Essentials of Marketing 17th Edition Test Bank by QuentinAxel

BONUS TEST BANK: A TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Implementation puts plans into operation, while control provides feedback. ⊚ ⊚

true false

2) Although marketing information can be gathered quickly, it is impossible to analyze and utilize the information in real time. ⊚ ⊚

true false

3) The use of metrics and analytical tools allow marketing managers to make timely adjustments to their marketing strategies. ⊚ ⊚

true false

4) The ideal of doing things better, faster, and at lower cost is easy to implement once it is accepted. ⊚ ⊚

true false

5) Implementing a strategy is straightforward; there are usually only a limited number of ways things can go wrong. ⊚ ⊚

true false

6) Traditional accounting reports are usually too general to be of much help to the marketing manager in controlling marketing plans. ⊚ ⊚

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true false

7) Traditional accounting reports don't give sufficient information to managers who need to know what's happening, in detail, to improve the bottom line. ⊚ ⊚

true false

8) The "80/20 rule" describes the relationship that 80 percent of an organization's business often comes from only 20 percent of its products or customers. ⊚ ⊚

true false

9) According to the "80/20 rule," it is common to find that about 80 percent of a firm's business comes from only about 20 percent of its customers. ⊚ ⊚

true false

10) The best way to do a sales analysis is to first break down sales by customer type, and then geographic region. ⊚ ⊚

true false

11) Because too much sales data can drown a manager, it's best to start by asking only for breakdowns that involve customer type. ⊚ ⊚

true false

12) Statistical packages and information systems that produce graphs and charts can make it easier to see patterns that are hidden in a table of numbers. ⊚ ⊚

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true false

13) Advances in computer software have accelerated the move to cost analysis and performance analysis. ⊚ ⊚

true false

14) Performance analysis permits the manager to compare actual performance against performance standards. ⊚ ⊚

15)

Sales analysis provides a simple listing of sales figures compared against standards. ⊚ ⊚

16)

true false

Performance analysis looks for exceptions or variations from planned performance. ⊚ ⊚

17)

true false

As with sales analysis, performance analysis is limited to sales data. ⊚ ⊚

true false

18) Marketing managers use performance indexes to compare what did happen with what ought to have happened. ⊚ ⊚

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true false

19) The main advantage of performance indexes is that they make it easier to compare numbers in a performance analysis. ⊚ ⊚

true false

20) The iceberg principle says that looking at detailed breakdowns of data is not very useful, since most relevant information is revealed in good summaries. ⊚ ⊚

21)

true false

Cost analysis and performance analysis are the same thing. ⊚ ⊚

true false

22) Experience shows that it doesn't make sense for marketing managers to allocate costs to specific market segments or products. ⊚ ⊚

23)

true false

In general the more products a company has, the more difficult it will be to allocate costs. ⊚ ⊚

true false

24) With the full-cost approach to marketing cost analysis, all costs are allocated to products, customers, or other categories. ⊚ ⊚

true false

25) In the full-cost approach, all costs except fixed costs and common costs are allocated to products or customers.

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true false

26) With the contribution-margin approach to marketing cost analysis, all costs are allocated to products, customers, or other categories. ⊚ ⊚

true false

27) The contribution-margin approach to marketing cost analysis focuses attention on variable costs rather than total costs. ⊚ ⊚

true false

28) The contribution-margin approach ignores some costs to simplify comparing among specific alternatives. ⊚ ⊚

true false

29) The contribution-margin and full-cost approaches to marketing cost analysis are different, but they should lead to the same action implications. ⊚ ⊚

true false

30) The full-cost approach and the contribution-margin approach always suggest the same outcome. ⊚ ⊚

true false

31) The full-cost approach to marketing cost analysis is likely to lead to arguments among product managers about how costs are to be allocated.

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true false

32) When it comes to marketing cost analysis, a sales rep is likely to favor the full-cost approach over the contribution-margin approach. ⊚ ⊚

true false

33) Top management often finds contribution-margin analysis to be much more useful than full-cost analysis. ⊚ ⊚

34)

true false

Sales and cost analyses should always be analyzed and reviewed separately. ⊚ ⊚

true false

35) By combining sales and cost analyses, a firm can compare actual sales with what is projected and take corrective action if necessary. ⊚ ⊚

true false

36) Marketing metrics are the numeric data that marketing managers use to evaluate a firm's marketing performance. ⊚ ⊚

true false

37) Marketing analytics are important because, as has been said, "What gets measured gets improved."

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true false

38) One challenge that marketing analytics poses for marketing managers is that it is not possible to demonstrate the links between the various metrics and ultimate performance outcomes. ⊚ ⊚

true false

39) A marketing audit is similar to an accounting audit or a personnel audit, which businesses have used for some time. ⊚ ⊚

true false

40) A marketing audit is a systematic procedure for allocating the full costs of marketing to the appropriate functional accounts. ⊚ ⊚

true false

41) A marketing audit is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function. ⊚ ⊚

true false

42) Marketing audits consider future marketing plans, so they are not concerned with a company's current marketing strategies. ⊚ ⊚

true false

43) In a marketing audit, the auditor evaluates the plans being implemented, but not the quality of the effort. Version 1

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44)

A marketing audit evaluates the whole marketing program. ⊚ ⊚

45) data.

true false

The accounting department should do a marketing audit, since they have access to the ⊚ ⊚

46)

true false

Ideally, a marketing audit should not be necessary. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 47) A good marketing plan helps managers make strategic planning decisions and provides a framework for effective implementation and A) analysis. B) control. C) organization. D) research. E) supervision.

48)

Control helps marketing managers learn how

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A) to plan for the future. B) implementation is working. C) ongoing plans are working. D) All these answers are correct.

49) ________ is the feedback process that helps the marketing manager learn how ongoing plans are working and how to plan for the future. A) Design B) Planning C) Implementation D) Control E) Benchmarking

50) Ruth Boller, marketing manager at Hi Mountain Water, is looking to learn more about how ongoing plans and implementation are working and how she can plan for the future. This process is called A) design. B) forecasting. C) implementation. D) control. E) modeling.

51)

Which of the following is true regarding marketing control?

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A) Today's marketing managers have access to more information about the effectiveness of their strategies than in previous years. B) Fast feedback from the marketplace can be a source of competitive advantage. C) The marketing manager needs information that is captured as soon as it comes in. D) Fast feedback is not possible unless the necessary data can be quickly sorted and analyzed. E) All these answers are correct.

52)

With respect to marketing control,

A) all cost records should be kept in the marketing department. B) faster feedback can often be the basis for a competitive advantage. C) many advances have been made, but there is still no effective way for a manager to be sure that a product is actually selling to the intended target market rather than to some other group. D) All these answers are correct.

53) To improve the effectiveness of the marketing control process, the marketing manager should A) realize that most errors are made because managers react to detailed information too quickly—instead of waiting to see what patterns show up in summary reports. B) be the supervisor for the data-processing manager. C) have all necessary data captured as it comes in and kept in a form that can be quickly sorted and analyzed by computer. D) be certain that all cost records are kept in a central location controlled by the marketing department. E) All these answers are correct.

54)

The basic objective of implementation is to do things

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A) better. B) faster. C) at lower cost. D) All of these are basic objectives of implementation.

55) Top executives of a health maintenance organization (HMO) were discussing a proposal to start providing each patient with a short customer satisfaction survey that would be on a card given to the patient when the patient left one of the HMO's clinics. All the patient had to do was to complete the survey items and drop the card in a mailbox; the HMO would pay the return postage. After several minutes, one of the executives said, "I don't like this idea at all, because the only people who will respond to the survey are people who want to complain about something." Apparently, this executive doesn't understand that A) most companies don't pay any attention to customer surveys anyway. B) complaints can bring implementation problems to light so that the company can fix them. C) no one answers surveys that are sent through the mail. D) most customers are too nervous to record negative experiences, although they will pass them along through word-of-mouth. E) None of these answers are correct.

56)

Which of the following statements about customer complaints is false?

A) Customer complaints that are handled well by the company usually help it win new customers. B) In business markets, customer complaints are usually handled by the sales force. C) In consumer markets, customer complaints are usually handled by toll-free telephone lines, websites, and e-mail customer service reps. D) Customer complaints that are handled well by the company usually help it keep its customers.

57) Studies have shown that customers who aren't satisfied with a response to their complaints

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A) tell one person, on average, about their experience. B) tell ten people, on average, about their experience. C) usually never speak about it. D) will typically make at least two more complaints. E) tend to speak about their experience only when prodded by researchers.

58) Whistler's Camping Supplies wants to identify its most frequent customers and offer them quantity discounts to increase their purchases and loyalty. Which of the following implementation approaches might address this problem? A) putting a toll-free telephone number and website address on the product label B) using bar code scanners, RFID tags, EDI, and inventory reorder software C) creating a "favored customer" club with an ID card D) setting different prices in similar markets and tracking sales, including sales of competing products E) setting up a video conference

59) Sam Reuter, marketing manager for Herbal Shampoo Company, has to choose one of three different proposed labels for a new herbal shampoo. How might Sam pretest the consumer response to the labels? A) by putting a toll-free telephone number and website address on the product label B) by checking the labels of competitors C) by launching the product with new labels and evaluating the response D) by preparing sample labels with graphics software and testing them on the Internet E) by setting up a video conference

60)

Which of the following statements about implementation is false?

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A) Good implementation builds relationships with customers. B) Implementation ignores external matters. C) Implementation is especially critical in mature and highly competitive markets. D) Effective implementation means that plans work as intended. E) Implementation has its own objectives.

61)

Effective implementation of a marketing plan

A) matters least in markets that are mature and highly competitive. B) usually does not make the difference between winning and losing a customer. C) can involve decisions related to both internal (invisible to the consumer) and external (visible to the consumer) matters. D) is unrelated to the overall objectives of the marketing strategy. E) None of these answers is correct.

62) A firm generates a monthly profit of $160,000 dollars. If the 80/20 rule applies to this firm's products, which of the following statements is true? A) The firm generates $160,000 in profit from 80 percent of its products. B) The firm generates $128,000 in profit from 80 percent of its products. C) The firm generates $128,000 in profit from 20 percent of its products. D) The firm generates $80,000 in profit from 20 percent of its products. E) The firm generates $64,000 in profit from 20 percent of its products.

63) While doing an analysis, Sara realizes that close to 80 percent of her company's revenues comes from only 20 percent of her customers. This finding substantiates the A) iceberg principle. B) sales paradox. C) 80/20 rule. D) standard markup rule. E) fishbone rule.

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64)

The 80/20 rule suggests that

A) 20 percent of marketing efforts is wasted. B) 80 percent of marketing efforts is well implemented, but the remaining 20 percent is out of control. C) 80 percent of the business comes from 20 percent of the customers. D) it will take 80 percent more effort to get 20 percent more business. E) None of these answers is correct.

65)

The 80/20 rule says that

A) only 20 out of every 100 firms use formal accounting controls. B) a firm should hire 20 sales reps for every 80 customers. C) marketing accounts for 80 percent of a typical consumer's dollar. D) even though a firm is showing a profit, 80 percent of its business might be coming from only 20 percent of its customers. E) usually about 20 percent of a firm's customers are unprofitable.

66)

According to the 80/20 rule,

A) marketing accounts for 80 percent of the consumer's dollar. B) only 20 out of every 100 firms use formal marketing control programs. C) about 20 percent of a typical firm's customers are unprofitable to serve. D) even though a firm might be showing a profit, 80 percent of its business might be coming from only 20 percent of its products or customers. E) None of these answers is correct.

67)

Which of the following statements illustrates the 80/20 rule?

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A) "80 percent of our target market doesn't respond to our marketing mix, and we only have a 20 percent market share." B) "Of the hundred retailers who carry our products, the top 20 account for nearly 80 percent of our total business." C) "20 percent of our marketing effort is wasted, but we don't know which 20 percent." D) "We don't know whether our profits are 20 percent higher than we deserve, or only 80 percent of what might be easily obtained." E) None of these answers is correct.

68) When involved in the control process, the marketing manager should view company profit A) as a gross index of performance that should be further broken down into smaller components. B) as a guide to future operations. C) as the test of whether or not the marketing mix is successful. D) All these answers are correct.

69)

Which of the following is true regarding control of marketing programs? A) Sales analysis and performance analysis mean the same thing. B) Traditional accounting reports are very useful for controlling marketing programs. C) Sales analysis is so revealing that there is no such thing as having "too much" data. D) The control process helps marketing managers learn how ongoing plans are working. E) All these answers are correct.

70)

Sales analysis is a

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A) well-accepted trend analysis method. B) necessity for making all important marketing decisions. C) way of assuring that future sales will be profitable. D) detailed report of likely profitability. E) detailed breakdown of a company's sales records.

71) ________ involves a detailed breakdown and analysis of customer purchases but does not compare these figures against standards. A) Sales analysis B) Performance analysis C) Cost analysis D) A performance index E) A marketing audit

72)

Marketing sales analysis A) keeps track of whether a firm's sales are increasing or decreasing. B) requires a detailed breakdown of a company's sales records. C) is very hard to do—because computers must be involved. D) looks for exceptions or variations from planned performance. E) tries to avoid the 80/20 rule.

73)

Which of the following is the best way to break down and analyze sales data? A) order size B) geographic region C) customer type D) product, package, size, grade, or color E) Any of these may be the best, depending on the situation.

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74)

The most useful breakdown of data in a sales analysis is by A) size of order. B) product, package size, grade, or color. C) customer type. D) geographic region. E) Any or all of these may be useful—depending on the situation.

75)

Which of the following is true of sales analysis? A) It requires more information than is available from traditional accounting reports. B) It can be done in different ways—there is no single "best way." C) It often studies how sales patterns change over time. D) All these answers are correct.

76)

Which of the following observations concerning sales analysis is not correct? A) It is a detailed breakdown of a company's sales records. B) By-product category is the best way to analyze sales data. C) Data can easily be obtained from basic billing and accounts receivable procedures. D) It is easy to do, and usually it's inexpensive. E) There is no one best way to break down sales data.

77)

A marketing manager who wants to analyze the firm's sales should be aware that

A) sales invoice files contain little useful information. B) the best way to analyze sales data is according to geographic regions. C) sales analysis involves a detailed breakdown of a company's sales forecasts. D) sales analysis may not be possible unless the manager has made arrangements for the company to capture identifying information about each sale. E) a manager can never have too much data.

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78)

Detailed sales analysis is A) not worth the cost unless the firm is very unprofitable. B) based on the information available on traditional accounting reports. C) important for producers but usually not that valuable for retailers. D) most useful when it analyzes costs from different possible target markets. E) None of these answers is correct.

79)

Sales analysis

A) typically involves reorganizing existing information rather than gathering new information. B) may involve analyzing many different breakdowns of overall sales. C) is usually a good first step when setting up a control system. D) All these answers are correct.

80)

Which of the following is true regarding sales analysis?

A) Sales data should be broken down according to customer characteristics such as demographics, because those are the only relevant dimensions. B) There is a single best way for analyzing sales data. C) Sales analysis is difficult and expensive because the data are difficult to obtain. D) Sales analysis can highlight important trends and help managers develop more accurate sales forecasts. E) A detailed sales analysis is most effectively presented with tables containing rows and columns of numbers, as opposed to charts and graphs.

81)

A ________ looks for exceptions or variations from planned performance.

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A) performance analysis B) break-even analysis C) Pareto chart D) fishbone diagram E) pie chart

82)

Compared with sales analysis, performance analysis A) shows which customers should be dropped. B) looks for exceptions or variations from planned performance. C) does not do as much comparing against standards. D) shows how to improve performance. E) All these answers are correct.

83)

Performance analysis differs from sales analysis in that performance analysis involves A) detailed breakdowns of a company's sales records. B) analyzing only the performance of sales representatives. C) comparing performance against standards—looking for exceptions or variations. D) analyzing only people—not products or territories. E) budgeting for marketing expenditures on the basis of contribution margins.

84)

The major difference between a sales analysis and a performance analysis is that

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A) performance analysis looks at variations from planned performance, while sales analysis shows what happened. B) sales analysis looks at individual transactions, while performance analysis groups them into categories. C) sales analysis is a control procedure, while performance analysis is part of implementation. D) sales analysis is concerned with expected sales, while performance analysis is concerned with past sales. E) sales analysis is used to find profitable sales patterns, while performance analysis seeks unprofitable patterns.

85)

Which of the following observations concerning performance analysis is true? A) It doesn't help identify what data is most relevant. B) It merely lists figures and doesn't compare them against standards. C) It doesn't look for differences or exceptions. D) It doesn't have to be limited to sales. E) None of these answers is correct.

86)

A marketing performance analysis is most likely to compare which of the following? A) an individual sales rep's performance to total company sales B) a firm's sales with its competitors' sales C) sales by product to sales by territory D) advertising cost to sales E) planned sales with actual sales

87)

The main purpose of a performance analysis is to

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A) see whether or not the 80/20 rule applies in a particular situation. B) uncover variations in performance that may be hidden in summary information. C) determine who should receive a performance bonus when profit is greater than expected. D) determine if the marketing budget is large enough to achieve the expected sales performance. E) provide a detailed breakdown of a company's sales records.

88)

Which of the following statements might result from a performance analysis? A) "Our California salesman sold more aluminum tubing than any of our other reps." B) "Sophia Sanchez calls on two of our three biggest customers." C) "Joshua Voigt sold less tubing to wholesalers than to manufacturers." D) "Walker Brown sold more aluminum tubing than steel tubing." E) "Pele Ruiz's sales are over his quota."

89) Doug Selkirk is a sales manager for IBM. He has asked his assistant to prepare an analysis that shows what percentage over or under quota each sales rep was during the last year. This is an example of A) using natural accounts. B) the contribution-margin approach. C) sales analysis. D) target market analysis. E) performance analysis.

90) Charter Communications uses the order-call ratio to measure the performance of its salespeople. If, in the past year, a salesperson made $13 million in sales, called on 4,312 potential business customers (either by phone or in person), and got 1,216 orders, what was this sales rep's order-call ratio (to the nearest whole number percentage)?

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A) 12 percent B) 18 percent C) 28 percent D) 36 percent E) 355 percent

91) Dell uses the sales-order ratio to measure the performance of its salespeople. If, in the past year, a salesperson made $2 million in sales, called on 5,250 potential business customers (either by phone or in person), and got 3,124 orders, what was this sales rep's order-call ratio (to the nearest whole number amount)? A) 18 percent B) 29 percent C) 73 percent D) 59 percent E) 10 percent

92) Capitol Enterprises uses the cost-sales ratio to measure the performance of its salespeople. If, in the past year, a salesperson made $800,000 in sales, had travel expenses of $23,000, and received a base salary of $40,000 plus $6,000 in commissions, what was this sales rep's cost-sales ratio (to the nearest whole number percentage)? A) 3 percent B) 6 percent C) 9 percent D) 12 percent E) 15 percent

93)

Performance analysis

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A) is based on qualitative factors—as contrasted with sales and cost analyses, which are based on quantitative data. B) is most useful in situations where the iceberg principal is not likely to be a concern. C) indicates why problems have occurred and how to solve them. D) may be based on several different performance indexes. E) All these answers are correct.

94)

A good reason for using performance indexes is to A) convert sales data to profit data. B) make it easier to compare situations. C) find territories where actual sales are very high or low. D) direct management attention to territories where the market potential is greatest. E) None of these answers is correct.

95)

Performance indexes A) are based on the iceberg principle. B) show the relation of one value to another. C) are used mainly to eliminate lazy salespeople. D) provide a qualitative measure of what "ought to happen." E) are calculated from the Consumer Price Index.

96) A ________ is a number like a baseball batting average that shows the relation of one value to another. A) benchmarking goal B) performance index C) performance quota D) benchmark ratio E) standard quota

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97) Avon, Inc., has analyzed the market potential in its territories and set sales quotas for its salespeople. It is now in a good position to develop ________ indexes at the end of the year. A) MIS B) performance C) PERT D) sales E) contribution

98) If Salesperson A has a performance index of 80 and Salesperson B has a performance index of 120, A) Salesperson A's performance should be used as a model to improve everyone's performance. B) Salesperson B's performance should be improved to bring it up to "average." C) Salesperson A may be having some problems. D) Salesperson B should be fired. E) the two average out to 100—and "all is well."

99) If Salesperson X had a performance index of 80 and Salesperson Y had a performance index of 120, A) Salesperson X may be having some problems and his or her sales performance should be investigated. B) the two would average out to 100—and this would suggest that "all is well." C) Salesperson X's performance should be investigated as a guide to improving everyone's performance. D) Salesperson Y probably should be fired. E) Salesperson Y obviously had higher sales than Salesperson X.

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100) Wiz Bang Foods put together data to measure sales performance by region of the United States. The Southern region included 25 percent of the U.S. population and was expected to deliver a similar share of Wiz Bang Foods' sales. This region ended up delivering 30 percent of the company's overall sales. The performance index for the Southern region would be A) 120. B) 83. C) 117. D) 1.17. E) 0.90.

101) Worldwide Appliance Co. put together data to measure sales performance by region of the United States. The Western region included 30 percent of the U.S. population and was expected to deliver a similar share of Worldwide's sales. This region ended up delivering 30 percent of the company's overall sales. The performance index for the Western region would be A) 0.90. B) 1.30. C) 130. D) 100. E) 90.

102) Information about five sales reps and their territories is presented below. If the firm has total sales of $1 million, which sales rep has the highest performance index?

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A) Aayak B) Bellio C) Cadams D) Dooty E) Eayma

103) Consider the performance data about the four sales regions shown below. Which of the four regions has the highest performance index?

A) North B) South C) East D) West E) This cannot be determined from the information provided.

104) Premier Bank considers population an effective measure of sales potential for its safe deposit boxes. It has broken down the population of the U.S. by region and assigned 30 percent of the total population to the Northeastern region. If Premier has a planned sales goal of $2.5 million nationwide, and actual sales in the Northeastern region last year were $650,000, what was the Northeastern region's performance index (to the nearest whole number percentage)? A) 33 percent B) 50 percent C) 66 percent D) 75 percent E) 87 percent

105)

According to the ________, much good information is hidden in summary data.

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A) iceberg principle B) sales paradox C) 80/20 rule D) summary definition E) fishbone rule

106)

The iceberg principle A) explains why some firm's sales are "cooler" that others. B) explains why some customers are more profitable than others. C) suggests that sales will vary from one territory to another. D) suggests that much good information may be hidden in summary data. E) says that sales reps should never make cold calls on customers.

107)

The iceberg principle suggests that

A) most competitors' strategies are not obvious on the surface. B) small customers usually have the most hidden profit potential. C) conclusions based on summary information are often misleading. D) no matter what control procedure is used, most major problems are impossible to detect until it is too late. E) None of these answers is correct.

108)

Which of the following statements best explains the iceberg principle?

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A) Several salespeople in a sales force usually meet their quotas, while many others don't. B) Many salespeople don't make their quotas because they only try to sell to large customers. C) Most consumer decisions are at the 90 percent preconscious level. D) Ten percent of a firm's customers usually account for 90 percent of its sales. E) Good performance in some areas may hide poor performance in other areas if only averages are evaluated.

109) Averages are useful for summarizing data—but only analyzing "averages" may be misleading, according to A) the iceberg principle. B) AIDA. C) the hypothesis-testing theory. D) the law of central tendency. E) the "50/50" rule.

110) A sales manager has just discovered that one of his sales reps has sales about 20 percent below his quota. The sales manager should conclude A) that the sales rep's quota was set too high. B) that the sales rep lacks the desire to succeed. C) that "all is well" because other salespeople had sales that were at least 20 percent over their quotas. D) that the salesperson's performance index is 4 (i.e., 80:20). E) nothing thus far—because of the "iceberg principle."

111)

Which of the following statements best describes the iceberg principle?

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A) Problems in one area may be offset by good performances in other areas—and thus the problems may not be visible on the surface. B) Ten percent of the items in inventory usually account for 80 percent of the sales. C) Within a company's sales force there are usually one or two sales reps who don't carry their weight. D) Many sales reps do not make their quotas because they ignore certain clients. E) Airfreight is less risky than shipping by boat.

