 56. a 57. c 58. a 59. c 60. e 61. e 62. e 63. d 64. c 65. a 66. d 67. a 68. b 69. c 70. c 71. d 72. d 73. c 74. c 75. b 76. b 77. b 78. d 79. e 80. b 81. e 82. d Copyright Cengage Learning. Powered by Cognero.

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Chap 20_20e 83. e 84. b 85. d 86. a 87. d 88. d 89. d 90. d 91. d 92. a 93. b 94. a 95. e 96. d 97. b 98. c 99. d 100. b 101. b 102. c 103. c 104. b 105. a 106. e 107. a 108. d 109. e 110. b Copyright Cengage Learning. Powered by Cognero.

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Chap 20_20e 111. d 112. c 113. b 114. d 115. d 116. d 117. c 118. a 119. d 120. e 121. b 122. a 123. b 124. c 125. e 126. a 127. e 128. b 129. a 130. a 131. c 132. b 133. e 134. b 135. c 136. c 137. e

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Chap 20_20e 138. e 139. a 140. d 141. e 142. a 143. a 144. b 145. e 146. e 147. e 148. a 149. e 150. d 151. c 152. a 153. b 154. e 155. b 156. b 157. c 158. d 159. e 160. a

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Chap 20_20e 161. The first step in setting prices is developing pricing objectives that form the basis for decisions for other stages of the pricing process. A firm’s objectives include survival, profit, return on investment, market share, cash flow, status quo, and product quality. Survival means temporarily setting prices low, even at times below costs, in order to attract more sales. Profit objectives tend to be set at levels that the owners and top-level decision makers view as satisfactory and attainable. Pricing to attain a specified rate of return on the company’s investment is a profit-related pricing objective. A return on investment (ROI) pricing objective generally requires some trial and error. Firms establish pricing objectives to maintain or increase market share. They recognize that high relative market shares often translate into high profits. Some companies set prices so they can recover cash as quickly as possible. The use of cash flow and recovery as an objective oversimplifies the contribution of price to profits. A status quo pricing objective can reduce a firm’s risks by helping to stabilize demand for products. A high price on a product may have the effect of signaling to customers that the product is of a high quality. 162. With cost-plus pricing, the seller’s costs are determined (usually during a project or after a project is completed), and then a specified dollar amount or percentage of the cost is added to the seller’s cost to establish the price. When production costs are difficult to predict, cost-plus pricing is appropriate. Projects involving custom-made equipment and commercial construction are often priced using this technique. The government also frequently expects cost-plus pricing from defense contractors. One pitfall for the buyer is that the seller may increase stated costs to gain a larger profit base. Furthermore, some costs, such as overhead, may be difficult to determine. In periods of rapid inflation, cost-plus pricing is popular, especially when the producer must use raw materials that frequently fluctuate in price. In industries in which cost-plus pricing is common and sellers have similar costs, price competition will not be especially intense. With markup pricing, commonly used by retailers, a product’s price is derived by adding a predetermined percentage of the cost, called markup, to the cost of the product. For instance, most supermarkets mark up prices by at least 25%, whereas warehouse clubs, like Costco and Sam’s Club, have a lower average markup of around 14%. Markups can vary a great deal depending on the product and the situation. Although the percentage markup in a retail store varies from one category of goods to another—35% of cost for hardware items and 100% of cost for greeting cards, for example—the same percentage is often used to determine the prices on items within a single product category, and the percentage markup may be largely standardized across an industry at the retail level. Using a rigid percentage markup for a specific product category reduces pricing to a routine task that can be performed quickly. 163. Developing pricing objectives is an important task because they form the basis for decisions for other stages of the pricing process. Thus, pricing objectives must be stated explicitly and in measurable terms, and should include a time frame for accomplishing them. Marketers must ensure that pricing objectives are consistent with the firm’s marketing and overall goals because pricing objectives influence decisions in many functional areas of a business, including finance, accounting, and production. A marketer can use both short- and long-term goals and can employ one or multiple pricing objectives.