112) A sales manager is trying to determine why the company's sales are down compared to a year ago. He starts with sales data summaries but quickly decides to break down sales further by territory, then salesperson, then store, and finally product. His actions suggest the A) contribution-margin approach. B) marketing audit. C) gross profit approach. D) iceberg principle. E) full-cost approach.

113) Which of the following statements by a sales manager best reflects an understanding of the iceberg principle? A) "Detailed cost analysis gets you focused on small parts of the problem, whereas general summaries make it easier to see the really big problems." B) "Most costs that look like they're fixed are actually changing all the time." C) "Don't tell me that you're certain we're going to increase sales. They were certain that an iceberg couldn't sink the Titanic!" D) "Let's not dwell on sales data summaries—let's get below the surface and study the details." E) "Cost problems always show up first—but controlling expenses doesn't mean that you won't run into revenue problems."

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114) Every graduating senior at State University is required to answer the following survey question: "Please use the following scale to indicate your degree of overall satisfaction or dissatisfaction with your educational experience at this university." The response choices are: dissatisfied, slightly satisfied, somewhat satisfied, very satisfied, and extremely satisfied. After collecting the data, analysts at the university found that only 5 percent of the students chose "dissatisfied," while 40 percent chose "slightly satisfied," 35 percent chose "somewhat satisfied," 15 percent chose "very satisfied," and only 5 percent chose "extremely satisfied." In its brochures used to recruit new students, these results were summarized as follows: "The annual survey of student satisfaction indicates that an astounding 95 percent of our graduating seniors reported that they were satisfied with their educational experience at this university." This serves as an example of A) a Pareto chart. B) the iceberg principle. C) a fishbone diagram. D) sales analysis. E) the ostrich principle.

115)

General summaries of overall marketing cost data

A) may hide problems rather than highlighting them. B) are usually the key to identifying how to improve the marketing plan. C) should not be too detailed—since detailed analysis requires allocating costs that are actually fixed. D) are usually enough to reveal areas where changes are needed. E) All these answers are correct.

116) Marketing cost analysis shows that one of Buildco, Inc.'s customers is unprofitable. Buildco should

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A) refuse to sell to that customer. B) try to determine why the customer is unprofitable. C) drop the customer and shift all fixed costs to the other customers. D) assign a new salesperson to that account. E) immediately develop a plan to sell more to that customer.

117)

Marketing cost analysis is often not given enough importance because A) accountants show little interest in their firm's marketing process. B) marketing costs are rarely significant. C) marketing costs don't have financial objectives. D) marketing costs don't have a clear purpose. E) IT managers don't understand the different marketing activities.

118) Using cost analysis to analyze the money being spent by a firm is analogous to using ________ to analyze the money coming into the firm. A) sales analysis B) traditional accounting reports C) performance analysis D) the iceberg principle E) TQM methods

119)

________ are the two basic approaches to handling marketing cost allocation problems. A) The average-cost approach and the break-even approach B) The performance-analysis approach and the sales-analysis approach C) The revenues approach and the expenses approach D) The gross margin approach and the net margin approach E) The full-cost approach and the contribution-margin approach

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120)

The full-cost approach to marketing cost analysis A) looks only at each customer or product's "contribution margin." B) allocates all costs to products, customers, or other categories. C) looks only at those costs that are directly related to particular alternatives. D) is misleading and should be avoided. E) All these answers are correct.

121) In the ________ approach, all costs are allocated to products, customers, or other categories. A) contribution-margin B) full-cost C) marketing overheads D) gross margin E) overhead

122)

The full-cost approach to marketing cost analysis

A) allocates all costs, except fixed costs, to products, customers, or other categories. B) is designed so that customers, products, or other categories are always allocated an equal amount of costs. C) requires that difficult-to-allocate costs be split in some way. D) should always be avoided. E) None of these answers is correct.

123)

A contribution-margin income statement shows

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A) the contribution of each department to both fixed costs and profit. B) the effect of a marketing strategy on sales in different areas. C) the marginal costs for producing each new unit of a product. D) the effect of competitors' prices on the profits of a company. E) the contribution of external market factors to the profits or losses of the company.

124)

Which of the following observations concerning the full-cost approach is false?

A) All costs are not allocated in all situations. B) It requires that difficult-to-allocate costs be split on some basis. C) Fixed costs are also allocated in some way. D) It could lead to a different decision than the one suggested by the contributionmargin approach. E) Common costs are also allocated in some way.

125)

Which of the following is true regarding marketing cost analysis?

A) The full-cost approach should usually be used, as there are almost always some fixed costs to be allocated. B) The contribution-margin approach focuses attention on variable costs. C) Fixed costs should be allocated according to the contribution-margin approach. D) The action implications will be the same whether the full-cost approach or contribution-margin approach is used. E) The contribution-margin approach provides the most complete allocation of total expenses.

126) The main difference between the full-cost and contribution-margin approaches to marketing cost analysis is that

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A) the contribution-margin approach uses both mechanical and logical reasoning to allocate marketing costs. B) the full-cost approach allocates all costs—even fixed costs—to products, customers, or other categories. C) the contribution-margin approach allocates all costs, to show how profitable various customers are. D) the full-cost approach focuses on variable costs rather than total costs.

127)

The contribution-margin approach to marketing cost analysis A) considers only those costs that are directly related to particular alternatives. B) is especially useful for estimating the long-run profit of a proposed strategy. C) allocates variable costs that are hard to measure to overhead. D) is especially useful for determining if there should be more controls on fixed costs. E) All these answers are correct.

128)

The contribution-margin approach to marketing cost analysis

A) allocates all costs to products or customers. B) should always be used instead of the full-cost approach, so that fixed costs are fully considered. C) focuses management's attention on variable costs rather than total costs. D) assumes that all costs must be allocated. E) None of these answers is correct.

129)

The contribution-margin approach to marketing cost analysis A) focuses attention on the allocation of fixed costs. B) is mainly concerned with the allocation of variable costs. C) always leads to the same conclusions as the full-cost approach. D) is always preferred to the full-cost approach. E) None of these answers is correct.

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130)

With the contribution-margin approach to marketing cost analysis, A) all costs are allocated to products, customers, or other categories. B) fixed costs are allocated based on the profit contribution to the firm. C) variable costs are treated as common costs. D) common costs that are hard to allocate are ignored. E) None of these answers is correct.

131)

Which of the following observations is true?

A) Variable costs are irrelevant in the contribution-margin approach. B) Both the full-cost approach and the contribution-margin approach yield similar decisions. C) The contribution-margin approach ignores some costs to get results. D) Top management always prefers the contribution-margin approach. E) In the contribution-margin approach, all costs are allocated to products, customers, or other categories.

132) Lori Winters, a regional sales manager, is interested in the profitability of the different sales reps in her region. She has used a variety of different approaches for allocating fixed sales expenses to the different sales reps, but she reaches very different conclusions depending on which allocation approach is used. In this case, it would be wise for Ms. Winters to supplement her other analyses with an analysis based on the A) contribution-margin approach. B) full-cost approach. C) marketing audit approach. D) None of these answers is correct.

133) Regarding the contribution-margin approach to marketing cost analysis, which of the following statements is true?

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A) The total net profit obtained with this approach is different from that obtained using the full-cost approach. B) It is concerned with the amount contributed by a product or customer toward covering variable costs—after fixed costs have been covered. C) This approach stresses the need for evaluating fixed costs. D) This approach may suggest a different action than the full-cost approach. E) All these statements are true.

134) The contribution-margin approach focuses attention on ________ rather than on ________. A) fixed costs; variable costs B) gross margins; net margins C) total costs; fixed costs D) overheads; fixed costs E) variable costs; total costs

135) Department A in a company had sales of $60,000 in the year 2012. Variables costs of sales was $30,000 and variable selling expenses were $9,000. Fixed administrative expenses were $5000. What is the contribution margin? A) $60,000 B) $39,000 C) $21,000 D) $30,000 E) $16,000

136) A company produces three product lines and a different marketing manager is responsible for each line. Most marketing expenses are specific to each line, but a common sales force sells all three lines. Sales reps are paid by commission, with a different commission for each product line. In this case, in a marketing cost analysis,

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A) the contribution-margin approach would probably divide personal selling expense based on commission expense for each product line. B) a full-cost approach would ignore commission expense, since it is not a fixed cost. C) sales commissions are a variable expense and would not be considered in the contribution-margin approach. D) the full-cost approach would be easier to do if all sales reps were paid a straight salary. E) None of these answers is correct.

137)

When deciding how to evaluate costs, a marketing manager should realize that

A) the best method for dealing with fixed costs depends on the objectives of the analysis. B) according to the iceberg principle, too much detail in cost analysis obscures the big problems by calling attention to the superficial problems. C) the full-cost approach is misleading and should not be used. D) the contribution-margin approach ignores necessary fixed costs and should not be used. E) None of these answers is correct.

138) When the full-cost approach to marketing cost analysis is used, allocating fixed costs on the basis of sales A) may make low-volume customers appear more profitable than they are. B) increases each customer's contribution margin. C) decreases the profitability of the whole business. D) makes large-volume customers appear more profitable that they are. E) increases the profitability of the whole business.

139) If one were using the full-cost approach to marketing cost analysis, allocating fixed costs on the basis of sales volume would

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A) make some customers appear more profitable than they actually are. B) not be done—because only variable costs would be analyzed. C) make some products appear less profitable than they actually are. D) decrease the profitability of the whole business. E) do both these things: make some customers appear more profitable than they actually are, and make some products appear less profitable than they actually are.

140) Which of the following is the best reason to use the full-cost approach when comparing the performance of several product managers? A) Unlike the contribution-margin approach, the full-cost approach charges managers only for the expenses that are directly related to their operations. B) The full-cost approach is required by federal tax laws. C) The full-cost approach charges each product manager only for those expenses he or she controls. D) The full-cost approach allows management to consider only the variable costs related to different products. E) The full-cost approach makes each manager bear a share of the overhead expenses that were made for everyone's benefit.

141) Which of the following is true regarding the choice between the full-cost and contribution-margin approaches to marketing cost analysis? A) Top management tends to prefer the full-cost approach. B) The full-cost approach often leads to arguments within a company. C) The choice of the method depends on the objectives of the analysis. D) All these answers are correct.

142)

Which of the following statements about the contribution-margin approach is false?

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A) It is concerned with the amount contributed by an item or group of items toward covering fixed costs. B) This approach suggests that it is not necessary to consider all costs in all situations. C) Top management almost always finds this approach more useful than full-cost analysis. D) This approach frequently leads to data that suggest a different decision than might be indicated by the full-cost approach. E) It focuses on controllable costs—rather than on total costs.

143) The ________ approach shows operating managers and salespeople what they've actually contributed to covering general overhead and profit. A) net margin B) full-cost C) marketing overhead D) contribution-margin E) net profit

144)

Marketing metrics are

A) numeric data that help to evaluate performance. B) the practices of measuring and analyzing marketing performance. C) any type of communication created by customers for other customers. D) software programs that track individual customers' behavior and trigger actions in response to specific customer actions. E) the portions of total sales in a product category accounted for by particular brands.

145) The practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness is known as marketing

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A) analytics. B) control. C) review. D) metrics. E) survey.

146)

A marketing manager should monitor a marketing strategy to ensure that it A) responds to changes in the external market environment. B) remains unchanged so that that its effectiveness can be measured. C) operates without consideration of the competition. D) remains independent of Product, Place, Promotion, and Price decisions. E) All these answers are correct.

147) A marketing manager wants to measure the market situation to assure that the firm's marketing strategy is evolving in response to changes in both the external market environment and in the behavior of customers and competitors. Which of the following marketing metrics would be the least likely to help the marketing manager in this task? A) marginal analysis B) market share C) cluster analysis D) customer sentiment analysis E) sales forecasting

148) Which of the following marketing metrics could best help a firm evaluate whether its Place decisions are achieving their objectives?

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A) sales by channel B) bounce rate C) cluster analysis D) break-even analysis E) brand awareness

149) A marketing manager wants to measure the brand awareness of its brand of athletic wear. What marketing strategy planning area does this evaluate? A) Product B) Place C) Promotion D) Price E) Profit

150) All of the following are ways for a firm to measure whether its promotion strategy is successfully communicating to its potential buyers except A) break-even analysis. B) click-through rate. C) cost per one thousand impressions. D) bounce rate. E) form completion rate.

151) Margin percent, fixed-cost contribution per unit, and marginal analysis are all marketing metrics that can be used to evaluate the effectiveness of decisions based on A) Price. B) Performance. C) Promotion. D) Place. E) Product.

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152) Which of the following is a challenge that marketing analytics and big data pose for marketing managers? A) increased marketing performance expectations B) more demands to justify strategy decisions C) the need to demonstrate links between metrics and performance outcomes D) having to properly interpret results E) All these answers are correct.

153) A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function—and of the organization, methods, procedures, and people employed to implement the policies—is called a(n) A) MIS report. B) marketing audit. C) management review. D) marketing information system. E) marketing analysis survey.

154)

A marketing auditor for a firm will most likely

A) develop marketing plans for the firm based on the current plans being implemented. B) interview employees of the firm to determine the level of job satisfaction. C) evaluate the marketing plans being implemented by the firm to see if they are still the best plans the firm can offer. D) set company-wide objectives and targets in line with the marketing plan. E) compare the firm's current marketing plans to older plans in order to determine the progress made by the firm.

155) A ________ is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function and of the organization, methods, procedures, and people employed to implement the policies.

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A) benchmarking study B) marketing audit C) sales analysis D) full-cost assessment E) marketing strategy survey

156) A ________ requires a detailed look at the company's current marketing plans to see if they are still the best plans the firm can offer. A) cost analysis B) full-cost approach C) sales analysis D) marketing audit E) strategic scenario review

157)

A marketing audit is a(n)

A) evaluation of day-to-day marketing operations. B) analysis of the profitability of all profit centers. C) review of a marketing program during a crisis. D) detailed look by a CPA at how the company's marketing costs are allocated. E) systematic, critical, and unbiased review and appraisal of the objectives and policies of the marketing function.

158)

A marketing audit should help determine if A) current marketing strategies are good ones. B) the company's marketing objectives are reasonable. C) implementation of a marketing program was effective. D) All these answers are correct.

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159)

A marketing audit should A) be done by someone inside the finance department. B) be conducted whenever a crisis arises. C) be conducted by the person most familiar with each of the firm's marketing plans. D) evaluate a company's whole marketing program on a regular basis. E) All these answers are correct.

160)

Which of the following statements about marketing audits is true?

A) A marketing audit should be conducted only when some crisis arises. B) Marketing audits should probably be conducted by someone inside the marketing department who is familiar with the whole program. C) A marketing audit should evaluate the company's whole marketing program—not just some parts of it. D) A marketing audit should be handled by the specialist most familiar with each of the marketing plans in the program. E) All these statements are true.

161)

Which of the following statements about marketing audits is false?

A) A marketing audit takes a detailed look at the firm's current marketing plans to see if they are still the best plans the firm can offer. B) A marketing audit should be done on a regular basis. C) The marketing strategy planning framework is useful in conducting a marketing audit. D) A good audit is internal and is not concerned with gathering information from outside the firm. E) Ideally, a marketing audit should not be necessary, but it often is.

162)

A marketing audit

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A) takes a big view of the business. B) evaluates the whole marketing program. C) may be done internally or externally. D) requires a detailed look at the company's current marketing plans. E) All these answers are correct.

163) When a company hires a consulting firm to do a complete annual review and analysis of its marketing plans and financial performance, the process represents a A) marketing audit. B) performance analysis. C) performance index. D) full-cost approach. E) contribution-margin approach.

164)

A marketing audit is necessary because

A) it is a standard practice adopted by all companies worldwide. B) managers may pursue certain strategies blindly, when other strategies might be more effective. C) regulators require marketing audits at the same time as accounting audits. D) All these answers are correct.

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Answer Key Test name: Bonus Test Bank A 1) TRUE Successful marketing requires efficient implementation and control. Implementation puts plans into operation, and control provides feedback 2) FALSE Information can be gathered quickly, and it can also be analyzed quickly. Marketing analytics can often happen in real time—while an event is happening. 3) TRUE To more effectively implement and control marketing strategies, marketing managers must take advantage of technology that gives them more information, more often. Metrics and analytical tools can provide marketing managers with frequent and timely information, which they can use to adjust their marketing strategies. 4) FALSE The ideal of doing things better, faster, and at lower cost is easy to accept. But in practice implementation is often complicated by trade-offs among the three objectives. 5) FALSE There are thousands of ways that a plan or its implementation can go astray. Implementing a strategy is a complicated process and requires constant monitoring. 6) TRUE

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Unfortunately, traditional accounting reports are usually too general to be much help in answering these questions. A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. 7) TRUE Unfortunately, traditional accounting reports are usually too general to be much help in answering these questions. A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. 8) TRUE A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 9) TRUE A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 10) FALSE There is no one best way to break down or analyze sales data. Several breakdowns may be useful, depending on the nature of the company and product and what dimensions are relevant. 11) FALSE Version 1

There is no one best way to break down or analyze sales data. Several breakdowns may be useful, depending on the nature of the company and product and what dimensions are relevant. 12) TRUE Well-designed information systems provide managers with color graphs and charts that make it easy to see patterns that otherwise might be hidden scrolling through online tables with a browser. 13) TRUE Performance analysis looks for exceptions or variations from planned performance. In performance analysis, managers make comparisons. Well-designed information systems provide managers with color graphs and charts that make it easy to see patterns that otherwise might be hidden scrolling through online tables with a browser. 14) TRUE In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. In performance analysis, managers make comparisons. They might compare one territory against another, against the same territory's performance last year, or against expected performance. 15) FALSE In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. 16) TRUE Performance analysis looks for exceptions or variations from planned performance. In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. In performance analysis, managers make comparisons.

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17) FALSE Performance analysis doesn't have to be limited to sales. Other data can be analyzed too. These data may include the frequency of stock-outs, the number of sales calls made, the number of orders, customer satisfaction ratings, or the cost of various tasks. 18) TRUE To get a better check on performance effectiveness, the marketing manager compares what did happen with what ought to have happened. This involves the use of performance indexes. 19) TRUE The main advantage of performance indexes is that they make it easier to compare numbers in a performance analysis. When a manager sets standards—that is, quantitative measures of what ought to happen—it's relatively simple to compute a performance index—a number like a baseball batting average that shows the relation of one value to another. 20) FALSE The iceberg principle says that much good information is hidden in summary data. 21) FALSE Detailed cost analysis is very useful in understanding production costs, while the purpose of performance analysis is to improve operations. Performance analysis helps explain if performances are the general rule or an individual event. 22) FALSE Marketing costs have a purpose, and so it usually makes sense to allocate costs to specific market segments, or customers, or to specific products.

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23) TRUE Allocating costs is tricky. Some costs are likely to be fixed for the near future, regardless of what decision is made. And some costs are likely to be common to several products or customers, making allocation difficult. In general, the more products a company has the more difficult it will be to allocate costs. 24) TRUE In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. 25) FALSE In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. 26) FALSE In the contribution-margin approach, all costs are not allocated in all situations. 27) TRUE The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate. 28) TRUE The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate.

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29) FALSE The difference between the full-cost approach and the contributionmargin approach is important. The two approaches may suggest different decisions. 30) FALSE The difference between the full-cost approach and the contributionmargin approach is important. The two approaches may suggest different decisions. 31) TRUE Arguments over allocation methods can be deadly serious. The method used may reflect on the performance of various managers—and it may affect their salaries and bonuses. 32) FALSE Arbitrary allocation of costs may have a direct impact on sales reps' morale. To avoid this problems and others, firms often use the contribution-margin approach. 33) FALSE Top management often finds full-cost analysis more useful. In the long run, some products, departments, or customers must pay for the fixed costs. Full-cost analysis has its place too. 34) FALSE Management often combine sales and cost analyses to keep a running check on its activities—to make sure the plans are working—and to see when and where new strategies are needed. 35) TRUE

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A planning and control chart that combines sales and cost analyses compares actual sales with what it projected. If actual sales were less than projected, corrective action could take either of two courses: improving implementation efforts or developing new, more realistic strategies. 36) TRUE Marketing metrics are the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 37) TRUE Marketing analytics is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. And, as business guru Peter Drucker has been credited with writing, "What gets measured gets improved." 38) FALSE For marketing managers, a challenge created by big data and marketing analytics is that they must demonstrate the links between the various metrics and ultimate performance outcomes. 39) TRUE To make sure that the whole marketing program is evaluated regularly, marketing specialists developed the marketing audit. A marketing audit is similar to an accounting audit or a personnel audit, which businesses have used for some time. 40) FALSE A marketing audit is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function and of the organization, methods, procedures, and people employed to implement the policies.

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41) TRUE A marketing audit is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function and of the organization, methods, procedures, and people employed to implement the policies. 42) FALSE A marketing audit requires a detailed look at the company's current marketing plans to see if they are still the best plans the firm can offer. 43) FALSE The consultant-auditor evaluates the quality of the effort, looking at who is doing what and how well. This means interviewing customers, competitors, channel members, and employees. 44) TRUE A marketing audit takes a big view of the business—and it evaluates the whole marketing program. It might be done by a separate department within the company, perhaps by a marketing controller. 45) FALSE A market audit might be done by a separate department within the company, perhaps by a marketing controller. But to get both expert and objective evaluation, it's probably better to use an outside organization such as a marketing consulting firm. 46) TRUE Ideally, a marketing audit should not be necessary. Good managers do their best in planning, implementing, and controlling—and they should continually evaluate the effectiveness of the operation. 47) B

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Effective strategy planning decisions set the firm on a course toward profitable opportunities. And when good strategies and plans are developed, everyone in the organization knows what needs to be done. Thus, good marketing plans set the framework for effective implementation and control. 48) D Successful marketing requires efficient implementation and control. A good marketing plan sets the framework for effective implementation and control. 49) D Control is the feedback process that helps the marketing manager learn (1) how ongoing plans and implementation are working and (2) how to plan for the future. 50) D Control is the feedback process that helps the marketing manager learn (1) how ongoing plans and implementation are working and (2) how to plan for the future. 51) E Fast feedback is not possible unless data are in a form that can be quickly sorted and analyzed by computer. Here the creative marketing manager plays a crucial role by insisting that necessary data be captured as they come in. It is difficult, if not impossible, to get the information later. Sometimes the type of information to collect and monitor is not so obvious—so it helps to have a marketing manager in charge. 52) B

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Marketing managers can use faster feedback to develop a competitive advantage. They can quickly fine-tune a smooth-running implementation to make it even better. If there are problems, they can spot them early and fix them. 53) C Fast feedback is not possible unless data are in a form that can be quickly sorted and analyzed by computer. 54) D There are three general objectives that apply to all implementation efforts: better—so customers really get superior value as planned; faster—to avoid delays that cause customers problems; and at lower cost—without wasting money on things that don't add value for the customer. 55) B Customer complaints bring implementation problems to light. Quick responses can help a company provide better customer service and manage its reputation—especially if it is likely to get blamed for something it didn't do. 56) A Toll-free customer service lines, e-mail features built into websites, and social media people who monitor and respond to customer concerns on Twitter and Facebook don't win many new customers. But they do help a firm keep its current customers—if complaints are handled well. 57) B

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There should be a tracking system to be certain that a customer gets a response. This follow-up can be very important. One study found that callers who had their complaints resolved, on average, told five people about the help they received. Those who weren't satisfied told twice as many people. 58) C In this scenario, creating a "favored customer" club can help Whistler's Camping Supplies increase their customer count and loyalty. 59) D The Internet has made it easier to reach customers. It is ideal in providing faster feedback. Marketing managers can use faster feedback to develop a competitive advantage. 60) B Marketing implementation usually involves decisions and activities related to both internal and external matters. 61) C Marketing implementation usually involves decisions and activities related to both internal and external matters. Whether implementation decisions and activities are internal or external, they all must be consistent with the objectives of the overall strategy and with the other details of the plan. 62) C The 80/20 rule applies to a business that generates 80 percent of its business from only 20 percent of its products. 63) C

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A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 64) C A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 65) D A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 66) D A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 67) B

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A company may be showing a profit, while 80 percent of its business comes from only 20 percent of its products—or customers. The other 80 percent may be unprofitable. But without special analyses, managers won't know it. This 80/20 relationship is fairly common—and it is often referred to as the 80/20 rule. 68) A A manager must make sure the company captures identifying information on important dimensions such as territory, sales rep, product model, and customer in a database. Then the marketing information system can easily provide detailed sales analyses broken down by any variable (or combination of variables) in the database. 69) D The control process helps marketing managers learn how ongoing plans are working. A marketing program must be controlled. Good control helps the marketing manager locate and correct weak spots and at the same time find strengths that may be applied throughout the marketing program. Control works hand in hand with planning. 70) E Sales analysis is a detailed breakdown of a company's sales records. 71) A A breakdown and analysis of sales or customer purchases is called sales analysis. 72) B Marketing sales analysis requires a detailed breakdown of a company's sales records. 73) E

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There is no one best way to break down or analyze sales data. Several breakdowns may be useful, depending on the nature of the company and product and what dimensions are relevant. 74) E There is no one best way to break down or analyze sales data. Several breakdowns may be useful, depending on the nature of the company and product and what dimensions are relevant. 75) D Marketing executives need more detailed sales data to keep in touch with what's happening in the market. They get this detail by turning to sales analysis—a detailed breakdown of a company's sales records. There is no one best way to break down or analyze sales data. When sales analyses are routinely prepared over time (every day, week, month, or quarter), they show trends and help managers develop more accurate sales forecasts. 76) B There is no one best way to break down or analyze sales data. Several breakdowns may be useful, depending on the nature of the company and product and what dimensions are relevant. 77) D Sales analysis is easy to do, and usually it's inexpensive because the data for the analysis can easily be obtained as a by-product of basic billing and accounts receivable procedures. However, the manager must make sure the company captures identifying information on important dimensions such as territory, sales rep, product model, and customer in a database. 78) E

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While detailed and timely sales analysis can be very useful, information that is too detailed or complex can drown a manager. Information systems can spew out more data than a manager can absorb. 79) D Sales analysis involves reorganizing existing information rather than gathering new information. It may also involve analyzing many different breakdowns of overall sales, and is usually a good first step when setting up a control system. 80) D When sales analyses are routinely prepared over time (every day, week, month, or quarter), they show trends and help managers develop more accurate sales forecasts. 81) A A performance analysis looks for exceptions or variations from planned performance. 82) B Performance analysis looks for exceptions or variations from planned performance. 83) C Performance analysis looks for exceptions or variations from planned performance. In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. In performance analysis, managers make comparisons. 84) A

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Performance analysis looks for exceptions or variations from planned performance. In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. In performance analysis, managers make comparisons. 85) D Performance analysis doesn't have to be limited to sales. Other data can be analyzed too. These data may include the frequency of stock-outs, the number of sales calls made, the number of orders, customer satisfaction ratings, or the cost of various tasks. 86) E Performance analysis looks for exceptions or variations from planned performance. In simple sales analysis, the figures are merely listed or graphed—they aren't compared against standards. In performance analysis, managers make comparisons. They might compare one territory against another, or planned sales against actual sales. 87) B Performance analysis looks for exceptions or variations from planned performance. 88) E Performance analysis looks for exceptions or variations from planned performance. It might compare one territory against another, against the same territory's performance last year, or against expected performance. 89) E The purpose of performance analysis is to improve operations. The salesperson, territory, or other factors showing poor performance can be identified and singled out for detailed analysis and corrective action; or outstanding performances can be analyzed to see if the successes can be explained and made the general rule. Version 1

90) C The order-call ratio is calculated as Total Orders/Total Calls—times 100. The order-call ratio here: 121,600 ÷ 4,312 = 28 percent. 91) D The order-call ratio is calculated as Total Orders ÷ Total Calls—times 100. The order-call ratio here: 312,400 ÷ 5,250 = 59 percent. 92) C The cost-sales ratio is Total Sales Rep Expenses/Sales Produced—times 100. The cost-sales ratio in this scenario: 6,900,000 ÷ 800,000 = 9 percent. 93) D To get a better check on performance effectiveness, the marketing manager compares what did happen with what ought to have happened. This involves the use of performance indexes. 94) B With a straight performance analysis, the marketing manager can evaluate the variations among sales reps to try to explain the "why." But this takes time. To get a better check on performance effectiveness, the marketing manager compares what did happen with what ought to have happened. This involves the use of performance indexes. 95) B When a manager sets standards—that is, quantitative measures of what ought to happen—it's relatively simple to compute a performance index—a number like a baseball batting average that shows the relation of one value to another. 96) B

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When a manager sets standards—that is, quantitative measures of what ought to happen—it's relatively simple to compute a performance index—a number like a baseball batting average that shows the relation of one value to another. 97) B When a manager sets standards—that is, quantitative measures of what ought to happen—it's relatively simple to compute a performance index—a number like a baseball batting average that shows the relation of one value to another. 98) C A sales performance index is computed by dividing actual sales by expected sales for the area (or sales rep, product, etc.) and then multiplying by 100. If a sales rep is batting 82 percent, the index is 82. 99) A A sales performance index is computed by dividing actual sales by expected sales for the area (or sales rep, product, etc.) and then multiplying by 100. If a sales rep is batting 82 percent, the index is 82. 100) A A sales performance index is computed by dividing actual sales by expected sales and then multiplying by 100. This would be (30 ÷ 25)× 100 = 120. 101) D A sales performance index is computed by dividing actual sales by expected sales and then multiplying by 100. This would be (30 ÷ 30)× 100 = 100. 102) D

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From the given data, the performance index can be calculated as (Actual Sales ÷ Expected Distribution of Sales Based on Population)× 100. The total actual sales are $1,000,000. Dooty is expected to sell 10 percent, or $100,000. Dooty actually sells $150,000. Dooty's performance index is calculated by taking his actual sales ($150,000) and dividing it by expected sales (10 percent of $1,000,000 = $100,000) —and then multiplying this by 100. The equation is ($150,000 ÷ 100,000)× 100 = 150. If you calculate the other sales reps' performance index, you will find each is lower.

103) C From the given data, the performance index can be calculated as (Actual Sales ÷ Expected Sales)× 100. In this scenario, the East would have the highest performance index. The East has an expected sales of $140,000 and an actual sales figure of $190,000. Therefore, the East's performance index is calculated as ($190,000 ÷ 140,000)× 100 = 135. The other performances indexes are below 135.

104) E The expected sale from the Northeastern region is 30 percent of $2.5 million, which is $750,000. The actual sales from the Northeastern region are $650,000. The performance index is calculated as (Actual Sales ÷ Expected Sales)× 100. Therefore, the performance index for the Northeastern region is ($650,000 ÷ $750,000)× 100 = 87 percent. 105) A According to the iceberg principle, much good information is hidden in summary data. 106) D According to the iceberg principle, much good information is hidden in summary data. 107) C According to the iceberg principle, much good information is hidden in summary data. 108) E

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Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 109) A The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 110) E The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 111) A The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 112) D The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 113) D Version 1

The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 114) B The iceberg principle states that a lot of good information is hidden in summary data. Since total sales may be large and company activities varied, problems in one area may hide below the surface. Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. 115) A Averaging and summarizing data are helpful, but be sure summaries don't hide more than they reveal. Marketing managers need facts to avoid rash judgments based on incomplete information. 116) B Because marketing costs have a purpose, it usually makes sense to allocate costs to specific market segments, or customers, or specific products. In some situations, companies allocate costs directly to the various geographical market segments they serve. This may let managers directly analyze the profitability of the firm's target markets. 117) A Detailed cost analysis is very useful in understanding production costs— but much less is done with marketing cost analysis. One reason is that many accountants show little interest in their firm's marketing process— or they don't understand the different marketing activities. They just treat marketing as overhead and forget about it. 118) A Version 1

Sales come at a cost. And costs can and should be analyzed and controlled too. Using cost analysis to analyze the money being spent by a firm is analogous to using sales analysis to analyze the money coming into the firm. 119) E There are two basic approaches to handling the allocation problem: the full-cost approach and the contribution-margin approach. 120) B In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. 121) B In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. 122) C In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. 123) A A contribution-margin income statement shows the contribution of each department more clearly, including its contribution to both fixed costs and profit. 124) A In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. Version 1

125) B When we use the contribution-margin approach, all costs are not allocated in all situations. When we compare various alternatives, it may be more meaningful to consider only the costs directly related to specific alternatives. Variable costs are relevant here. 126) B In the full-cost approach, all costs are allocated to products, customers, or other categories. Even fixed costs and common costs are allocated in some way. In the contribution-margin approach, all costs are not allocated in all situations. The contribution-margin approach focuses attention on variable costs rather than on total costs. 127) A In the contribution-margin approach, all costs are not allocated in all situations. The approach focuses attention on variable costs rather than on total costs. 128) C In the contribution-margin approach, all costs are not allocated in all situations. The approach focuses attention on variable costs rather than on total costs. 129) B In the contribution-margin approach, all costs are not allocated in all situations. The approach focuses attention on variable costs rather than on total costs. 130) D The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate. Version 1

131) C The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate. 132) A The difference between the full-cost approach and the contributionmargin approach is important. The two approaches may suggest different decisions. The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate. 133) D The difference between the full-cost approach and the contributionmargin approach is important. The two approaches may suggest different decisions. The contribution-margin approach focuses attention on variable costs rather than on total costs. 134) E The difference between the full-cost approach and the contributionmargin approach is important. The two approaches may suggest different decisions. The contribution-margin approach focuses attention on variable costs rather than on total costs. Total costs may include some fixed costs that do not change in the short run and can safely be ignored or some common costs that are more difficult to allocate. 135) C The contribution margin can be calculated by subtracting total variable cost from sales. In this scenario, contribution margin would be: $30,000 + $9,000− $60,000 = $21,000. Version 1

136) A A contribution-margin income statement shows the contribution of each department more clearly, including its contribution to both fixed costs and profit. Using the full-cost approach often leads to arguments within a company. Any method of allocation can make some products or customers appear less profitable. 137) A Allocating costs is tricky. Some costs are likely to be fixed for the near future, regardless of what decision is made. And some costs are likely to be common to several products or customers, making allocation difficult. 138) A Using the full-cost approach often leads to arguments within a company. Any method of allocation can make some products or customers appear less profitable. Top management often finds full-cost analysis more useful, however. In the long run, some products, departments, or customers must pay for the fixed costs. Full-cost analysis has its place too. 139) E Using the full-cost approach often leads to arguments within a company. Any method of allocation can make some products or customers appear less profitable. Top management often finds full-cost analysis more useful, however. In the long run, some products, departments, or customers must pay for the fixed costs. Full-cost analysis has its place too. 140) E

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The full-cost approach is especially useful for evaluating alternatives and for showing operating managers and salespeople how they're doing. The contribution-margin approach shows what they've actually contributed to covering general overhead and profit. 141) D Arguments over allocation methods can be deadly serious. The method used may reflect on the performance of various managers—and it may affect their salaries and bonuses. Of the two approaches, top management often finds full-cost analysis more useful. 142) C Top management often finds full-cost analysis more useful. In the long run, some products, departments, or customers must pay for the fixed costs. 143) D The contribution-margin approach is especially useful for evaluating alternatives and for showing operating managers and salespeople how they're doing. It shows what they've actually contributed to covering general overhead and profit. 144) A Marketing metrics are the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 145) A Marketing analytics is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. 146) A

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Measuring elements of the marketing strategy planning process are critical. It can mean monitoring and measuring the market situation to assure that marketing strategy evolves in response to changes in the external market environment or the behavior of customers or competitors. It can also mean measuring the effectiveness of decisions based on the Four Ps. 147) A Marginal analysis helps a firm find the right price for its product. The other marketing metrics would help a marketing manager measure and monitor their customers and competitors and the external market environment. See Exhibit BC1–14. 148) A A sales by channel report gives marketing managers insight into the performance of each channel. It relates to Place decisions because it involves ensuring that goods and services are available in the right quantities and locations when customers want them. See Exhibit BC1– 14. 149) A To assess a product's brand recognition, a company will often use a measure of brand awareness. Branding and brand familiarity are elements of product planning. See Exhibit BC1–14. 150) A Various marketing metrics can measure a firm's promotions efforts. A break-even analysis, however, evaluates whether a firm will be able to cover its costs with a particular price and can be used to evaluate whether a firm is meeting its Price objectives. See Exhibit BC1–14. 151) A

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Marketing metrics that are used to evaluate Price decisions include markup and margin percent, price premium, variable cost, fixed cost, and fixed-cost contribution per unit, break-even analysis, and marginal analysis. See Exhibit BC1–14. 152) E Marketing analytics and big data raise the expectations for marketing in both performance outcomes and justification of strategy. With all this information, marketing managers must demonstrate links between various metrics and ultimate performance outcomes. Marketing managers are also faced with the challenge of properly interpreting results. 153) B A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function—and of the organization, methods, procedures, and people employed to implement the policies—is called a marketing audit. 154) C The marketing audit is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function. It does not develop the plan or policies for a firm. 155) B A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function—and of the organization, methods, procedures, and people employed to implement the policies—is called a marketing audit. 156) D

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A marketing audit requires a detailed look at the company's current marketing plans to see if they are still the best plans the firm can offer. Customers' needs and attitudes change—and competitors continually develop new and better plans. 157) E A systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function—and of the organization, methods, procedures, and people employed to implement the policies—is called a marketing audit. 158) D A marketing audit requires a detailed look at the company's current marketing plans to see if they are still the best plans the firm can offer. A marketing audit helps ensure that the company's strategies are on the right track and being implemented properly. A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 159) D A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 160) C A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 161) D A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 162) E

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A marketing audit requires a detailed look at the company's current marketing plans to see if they are still the best plans the firm can offer. A marketing audit helps ensure that the company's strategies are on the right track and being implemented properly. A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 163) A A marketing audit is a systematic, critical, and unbiased review and appraisal of the basic objectives and policies of the marketing function and of the organization, methods, procedures, and people employed to implement the policies. A marketing audit takes a big view of the business—and it evaluates the whole marketing program. 164) B Managers often become identified with certain strategies, and pursue them blindly, when other strategies might be more effective. An outside view can give needed perspective. Marketing audits may be more common in the future.

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BONUS TEST BANK: B TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A marketing strategy that is focused on a real breakthrough opportunity will usually be successful even if there are obstacles to getting help from other functional areas in the firm. ⊚ ⊚

true false

Cross-functional links rarely affect strategy planning. ⊚ ⊚

true false

3) Turning a strategy into a profitable business usually requires money, people, and other resources, such as production capacity, as well as a marketing plan. ⊚ ⊚

true false

4) Coordinating the linkages between different functional areas is likely to be easier when a new strategy involves only a minor modification to a plan that the firm is already implementing. ⊚ ⊚

true false

5) Coordinating the linkages between different functional areas is likely to be more difficult and critical when a strategy involves development of a totally new product idea rather than a minor change to an existing plan. ⊚ ⊚

true false

6) Cross-functional challenges are greater for minor changes to a strategy than for a completely new strategy.

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⊚ ⊚

true false

7) The introduction of a totally new product idea would present a greater challenge in coordinating the activities of the different functional areas of a company than would a modification of an existing product. ⊚ ⊚

true false

8) Coordinating the linkages between marketing and other functional areas is likely to be easier when a strategy involves developing a totally new product idea rather than just modifying an existing plan and established ways of doing things. ⊚ ⊚

true false

Capital is the financial term for the amount of money invested in a firm. ⊚ ⊚

true false

10) Capital is the financial term for the amount of cash that a firm has in a bank checking account or other readily available form. ⊚ ⊚

true false

11) Capital is the money needed to pay the personnel expenses required during the period of a marketing plan. ⊚ ⊚

12)

true false

Finding and allocating capital is usually handled by a firm's chief financial officer.

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13)

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A marketing manager usually has responsibility for finding and allocating a firm's capital. ⊚ ⊚

true false

14) When evaluating possible strategies, a marketing manager shouldn't have to worry about screening based on financial criteria because the finance area's main job is to get the capital needed to implement the firm's marketing plan. ⊚ ⊚

true false

15) A marketing plan is more likely to be funded if the marketing manager has included financial measures as quantitative criteria when screening possible opportunities. ⊚ ⊚

16)

true false

Funded marketing plans have no budget constraints. ⊚ ⊚

true false

17) Working capital is the money needed to pay for short-term expenses—such as employee salaries, advertising, and marketing research—as they occur. ⊚ ⊚

true false

18) Working capital is the money needed to pay for investments in facilities, equipment, and other "fixed assets" needed to do the firm's basic work.

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19) It would probably be a bad idea to go to work as a salaried salesperson selling installations for a firm that didn't have any working capital. ⊚ ⊚

true false

20) A firm's working capital may come from either internal sources—such as company bonds—or external sources—such as money paid by customers. ⊚ ⊚

true false

21) A firm's working capital may come from either internal sources—such as sales revenue and profits—or external sources—such as money from sales of stocks or bonds. ⊚ ⊚

22)

Capital comes from external sources, and working capital comes from internal sources. ⊚ ⊚

23)

true false

Internal sources for capital include loans, stocks, and bonds. ⊚ ⊚

true false

24) A strategy that's expected to "pay its own way" must be based on a plan that generates the working capital needed to implement the plan. ⊚ ⊚ Version 1

true false

25) With externally generated funding a firm's marketing program may be expected to "pay its own way." ⊚ ⊚

true false

26) It's not sensible for a firm to implement a marketing plan if the plan doesn't generate at least enough initial revenue to cover working capital needs. ⊚ ⊚

true false

27) Selling stock is a common way to raise money for capital and involves selling shares in the ownership of the company. ⊚ ⊚

28)

The value of a firm's stock is more likely to increase when its profits are growing. ⊚ ⊚

29)

true false

A firm with a great strategy will always attract investors. ⊚ ⊚

true false

30) Compared to most U.S. firms, Japanese firms have a reputation for expecting a marketing plan to be profitable in a much shorter period of time. ⊚ ⊚

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31) There's more risk for financial investors when the potential profits from a marketing plan are off in the future rather than immediate. ⊚ ⊚

true false

32) When a firm uses debt financing, the organization providing financing receives an ownership share in the company. ⊚ ⊚

true false

33) If a company borrows money via debt financing, the people or institutions that loan the money get an ownership share in the company. ⊚ ⊚

true false

34) A bank (or other institution) that provides debt financing to fund a marketing plan is usually more willing to take risks than are investors who buy stock. ⊚ ⊚

true false

35) Some banks work aggressively to attract business customers who want loans, but most commercial lenders like to avoid risk and making loans that are not secured with assets. ⊚ ⊚

true false

36) In general, the greater the risk that the lender takes on to provide the loan, the greater the interest rate charge will be. ⊚ ⊚

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37) Before profits accumulate, a firm's selling price must cover all of the costs of doing business, including the interest charge on borrowed money. ⊚ ⊚

38) plan.

true false

When the cost of borrowing is high, firms should wait before implementing a marketing ⊚ ⊚

true false

39) A company with a successful marketing strategy has its own internal source of funds— profits. ⊚ ⊚

true false

40) A company with a successful marketing strategy has its own external source of funds— profits. ⊚ ⊚

41)

true false

A company with a profitable strategy has its own internal source of funds. ⊚ ⊚

true false

42) Apple is a good example of a company that uses its own internal funds to research, develop, and bring to market new products like the iPad, iPhone, and Apple Watch. ⊚ ⊚

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43) Paying for growth by reinvesting cash generated from operations is usually less expensive than borrowing money, because no interest expense is involved. ⊚ ⊚

true false

44) A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. ⊚ ⊚

true false

45) Forecasting the amount of cash that will be available after paying expenses is straightforward because it's always equal to the firm's "bottom line"—the net profit figure shown on the operating statement. ⊚ ⊚

true false

46) When finances are tight, it's sensible to look for strategy alternatives that get a better return on money that is already invested. ⊚ ⊚

true false

47) When a marketing strategy increases profit contribution without increasing capital invested, the firm's return on investment also increases. ⊚ ⊚

48)

true false

Indirect distribution usually requires less investment capital than direct approaches. ⊚ ⊚

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true false

49) Capital requirements are likely to be less when intermediaries take on much of the responsibility for promotion in the channel. ⊚ ⊚

true false

50) Production capacity is the ability to produce a certain quantity and quality of specific goods or services. ⊚ ⊚

true false

51) Concerns about production capacity apply to physical goods, but they are not relevant when the product is a service. ⊚ ⊚

true false

52) While excess capacity can be costly, it can be a part of a sensible plan for preventing lost sales if demand suddenly picks up. ⊚ ⊚

53)

true false

Excess capacity can be a safety net if demand suddenly picks up. ⊚ ⊚

true false

54) Kikkoman is a good example of a company that took advantage of both production capacity and production flexibility to introduce a new line of specialized condiments to appeal to additional market segments. ⊚ ⊚

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true false

55) If demand is irregular, a firm's production flexibility is likely to influence the severity of stock-out problems in the channel of distribution. ⊚ ⊚

true false

56) Promotion spending is wasted if a new marketing mix is more successful than expected and demand quickly outstrips supply. ⊚ ⊚

true false

57) When Frito-Lay introduced Tostitos Gold, demand quickly outstripped supply, resulting in lost sales and wasted promotion spending. ⊚ ⊚

true false

58) Problems of matching supply and demand often occur when a marketing plan calls for quick expansion into many different types of channels. ⊚ ⊚

true false

59) Problems of matching supply and demand for a new product often occur when a marketing plan calls for quick expansion into many different types of channels at the same time. ⊚ ⊚

true false

60) Problems of matching supply and demand often occur when a marketing plan calls for a regional roll out rather than a national roll out. ⊚ ⊚

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true false

61) Production capacity is more easily matched to the distribution of a new product if that distribution is staged. ⊚ ⊚

62)

true false

A virtual corporation may not make anything at all. ⊚ ⊚

true false

63) A virtual corporation is likely to look for a capable supplier to produce a product that meets the specs laid out in the firm's marketing plan. ⊚ ⊚

true false

64) A virtual corporation is one that achieves great flexibility in production by using computer-controlled manufacturing equipment. ⊚ ⊚

true false

65) A virtual corporation is one where the firm is primarily a coordinator—with a good marketing concept. ⊚ ⊚

true false

66) When a firm is a virtual corporation, it acts primarily as a producer and leaves it to another firm to coordinate functions such as marketing, finance, and human resources. ⊚ ⊚

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true false

67) Outsourcing production may increase a firm's flexibility in some ways, but it may also make production costs higher and quality control more difficult. ⊚ ⊚

true false

68) A virtual corporation may enjoy flexibility in operations, but often at higher cost or with less control of quality and schedules. ⊚ ⊚

true false

69) Outsourcing reduces coordination and logistics problems if several firms are involved in different parts of production. ⊚ ⊚

true false

70) It makes sense for a firm to produce where it can produce most economically—if the cost of transporting and storing products to match demand doesn't offset the production savings. ⊚ ⊚

true false

71) Task transfer is using telecommunications to move service operations to places where there are pools of skilled workers. ⊚ ⊚

true false

72) Just as a firm has a social responsibility in the country where it sells products, it also has a social responsibility to the people who produce its products. ⊚ ⊚

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true false

73) Production flexibility allows a firm to provide business customers with the just-in-time delivery service or rapid-response replenishment of inventories that they expect. ⊚ ⊚

true false

74) Production flexibility allows a firm to make better use of EDI or some other type of computerized reorder system because the firm can respond to customer needs more quickly. ⊚ ⊚

true false

75) Mass customization means using the principles of mass production to appeal to the unique needs of individual customers and smaller segments of the market. ⊚ ⊚

true false

76) Mass customization applies the principles of mass production to the challenge of meeting the unique needs of individual customers. ⊚ ⊚

77)

true false

Mass customization serves individual needs. ⊚ ⊚

true false

78) The mass-customization approach is not useful if a firm wants to focus on a particular market segment. ⊚ ⊚