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Chap 20_20e 164. Bundle pricing is the packaging together of two or more products, usually of a complementary nature, to be sold for a single price. To be attractive to customers, the single price usually is considerably less than the sum of the prices of the individual products. Being able to buy the bundled combination in a single transaction may be of value to the customer, increasing convenience and a sense of value. Bundle pricing is used commonly for banking and travel services, computers, and automobiles with option packages. Bundle pricing can help to increase customer satisfaction. It can also help firms to sell slow-moving inventory and increase revenues by bundling it with products with a higher turnover. Examples: (1) an airline company offers low-cost accommodations when tickets are reserved to a particular place; (2) a fast-food chain offers soda and a burger for a lower price than if the two had been purchased separately; (3) a computer retailer offers accessories for a lower price when combined with the purchase of a laptop. 165. The three major dimensions on which prices can be based are cost, demand, and competition. When using cost-based pricing, the firm determines price by adding a dollar amount or percentage to the cost of the product. Two common cost-based pricing methods are cost-plus and markup pricing. Demand-based pricing is based on the level of demand for the product. To use this method, a marketer must be able to estimate the amounts of a product that buyers will demand at different prices. Demand-based pricing results in a high price when demand for a product is strong and a low price when demand is weak. Compared with cost-based pricing, demand-based pricing places a firm in a better position to reach high profit levels, as long as demand is strong at times and buyers value the product at levels sufficiently above the product’s cost. In the case of competition-based pricing, costs and revenues are secondary to competitors’ prices. This is a common method among producers of relatively homogeneous products, particularly when the target market considers price to be an important purchase consideration. A firm that uses competitionbased pricing may choose to set their prices below competitors’ or at the same level. Competitors believe that Amazon’s competition-based pricing model has been an attempt to gain monopoly control of many retail markets. Amazon uses highly sophisticated analytics to gauge consumer demand and compare its prices to competitors. 166. Price skimming is the strategy of charging the highest possible price for a product during the introduction stage of its lifecycle. A seller essentially “skims the cream” off the market, which helps a firm to recover the high costs of R & D more quickly. A danger is that a price-skimming strategy may make a product appear more lucrative than it actually is to potential competitors. A firm also risks misjudging demand and facing insufficient sales at a high price. Penetration pricing is the strategy of setting a low price for a new product. The main purpose of setting a low price is to build market share quickly in order to encourage product trial by the target market and discourage competitors from entering the market. A disadvantage of penetration pricing is that it places a firm in a less-flexible pricing position. It is more difficult to raise prices significantly than it is to lower them. 167. In most cases, marketers are in a better position to establish prices when they know the prices charged for competing brands. Learning competitors’ prices should be a regular part of marketing research. Some grocery and department stores even employ comparative shoppers who systematically collect data on prices. Companies may also purchase price lists from syndicated marketing research services. Even if a marketer has access to competitors’ price lists, they may not reflect the actual prices at which competitive products sell because negotiation is involved. Knowing the prices of competing brands is essential for a marketer. Regardless of a firm’s actual costs, it does not want to sell its product a great deal above competitors’ because products may not sell well, or a great deal below because customers may believe the product is of a low quality. Particularly in an industry in which price competition prevails, a marketer needs competitive price information to ensure that a firm’s prices are the same as, or slightly lower than, competitors’. In some instances, an organization’s prices are designed to be slightly above competitors’ prices, to lend an exclusive image.