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true false

79) With the mass-customization approach, a firm tries to find a low-cost way to give individual customers more or better choices. ⊚ ⊚

true false

80) A firm that relies on mass customization tries to get a competitive advantage by finding a low-cost way to give each customer in its target market more or better choices. ⊚ ⊚

true false

81) Mass customization is based on the idea that all the people in a particular market have the same needs. ⊚ ⊚

true false

82) Mykleenextissue.com, where customers can personalize a tissue-box design with their own color photos, is a good example of mass customization. ⊚ ⊚

true false

83) Nikeid.com, where customers can design a shoe to their own preferences, is a good example of mass customization. ⊚ ⊚

true false

84) Cost advantages that are gained from economies of scale in production may later be lost to inventory carrying costs. ⊚ ⊚

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85) Marketing managers should strive to cut production costs that don't add value for customers. ⊚ ⊚

true false

86) Accounting statements that are prepared for tax purposes and for outside investors often aren't helpful for managers who need to make decisions about marketing strategy. ⊚ ⊚

true false

87) It's often hard for a marketing manager to be familiar with all of the costs associated with a product (or customer) without help from the firm's accountants. ⊚ ⊚

88)

true false

Marketing cost analysis usually requires a new way of classifying accounting data. ⊚ ⊚

true false

89) Marketing cost analysis usually requires a new way of classifying accounting data based on functional accounts rather than the natural accounts typically used for financial analysis. ⊚ ⊚

true false

90) Marketing cost analysis usually requires a new way of classifying accounting data based on natural accounts rather than the functional accounts that are typically used for financial analysis. ⊚ ⊚

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91)

Natural accounts are called so because they have the names of their expense categories. ⊚ ⊚

92)

Natural accounts show the purpose for which expenditures are made. ⊚ ⊚

93)

true false

The titles of functional cost accounts show the purpose for which expenditures are made. ⊚ ⊚

95)

true false

Functional accounts show the purpose for which expenditures are made. ⊚ ⊚

94)

true false

Examples of functional accounts include taxes, supplies, and wages. ⊚ ⊚

true false

96) The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. ⊚ ⊚

true false

97) The first step in marketing cost analysis is to reclassify all of the costs in functional accounts into natural accounts. ⊚ ⊚

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98) For marketing cost analysis, it's often useful to reallocate costs in various natural accounts to specific products or customers. ⊚ ⊚

true false

99) Advertising costs can often be allocated to specific products, just as the cost of labor in the factory can be allocated to specific products. ⊚ ⊚

100)

true false

Most small organizations have a separate information technology management group. ⊚ ⊚

true false

101) As marketing managers do more promotion and selling over the Internet, it is critical that information technology systems be robust from a security standpoint. ⊚ ⊚

true false

102) All large organizations have secure information technology security systems that prevent them from being hacked. ⊚ ⊚

true false

103) Enterprise resource planning systems are used to integrate internal and external information management across the entire organization. ⊚ ⊚

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104) Human resource issues include recruiting and hiring new employees, deciding how people will be compensated, and what to do when a job is not being performed well or is no longer necessary. ⊚ ⊚

true false

105) A new marketing strategy often upsets established ways of doing things in the organization. ⊚ ⊚

true false

106) Human resource issues can be especially important when there is a need to implement a new marketing plan that involves major changes in the organization. ⊚ ⊚

true false

107) Many of the people affected by a new strategy may not be under the control of the marketing manager. ⊚ ⊚

true false

108) It is the marketing manager's job to communicate with others in the organization and explain a new strategy and what needs to happen and why. ⊚ ⊚

true false

109) It is the chief executive's job to communicate with others in the organization and explain a new marketing strategy and what needs to happen and why.

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true false

110) The marketing manager needs to work with the human resources manager or with other managers who will participate in preparing the firm's personnel for changes required by a new marketing strategy. ⊚ ⊚

true false

111) Rapid growth strains human resources because it's a challenge getting enough qualified people. ⊚ ⊚

true false

112) Training is especially important during rapid growth of a company because it takes time to hire people and get them up to speed. ⊚ ⊚

true false

113) In planning a new strategy or reorganization, it's important to keep in mind that each change may require several other changes, and each change may take time. ⊚ ⊚

true false

114) Marketing managers should plan time for strategy changes and not put undue pressure on the people in their organization to perform heroic efforts. ⊚ ⊚

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true false

115) While there are real human resources challenges in dealing with rapidly expanding marketing efforts, there are also challenges in dealing with decisions to drop products, channels of distribution, or even certain types of customers. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 116) According to the text, one of the main reasons that IKEA has been able to grow rapidly without greater capital investments is that A) it operates in tax havens. B) most of its production is outsourced to other firms. C) it is a privately held company. D) it has relied more on local production. E) it sells at the lowest-cost price in the market.

117) In which of the following situations is the cross-functional challenge likely to be the greatest? A) a firm selecting employees for Six Sigma quality training B) an advertising campaign that has been developed based on another successful advertising campaign and is targeting a similar audience C) a quality control department that has been formed by selecting the most experienced employees of a division D) a company's plan to diversify operations by entering a new industry E) a firm's decision to obtain its raw materials from a new supplier

118)

Cross-functional challenges are greatest

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A) when minor changes are made to an existing strategy. B) in routine established operations. C) with a plan that the firm is already implementing. D) when developing completely new marketing strategies. E) when competition is nonexistent.

119) The department within a company that is typically concerned with providing money to invest in marketing plans and meet ongoing expenses is the A) marketing department. B) production department. C) finance department. D) accounting department. E) human resources department.

120)

________ refers to the money invested in a firm. A) Dividend B) Debt C) Cash flow D) Capital E) Overhead

121)

A firm's ________ is usually responsible for finding and allocating capital. A) chief financial officer B) chief operating officer C) chief technology officer D) chief executive officer E) chief marketing officer

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122) Which of the following expenses involves the working capital a company needs for operation? A) the money required to purchase land in order to set up a plant B) the money required to purchase equipment necessary to begin operations C) the money required to pay the salary of employees D) the money required to acquire a competing firm E) the money required to set up the power grid for a new manufacturing plant

123)

Which of the following is true regarding capital?

A) Few firms have a separate financial manager who works with top management on major financial decisions. B) In most firms, different possible opportunities compete for capital. C) The marketing manager should leave all decisions about a marketing plan's budget to the firm's financial manager. D) Marketing managers do not consider financial measures as screening criteria when evaluating opportunities. E) None of these statements is true.

124)

Which of the following observations is true?

A) In an organization, opportunities rarely compete for capital. B) Dividend refers to the money invested in a firm. C) The chief operations officer usually handles money matters in a firm. D) Marketing plans that are funded usually must work within a budget constraint. E) There's no reason for a firm's marketing manager and financial manager to work together, since they are in different functional areas.

125) A firm needs ________ to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers.

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A) debt financing B) current assets C) prepaid expenses D) working capital E) overhead

126)

Working capital may be used to pay for A) advertising. B) what a firm owes suppliers. C) employee salaries. D) marketing research. E) All of the answers are correct.

127)

Working capital may be used to pay for A) advertising. B) storage. C) employee salaries. D) what a firm owes suppliers. E) All of the answers are correct.

128)

Working capital may be used to pay for A) what a firm owes suppliers. B) what it costs to store inventory. C) employee salaries. D) marketing research. E) All of the answers are correct.

129)

Working capital may be used to pay for

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A) what it costs to store inventory. B) marketing research. C) advertising. D) what a firm owes suppliers. E) All of the answers are correct.

130)

Working capital would be used to pay for A) employee salaries. B) marketing research. C) advertising. D) storage. E) All of the answers are correct.

131)

Working capital would not be used to pay for A) advertising expenses. B) what it costs to store inventory. C) what a firm owes suppliers. D) employee salaries. E) the cost of new facilities.

132)

Which of the following would not be paid for with working capital? A) employee salaries B) what it costs to store inventory C) what a firm owes suppliers D) marketing research costs E) new production equipment

133)

Which of the following typically would not be paid for with working capital?

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A) purchase of new facilities B) what it costs to store inventory C) what a firm owes suppliers D) employee salaries E) marketing research costs

134)

Which of the following would not be paid for with working capital? A) employee salaries B) what it costs to store inventory C) what a firm owes suppliers D) purchase of new facilities E) advertising expenses

135)

Working capital A) pays for long-term investments in fixed assets. B) may be used to pay for new production facilities. C) pays for short-term expenses. D) is not needed on an ongoing basis. E) None of the answers are correct.

136) A restaurant chain wants to improve its marketing information function by doing regular customer surveys using a random sample of consumers and by placing comment cards on the tables in all of its locations. This effort would likely be financed with A) marketing capital. B) working capital. C) research capital. D) long-term capital. E) None of the answers are correct.

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137)

Capital sources include A) bonds. B) profits. C) loans. D) stocks. E) All of the answers are correct.

138)

Working capital might come from A) the sale of bonds. B) a previous period's profits. C) loans. D) the sale of stocks. E) All of the answers are correct.

139)

________ is/are an internal source of capital. A) Loans B) The sale of stock C) Retained earnings D) The sale of bonds E) Private equity

140)

There are a number of different possible sources of capital, but

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A) the sale of stock or bonds is considered to be an internal source of capital. B) debt financing is now illegal in the United States. C) they are all likely to have the same effect when it comes to the time horizon within which a marketing manager's plan is expected to be profitable. D) a firm that is not yet profitable is likely to need to use external sources. E) a firm isn't likely to be able to sell stock unless its marketing plan is a sure thing.

141)

________ refers to a share in the ownership of a company. A) Dividend B) Stock C) Overhead D) Debt E) Working capital

142)

A firm may raise money by selling shares of ownership in the company, called A) bonds. B) working capital. C) capital. D) stock. E) None of the answers are correct.

143)

Which of the following statements about the behavior of investors is true?

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A) A company with a good strategy will attract investors in spite of any other conditions in the economic environment. B) Investors may have expectations for short-term profits, long-term profitability, or both when considering companies in which they might invest. C) Investors are not usually interested in detailed information about a firm's plans before they invest. D) Financial performance estimates that are provided to investors have no relationship to estimates of demand, revenue, and expenses from the marketing manager. E) None of the answers are correct.

144)

________ involves borrowing money based on a promise to repay the loan. A) Plough-back B) Profit reinvestment C) Sale of stock D) Debt financing E) Stock buyback

145)

Which of the following is/are associated with debt financing? A) dividends B) stock appreciation C) interest cost D) bonus shares E) stock split

146)

Generating capital by means of debt financing

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A) involves borrowing money, either with a bank loan or with the use of corporate bonds. B) means that the firm borrowing the money will have to pay interest charges. C) may be worth it if the borrowed money is used to implement a marketing plan that earns a return greater than the cost of borrowing the money. D) means that the firm will have to put up some of its assets as a loan guarantee. E) All of the answers are correct.

147) If a marketing plan requires that the firm obtain additional capital, a manager should remember that A) interest expense on a loan may impact prices and profits. B) a company with a successful marketing strategy has its own internal source of funds—profits. C) institutions that loan money are usually even less willing to take a risk than are investors who buy stock. D) the firm may be able to sell stock to its own employees. E) All of the answers are correct.

148)

Which of the following statements about borrowing money is false?

A) The interest expense on a loan may impact prices and profits. B) A company with a successful marketing strategy has its own internal source of fund—profits. C) Institutions that loan money are usually more willing to take a risk than are investors who buy stock. D) The firm may be able to sell stock to its own employees. E) Entrepreneurs often borrow money from family and friends.

149)

Which of the following observations concerning debt financing is false?

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A) The cost of borrowing money can be a real financial burden. B) The impact of interest charges on prices is negligible. C) Most commercial banks are conservative. D) The greater the risk that the lender takes on, the greater the interest rate charge will be. E) It might involve a loan from a commercial bank or the use of corporate bonds.

150)

Which of the following statements about borrowing money is false?

A) In general, the greater the risk associated with a loan, the greater the interest rate charge will be. B) The interest expense on a loan may impact prices and profits. C) Borrowing money is usually less expensive than reinvesting cash generated from operations. D) A company with a successful marketing strategy has its own internal source of funds—profits. E) Money is usuallyborrowed for a fixed time period and with a specific interest charge.

151) A financial report that forecasts how much money will be available after paying expenses is a(n) A) income statement. B) balance sheet. C) cash flow statement. D) capital report. E) None of the answers are correct.

152) Which of the following is the reason why an internally financed company selling its products at a lower price can earn more profit than a competitor who is operating on borrowed money?

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A) Investors are more likely to purchase a company's stock if it is internally financed. B) It is less expensive, since no interest expense is involved. C) The value of stock of an internally financed company is easier to predict. D) Market forecasting is more difficult if a company is operating on borrowed money. E) Commercial banks do not allow a company to borrow money unless it can provide collateral security.

153) A ________ is a financial report that forecasts how much cash will be available after paying expenses. A) cash flow statement B) reconciliation statement C) workflow analysis D) balance sheet E) capital expenditure report

154)

________ looks at when money will be available. A) Cash flow B) Profit and loss C) Balance sheet D) Net profit E) Gross margin

155)

In determining cash flow, managers often look at a company's A) net profit figure shown on the firm's operating statement. B) earnings before subtracting out noncash expenses. C) earnings after subtracting noncash expenses. D) revenue after subtracting depreciation of facilities. E) historical net profit numbers.

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156)

Which of the following is true regarding the use of funds generated within the firm?

A) Reinvesting cash generated from operations is usually more expensive than borrowing money. B) A company with a product that has significant growth potential should invest the earnings from that product to salvage declining products. C) Indirect distribution usually requires more investment capital for a producer than does direct distribution. D) When finances are tight, companies should look for strategy alternatives that help get a better return on money already invested. E) All of the answers are correct.

157) Any increase in profit contribution that a strategy generates, without increasing capital invested, A) is an impossible task. B) increases the firm's return on investment. C) reduces shareholder value. D) increases the debt to equity ratio. E) increases the risk associated with that strategy.

158)

Indirect distribution

A) usually requires less investment capital than direct approaches. B) usually increases the initial cash outlay. C) usually has no effect on capital investment, especially as compared to direct approaches. D) usually increases the time required to bring a product to market drastically. E) is always the most effective distribution method.

159)

Indirect distribution typically requires less capital than direct distribution because

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A) agent wholesalers may take on much of the selling effort and not expect any compensation until the revenue is in on what they've sold. B) intermediaries may provide the capital required for logistics facilities. C) merchant wholesalers and retailers usually pay for products when they purchase them and then take over the costs of carrying inventory. D) All of the answers are correct.

160) Which of the following statements about the capital requirements for marketing mix decisions is true? A) Direct distribution approaches usually require less investment capital than indirect approaches. B) Intermediaries that pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow. C) Public warehouses and transportation firms increase the capital needed for logistics facilities. D) More capital is needed when intermediaries take on responsibility for promotion. E) Control is higher if indirect distribution is used.

161)

When a new marketing plan is more successful than expected,

A) scarce supply may result in a waste of marketing resources, especially promotion spending. B) the firm may face problems finding enough well-trained people to handle the growth that occurs. C) the firm is more likely to be able to fund expansion through its own cash flow. D) All of the answers are correct.

162) ________ is the ability to produce a certain quantity and quality of specific goods or services.

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A) Economies of scope B) Production capacity C) Production possibility curve D) Economies of scale E) Marketing capability

163) An automobile plant is capable of manufacturing 40 sport utility vehicles in 24 hours. This details the manufacturing plant's A) task transfers. B) production capacity. C) mass customization strategy. D) working capital. E) natural accounts.

164)

Which of the following statements is true regarding excess capacity?

A) Firms usually have excess capacity when the demand for the product is very high. B) Excess capacity exists because the product is extremely useful and cheap but has no competitors. C) If the demand of a product falls, excess capacity declines. D) If the demand for a firm's product is stable, then excess capacity is likely to increase. E) Excess capacity can be a safety net if demand suddenly picks up.

165)

Which of the following is an example of a task transfer?

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A) an employee who has been shifted to a different department with different responsibilities and duties B) a firm that bases its toll-free customer care service for technical problems in a different country because it offers cheap, skilled labor C) a project whose objectives have been broken down to grouped tasks to be handled by specific departments D) a firm that has eliminated its customer service department and has made its sales representatives responsible for resolving customer queries E) a flexible manufacturing unit that is required to manufacture another product because of a sudden spike in the product's demand in the market

166) Many universities have begun conducting a variety of academic and athletic summer camp programs for elementary school, middle school, and high school students. These programs utilize the space in classrooms, dormitories, and other facilities that would otherwise be unused during the summer months. In addition, the programs generate revenue for the universities and promote them to prospective students. These new opportunities are possible because during the summer, the universities have excess A) capital. B) capacity. C) cash flow. D) inventory. E) None of the answers are correct.

167) Which of the following aspects of production capacity should be considered in marketing planning? A) A firm can produce only limited quantities of its current product without a major investment in new facilities. B) Other firms are available to handle production on a contract or supplier basis. C) A firm's production capacity allows it to produce some products quickly but not others. D) A firm has more production capacity than it can use. E) All of the answers are correct.

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168)

If a firm has excess production capacity, it

A) can serve as a safety net if demand suddenly picks up. B) may be a sign that there's too much competition. C) may make sense for the marketing manager to try to find new markets for current products. D) can be costly. E) All of the answers are correct.

169) Excess capacity may exist because there is ________ demand for what a firm can produce or there's ________ competition. A) high; too much B) little; too little C) high; no D) little; too much E) no; too little

170) for

The challenges of matching supply and demand often occur when a marketing plan calls

A) an international rollout instead of a regional rollout. B) quick expansion into many different types of channels. C) simultaneously expanding into many different market areas rather than expanding into one market after another. D) All of the answers are correct.

171) The problems of matching supply and demand occur less frequently when a marketing plan calls for

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A) rapid penetration into many different types of channels. B) the staged distribution of a new product. C) quick expansion into many different market areas at once. D) a national rollout instead of a regional roll out.

172)

Which of the following statements about virtual corporations is accurate? A) They may not make anything at all. B) They look for capable suppliers to produce the actual products. C) They act primarily as coordinators. D) They try to come up with good marketing plans. E) All of the answers are correct.

173)

A virtual corporation A) does all of its production “in-house.” B) looks for capable suppliers who can meet the specs it lays out. C) acts primarily as a producer. D) does not need to have a good marketing plan. E) None of the answers are correct.

174)

A virtual corporation A) acts primarily as a coordinator. B) has no need for suppliers because it produces everything it needs or sells. C) does all of its production “in-house.” D) has fewer problems with logistics. E) All of the answers are correct.

175)

A virtual corporation

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A) has strong capital, but it can only survive if it develops a close relationship (i.e., a partnership) with another firm that has developed a good marketing plan. B) looks for capable suppliers who can meet the specs it lays out. C) handles all of its sales using the Internet. D) does all of its production “in-house.” E) None of the answers are correct.

176) Managed Care Concepts facilitates the processing of medical claims for organizations, such as government agencies, whose employees are injured while performing their jobs. The company does not actually process the claims. Instead, it coordinates the work of customer service personnel, nurses, physicians, case managers, and pharmacists who work for other companies and have some role to play in the processing of an injured worker's claim. Managed Care Concepts relieves its clients of the burden of processing their own injured worker claims and can usually save the organizations a significant amount of money. Managed Care Concepts operates like a A) merchant wholesaler. B) manufacturer's agent. C) virtual corporation. D) manufacturer. E) None of the answers are correct.

177) When an American accounting firm sends some of its tax work to India to take advantage of lower wages, the process is called A) skills transfer. B) task transfer. C) knowledge transfer. D) tax movement. E) source relaying.

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178) Service firms are finding ways to reduce the cost of some of their production work with ________—using information technology to move service operations to places where there are pools of skilled workers. A) skills transfer B) task transfer C) knowledge transfer D) turnkey projects E) mobile environments

179) ConnectSys is a California-based manufacturer of computer networking equipment for home and small business users. When people call the company's toll-free customer support telephone number, they are connected to a customer service representative in India. ConnectSys uses this arrangement because the wages for customer service representatives are lower in India than in the United States. This is an example of A) a virtual corporation. B) exporting telecommunications. C) an indirect distribution channel. D) a task transfer service. E) None of the answers are correct.

180)

Overseas production A) generally makes distribution more complicated. B) may be very economical. C) sometimes brings concerns about nationalism to the forefront. D) can apply to services as well as physical goods. E) All of the answers are correct.

181)

Production flexibility should help a supplier support its business customers with

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A) just-in-time delivery. B) EDI. C) rapid-response replenishment of inventories. D) computerized reorder capabilities. E) All of the answers are correct.

182)

Firms that use mass customization

A) may target either business customers or final consumers. B) may be able to take advantage of the Internet for orders. C) may be able to give their customers more or better choices. D) are likely to have higher costs than do firms who produce more standardized products, but they may earn better profit margins. E) All of the answers are correct.

183)

With the mass-customization approach, a firm

A) tailors the principles of mass production to meet the unique needs of individual customers in its target market. B) tries to justify high prices by customizing its offering for everyone in a mass market. C) gives up segmenting to go after the mass market. D) All of the answers are correct.

184) ________ involves tailoring the principles of mass production to meet the unique needs of individual customers. A) Personal selling B) Mass customization C) Traditional manufacturing D) Standardization E) Outsourcing

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185) In serving individuals within target segments, ________ tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. A) mass marketing B) standardization C) traditional manufacturing D) outsourcing E) mass customization

186)

A widespread shift to mass customization has not occurred because firms found that A) production costs were still high. B) the Internet offered a low-cost way to get a lot of orders. C) mass production is always better. D) economies of scale provides a better alternative. E) technology introduces a new set of problems.

187)

Which of the following statements about mass customization is true?

A) There has been a widespread shift to mass customization by thousands of companies. B) The biggest successes in mass customization have all been in consumer markets as opposed to business markets. C) If a company is to succeed with a mass customization strategy, it must be able to find a low-cost way to produce the products. D) All these statements are true.

188)

Which of the following statements about mass customization is true?

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A) Andersen's windows, which an architect can order in just about any combination of size, glass and hardware style, is a good example of mass customization for business markets. B) Mass customization avoids the need for working capital. C) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets. D) The mass-customization approach applies only to services, and these often must be custom produced anyway. E) Mass customization reduces production costs, but it's less likely to meet a customer's needs.

189)

Which of the following statements about mass customization is true?

A) Mass customization means that a firm is targeting the mass market but tries to customize the design of a product so that it is different from what a competitor offers. B) Mass customization requires a firm to give up segmentation thinking to pursue larger, more heterogeneous markets. C) The mass-customization approach applies only to services, and these often must be custom produced anyway. D) ChemStation's industrial detergents, which a business customer can order to fit any special cleaning need, is a good example of mass customization. E) None of these statements is true.

190) Starbucks ran a full-page ad in The Wall Street Journal proclaiming that its baristas can make more than 87,000 possible combinations of an espresso coffee drink. This is an example of A) a combined target market approach. B) mass customization. C) task transfer. D) a diversification strategy. E) a single target market approach.

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191) At Dell's website, a student can order a laptop computer with the exact memory capability and software that she wants and have it shipped to her dorm room within 48 hours. This is an example of A) a combined target market approach. B) task transfer. C) mass customization. D) a diversification strategy. E) a single target market approach.

192) At the Comfort Inn website, a customer can create an account with his preferences for a smoking or nonsmoking room, the type of pillows he likes, early or late check-in and check-out, and his room location. The hotel keeps track of this information and uses it whenever this customer reserves a room in the future. This is an example of A) a combined target market approach. B) diversification. C) task transfer. D) mass customization. E) a single target market approach.

193)

Which of the following is true regarding marketing cost analysis? A) There is only one right way to allocate functional costs. B) Traditional accounting analysis doesn't analyze the purpose of marketing costs. C) Marketing costs should usually be allocated to general overhead. D) Functional accounts and natural accounts usually have the same names. E) All these statements are true.

194)

Which of the following is/are a part of the functional account category of a factory?

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A) salaries B) supplies C) raw materials D) advertising E) maintenance

195)

Marketing cost analysis

A) just uses the same "natural" accounting categories commonly used for financial analysis. B) allocates costs to products or customers, to focus on the purpose for which marketing money is spent. C) is not very accurate, since it is almost impossible to link marketing costs to specific sales. D) is done more frequently than analysis of manufacturing costs. E) None of the answers are correct.

196)

A major purpose of marketing cost analysis is to

A) determine which costs are fixed and which are variable. B) avoid the pitfalls of the full-cost approach to allocating costs. C) divide costs into natural accounts. D) show the marketing manager where costs occur in relation to serving particular customers. E) avoid the pitfalls of the contribution-margin approach to allocating costs.

197)

Marketing cost analysis starts with the assumption that

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A) "natural accounts" are more useful than "functional accounts." B) marketing expenditures are made for a specific purpose—and so it makes sense to allocate costs to different market segments, customers, or products. C) all marketing expenditures should be treated as overhead expenses. D) overall profit is what counts—so it isn't critical if some market segments, products, or customers are unprofitable. E) All of the answers are correct.

198)

Which of the following statements regarding marketing cost analysis is false?

A) Functional accounts include items such as salaries, wages, supplies, raw materials, and advertising. B) The costs allocated to the functional accounts will be equal in total to those in the natural accounts. C) Functional accounts can be used to show the profitability of territories, products, customers, sales representatives, and so on. D) Cost analysis is not performance analysis. E) Traditional accounting methods do not show the purpose for which marketing expenditures are made.

199) ________ are the categories to which various costs are charged in the normal financial accounting cycle. A) Natural accounts B) Live accounts C) Functional accounts D) Defined accounts E) Normal accounts

200) The categories to which various costs are charged in the normal financial accounting cycle are

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A) natural accounts. B) functional accounts. C) cash accounts. D) expense accounts. E) None of the answers are correct.

201)

Natural accounts are A) usually allocated to functional accounts by the MIS method. B) accounts to which various costs are charged in the normal accounting cycle. C) misleading for calculating a firm's total profitability. D) usually named to show the purpose for which expenditures are made. E) All of the answers are correct.

202)

In marketing cost analysis, all of the following are considered natural accounts except A) salaries. B) raw materials. C) wages. D) office supplies. E) packing and shipping.

203)

Accounts such as rent, salaries, taxes, and auto expenses are called ________ accounts. A) functional B) general business C) cost analysis D) distribution E) natural

204)

In the factory, ________ show the purpose for which expenditures are made.

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A) natural accounts B) live accounts C) functional accounts D) defined accounts E) deferred accounts

205)

As compared to natural accounts, functional accounts

A) are the accounts to which various costs are charged in the normal accounting cycle. B) show the purpose for which expenditures are made. C) include items such as storing, salaries, and taxes. D) Both of the answers are correct: Functional accounts are the accounts to which various costs are charged in the normal accounting cycle; and functional accounts include items such as storing, salaries, and taxes. E) All of the answers are correct.

206) Classifying marketing costs in terms of their purpose—why the money was spent— requires the use of A) iceberg accounts. B) marketing audit accounts. C) expense accounts. D) functional accounts. E) natural accounts.

207) In marketing cost analysis, all of the following are considered functional accounts except

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A) rent. B) billing. C) order assembly. D) storing. E) transporting.

208)

Which of the following is an example of a functional cost account?

A) auto repairs B) advertising C) taxes D) Social Security E) any of these—because functional accounts include any costs that are used in the normal preparation of a company's operating statement

209)

Which of the following is not a functional cost account? A) packaging B) selling C) order entry D) rent E) billing

210)

The first step in marketing cost analysis is to

A) reclassify the dollar cost entries in the functional accounts into natural cost accounts. B) use the entries in the functional accounts to evaluate the profitability of profit centers. C) allocate the entries in the functional accounts to specific customers. D) reclassify the dollar cost entries in the natural accounts into functional cost accounts. E) None of the answers are correct.

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211)

What is the first step in marketing cost analysis? A) allocating functional costs to customers B) reallocating costs to evaluate the profitability of profit centers C) analyzing the results D) reclassifying dollar cost entries into functional cost accounts E) initiating a follow-up

212)

Regarding marketing cost analysis, which of the following statements is true? A) Natural accounts are set up to indicate the purpose for which the expenditures were

made. B) The contribution-margin approach focuses attention on all costs equally. C) The first step is to reclassify all costs in the natural accounts into functional accounts. D) The total of costs in the natural accounts will often differ from the total of those in the functional accounts. E) All these statements are true.

213) A marketing manager who wants to calculate the cost of marketing several products to several target markets will probably have to A) read all requisitions very carefully. B) allocate the advertising expense to general overhead. C) reorganize some of the company's functional cost accounts to natural accounts. D) reclassify all natural accounts into functional accounts. E) None of the answers are correct.

214) One major difference between functional accounts and natural accounts is that functional accounts

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A) are based on the contribution-margin approach, while natural accounts are based on the full-cost approach. B) always total to a lower overall expense than the total of the natural accounts. C) might be used to compare the costs of serving different customers—but natural accounts are not suited to that purpose. D) are the basis for most accounting systems, while natural accounts are more useful for marketing managers. E) do not consider fixed costs, while natural accounts do so.

215)

A good marketing manager knows that

A) the costs allocated to functional accounts during a marketing cost analysis should equal—in total—those in the natural accounts. B) functional accounts are usually needed for determining the profitability of customers. C) functional accounts are usually needed for determining the profitability of products. D) functional accounts can be used to evaluate the profitability of profit centers. E) All of the answers are correct.

216)

Marketing cost analysis can A) determine if a change in the marketing mix will increase profit. B) assign costs to product lines and customers. C) prepare a profit and loss statement for each customer. D) show which customers contribute the most to the firm's profitability. E) All of the answers are correct.

217) A firm is doing a marketing cost analysis involving two products, three target markets, and $6 million in advertising costs. The firm should

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A) allocate $2 million of the advertising costs to each target market. B) allocate these costs to general overhead. C) determine the purpose of the advertising and allocate costs to products and target markets accordingly. D) allocate these costs to each product and target market on the basis of their percentage of total sales. E) allocate $3 million of the advertising costs to each product.

218) Each month the sales staff of Capital Plumbing Supplies, Inc., makes an average of 125 sales calls on prospective customers at a cost of about $3,500 (salary plus expenses). What is the average cost of a sales call (to the nearest dollar amount)? A) $22 B) $25 C) $28 D) $31 E) $34

219) Each month the sales staff of TechPro Products makes an average of 209 sales calls on prospective customers at a cost of about $4,600 (salary plus expenses). What is the average cost of a sales call (to the nearest dollar amount)? A) $22 B) $25 C) $28 D) $31 E) $34

220) Each month the billing department of Phoenix Enterprises processes an average of 51 orders from customers at a cost of about $612 (in salaries and supplies). What is the average cost per order for this department (to the nearest dollar amount)?

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A) $4 B) $6 C) $8 D) $10 E) $12

221) Each month the billing department of Lone Star Drilling, Inc., processes an average of 102 orders from customers at a cost of about $1,734 (in salaries and supplies). What is the average cost per order for this department (to the nearest dollar amount)? A) $14 B) $17 C) $20 D) $22 E) $25

222) A company has three products (X, Y, and Z) that it sells, packs, and ships to its customers. Because the products have different sizes they also have different packing and shipping costs, so we will use a new measure—a packing/shipping unit. Because Product Y is the smallest of the three products, we will assign it a value of 1 packing/shipping unit. Product X is twice as big as Product Y and Product Z is four times as big as Product Y. If, on a monthly basis, this company sells an average of 1,500 units of Product X, 800 units of Product Y, and 60 units of Product Z, how many packing/shipping units should the company allocate to Product Z per month (to the nearest whole number)? A) 240 B) 424 C) 620 D) 800 E) 3,000

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223) A company has three products (X, Y, and Z) that it sells, packs, and ships to its customers. Because the products have different sizes they also have different packing and shipping costs, so we will use a new measure—a packing/shipping unit. Because Product Y is the smallest of the three products, we will assign it a value of 1 packing/shipping unit. Product X is twice as big as Product Y and Product Z is four times as big as Product Y. On a monthly basis, this company sells an average of 1,500 units of Product X, 800 units of Product Y, and 60 units of Product Z. If the company spends on average of $3,720 each month on total packing/shipping costs, what amount should it allocate to Product X per month (to the nearest dollar amount)? A) $736 B) $1,380 C) $1,836 D) $2,500 E) $2,760

224) A company has three products (X, Y, and Z) that it sells, packs, and ships to its customers. Because the products have different sizes they also have different packing and shipping costs, so we will use a new measure—a packing/shipping unit. Because Product Y is the smallest of the three products, we will assign it a value of 1 packing/shipping unit. Product X is twice as big as Product Y and Product Z is four times as big as Product Y. On a monthly basis, this company sells an average of 1,500 units of Product X, 800 units of Product Y, and 60 units of Product Z. If the company spends on average of $3,720 each month on total packing/shipping costs, what amount should it allocate to Product Z per month (to the nearest dollar amount)? A) $101 B) $169 C) $221 D) $498 E) $736

225) Marketing managers should insist that any IT systems used be robust from a security standpoint. Which of the following is a likely reason for this requirement?

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A) Marketing managers are storing more personal customer data in CRM systems. B) Cybercrime has been on the decline over the last few years. C) Maintaining robust IT systems usually involves high maintenance costs. D) Organizations with highly secure IT systems offer better products and services than others. E) Customers are willing to pay more for products when organizations have secure IT systems.

226)

Which of the following best explains the function of a CRM database? A) It is used to improve the security of IT systems employed for marketing. B) It is used to keep track of orders from suppliers and related cost fluctuations. C) It is used to gather, store, and maintain personal information about customers. D) It is used to estimate changes in currency values in the international market. E) It is used to evaluate employee performances.

227) An electronic goods manufacturer launched a promotional campaign that involved a flat 20 percent discount on all purchases made on the manufacturer's website. This campaign became very popular. However, the large number of simultaneous purchases on the website caused it to crash. Which of the following can definitely be concluded from this information? A) The company's website was not secure, which made hacking easy. B) The online sales resulting from this promotional campaign generated more revenue than its retail outlets during the same period. C) Promotional campaigns involving a discount generally result in a loss rather than an increase in profit. D) The company's website did not have the capacity to handle such a high load. E) Sales at the manufacturer's retail stores were at an all-time low prior to the promotional campaign.

228) Many companies today choose to use ERP systems to manage information. ERP here stands for

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A) entrepreneurship research program. B) enterprise resource planning. C) efficient resource production. D) economic rate planning. E) ergonomics research program.

229) Which of the following is commonly used to integrate internal and external information management across an entire organization? A) enterprise resource planning system B) customer relationship management system C) human resource planning system D) enterprise performance management system E) corporate decision support system

230)

Which of the following is true of an ERP system?

A) It can only be used to store data about a company's resources. B) Its usage makes hacking difficult and therefore enhances security. C) It facilitates the flow of information among all the business functions within an organization. D) Its usage is mandatory for ensuring the protection of customer data. E) It does not facilitate the flow of information between a company and its suppliers.

231)

Human resource issues include A) retraining employees for other jobs within the company. B) deciding what to do when a job is not being performed well. C) recruiting and hiring new employees. D) deciding how people will be compensated. E) All of the answers are correct.

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232)

Which of the following statements concerning human resources is false?

A) Most of the people affected by a new strategy are under the control of a marketing manager. B) Communication is very important, because you can't expect people to pull together in an organization-wide effort if they don't know what's going on. C) People are one of a company's most important resources. D) It is the marketing manager's job to communicate with others in the organization and explain a new strategy and what needs to happen and why.

233)

Regarding human resources, a good marketing manager knows that

A) all the people affected by a new marketing strategy are under the marketing manager's direct control. B) it is the marketing manager's job to explain a new marketing strategy and what needs to happen and why. C) sometimes training must be sacrificed in order to meet objectives for rapid growth. D) there are no human resource challenges involved in the decision to drop a product, a channel of distribution, or a customer. E) All of the answers are correct.

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Answer Key Test name: Bonus Test Bank B 1) FALSE When a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. 2) FALSE Cross-functional links impact one's ability to develop marketing strategies and plans that really work. 3) TRUE Implementing a marketing plan usually requires a financial investment. Available production capacity, production flexibility, and operating issues impact marketing planning. 4) TRUE When a new strategy involves only minor changes to a plan that the firm is already implementing, the specialists usually have a pretty good idea of how their activities link to other areas. 5) TRUE When a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. 6) FALSE When a new strategy involves only minor changes to a plan that the firm is already implementing, the specialists usually have a pretty good idea of how their activities link to other areas.

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7) TRUE When a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. 8) FALSE When a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. 9) TRUE Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 10) FALSE Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 11) FALSE A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 12) TRUE Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 13) FALSE Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 14) FALSE

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In most firms, different possible opportunities compete for capital. There's usually not enough money to do everything, so strategies that are inconsistent with the firm's financial objectives and resources are not likely to be funded. That's why marketing managers use relevant financial measures as quantitative screening criteria when evaluating various alternatives in the first place. 15) TRUE In most firms, different possible opportunities compete for capital. There is usually not enough money to do everything, so strategies that are inconsistent with the firm's financial objectives and resources are not likely to be funded. That is why marketing managers use relevant financial measures as quantitative screening criteria when evaluating various alternatives in the first place. 16) FALSE Marketing plans that are funded must usually work within a budget constraint. 17) TRUE A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 18) FALSE Financial managers usually think about two different uses of capital. First, capital may be required to pay for investments in facilities, equipment, computer networks, and other "fixed assets." These installations are usually purchased and then used, and depreciated, over a number of years. 19) TRUE

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A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. A firm must usually pay for these ongoing expenses as they occur. 20) FALSE There are a number of different possible sources of capital. However, it is useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 21) TRUE There are a number of different possible sources of capital. However, it is useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 22) FALSE There are a number of different possible sources of capital. However, it is useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 23) FALSE There are a number of different possible sources of capital. However, it is useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 24) TRUE

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A firm usually seeks outside funding before it is needed to invest in a new strategy. Internally generated profits may be accumulated and used in the same way, but often internal money is used as it becomes available. In other words, with internally generated funding a firm's marketing program may be expected to "pay its own way." 25) FALSE A firm usually seeks outside funding before it is needed to invest in a new strategy. Internally generated profits may be accumulated and used in the same way, but often internal money is used as it becomes available. In other words, with internally generated funding a firm's marketing program may be expected to "pay its own way." 26) FALSE While a firm might like to fund its marketing program from rapid growth in its own profits, that is not always possible. New companies often don't have enough money to start that way. An established company may not have enough capital to make long-term investments and still pay for routine expenses. 27) TRUE A firm may be able to raise money by selling stock—a share in the ownership of the company. Stock sales may be public or private, and the buyers may be individuals, including a firm's own employees, or institutional investors (such as a pension fund or venture capital firm). 28) TRUE The value of a firm's stock typically doesn't increase unless its profits are growing. This is one reason that marketing managers are always looking for profitable new growth opportunities. 29) FALSE

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It is a sad reality that a firm with a great strategy can't always attract investors. In a weak economy, many investors just have a wait-and-see attitude and won't invest in anything until overall business conditions seem more favorable. 30) FALSE How quickly investors expect profit and growth is very important to the marketing manager. If investors are patient, a marketing manager may have the luxury of developing a plan that will be very profitable in the long run, even if it racks up short-term losses. Many Japanese firms take this approach. 31) TRUE Most marketing managers face intense pressure to develop plans that will generate profits quickly; there's more risk for investors if potential profits are off in the future. 32) FALSE Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. People or institutions that loan the money typically do not get an ownership share in the company, and they are usually even less willing to take a risk than are investors who buy stock. 33) FALSE Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. People or institutions that loan the money typically do not get an ownership share in the company, and they are usually even less willing to take a risk than are investors who buy stock. Version 1

34) FALSE Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. People or institutions that loan the money typically do not get an ownership share in the company, and they are usually even less willing to take a risk than are investors who buy stock. 35) TRUE Most commercial banks are conservative. They usually won't loan money to a firm that doesn't have some valuable asset to put up as a guarantee that the lender will get its money. 36) TRUE In general, the greater the risk that the lender takes on to provide the loan, the greater the interest rate charge will be. 37) TRUE Just as a firm's selling price must cover all of the marketing expenses and the other costs of doing business before profits begin to accumulate, it must also cover the interest charge on borrowed money. The impact of interest charges on prices can be significant. 38) FALSE While the cost of borrowing money can be high, it may still make sense if the money is used to implement a marketing plan that earns an even greater return. 39) TRUE A company with a successful marketing strategy has its own internal funds—profits that become cash in the bank! 40) FALSE Version 1

A company with a successful marketing strategy has its own internal funds—profits that become cash in the bank! 41) TRUE A company with a successful marketing strategy has its own internal funds—profits that become cash in the bank! 42) TRUE A company with a successful marketing strategy has its own internal funds—profits that become cash in the bank! For example, back in 2011, Apple reported a net income of about $25.9 billion on sales of about $108.2 billion. 43) TRUE Reinvesting cash generated from operations is usually less expensive than borrowing money because no interest expense is involved. So internal financing often helps a firm earn more profit than a competitor that is operating on borrowed money—even if the internally financed company is selling at a lower price. 44) TRUE A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. 45) FALSE A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. 46) TRUE Version 1

When finances are tight, it's sensible to look for strategy alternatives that help get a better return on money that's already invested. 47) TRUE Any increase in profit contribution that the strategy generates—without increasing capital invested—increases the firm's return on investment. 48) TRUE Indirect distribution usually requires less investment capital than direct approaches. 49) TRUE Indirect distribution usually requires less investment capital than direct approaches. Intermediaries who pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow. 50) TRUE If a firm is going to pursue an opportunity, there needs to be effective coordination between marketing planning and production capacity—the ability to produce a certain quantity and quality of specific goods or services. 51) FALSE If a firm is going to pursue an opportunity, there needs to be effective coordination between marketing planning and production capacity—the ability to produce a certain quantity and quality of specific goods or services. 52) TRUE Excess capacity can be a safety net if demand suddenly picks up. 53) TRUE Excess capacity can be a safety net if demand suddenly picks up. Version 1

54) TRUE Kikkoman was able to take advantage of both production capacity and production flexibility to introduce a new line of specialized condiments to appeal to additional market segments. 55) TRUE One aspect of flexibility concerns how quickly and easily a firm can adjust the quantity of a product it produces. This can be especially important when demand is uncertain. If a new marketing mix is more successful than expected, demand can quickly outstrip supply. 56) TRUE If a new marketing mix is more successful than expected, demand can quickly outstrip supply. Promotion spending is wasted when this happens. 57) TRUE The Tostitos ads did a better job than expected in stirring interest, and chip lovers were so enthusiastic about Tostitos Gold that the chips were quickly out of stock at most supermarkets because the factory couldn't keep up with incoming orders. The stock-outs resulted in lost sales of about $500,000 a week. 58) TRUE Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. 59) TRUE

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Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. 60) FALSE Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. 61) TRUE Staged distribution may match capacity. Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. 62) TRUE Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 63) TRUE Many firms are finding that they can satisfy customers and build profits without doing any production in-house. Instead, they look for capable suppliers to produce a product that meets the specs laid out in the firm's marketing plan. 64) FALSE Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept.

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65) TRUE Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 66) FALSE Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 67) TRUE Outsourcing production can reduce costs and increase flexibility. However, it sometimes introduces problems. The reputation of a firm's brand often depends on the quality of the manufacturing behind it. Some firms find it difficult to control quality with outsourcing. 68) TRUE Outsourcing production can reduce costs and increase flexibility. However, it sometimes introduces problems. The reputation of a firm's brand often depends on the quality of the manufacturing behind it. Some firms find it difficult to control quality with outsourcing. 69) FALSE Outsourcing can increase coordination and logistics problems. 70) TRUE It may make sense for a firm to produce where it can produce most economically, if the cost of transporting and storing products to match demand doesn't offset the savings. On the other hand, production in areas distant from customers can make the distribution job much more complicated. 71) TRUE Version 1

Service firms are finding ways to reduce the cost of some of their production work with task transfer—using telecommunications to move service operations to places where there are pools of skilled workers. 72) TRUE Just as a firm has a social responsibility in the country where it sells products, it also has a social responsibility to the people who produce its products. However, pay or safety standards that seem low in developed nations may make it possible for workers in an undeveloped nation to have a better, healthier life. 73) TRUE Production flexibility can give a firm a competitive advantage in meeting a target market's needs better or faster. Without flexible operations, it can be difficult to provide business customers with just-intime delivery or rapid response to orders placed by EDI or some other type of e-commerce reorder system. 74) TRUE Production flexibility can give a firm a competitive advantage in meeting a target market's needs better or faster. Without flexible operations, it can be difficult to provide business customers with just-intime delivery or rapid response to orders placed by EDI or some other type of e-commerce reorder system. 75) TRUE A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. 76) TRUE

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A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. 77) TRUE A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. 78) FALSE With the mass-customization approach, a firm may still focus on certain market segments within a broad product-market. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 79) TRUE With the mass-customization approach, a firm may still focus on certain market segments within a broad product-market. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 80) TRUE With the mass-customization approach, a firm may still focus on certain market segments within a broad product-market. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 81) FALSE Version 1

Mass customization refers to tailoring the principles of mass production to meet the unique needs of individual customers. 82) TRUE Mass customization refers to tailoring the principles of mass production to meet the unique needs of individual customers. 83) TRUE Mass customization refers to tailoring the principles of mass production to meet the unique needs of individual customers. 84) TRUE Cost advantages that are gained from economies of scale in production may later be lost to inventory carrying costs. 85) TRUE A well-informed marketing manager can play an important role in working with production people to decide which costs are necessary to add value that meets customer needs and which are just added expense with little real benefit. 86) TRUE Summary accounting statements that are prepared for tax purposes and for outside investors often aren't helpful for managers who need to make decisions about marketing strategy. 87) TRUE Marketing managers and accountants can work together to allocate costs to products or customers. In recent years, accountants have devoted more attention to this problem and given it the name "activity-based accounting." 88) TRUE

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Marketing cost analysis usually requires a new way of classifying accounting data. Instead of using the type of accounts typically used for financial analysis, we have to use functional accounts. 89) TRUE Marketing cost analysis usually requires a new way of classifying accounting data. Instead of using the type of accounts typically used for financial analysis, we have to use functional accounts. 90) FALSE Marketing cost analysis usually requires a new way of classifying accounting data. Instead of using the type of accounts typically used for financial analysis, we have to use functional accounts. 91) TRUE Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts are called natural because they have the names of their expense categories. 92) FALSE In the factory, functional accounts show the purpose for which expenditures are made. 93) TRUE In the factory, functional accounts show the purpose for which expenditures are made. 94) TRUE In the factory, functional accounts show the purpose for which expenditures are made. 95) FALSE

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In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 96) TRUE The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. 97) FALSE The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. 98) TRUE The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. Each unit can be treated as a profit center. 99) TRUE The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. Each unit can be treated as a profit center. 100) FALSE Most medium-size or larger organizations have a separate information technology (IT) management group. This group enables many activities in the marketing strategy process planning model.