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Chap 20_20e 168. A pricing strategy will yield a certain price or range of prices, which is the final step in the pricing process. However, marketers may need to refine this price in order to make it consistent with circumstances, such as a sluggish economy, and with pricing practices in a particular market or industry. Pricing strategies should help a firm in setting a final price. If they are to do so, marketers must establish pricing objectives, have considerable knowledge about target market customers, and determine demand, price elasticity, costs, and competitive factors. The way marketers use pricing in the marketing mix will also affect the final price. 169. Some consumers are seeking less-expensive products and shopping more selectively, enabling some manufacturers and retailers to focus on the value of their products in communications with customers. Value is more than just a product’s price. It combines price with quality attributes, which customers use to differentiate between competing brands. Generally, consumers want to maximize the value they receive for their money. Consumers may even perceive products to have great value that are not the least expensive, such as organic produce, if they have desirable features or characteristics. Consumers are also generally willing to pay a higher price for products that offer convenience and time savings. Companies that offer both low prices and high quality have altered consumers’ expectations about how much quality they must sacrifice for low prices. Understanding the importance of a product to customers, as well as their expectations about quality and value, helps marketers correctly assess the target market’s evaluation of price. 170. Product-line pricing means establishing and adjusting the prices of multiple products within a product line. Product-line pricing can provide marketers with flexibility in setting prices. When marketers employ product-line pricing, they have several strategies from which to choose. These include captive pricing, premium pricing, bait pricing, and price lining. When marketers use captive pricing, the basic product in a product line is priced low, but the price on the items required to operate or enhance it are higher. This pricing strategy is effective because consumers must purchase more of the operating items than the basic product, over their lifetimes. Premium pricing occurs when the highest-quality product or the most-versatile and most desirable version of a product in a product line is assigned the highest price. Other products in the line are priced to appeal to price-sensitive shoppers or to those who seek product-specific features. Marketers that use premium pricing often realize a significant portion of their profits from premium-priced products. To attract customers, marketers may put a low price on one item in the product line with the intention of selling a higher-priced item in the line. This strategy is known as bait pricing. Producers of smartphones and tablets may engage in bait pricing, selling ultra-low-priced models that lure in customers but charging extra for the most desirable features. Price lining is the strategy of selling goods only at certain predetermined prices that reflect explicit price breaks. It eliminates minor price differences from the buying decision —both for customers and for managers who buy merchandise to sell in these stores. 171. Differential pricing means charging different prices to different buyers for the same quality and quantity of product. For differential pricing to be effective, the market must consist of multiple segments with different price sensitivities. Differential pricing can occur in several ways, including negotiated pricing, secondary-market pricing, periodic discounting, and random discounting. Negotiated pricing occurs when the final price is established through bargaining between a seller and a customer. Negotiated pricing occurs in a number of industries and at all levels of distribution. Secondary-market pricing means setting one price for the primary target market and a different price for another market. Often the price charged in the secondary market is lower. However, when the costs of serving a secondary market are higher than normal, secondary-market customers may have to pay a higher price. Periodic discounting is the temporary reduction of prices on a patterned or systematic basis. Random discounting is employed to alleviate the problem of customers’ knowing when discounting will occur, by reducing the prices temporarily on a nonsystematic basis.

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Chap 20_20e 172. The seven types of psychological pricing are odd-even pricing, multiple-unit pricing, reference pricing, bundle pricing, everyday low pricing (EDLP), customary pricing, and prestige pricing. Odd-even pricing is the setting of prices using odd numbers that are slightly below whole-dollar amounts. Odd-even prices increase sales because consumers register the dollar amount, not the cents. Multiple-unit pricing involves setting a single price for two or more units of a product, especially for frequently-purchased products. This strategy increases sales by encouraging consumers to purchase multiple units when they might otherwise have only purchased one. Reference pricing means pricing a product at a moderate level and positioning it next to a more expensive model or brand in the hope that a customer will use the higher price as a reference point. Bundle pricing is the packaging together of two or more products, usually of a complementary nature, to be sold for a single price that is usually less than the sum of prices of the individual products. When everyday low pricing are used, a marketer sets a low price for its products on a consistent basis, rather than setting higher prices and frequently discounting them. In customary pricing, certain goods are priced on the basis of tradition. With prestige pricing, prices are set at an artificially-high level to convey a quality image. Prestige pricing is used especially when buyers associate a higher price with higher quality. 173. Sometimes a firm prices a few products below the usual markup, near cost, or below cost, which results in what are known as price leaders. This type of pricing is used most often in supermarkets and restaurants to attract customers by offering them especially low prices on a few items, with the expectation that they will purchase other items as well. Management expects that sales of regularly-priced products will more than offset the reduced revenues from the price leaders. 174. Before a product’s price can be set, an organization must determine the basis on which it will compete—whether on price alone or some combination of factors. There are six stages that marketers can follow to establish prices. Stage 1 is developing a pricing objective that is compatible with the organization’s overall marketing objectives. Stage 2 entails assessing the target market’s evaluation of price. Stage 3 involves evaluating competitors’ prices, which helps determine the role of price in the marketing strategy. Stage 4 requires choosing a basis for setting prices. Stage 5 is selecting a pricing strategy, or determining the role of price in the marketing mix. Stage 6 involves determining the final price. This final step depends on environmental forces and marketers’ understanding and use of a systematic approach to establishing prices. These stages are not rigid, and not all marketers will follow all the steps. They are merely guidelines that provide a logical sequence for establishing prices.

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