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101) TRUE As marketing managers do more promotion and selling over the Internet, it is critical that information technology systems be robust from a security standpoint. 102) FALSE As marketing managers do more promotion and selling over the Internet, it is critical that information technology systems be robust from a security standpoint. Companies such as Sony, LinkedIn, Citigroup, Best Buy, and Walgreens are just a few of the companies whose customer data have been compromised by hackers. 103) TRUE Enterprise resource planning systems are used to integrate internal and external information management across the entire organization. Such a system connects the rest of the firm with the marketing information system. 104) TRUE A small firm may not have a separate department—but somebody (perhaps the owner or other managers) must deal with peoplemanagement matters, like recruiting and hiring new employees, deciding how people will be compensated, and what to do when a job is not being performed well or is no longer necessary. 105) TRUE New strategies often require changes that upset the status quo and vested interests. 106) TRUE

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Human resource issues can be important both in a marketing manager's choice among different possible marketing opportunities and in the actual implementation of marketing plans—especially new plans that involve major change. 107) TRUE People affected by a new strategy may not be under the control of the marketing manager. And the marketing manager may not be able to change everyone into enthusiastic supporters of the plan. 108) TRUE Good communication is crucial. The marketing manager must find ways to explain a new strategy and what needs to happen and why. 109) FALSE Good communication is crucial. The marketing manager must find ways to explain a new strategy and what needs to happen and why. 110) TRUE Good communication is crucial. At a minimum, the marketing manager needs to have clear communication with other managers who will participate in preparing the firm's personnel for a change. 111) TRUE The success of a marketing plan often depends on how quickly the firm's personnel can get geared up for what needs to be done. Firms that grow rapidly may face challenges in finding enough qualified people. 112) TRUE Training takes time. A marketing manager who wants to reorganize the firm's sales force so that salespeople are assigned to specific customers rather than by product line may have a great idea, but it can't be implemented overnight. Version 1

113) TRUE Each change may require several others and that each change may take time. 114) TRUE A marketing manager who ignores the ripple effects of a change in strategy may later expect everyone to meet a schedule that won't work. Certainly there are cases of heroic efforts by people in organizations to turn someone's vision into a reality; but it's more typical for such a plan to fall behind schedule, to run up unnecessary costs, or to just plain fail. 115) TRUE Decisions to drop products, channels of distribution, or customers can be traumatic, especially if jobs will be cut. To the extent possible, it's important to plan a phase-out period so that people can make other plans. 116) B One reason that IKEA has been able to grow so rapidly—without greater capital investments—is that it carefully manages its costs. 117) D When a new strategy involves only minor changes to a plan that the firm is already implementing, the specialists usually have a pretty good idea of how their activities link to other areas. However, when a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. 118) D When a potential strategy involves a more significant change—like the introduction of a totally new product idea—understanding the links between the different functional areas is usually much more critical. Version 1

119) C Bright marketing ideas for new ways to satisfy customer needs don't go very far if there isn't enough money to put a plan into operation. Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 120) D Bright marketing ideas for new ways to satisfy customer needs don't go very far if there isn't enough money to put a plan into operation. Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 121) A Bright marketing ideas for new ways to satisfy customer needs don't go very far if there isn't enough money to put a plan into operation. Finding and allocating capital—the money invested in a firm—is usually handled by a firm's chief financial officer. 122) C Working capital is money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 123) B In most firms, different possible opportunities compete for capital. There's usually not enough money to do everything, so strategies that are inconsistent with the firm's financial objectives and resources are not likely to be funded. 124) D Marketing plans that are funded must usually work within a budget constraint. Ideally, the marketing manager should have some input on what that budget is—to get the marketing tasks done. Version 1

125) D A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 126) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 127) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 128) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 129) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 130) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 131) E

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A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 132) E A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 133) A A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 134) D A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 135) C A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 136) B A firm needs working capital—money to pay for short-term expenses such as employee salaries, advertising, marketing research, inventory storing costs, and what the firm owes suppliers. 137) E

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There are a number of different possible sources of capital. However, it's useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 138) E There are a number of different possible sources of capital. However, it's useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 139) C There are a number of different possible sources of capital. However, it's useful to boil them down to two categories: external sources, such as loans or sales of stocks or bonds, and internal sources, such as cash accumulated from the firm's profits. 140) D A firm usually seeks outside funding before it is needed to invest in a new strategy. Internally generated profits may be accumulated and used in the same way, but often internal money is used as it becomes available. 141) B A firm may be able to raise money by selling stock—a share in the ownership of the company. 142) D A firm may be able to raise money by selling stock—a share in the ownership of the company. 143) B

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If investors are patient, a marketing manager may have the luxury of developing a plan that will be very profitable in the long run even if it racks up short-term losses. However, most marketing managers face intense pressure to develop plans that will generate profits quickly; there's more risk for investors if potential profits are off in the future. 144) D Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. 145) C Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. Debt financing involves an interest cost. 146) E Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. This might involve a loan from a commercial bank or the use of corporate bonds. 147) E Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. This might involve a loan from a commercial bank or the use of corporate bonds. Entrepreneurs often borrow money from family and friends. People or institutions that loan the money typically do not get an ownership share in the company, and they are usually even less willing to take a risk than are investors who buy stock. Version 1

148) C Rather than sell stock, some firms prefer debt financing—borrowing money based on a promise to repay the loan, usually within a fixed time period and with a specific interest charge. This might involve a loan from a commercial bank or the use of corporate bonds. Entrepreneurs often borrow money from family and friends. People or institutions that loan the money typically do not get an ownership share in the company, and they are usually even less willing to take a risk than are investors who buy stock. 149) B The cost of borrowing money can be a real financial burden. Just as a firm's selling price must cover all of the marketing expenses and the other costs of doing business before profits begin to accumulate, it must also cover the interest charge on borrowed money. The impact of interest charges on prices can be significant. 150) C Reinvesting cash generated from operations is usually less expensive than borrowing money because no interest expense is involved. So internal financing often helps a firm earn more profit than a competitor that is operating on borrowed money—even if the internally financed company is selling at a lower price. 151) C A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. 152) B

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Reinvesting cash generated from operations is usually less expensive than borrowing money because no interest expense is involved. So internal financing often helps a firm earn more profit than a competitor that is operating on borrowed money—even if the internally financed company is selling at a lower price. 153) A A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. 154) A A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. 155) B A cash flow statement is a financial report that forecasts how much cash will be available after paying expenses. The amount that's available isn't always just the bottom line or net profit figure shown on the firm's operating statement. Some expenses, like depreciation of facilities, are subtracted from revenue for tax and accounting purposes but do not actually involve writing a check. In determining cash flow, managers often look at a company's earnings before subtracting out these noncash expenses. 156) D When finances are tight, it's sensible to look for strategy alternatives that help get a better return on money that's already invested. 157) B Version 1

A firm that has a successful domestic product might look for new international markets. Any increase in profit contribution that the strategy generates—without increasing capital invested—increases the firm's return on investment. 158) A Indirect distribution usually requires less investment capital than direct approaches. Intermediaries who pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow. 159) D Indirect distribution usually requires less investment capital than direct approaches. Intermediaries who pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow. 160) B Indirect distribution usually requires less investment capital than direct approaches. Intermediaries who pay for products when they purchase them and pay the costs of carrying inventory help a producer's cash flow. 161) D If a new marketing mix is more successful than expected, demand can quickly outstrip supply. Promotion spending is wasted when this happens. 162) B If a firm is going to pursue an opportunity, there needs to be effective coordination between marketing planning and production capacity—the ability to produce a certain quantity and quality of specific goods or services. Version 1

163) B The production capacity is the ability of a firm to produce a certain quantity and quality of specific goods or services. Different aspects of production capacity have different impacts on marketing planning. 164) E Excess capacity can be a safety net if demand suddenly picks up because it allows firms to benefit from the sudden increase in demand by increasing production. 165) B A task transfer uses telecommunications to move service operations to places where there are pools of skilled workers. 166) B If a firm has unused capacity, a marketing manager can try to identify new markets or new products that make more effective use of that investment. 167) E If a firm has unused capacity, a marketing manager can try to identify new markets or new products that make more effective use of that investment. Expanded production might result in lower costs because of economies of scale. Profit contribution from the new products could improve the return on investment the firm has already made. If a firm's production capacity is flexible, many different marketing opportunities might be possible. 168) E

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Excess capacity can be a safety net if demand suddenly picks up. Excess capacity may exist because there is little demand for what a firm can produce or if there's too much competition. In these situations, rather than struggling to improve capacity use, it might be better for the marketing manager to lead the firm toward other, more profitable alternatives. 169) D Excess capacity can be a safety net if demand suddenly picks up. Excess capacity may exist because there is little demand for what a firm can produce or if there's too much competition. In these situations, rather than struggling to improve capacity use, it might be better for the marketing manager to lead the firm toward other, more profitable alternatives. 170) D Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. 171) B Problems of matching supply and demand often occur when a marketing plan calls for expansion into many market areas all at once. That's one reason a marketing manager may plan a regional rollout of a new product. Staged distribution may match capacity. 172) E Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 173) B Version 1

Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 174) A Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 175) B Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 176) C Many firms now outsource manufacturing and basically act like a virtual corporation, where the firm is primarily a coordinator with a good marketing concept. 177) B Service firms are finding ways to reduce the cost of some of their production work with task transfer—using information technology to move service operations to places where there are pools of skilled workers. 178) B Service firms are finding ways to reduce the cost of some of their production work with task transfer—using information technology to move service operations to places where there are pools of skilled workers. 179) D

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Service firms are finding ways to reduce the cost of some of their production work with task transfer—using information technology to move service operations to places where there are pools of skilled workers. 180) E The trend toward outsourcing to where labor costs are low is resulting in the loss of thousands of manufacturing jobs in the United States. It's also sparking economic growth in some of the less-developed areas of the world and changing the balance of trade among nations. 181) E Production flexibility can give a firm a competitive advantage in meeting a target market's needs better or faster. Without flexible operations, it can be difficult to provide business customers with just-intime delivery or rapid response to orders placed by EDI or some other type of e-commerce reorder system. 182) E A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. With the mass-customization approach, a firm may still focus on certain market segments within a broad productmarket. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 183) A

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A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. With the mass-customization approach, a firm may still focus on certain market segments within a broad productmarket. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 184) B A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. With the mass-customization approach, a firm may still focus on certain market segments within a broad productmarket. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 185) E A wide variety of companies are now looking for innovative ways to serve smaller segments of customers by using mass customization— tailoring the principles of mass production to meet the unique needs of individual customers. With the mass-customization approach, a firm may still focus on certain market segments within a broad productmarket. However, in serving individuals within those target segments it tries to get a competitive advantage by finding a low-cost way to give each customer more or better choices. 186) A

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The widespread shift to mass customization has not occurred, mainly because many firms that experimented with it found that production costs were still high even if the Internet offered a low-cost way to get a lot of orders. 187) C The widespread shift to mass customization has not occurred, mainly because many firms that experimented with it found that production costs were still high even if the Internet offered a low-cost way to get a lot of orders. 188) A Some of the biggest successes in mass customization have been in business markets. For example, Andersen gives builders and architects software that they use to design custom windows by combining different types of glass, different sizes of frames, and a variety of hardware styles that Andersen already manufactures. 189) D Some of the biggest successes in mass customization have been in business markets. Sales reps for ChemStation, a firm that produces industrial detergents, work closely with customers to understand their special cleaning needs—a car wash wants something very different from a metal-working plant. Then scientists at ChemStation develop just the right product, with the correct amount of foam, grease cutting, grit, and the like. 190) B A wide variety of companies are looking for innovative ways to serve smaller segments of customers by using mass customization—tailoring the principles of mass production to meet the unique needs of individual customers. Version 1

191) C A wide variety of companies are looking for innovative ways to serve smaller segments of customers by using mass customization—tailoring the principles of mass production to meet the unique needs of individual customers. 192) D A wide variety of companies are looking for innovative ways to serve smaller segments of customers by using mass customization—tailoring the principles of mass production to meet the unique needs of individual customers. 193) B Accounting data that help managers track where costs and profit are coming from is an important aid for strategy decisions. Unfortunately, summary accounting statements that are prepared for tax purposes and for outside investors often aren't helpful for managers who need to make decisions about marketing strategy. 194) E In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 195) B Marketing managers often need to assign costs to specific products or customers to be able to understand the profitability of different possible strategies. 196) D

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Marketing managers and accountants can work together to allocate costs to products or customers. In recent years, accountants have devoted more attention to this problem and given it the name "activity-based accounting." 197) B Understanding profitability depends on being able to identify the specific costs of different goods and services. Marketing managers and accountants can work together to allocate costs to products or customers. In recent years, accountants have devoted more attention to this problem and given it the name "activity-based accounting." 198) A Factory functional accounts include milling, grinding, maintenance, and so on. Factory cost accounting records are organized so that managers can determine the cost of particular products or jobs. 199) A Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts include salaries, wages, supplies, raw materials, advertising, and others. 200) A Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts include salaries, wages, supplies, raw materials, advertising, and others. 201) B Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts include salaries, wages, supplies, raw materials, advertising, and others. 202) E Version 1

Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts include salaries, wages, supplies, raw materials, advertising, and others. 203) E Natural accounts are the categories to which various costs are charged in the normal financial accounting cycle. These accounts include salaries, wages, supplies, raw materials, advertising, and others. 204) C In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 205) B In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 206) D In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 207) A In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 208) B In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. Version 1

209) D In the factory, functional accounts show the purpose for which expenditures are made. Factory functional accounts include milling, grinding, maintenance, and so on. 210) D The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. For example, the many cost items in the natural salary account may be allocated to functional accounts. 211) D The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. For example, the many cost items in the natural salary account may be allocated to functional accounts. 212) C The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. For example, the many cost items in the natural salary account may be allocated to functional accounts. 213) D The first step in marketing cost analysis is to reclassify all the dollar cost entries in the natural accounts into functional cost accounts. For example, the many cost items in the natural salary account may be allocated to functional accounts. 214) C

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The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, sales people, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 215) E The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, sales people, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired.Each unit can be treated as a profit center. 216) E The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 217) C The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 218) C

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The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 219) A The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 220) E The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 221) B The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 222) A

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The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 223) E The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 224) C The costs allocated to the functional accounts equal, in total, those in the natural accounts. But instead of being used only to show total company profits, the costs can now be used to calculate the profitability of territories, products, customers, salespeople, price classes, order sizes, distribution methods, sales methods, or any other breakdown desired. 225) A As marketing managers make greater use of CRM systems with customer personal information, it is critical that IT systems be robust from a security standpoint. 226) C CRM databases are used to gather, store, and maintain personal information about customers. 227) D

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Companies should ensure that online systems have the capacity to handle customer demands. This is especially valid when a company implements a strategy that will result in higher customer interaction with its online systems. The information given in the question makes it clear that the company's website did not have the capacity to handle such a high load. 228) B ERP stands for enterprise resource planning. 229) A Enterprise resource planning (ERP) systems are used to integrate internal and external information management across the entire organization. 230) C Enterprise resource planning (ERP) systems are used to integrate internal and external information management across an entire organization. They facilitate the flow of information among all the business functions within the organization. 231) E Large firms usually have a separate human resources department staffed by specialists who work with others in the firm to ensure that good people are available to do jobs that need to be done. 232) A People affected by a new strategy may not be under the control of the marketing manager. And the marketing manager may not be able to change everyone into enthusiastic supporters of the plan. 233) B

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Good communication is crucial. The marketing manager must find ways to explain the new strategy and what needs to happen and why. You can't expect people to pull together in a company-wide effort if they don't know what's going on.

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CHAPTER 1 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Marketing is basically selling and advertising. ⊚ ⊚

Marketing, in the literal sense, means "selling" or "advertising." ⊚ ⊚

true false

Making goods or performing services is called marketing. ⊚ ⊚

true false

4) Estimating what price consumers are willing to pay for a product and assessing whether the firm can make a profit selling at that price is an example of a production activity. ⊚ ⊚

true false

5) Marketing can provide needed direction for production and help make sure that the right goods and services find their way to interested consumers. ⊚ ⊚

true false

Marketing plays an essential role in creating customer satisfaction. ⊚ ⊚

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true false

7) Customer satisfaction is the extent to which a firm fulfills a consumer's needs, desires, and expectations. ⊚ ⊚

true false

8) If a firm produces the right goods or services, marketing has little role to play in creating customer satisfaction. ⊚ ⊚

true false

9) In advanced economies, it is estimated that marketing costs about 50 cents of each consumer's dollar. ⊚ ⊚

10)

In advanced economies, marketing costs only about 10 percent of each consumer's dollar. ⊚ ⊚

11)

true false

Marketing discourages the development and spread of new ideas, goods, and services. ⊚ ⊚

13)

true false

Marketing encourages the development and spread of new ideas, goods, and services. ⊚ ⊚

12)

true false

Marketing is both a set of activities performed by organizations and a social process. ⊚ ⊚

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true false 2

14) Marketing can be viewed as a set of activities performed by organizations, but not as a social process. ⊚ ⊚

true false

15) Marketing can be viewed as a social process, but not as a set of activities performed by organizations. ⊚ ⊚

true false

16) The micro view of marketing sees it as the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. ⊚ ⊚

true false

17) Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. ⊚ ⊚

true false

18) The micro view of marketing is mainly concerned with the activities performed by organizations. ⊚ ⊚

true false

19) From a micro view, marketing activities are performed only by profit-oriented organizations.

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⊚ ⊚

20)

Marketing only applies to profit organizations. ⊚ ⊚

21)

true false

Marketing only applies to for-profit organizations. ⊚ ⊚

22)

true false

Marketing activities should be of no interest to a nonprofit organization. ⊚ ⊚

true false

23) Marketing activities should begin with potential customer needs, not with the production process. ⊚ ⊚

24)

Production, not marketing, should determine what products are to be made. ⊚ ⊚

25)

true false

Marketing should begin with the production process. ⊚ ⊚

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true false

26) Marketing does not occur unless there are two or more parties who want to exchange something for something else. ⊚ ⊚

true false

27) In a pure subsistence economy—when each family unit produces everything it consumes—no marketing is involved. ⊚ ⊚

true false

28) A marketing exchange is a single transaction between a firm and a customer, nothing more. ⊚ ⊚

true false

29) Marketing is concerned with individual transactions rather than with building ongoing relationships with customers, because that is the job of people in the public relations department. ⊚ ⊚

30)

true false

Macro-marketing emphasizes how the whole marketing system works. ⊚ ⊚

true false

31) Micro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes society's objectives. ⊚ ⊚

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true false

32) Macro-marketing is a set of activities that direct an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. ⊚ ⊚

true false

33) Macro-marketing emphasizes how the whole system works, rather than the activities of individual organizations. ⊚ ⊚

34)

true false

Macro-marketing emphasizes the activities of individual organizations. ⊚ ⊚

true false

35) Macro-marketing is concerned with examining the relationship of the entire production and distribution system. ⊚ ⊚

true false

36) An effective macro-marketing system matches heterogeneous supply with heterogeneous demand. ⊚ ⊚

true false

37) Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. ⊚ ⊚

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true false

38) Achieving effective marketing in an advanced economy is simplified by the fact that producers are separated from consumers in only two ways: time and space. ⊚ ⊚

true false

39) The term "economies of scale" means that as a company produces larger numbers of a particular product, the cost for each unit of the product goes down. ⊚ ⊚

40)

true false

"Economies of scale" prevent a company from taking advantage of mass production. ⊚ ⊚

true false

41) "Economies of scale" means that as a company produces more of a product, the total cost of production goes up. ⊚ ⊚

true false

42) "Economies of scale" means that as a company produces more of a product, the cost of each unit produced goes down. ⊚ ⊚

true false

43) In an advanced economy, all goods and services can be produced with mass production and its economies of scale. ⊚ ⊚

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true false

44) Both mass production and effective marketing are needed to satisfy the economic needs of an advanced economy. ⊚ ⊚

true false

45) An effective macro-marketing system overcomes discrepancies of quantity and discrepancies of assortment by using the universal functions of marketing. ⊚ ⊚

46)

true false

The universal functions of marketing include transporting and storing. ⊚ ⊚

true false

47) The "universal functions of marketing" consist only of buying, selling, transporting, and storing. ⊚ ⊚

true false

48) The universal functions of marketing are performed in the same way in all nations and economic systems. ⊚ ⊚

true false

49) Marketing functions are performed by producers, consumers, and a variety of marketing specialists. ⊚ ⊚

50)

true false

Intermediaries specialize in trade and production.

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⊚ ⊚

true false

51) The advantages of working with intermediaries increase as the number of producers and customers, their distance apart, and the number and variety of competing products increase. ⊚ ⊚

true false

52) While intermediaries facilitate exchange, their cost makes the whole macro-marketing system less efficient. ⊚ ⊚

true false

53) Marketing collaborators are any firms that provide the marketing functions of buying and selling. ⊚ ⊚

true false

54) Marketing specialists such as intermediaries and collaborators hinder the exchange process between producers and consumers. ⊚ ⊚

true false

55) Responsibility for performing the marketing functions can be shifted and shared in a variety of ways, but no function can be completely eliminated. ⊚ ⊚

56)

true false

Not all societies need an economic system.

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true false

57) An economic system is the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption among various people and groups in the society. ⊚ ⊚

true false

58) Only industrial nations need an economic system to decide what and how much is to be produced and distributed by whom, when, to whom, and why. ⊚ ⊚

true false

59) There is little variety in countries with command economies, so consumers have few choices. ⊚ ⊚

true false

60) In a command economy, the individual decisions of many producers and consumers make the macro-level decisions for the whole economy. ⊚ ⊚

true false

61) In a market-directed economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. ⊚ ⊚

true false

62) In a market-directed economy, price is a rough measure of how society values particular goods and services. Version 1

⊚ ⊚

true false

63) Market-directed economies tend to provide consumers with greater freedom of choice than command economies. ⊚ ⊚

64)

In a market-directed economy, consumers enjoy complete freedom of choice. ⊚ ⊚

65)

true false

Most Western economies are completely market-directed. ⊚ ⊚

67)

true false

In a market-directed economy, profit is guaranteed. ⊚ ⊚

66)

true false

The American economy is entirely market-directed. ⊚ ⊚

true false

68) The American economy and most other Western economies are completely marketdirected. ⊚ ⊚

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true false

69) The simple trade era was a time when families traded or sold their "surplus" output to local distributors who resold these goods to other consumers or distant distributors. ⊚ ⊚

true false

70) During the production era a company focuses on production because few products are available in the market. ⊚ ⊚

71) era.

true false

From the Industrial Revolution until the 1920s, most companies were in the production ⊚ ⊚

true false

72) During the sales era, the firm tries to improve short-run marketing policy planning to tie together its activities. ⊚ ⊚

true false

73) Marketing departments are usually formed when firms go from the production era to the sales era. ⊚ ⊚

true false

74) The marketing department era is a time when all marketing activities are brought under the control of one department. ⊚ ⊚

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true false

75) During the "marketing company era," the total company effort is guided by the idea that customers exist to buy the firm's output. ⊚ ⊚

true false

76) A company has moved into the "marketing company era" when, in addition to short-run marketing planning, the total company effort is guided by the marketing concept. ⊚ ⊚

true false

77) The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. ⊚ ⊚

true false

78) The marketing concept says that a firm should aim all its efforts at satisfying customers, even if this proves to be unprofitable. ⊚ ⊚

true false

79) The "marketing concept" means that a firm emphasizes attracting new customers above all other objectives. ⊚ ⊚

true false

80) A firm that adopts the "marketing concept" will aim all its efforts at satisfying customers, while trying to make a profit. ⊚ ⊚

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true false

81) A firm that makes products that are easy to produce and then tries to sell them has a production orientation. ⊚ ⊚

true false

82) The term "marketing orientation" means making products that are easy to produce and then trying to sell them. ⊚ ⊚

true false

83) A marketing-oriented firm would try to produce what customers want, while a production-oriented firm would try to get customers to buy what the firm has produced. ⊚ ⊚

true false

84) The three basic ideas in the marketing concept are: (1) putting the marketing manager in charge of the whole firm, (2) a competitive orientation, and (3) an emphasis on profit. ⊚ ⊚

true false

85) When a firm makes a total company effort to satisfy its customers, and profit—not just sales—is an objective of the firm, the company is practicing the "marketing concept." ⊚ ⊚

true false

86) The three basic ideas included in the definition of the marketing concept are: customer satisfaction, a total company effort, and sales as an objective. ⊚ ⊚

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true false

87) The three basic ideas in the marketing concept are: (1) customer satisfaction; (2) confining marketing activities to marketing professionals; and (3) having profit as an objective. ⊚ ⊚

true false

88) The only way to effectively carry out the marketing concept is to have profit be the sole objective. ⊚ ⊚

true false

89) Adopting the marketing concept rarely requires any change in a firm's attitudes, organization structure, or management methods and procedures. ⊚ ⊚

true false

90) Adopting the marketing concept requires that a business firm eliminate all functional departments. ⊚ ⊚

true false

91) Marketing metrics are the numeric data that marketing managers use to calculate how well a strategy performs. ⊚ ⊚

true false

92) Companies that consider the triple bottom line measure economic, social, and political outcomes. ⊚ ⊚

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true false

93) Organizations guided by a triple bottom line consider economic, social, and environmental outcomes as measures of long-term success. ⊚ ⊚

true false

94) The marketing concept was very quickly accepted, especially among producers of industrial commodities like steel and glass. ⊚ ⊚

true false

95) Producers who operate in a competitive environment are more likely to adopt the marketing concept. ⊚ ⊚

96)

true false

Adoption of the marketing concept is today universal. ⊚ ⊚

true false

97) A manager who follows the production concept views customer satisfaction as the path to profits. ⊚ ⊚

true false

98) Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. ⊚ ⊚

99)

true false

Customer value is another term for customer satisfaction.

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⊚ ⊚

100)

A good or service that doesn't meet a customer's needs results in low customer value. ⊚ ⊚

101)

true false

Setting a low price for a firm's offering is a sure way of creating high customer value. ⊚ ⊚

102)

true false

Low price and high customer value are one and the same thing. ⊚ ⊚

true false

103) When it comes to customer value, it is the customer's view that matters, not the view of the marketing manager. ⊚ ⊚

104)

In marketing, it is the manager's viewpoint that matters, not the customer's. ⊚ ⊚

105)

true false

Offering superior customer value is especially important when competition is intense. ⊚ ⊚

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true false

106) Firms that embrace the marketing concept seek ways to build a profitable long-term relationship with each customer. ⊚ ⊚

true false

107) It is more costly for firms to try to attract new customers than it is to build a strong relationship with existing customers. ⊚ ⊚

true false

108) To develop lasting relationships with customers, marketing-oriented firms need to focus on customer satisfaction both before and after each sale. ⊚ ⊚

true false

109) When trying to build relationships with customers, salespeople must be particularly welltrained because they are usually the only employees whose actions influence customers directly. ⊚ ⊚

110)

true false

The marketing concept applies to nonprofit organizations as well as to businesses. ⊚ ⊚

true false

111) Because they don't try to earn a profit, the marketing concept is not very useful for nonprofit organizations. ⊚ ⊚

112)

true false

In nonprofit organizations, support may not come directly from satisfied customers.

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⊚ ⊚

true false

113) As with any business, a nonprofit organization must take in as much money as it spends or it won't survive. ⊚ ⊚

114)

true false

A nonprofit organization does not measure profit in the same way as a firm. ⊚ ⊚

true false

115) Sometimes the micro–macro dilemma arises because what is "good" for some producers and consumers may not be "good" for society as a whole. ⊚ ⊚

116)

true false

Gun control is an example of the micro–macro dilemma. ⊚ ⊚

true false

117) The micro–macro dilemma occurs when a firm focuses its efforts on satisfying some consumers to achieve its objectives, possibly causing negative societal outcomes. ⊚ ⊚

true false

118) A firm's obligation to improve its positive effects on society and reduce its negative effects is called fiscal responsibility. ⊚ ⊚

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true false

119) The marketing concept says that it is a firm's obligation to improve its positive effects on society and reduce its negative effects. ⊚ ⊚

true false

120) Organizations that adopt the marketing concept should be concerned about marketing ethics as well as broader issues of social responsibility. ⊚ ⊚

121)

true false

Marketing ethics are the moral standards that guide marketing decisions and actions. ⊚ ⊚

true false

122) The moral standards that guide marketing decisions and actions are called marketing ethics. ⊚ ⊚

true false

123) Moral standards often vary from one person to another, from one society to another, and among different groups within a society, so there is likely to be disagreement about what opinion is correct when it comes to marketing ethics. ⊚ ⊚

true false

124) A manager shouldn't be criticized for making an unethical marketing decision unless the ethical breach was intentional. ⊚ ⊚

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true false

125) The American Marketing Association has adopted a statement of ethics that sets specific ethical standards for many aspects of the management job in marketing. ⊚ ⊚

true false

126) The American Marketing Association's statement of ethics sets specific ethical standards for many aspects of marketing. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 127) According to the text, marketing means A) much more than selling and advertising. B) selling. C) producing and selling. D) advertising. E) selling and advertising.

128)

Which of the following activities is not part of marketing? A) advertising the grand opening of a new furniture store B) researching which furniture designs are popular with consumers C) determining how many pieces of furniture can be sold at different price points D) building a facility to make furniture E) selling furniture to customers in a furniture showroom

129)

A marketing manager planning to launch a successful new product should begin by

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A) obtaining financing for the venture. B) designing products that interest him or her. C) identifying a product or service customers need. D) choosing a business partner. E) establishing a legal corporation.

130)

Marketing means A) distribution. B) making good products. C) more than selling and advertising. D) promotion. E) performing services.

131)

The production of a new mountain bike model includes which of the following activities? A) determining how to get the new model to likely bike purchasers B) actually making the new mountain bikes C) estimating how many competing companies will be making bikes D) predicting what types of bikes different types of bike riders will want

132) Predicting what types of bicycles different customers will want and deciding which of those customers the business will try to satisfy are activities a firm should do as part of A) production. B) a command economy. C) marketing. D) making goods or performing services. E) a production orientation.

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133) For Tesla, a firm that makes electric cars, estimating how many competitors will make electric vehicles and what kinds they will make is A) one of the universal functions of innovation. B) a production activity. C) an example of the micro–macro dilemma. D) best left to intermediaries. E) a part of marketing the product.

134)

Marketing A) means "selling" or "advertising." B) provides direction for production. C) involves actually making goods or performing services. D) does not impact consumers' standard of living. E) is the development and spread of new ideas, goods, and services.

135) Customer ________ is the extent to which a firm fulfills a customer's needs, desires, and expectations. A) forecast B) satisfaction C) service D) support E) opportunity

136) In an advanced economy, marketing costs account for about ________ cents of every consumer dollar.

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A) 10 B) 20 C) 30 D) 40 E) 50

137)

Which of the following statements about marketing is false?

A) Marketing concepts and techniques apply with nonprofit organizations—as well as with profit-seeking organizations. B) Marketing offers many rewarding career opportunities. C) The cost of marketing is about 15 percent of the consumer’s dollar. D) Marketing affects almost every part of your daily life. E) Marketing is vital for economic growth and development.

138)

Marketing A) affects almost every aspect of our daily lives. B) offers few exciting or rewarding career opportunities. C) limits our choices of goods and services every day. D) focuses an organization on being the first to market a new product. E) should not be used to better appeal to future employers if you are in accounting.

139)

Which of the following is not a reason for you to study marketing? A) Marketing affects almost every aspect of daily life. B) Marketing will be important to your job. C) Marketing involves actually making the goods that people need. D) Marketing affects innovation and consumers’ standard of living. E) Marketing plays a big part in economic growth and development.

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140) Marketing encourages research and ________, the development and spread of new ideas, goods and services. A) analysis B) assessment C) evaluation D) innovation E) introspection

141) The development and spread of new ideas, goods, and services for the marketplace is called A) marketing. B) the micro–macro dilemma. C) collaboration. D) innovation. E) production.

142) Decisions about all of the following should be handled by the marketing department of a firm EXCEPT A) storing the product. B) making the product. C) advertising the product. D) designing the packaging for the product. E) setting the price of the product.

143)

Marketing can be viewed as

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A) a set of activities performed by individual organizations. B) relevant to for-profit organizations only. C) just selling and advertising. D) beginning with the production process.

144)

Which of the following is an accurate statement about marketing? A) Advertising and selling are not really part of marketing. B) Marketing is nothing more than a set of business activities performed by individual

firms. C) Marketing techniques have no application for nonprofit organizations. D) Marketing is a social process and a set of activities performed by organizations. E) A good product usually sells itself.

145)

Looking at marketing as a set of managerial activities means focusing on A) macro-marketing. B) for-profit marketing. C) micro-marketing. D) nonprofit marketing. E) personalized marketing.

146)

Marketing

A) tries to accomplish a company's objectives by anticipating customers' needs and trying to satisfy them. B) begins with the production process. C) involves persuading customers to buy your product. D) is a social process involving all producers, intermediaries, and consumers. E) tries to make the whole economic system fair and effective.

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147)

Which of the following is true of marketing?

A) It is concerned with whether the whole economic system is fair and effective. B) It applies only to profit organizations. C) It consists only of personal selling and advertising. D) It is a social process only. E) It tries to anticipate and satisfy customer needs and accomplish an organization's objectives.

148) ________ involves anticipating customer needs and directing a flow of need-satisfying goods and services from producer to customer. A) Innovation B) Advertising C) Selling D) Marketing E) Sales promotion

149)

From a micro view, marketing A) applies to large corporations but not to a new venture started by one person. B) is an important social process. C) emphasizes how the whole marketing system works. D) is a set of activities performed by an individual organization to satisfy its customers. E) directs an economy's flow of goods and services from producers to consumers.

150)

Which of the following statements best describes the modern view of marketing?

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A) The job of marketing is to get rid of whatever the company is producing. B) Marketing should take over production, accounting, and financial services within a firm. C) Marketing is concerned with generating a single exchange between a firm and a customer. D) Marketing begins with anticipating potential customer needs. E) Production, not marketing, should determine what goods and services are to be developed.

151)

Which of the following statements best describes the modern view of marketing? A) It is only necessary for profit-oriented firms. B) It consists mainly of advertising and personal selling. C) It anticipates customer needs. D) It begins as soon as products are produced. E) It is emphasized more for firms that don't rely on e-commerce.

152)

From a micro view, which of the following is the best example of marketing? A) North Korea unveils a new five-year production plan. B) China and the United States agree on a new trade agreement. C) The American Red Cross seeks more blood donors. D) The Internet makes it possible for firms to reach customers in other countries. E) None of these is a good example.

153) Which of the following statements by a U.S. president best reflects a micro view of marketing?

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A) "A tax cut will give consumers more spending money." B) "With interest rates low, many young people can now afford to buy a new home." C) "In the U.S. we have a better choice of products than in any other country." D) "Next year my administration will spend 75 percent more on domestic security." E) "Tourism firms should advertise more to attract more international visitors."

154)

Which of the following is an accurate statement about marketing?

A) It applies to both profit and nonprofit organizations. B) It says that marketing should take over all production, accounting, and financial activities. C) It should begin as soon as goods are produced. D) It does away with the need for advertising. E) It requires totally self-sufficient producers and consumers.

155)

Marketingdoes which of the following? A) emphasizes mass selling over personal selling B) allows production, rather than marketing, to determine what products to make C) applies to both profit and nonprofit organizations D) concentrates on production, rather than advertising E) None of these is a true statement about marketing.

156)

Which of the following statements is true about marketing?

A) It applies to both profit and nonprofit organizations. B) It is another name for selling and advertising. C) The process should pick up where the production process ends. D) Marketing people should expect that the production department will determine what goods and services are to be developed.

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157)

Which of the following would be least likely to need marketing skills? A) an accountant B) an electronics retailer C) a toy manufacturer D) a financial advisor E) All these organizations would be likely to need marketing skills.

158)

The aim of marketing is to A) help create a pure subsistence economy. B) eliminate the need for exchanges. C) persuade customers to buy the firm's product. D) identify customers' needs and meet those needs so well that the product almost "sells

itself." E) facilitate a single transaction.

159)

Effective marketing should begin with

A) an effort to persuade unwilling customers to buy the firm's products. B) potential customer needs. C) a decision about what the firm can produce efficiently. D) evaluation of the effect of the firm's decisions on the macro-marketing system. E) the marketing manager making important production, accounting, and financial decisions for the firm.

160)

Marketing should

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A) begin with the production process. B) make decisions about product design and packaging, prices, or fees. C) not need to coordinate with production, accounting, and financial activities. D) provide input, but let production determine what goods and services are to be developed. E) focus on getting customers to make a final purchase.

161)

Marketing will not take place without A) intermediaries. B) collaborators. C) two or more parties exchanging something for something else. D) a high standard of living.

162)

Marketing will not happen unless A) a pure subsistence economy is in place. B) collaborators are present to simplify exchange. C) intermediaries are present to facilitate exchange. D) two or more parties each have something they want to exchange for something else. E) an economy is market-directed rather than command.

163)

Which of the following must be present for marketing to happen? A) product B) place C) advertising D) price E) two or more parties exchanging something of value for something else of value

164)

Marketing is of no relevance in a ________ economy.

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A) consumer-oriented B) command C) pure subsistence D) market-directed E) production-oriented

165)

In a pure subsistence economy, A) each family unit is self-sufficient. B) exchanges are very important. C) the standard of living is relatively high. D) there is a great need for intermediaries.

166) A good example of ________ is the family units in a South Pacific island nation making all the products they consume. A) a pure subsistence economy B) a market-directed economy C) a micro-marketing system D) a command economy E) None of these is a correct answer.

167)

Which of the following statements about marketing is false?

A) Marketing is most important in a pure subsistence economy. B) Marketing should provide direction for production, accounting, and financial activities. C) Marketing builds long-lasting relationships that benefit the selling firm. D) Marketing doesn't occur unless two or more parties are willing to exchange something for something else. E) Marketing anticipates customer needs.

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168)

Which of the following statements about marketing is false?

A) Marketing affects the products you buy. B) Marketing applies to nonprofit organizations too. C) Marketing affects the advertising you see and hear. D) Marketing offers many good job opportunities. E) Marketing can help with individual transactions but not in building relationships with customers.

169)

Looking at marketing as a social process means focusing on A) macro-marketing. B) for-profit marketing. C) micro-marketing. D) nonprofit marketing. E) personalized marketing.

170)

Societies need a macro-marketing system to A) help match supply and demand. B) create a gap between producers and consumers. C) accomplish an organization's objectives only. D) identify collaborators. E) reduce the need for intermediaries.

171) Which of the following challenging scenarios would not be examined by macromarketing?

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A) Producers prefer to manufacture goods in large quantities, but consumers buy in small quantities. B) Consumers require a wide assortment of food items, but individual producers can offer only a narrow assortment of food products. C) Producers set prices to cover costs and make a profit, but consumers choose goods based on their ability to pay. D) Cedar Point Amusement Park would like to attract customers all year long, but its marketing strategy is currently limited to discount season pass offers during winter months while the park is closed. E) Producers tend to locate where it is economical to produce, but consumers are located in many scattered places.

172)

Macro-marketing A) emphasizes how the whole marketing system works. B) considers how marketing affects society, but not how society affects marketing. C) matches homogeneous supply and demand. D) is mainly concerned with the activities of individual organizations. E) primarily concerns itself with the production process.

173)

Macro-marketing does which of the following? A) tries to produce discrepancies of quantity and discrepancies of assortment B) focuses on the activities of individual organizations C) tries to effectively match supply and demand D) sets the activities performed by individual firms E) concerns itself with individual customer relationships

174)

Which of the following is true of macro-marketing?

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A) It is concerned with the activities performed by individual business organizations. B) It tries to match heterogeneous supply capabilities with heterogeneous demands for goods and services. C) It is concerned with how effectively and fairly an individual business organization performs. D) It assumes that the effectiveness and fairness of all macro-marketing systems must be evaluated in terms of the same social objectives.

175)

Macro-marketing is A) a social process. B) concerned with the activities of individual managers. C) what people have in mind when they talk about marketing in everyday use. D) what helps consumers that need a narrow assortment of products. E) something that applies only to nonprofit organizations.

176) ________ directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the society's objectives. A) Macro-marketing B) The transporting function C) Micro-marketing D) Standardization and grading E) Social responsibility

177)

Which of the following statements about macro-marketing is accurate?

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A) It emphasizes building a long-term relationship that benefits both the firm and the customer. B) It considers the marketing activities of corporations rather than individuals. C) It emphasizes how the whole marketing system works. D) It is concerned only with systems that are relevant to advanced economies. E) It addresses discrepancies that emerge from homogeneous consumer demand.

178) The following article titles are from Business Week magazine. Which article is most likely to be reporting on a macro-marketing topic? A) "Two-Person Engineering Firm Offers Unique Service" B) "Russia Increases Output of Consumer Goods" C) "Pepsi Sells in Japan" D) "Bank of America Offers New Internet Banking Services" E) "Donations to Tsunami Victims Fund Increase after TV Broadcast"

179) The following headlines are for articles from the Wall Street Journal. Which article is most likely to be reporting on a macro-marketing topic? A) "Mercedes Goes After Luxury Sport Utility Buyers" B) "Adidas Jumps as Footwear Competition Heats Up" C) "Drugstore Chain Aims at Seniors" D) "Hardee's Fried Chicken Takes on KFC" E) "Frozen Yogurt Popularity Leads to More Frozen Yogurt Shops"

180) Of the following articles from the Wall Street Journal, which is most likely to be about a macro-marketing topic?

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A) "Tupperware Has a New Strategy" B) "Thailand Has Unusually Large Number of Wholesalers" C) "Military Supplier Shifts to Selling Gas Masks to Private Citizens" D) "Coke Plans Beverage Line to Compete with Lipton's" E) "Dow Chemical Adds Shipping Safeguards"

181) Of the following articles from a business magazine, which is most likely to be about a macro-marketing topic? A) "Chinese Women Demand More Luxury Goods" B) "Girl Scouts Organize Nationwide Cookie Sale" C) "L'eggs Sells Direct in Brazil and Argentina" D) "Frito-Lay Offers New Low-Fat Products" E) "Coke Losing Beverage Sales in India to local brands"

182)

In advanced economies,

A) both supply and demand tend to be homogeneous. B) producers and consumers are often separated in several ways. C) most firms specialize in producing and selling small amounts of a huge assortment of goods and services. D) exchange is aided by discrepancies of quantity and assortment.

183)

Which of the following occurs in advanced economies? A) Economies of scale make the cost of a product higher. B) Exchange is simplified by discrepancies of assortment. C) There is little need for marketing specialists. D) Both supply and demand tend to be homogeneous in nature. E) Producers and consumers experience a separation of values.

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184) Exchanges between producers and consumers are more difficult in an advanced economy because of A) separation in time. B) separation in values. C) spatial separation. D) separation of information. E) All these answers are correct.

185) The primary purpose of the transporting and storing functions of marketing is to overcome A) the need for marketing specialists. B) separation of information. C) spatial separation. D) discrepancies of assortment. E) separation in values.

186) American supermarket chain FoodMart purchases cheese from five different manufacturers from around the world to assure its customers can choose among different types of cheeses at different prices. FoodMart facilitates the macro-marketing system by helping to address A) spatial separation. B) discrepancies of assortment. C) separation of values. D) All these answers are correct.

187) The fact that many Americancar companies are located in the upper Midwest while their customers are located throughout the United States is an example of

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A) separation in values. B) discrepancies of assortment. C) separation of information. D) spatial separation. E) separation in time.

188) When consumers do not know where to buy a product or what it costs and the product's producer does not know where its target market is located, we say there is a A) separation of information. B) discrepancy of quantity. C) separation of ownership. D) discrepancy of assortment. E) separation in time.

189) When an individual producer sets a price for its product to earn a certain profit while consumers search for the product at the lowest price available from any producer, we say there is a A) separation in time. B) discrepancy of quantity. C) separation in values. D) discrepancy of assortment. E) spatial separation.

190) The fact that producers usually prefer to produce products in large quantities while most consumers prefer to buy in small quantities results in

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A) discrepancies of quantity. B) separations of ownership. C) discrepancies of assortment. D) spatial separations. E) temporal separations.

191) In a simple economy, one family may produce only cooking pots, but many of them. Other families may specialize in farming, making clothing, and building shelters. This A) shows why discrepancies of assortment occur. B) is so simple that the universal functions of marketing are unnecessary. C) cannot work without an intermediary. D) is an example of "separation in values," since the different families choose to produce different things.

192)

Discrepancies of assortment happen when

A) producers prefer to produce and sell in large numbers, but consumers prefer to buy and consume in smaller numbers. B) consumers may not want to consume goods and services at the time producers would prefer to produce them. C) consumers value goods and services in terms of costs and competitive prices, while producers value them in terms of satisfying needs and ability to pay. D) producers specialize in producing a narrow range of goods and services but consumers need a wide variety. E) producers hold title to goods and services, that they themselves do not want to consume.

193) ________ refers to producers holding title to goods and services that they themselves do not want to consume and consumers wanting goods and services that they do not have.

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A) Discrepancies of assortment B) Separation of ownership C) Discrepancies of quantity D) Spatial separation E) Separation in time

194) When a firm produces a large quantity of a product, the cost of producing each individual unit usually goes down. This is known as A) discrepancies of quantity. B) exchange efficiency. C) economies of scale. D) macro-marketing. E) discrepancies of assortment.

195)

The term "economies of scale" means that A) the largest producers are always the most efficient. B) the cost of a product goes down as a company produces larger numbers of it. C) the more one produces, the greater the profit. D) it is more efficient for an economy to have a large number of transactions. E) None of these answers is correct.

196) From the macro-marketing perspective, the spatial separation that exists between military equipment manufacturers and the people who use the equipment overseas is directly addressed through which function? A) financing B) transporting C) risk taking D) market information E) storing

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197) The universal functions of marketing include buying, selling, transporting, storing, standardization and grading, financing, risk taking, and A) weighing. B) facilitating. C) market information. D) merchandise information.

198) Since individual firms cannot perform all marketing functions, ________ often play a role in the exchange process. A) intermediaries B) consumers C) nonprofits D) marketing managers E) government regulators

199)

The universal functions of marketing do not include A) financing and risk taking. B) standardization and grading. C) producing. D) transporting and storing. E) buying and selling.

200)

Which of the following statements about the universal functions of marketing is false? A) These functions do not have to be performed in all macro-marketing systems. B) How the functions are performed may differ among nations and economic systems. C) Who performs the functions may differ among nations and economic systems. D) These functions help to overcome discrepancies of quantity and assortment.

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201)

The universal functions of marketing A) must be performed in all macro-marketing systems. B) are performed the same way in all economies. C) are performed by the same parties in all economies. D) are needed to help foster various separations and discrepancies.

202)

Which of the following is not one of the universal functions of marketing? A) production B) standardization C) financing D) buying E) transporting

203)

The universal functions of marketing A) can be eliminated in advanced macro-marketing systems. B) are performed differently and by different parties in different economies. C) are never performed by consumers. D) create various separations and discrepancies between producers and consumers.

204) After seeing a "sale" ad in a local newspaper, Ben went to a local pet supply store and bought a year's supply of high-protein dog food. Which marketing function or functions—if any—did he perform? A) financing and risk taking B) transporting and storing C) consuming market information D) buying E) Ben performed all these marketing functions.

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205) A large advertising agency is planning a national promotion to introduce a new smartphone. Which of the universal functions of marketing is it performing? A) risk taking B) financing C) buying D) selling E) standardization

206) Which of the universal functions of marketing deals most directly with advertising a product in magazines? A) transporting B) selling C) financing D) risk taking E) market information

207) Market research firm BestOne sells reports about competitors, products, and other areas to various clients in the software industry. BestOne performs which universal marketing function? A) risk taking B) market information C) standardization and grading D) social responsibility E) financing

208)

The standardization and grading function of marketing involves

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A) looking for and evaluating goods and services. B) providing necessary cash and credit. C) promoting the product. D) sorting products according to size and quality. E) None of these answers is correct.

209)

The ________ function involves sorting products according to size and quality. A) transporting and storing B) financing C) standardization and grading D) marketing E) buying

210)

The standardization and grading function of marketing involves A) promoting goods and services through media. B) collection, analysis, and distribution of information. C) sorting products according to size and quality. D) looking for and evaluating goods and services. E) movement of goods from one place to another.

211)

The buying function of marketing involves A) risk taking and an element of chance. B) promoting the product or service. C) looking for and evaluating goods. D) the use of personal selling. E) sorting products according to size.

212)

The universal functions of marketing

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A) are not all needed in market-directed economies. B) are not all needed in command economies. C) can be performed by producers, consumers, and a variety of marketing specialists. D) are performed in the same way in all economic systems.

213)

The universal functions of marketing can be performed by A) producers. B) intermediaries. C) consumers. D) collaborators. E) all of these.

214)

The universal functions of marketing are

A) usually performed in the same way and by the same types of institutions in all macro-marketing systems. B) sometimes eliminated in very efficient macro-marketing systems. C) performed in both market-directed and command economies. D) all performed, from a micro view, by every firm.

215)

An intermediary A) is a wholesaler—not a retailer. B) usually increases the number of transactions required. C) tends to make the exchange process more difficult and costly. D) is someone who specializes in trade rather than production. E) None of these answers is correct.

216)

Which of the following is not true about intermediaries?

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A) They save time for other participants in a transaction. B) They always increase total expenses for a product. C) They play an important role in the exchange process. D) They specialize in trade rather than production.

217)

The advantages of working with an intermediary usually increase when there is A) excellent communication with customers. B) a greater number of customers. C) little distance between customers. D) a smaller number of competing products.

218) Firms that specialize in providing marketing functions other than buying or selling are known as A) suppliers. B) intermediaries. C) consultants. D) agents. E) collaborators.

219)

Collaborators A) specialize in trade rather than production. B) usually have a production orientation. C) emerged in the marketing company era. D) are only used in a command economy. E) facilitate or provide one or more of the marketing functions other than buying or

selling.

220)

Which of the following types of firms are collaborators?

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A) marketing research firms B) overnight delivery firms C) advertising agencies D) product-testing labs E) All of these are collaborators.

221)

Which of the following is LEAST likely to be classified as a marketing collaborator? A) Mayflower Transport Company B) Internet Advertising, Inc. C) Wachovia Bank D) Market Survey Research, Inc. E) Quality Coatings and Paint Company

222)

Which of the following is LEAST likely to be classified as a marketing collaborator? A) United Parcel Service (UPS) B) Public Warehouse Corporation C) Broadband Communications Company D) MeadowView Aluminum Company E) Product Safety Testing Laboratories, Inc.

223)

Which of the following is true of marketing intermediaries and collaborators?

A) They typically perform marketing functions less effectively than producers or consumers can perform them. B) Their services make the whole macro-marketing system more efficient and effective. C) Their services provide consumers with less time for consumption. D) The marketing functions they serve come at a higher cost—because of specialization or economies of scale

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224)

Amazon.com and eBay.com are both considered Internet-based A) collaborators. B) producers. C) service providers. D) intermediaries. E) manufacturers.

225) Concerning the "universal functions of marketing," which of the following statements is false? A) These functions can be performed by producers, intermediaries, collaborators, or consumers. B) Responsibility for performing these functions cannot be shared. C) From a micro viewpoint, not every company must perform every function. D) From a macro viewpoint, all these functions must be performed by someone.

226)

Which of the following is true of the universal functions of marketing? A) They may not be required in all macro-marketing systems. B) Not every firm must perform all of the marketing functions. C) Responsibility for performing them cannot be shifted or shared. D) All goods and services require all the functions at every level of their production.

227)

In macro-marketing, A) no universal marketing function is completely eliminated. B) the objectives of the individual firm are the most important. C) functions should not be shifted or shared. D) intermediaries are unnecessary. E) activities of individual organizations are emphasized.

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228)

Concerning the universal functions of marketing, it is true that

A) the functions must be performed in all macro-marketing systems. B) the functions can be performed by producers or intermediaries—but not by consumers. C) from a micro viewpoint, every firm must perform all the functions. D) responsibility for performing them can be shifted and shared—and some functions can be completely eliminated to reduce costs.

229) ________ refers to the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in society. A) Resource utilization B) Socio-economic policy C) The way a firm measures value D) Separation of values E) Economic system

230)

A macro-marketing system should A) provide everyone with the same goods and services. B) be part of a market-directed economy, not a command economy. C) match supply and demand and accomplish a society's objectives. D) depend solely on a society's political institutions.

231) An economic system in which government planners determine production levels is known as a ________ economy.

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A) command B) micro-marketing C) macro-marketing D) market-directed E) pure subsistence

232) An economic system in which government officials determine production levels is known as a ________ economy. A) pure subsistence B) macro-marketing C) market-directed D) production-oriented E) command

233)

In a command economy, A) producers have a great deal of choice about what and how much to produce. B) prices usually fluctuate according to supply and demand. C) marketing activities such as market research are encouraged. D) economies have little variety, so consumers have few choices. E) consumers decide what is to be produced and by whom.

234)

In a command economy, government officials decide A) who is to produce and distribute what to whom. B) how much is to be produced. C) how much is to be distributed to whom. D) what is to be produced. E) all of these.

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235)

In a command economy,

A) production is directed by the government. B) the individual decisions of the many producers and consumers come together to make macro-level decisions. C) consumers make a society's production decisions. D) consumers decide what is to be produced and by whom through their dollar "votes." E) the market adjusts itself.

236)

The various economic systems around the world are A) equally effective at providing for the needs of citizens. B) always shaped by the free decisions of producers and consumers. C) known collectively as the command economy. D) heavily influenced by a society's political institutions. E) based on the ideal of a pure subsistence economy.

237)

In a market-directed economy,

A) marketing managers make all the important economic decisions. B) government planners make all the important economic decisions. C) all the important economic decisions are made by voters in political elections. D) consumers make all the important economic decisions. E) the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy.

238) In a ________, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy.

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A) mixed economy B) command economy C) market-directed economy D) production-oriented economy E) controlled economy

239)

In a market-directed economy, A) profit, survival, and growth are all guaranteed for producers. B) consumers have little freedom of choice. C) consumers decide what is to be produced and by whom through their dollar "votes." D) prices usually do not change according to supply and demand. E) only the needs of the majority are served.

240)

Which of the following statements about economic decision-making is true?

A) In a market-directed economy, the micro-level decisions of individual producers and consumers determine the macro-level decisions. B) Government planning usually works best when economies become more complex and the variety of goods and services produced is fairly large. C) The United States may be considered a pure market-directed economy. D) Command economies usually rely on market forces to determine prices.

241) ________ in the marketplace are a rough measure of how society values particular goods and services. A) Inventories B) Prices C) The cost of labor and materials D) The number of producers E) Discrepancies of quantity

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242)

Price is a rough measure of A) company profits. B) customer value. C) market supply. D) company costs. E) economic inflation.

243)

The role of price in a market-directed economy is to

A) allocate resources and distribute income according to consumer preferences. B) serve as a rough measure of the social importance of consumer goods and services. C) coordinate the economic activity of many people and institutions. D) serve as a rough measure of the value of resources used to produce goods and services. E) All these answers are correct.

244)

Which of the following statements about economic systems is true?

A) Consumers usually have more freedom of choice in a market-directed economy. B) Command economies are most effective for countries with large and complicated varieties of goods and services. C) Branding is less common in a market-directed economy than in a command economy. D) The United States is a good example of a command economy. E) None of these statements is true.

245)

Which of the following is not true about a market-directed economy?

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A) Consumers enjoy maximum freedom of choice. B) Producers enjoy maximum freedom of choice. C) The interaction between consumers and producers is great. D) Government is responsible for setting up all marketing activities. E) The price of a consumer product serves as a measure of its value.

246)

Consumers in a market-directed economy

A) enjoy limited freedom of choice. B) are taxed to provide for goods and services that benefit society, such as public health, national defense, roads, and police and fire protection. C) do not decide what is to be produced and by whom. D) have to buy what is being produced. E) do not have to buy any goods or services.

247) Which of the following is LEAST likely to be a government role in a market-directed economy? A) setting rules to protect individual rights and freedom B) supervising the economy C) providing things such as mass transportation and highways, national defense, police and fire protection, and public health services D) controlling interest rates and the supply of money E) determining prices, thereby allocating resources and distributing income

248)

________ is/are not the government's job in a market-directed economy. A) Protecting property and enforcing contracts B) Regulating radio and television broadcasting C) Setting import and export rules D) Determining what and how much is to be produced E) Controlling interest rates and the supply of money

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249)

Which of the following statements about a market-directed economic system is true? A) Consumers are free to choose from a range of options that meets their needs. B) Profit, growth, and survival are guaranteed. C) Government has no role. D) There is very little interaction between producers and consumers. E) Consumers have little freedom of choice.

250)

Which of the following statements about market-directed economies is not correct?

A) A market-directed economy adjusts itself. B) The American economy is completely market-directed. C) Consumers in a market-directed economy decide what is to be produced and by whom—through their dollar "votes." D) Consumers in a market-directed economy are free to choose from a range of options that meet their needs.

251) Which of the following is TRUE about the effect of the rise of digital and social media in the market? A) It gives customers more power. B) It takes power away from customers. C) It renders sellers powerless to respond to customer complaints. D) It makes it impossible for customers to get redress. E) It makes prices more expensive.

252) The ability of customers to post positive or negative information on the Internet that prospective customers might see

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A) incentivizes companies to play by the socially accepted rules of the game. B) encourages companies to lessen their presence on the Internet. C) gives companies more power over customers. D) weakens the power of customers because problems aren’t resolved in person. E) is a loss for everyone, because nobody knows who to believe.

253) The American and most other Western economies are mainly, but not completely, market directed. In these economies, which of the following best exemplifies this? A) The government enforces “rules of the game.” B) The government refuses to play a role in the economy. C) Public interest groups supervise the entire system. D) Customers have gained control in the market through the use of technology. E) Consumers are not forced to buy any goods or services.

254) How does the Center for Science in the Public Interest (CSPI), a public interest group, act as a check on the market-directed economy? A) It exposes firms that make false or exaggerated product claims. B) It acts as a forum for consumers to report product dissatisfaction reviews. C) It lets consumers easily access environmental product information and reviews. D) It is a consumer watchdog group that pressures food companies to make healthier products. E) It lets technology firms play by the socially accepted rules of the game.

255) Which of the following is a consequence of consumers easily finding product satisfaction information through consumer reviews on the Internet?

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A) It allows firms to make exaggerated claims about their products. B) It allows government agencies to control interest rates and the supply of money. C) It allows firms to monopolize markets. D) It lets firms evaluate macro-marketing strategies in terms of society's objectives. E) It incentivizes firms to play by the socially accepted "rules of the game."

256)

Which of the following statements about economic systems is not true?

A) Government has less of a role in market-directed economies than in command economies. B) A market-directed economy self-adjusts through producer and consumer choices. C) Producers always make a profit in a market-directed system. D) A command economy is more likely to work if the variety of goods and services is small. E) Both market-directed and command economies need a macro-marketing system.

257)

Which of the following statements does not describe a command economy? A) Government bureaucrats decide what and how much is to be produced. B) A command economy is sometimes called a "planned economy." C) Prices are set by the law of supply and demand. D) Producers offer a highly limited assortment of goods and services. E) There is little variety, so consumers have few choices.

258)

All of the following are checks on the market-directed macro-marketing system EXCEPT A) the government forecasting what is needed to avoid shortages. B) customers voting with their dollars based on prices charged. C) customers voicing satisfaction and dissatisfaction. D) public interest groups sharing information. E) the government setting the “rules of the game.”

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259) Which era of marketing is characterized by families who sold their surpluses to local distributors? A) the simple trade era B) the production era C) the sales era D) the marketing department era E) the marketing company era

260) The text considers five "eras" of marketing evolution. These five eras in their logical order are A) simple trade, production, sales, marketing company, and marketing department. B) subsistence, production, sales, entrepreneurial, and marketing company. C) simple trade, production, sales, marketing department, and international trading. D) simple trade, production, sales, entrepreneurial, and marketing company. E) simple trade, production, sales, marketing department, and marketing company.

261) The text discusses the evolution of marketing through five "eras." Which of the following is not one of these eras? A) the diversification era B) the sales era C) the production era D) the marketing company era E) the simple trade era

262)

In the ________ era, families traded or sold their "surplus" output to local distributors.

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A) production B) pure subsistence C) sales D) simple trade E) marketing company

263) era.

From the Industrial Revolution until the 1920s, most companies were in the ________

A) marketing department B) production C) simple trade D) marketing company E) sales

264)

Which of the following statements is MOST characteristic of the production era? A) "If we sell harder, we will sell more." B) "We need to cater to the diverse needs of consumers." C) "If we can make it, it will sell." D) "The more options we offer consumers, the better." E) "Advertising is the key to our success."

265) Which of the following is the BEST example of management thinking during the "production era"? A) "We need to make whatever products are easy to produce." B) "We need to find out what the customer wants." C) "The more salespeople we have, the more we can sell." D) "We need to work hard to sell the product to our customers." E) "If we produce a good product, customers will find us and buy it."

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266) Which of the following is the BEST example of management thinking during the "production era"? A) "The more we advertise a product, the more we can sell." B) "We need to increase our sales effort—to sell what we can produce." C) "If we can produce it, customers will buy it." D) "We need to be selective and produce what customers want." E) "The lower we price a product, the more we can sell."

267) At one point, good PC software for producing digital videos was not available, but it was much in demand by businesses. The first companies to produce a specific type of program had good sales even though they did little promotion and their programs were not "user-friendly." It seemed that many of these "innovators" operated as if they were in the ________ era. A) simple trade B) marketing department C) sales D) marketing company E) production

268) Because of increased competition during the ________ era, firms put new effort into winning customers. A) simple trade B) sales C) production D) marketing company E) marketing department

269) During the ________ era, concern about increased competition led firms to focus on selling to attract customers.

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A) sales B) simple trade C) marketing department D) production E) marketing company

270) A firm that focuses its attention primarily on "selling" its present products in order to meet or beat competition is operating in which of the following? A) production era B) sales era C) marketing department era D) marketing company era E) advertising era

271) The ________ era is a time when a company emphasizes selling because of the increased competition in the external environment. A) supply B) demand C) production D) marketing E) sales

272) The president of a company that produces cardboard boxes is concerned about the large number of competitors with extra capacity. As he put it, "Our best shot is in the hands of our sales manager—she makes all of our marketing decisions and is creative enough to figure out how to sell more boxes." It seems that this company is run as if it were in the ________ era.

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A) production B) marketing company C) simple trade D) sales E) marketing department

273) The owner of a company that produces electronic circuit boards sees many competitors with extra capacity and says, "The only hope is that our sales manager, who makes all of our marketing decisions, will find a way to sell more boards." It seems that this company is run as if it were in the ________ era. A) production B) sales C) excess capacity D) marketing company E) marketing department

274) Administrators at a university noted that they were 200 students short of their enrollment projection as the start of the school year approached. The president of the university, fearing a revenue shortage, told the director of admissions, "You need to use whatever means necessary to get enough students to meet the projection before classes start. Run ads in the newspaper, call high school guidance counselors, recruit from our pool of rejected applicants—whatever it takes." The university president is operating as though he were in the ________ era. A) simple trade B) production C) sales D) marketing department E) marketing company

275)

Which of the following statements regarding the "sales era" is true?

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A) The emphasis was on producing. B) A central business problem was the decision of where to put the company's effort. C) More production capability was available than ever before. D) It followed the marketing department era.

276)

During the sales era, A) families traded or sold their surplus output to local distributors. B) characteristic management thinking was, "If we can make it, it will sell." C) all marketing activities were brought under the control of one department. D) increased competition made firms focus on winning customers. E) marketing people did both short-run and long-run marketing planning.

277) Asa Meyer was just named FireFly Products sales manager, with responsibilities for all marketing planning. FireFly's president tells him that his job is to "outsell the competition." FireFly is operating in the ________ era. A) market-oriented B) production C) sales D) marketing company E) marketing department

278)

As a firm moves from the sales era to the marketing department era, it is likely to A) have marketing people who develop long-range plans—sometimes five or more years

ahead. B) begin to integrate all the firm's marketing activities. C) place less emphasis on earning a profit and more emphasis on what customers will buy. D) adopt a narrower view of marketing. E) be more concerned with its ability to produce enough to meet demand.

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279) Myra Martinez was just named Treasure Island, Inc.'s marketing manager—with responsibilities for short-run policy planning of the firm's advertising, sales, marketing research, purchasing, and distribution efforts. Treasure Island is operating in the ________ era. A) market-oriented B) production C) marketing department D) marketing company E) sales

280) The main difference between the "marketing department era" and the "marketing company era" is A) more emphasis on selling and advertising in the marketing department era. B) whether the president of the firm has a background in marketing. C) more emphasis on short-run planning in the marketing company era. D) whether the whole company is customer-oriented. E) There is no difference.

281) When marketing people do long-range planning and the whole company is guided by the "marketing concept," the company has entered the ________ era. A) production B) customer satisfaction C) marketing company D) consumerism E) marketing department

282) A company where the marketing people do both short-run and long-range planning is operating in the ________ era.

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A) marketing company B) sales C) simple trade D) marketing department E) production

283)

Which of the following would be relevant in the marketing company era? A) bringing all marketing activities together under the control of one department B) planning for five or more years ahead C) reselling goods to consumers and intermediaries D) focusing on production

284) The president of a financial services company says that her new marketing manager has changed things a lot—making long-range plans about where the firm should focus its effort, and coordinating the decisions about what services to offer and how they should be promoted and priced. It seems that this company is just moving into the ________ era. A) marketing company B) sales C) production D) marketing department E) simple trade

285) SouthFace Corporation just named Chloe Perry to a marketing management position. One of the reasons she accepted a position with this company was its reputation for market-oriented long-range planning. SouthFace Corp. is probably operating in the ________ era.

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A) planning B) marketing company C) marketing research D) marketing department E) None of these answers is correct.

286)

Which of the following is true of the five stages in marketing evolution? A) In the marketing department era, firms do both short-run and long-run planning. B) The first era to evolve was the sales era. C) In the marketing company era, firms do short-run planning only. D) Most firms operate in the production era. E) None of these answers is correct.

287) The owner of The Rascal’s Bar & Grill does long-range planning, and the whole company is guided by the marketing concept. Rascal’s appears to be operating in the ________ era. A) production B) customer satisfaction C) marketing company D) consumerism E) marketing department

288)

Which of the following statements about the five stages in marketing evolution is true? A) Few firms have graduated to the marketing company era. B) The sales era continued until at least 1950 for most firms. C) In the marketing department era, firms began to do long-run planning. D) The production era was the first era to evolve.

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289) with

The marketing concept is a strategic way of approaching business that contrasts sharply

A) the marketing orientation. B) the production orientation. C) the profit orientation. D) macro-marketing. E) the triple bottom line.

290)

Compared with other approaches to business, the marketing concept is distinct in that it A) focuses on profits. B) produces new products and services. C) creates a broad assortment of products. D) produces quality products. E) focuses on satisfying customers' needs.

291) The triple bottom line is a measure of a firm's success based on multiple criteria, commonly referred to as A) product, price, and promotion. B) people, planet, and profit. C) partnership, planning, and positioning. D) segmentation, targeting, and positioning. E) brands, buyers, and bucks.

292) When a firm considers a triple bottom line as a measure of long-term success, this means that it measures outcomes in which of the following areas?

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A) economic success, social impact, and political change B) firm profitability, customer satisfaction, and behavioral change C) economic success, social impact, and environmental impact D) company effort, customer satisfaction, and relative market share E) customer satisfaction, environmental impact, and production efficiency

293) An organization practicing ________ aims all its efforts at satisfying its customers—at a profit. A) the sales concept B) a production orientation C) in the marketing department era D) profit maximization economics E) the marketing concept

294) All of the following are the basic ideas included in the definition of the marketing concept EXCEPT A) customer satisfaction. B) total company effort. C) profit, or another measure of long-term success, as an objective. D) making whatever products are easy to produce and then trying to sell them. E) giving customers what they need.

295)

A production-oriented firm typically A) views customer credit as a customer service. B) sets inventory requirements with customer needs in mind. C) tries to sell the products it can make easily. D) focuses advertising on need-satisfying product benefits. E) operates as an integrated unit.

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296) Managers who think of customers existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society have a ________ orientation. A) marketing B) production C) selling D) dynamic E) customer

297)

A manager with a production orientation would A) think of customers as existing to buy the firm's output. B) take production decisions guided by customers' needs. C) find out what product customers want to buy, and then produce that product. D) have production managers handle all marketing activities. E) get the production department to work closely with other departments.

298)

Which of the following is MOST likely to be found in a production-oriented firm? A) agreements among departments about how to improve customer satisfaction B) making products that are easy to produce C) producing goods that exactly meet the customer's needs D) a focus on profit rather than sales

299)

Which of the following is LEAST likely to be found in a production-oriented firm? A) disagreements among departments about how to improve the company's product B) making products that are easy to produce C) producing goods that exactly meet the customer's needs D) a mass marketing approach

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300) At MetroTech, salespeople blame the production people for making inferior products, and the production people complain that the salespeople are just not getting enough orders. MetroTech seems to have a ________ orientation. A) bottom line B) production C) customer D) sales E) marketing

301) MetroTech Corporation has been experiencing declining profits. The accounting department blames the MetroTech marketing staff for "out of control" sales costs. The salespeople blame the warehouse for being slow to fill orders. And the warehouse manager says that the production department can't meet its schedule. MetroTech seems to have A) implemented the marketing concept. B) a customer orientation. C) a marketing orientation. D) a sales orientation. E) a production orientation.

302) Accepting the "marketing concept" means that a firm should have a ________ orientation. A) marketing B) research C) production D) sales E) planning

303)

A firm with a marketing orientation

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A) has little need for salespeople. B) sells what it can make easily. C) tries to determine customers' needs before developing its product. D) focuses advertising on product features.

304)

The three basic ideas in the "marketing concept" are A) customer satisfaction, resource efficiency, and sales maximization. B) customer satisfaction, total company effort, and sales growth. C) resource efficiency, sales growth, and profit maximization. D) customer satisfaction, marketing manager as chief executive, and profit. E) customer satisfaction, total company effort, and profit.

305)

Which of the following is one of the three basic ideas in the "marketing concept"? A) resource efficiency B) a total company effort C) to obtain economies of scale D) to maximize sales E) the president having a marketing background

306)

Which of the following is one of the three basic ideas in the "marketing concept"? A) resource efficiency B) economies of scale C) profit as an objective D) to maximize sales E) training

307)

Which of the following is one of the three basic ideas in the "marketing concept"?

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A) resource efficiency B) customer satisfaction C) to obtain economies of scale D) to maximize sales E) the president having a marketing background

308)

An important step in applying the marketing concept is

A) changing the firm's organizational structure. B) changing the firm's management methods and procedures. C) appointing someone with a marketing management background to be the firm's president. D) hiring a marketing consultant. E) making a commitment to customer satisfaction.

309)

The marketing concept says that a business firm should aim all its efforts at A) doing more advertising and selling than competitors. B) selling what the company produces efficiently. C) satisfying customers regardless of profitability. D) making a profit selling to satisfied customers. E) producing products at the lowest cost.

310)

The "marketing concept" says that a business firm should A) aim all its efforts at meeting society's needs, regardless of profitability. B) aim all its efforts at satisfying its customers—at a profit. C) sell those products it can make at the lowest cost. D) place a heavy emphasis on developing new products. E) treat advertising and selling as its priority.

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311)

A producer with a marketing orientation is MOST likely to A) distribute the product according to customer needs. B) distribute the product in as many retail outlets as possible. C) provide overnight express shipping at an extra cost. D) use e-commerce as a key element in distribution. E) distribute directly from the producer to the consumer.

312)

Complete acceptance of the "marketing concept" would require

A) making sure that all departments focus their efforts on satisfying customer needs. B) having all production, finance, accounting, and personnel managers report directly to the marketing manager. C) placing less emphasis on profit as the objective of the firm. D) trying to satisfy the needs of each and every customer.

313)

"Production orientation" refers to the attitudes of A) sales managers. B) accountants. C) financial managers. D) production managers. E) anyone who doesn't practice the marketing concept.

314)

In a firm operating as a total system to implement the marketing concept, A) the whole company is customer-oriented. B) there are no departments. C) product planning is under the control of the production or engineering departments. D) the marketing manager directs and controls all company activities. E) None of these answers is correct.

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315)

The total system view of the marketing concept builds on the idea that A) sales should be the firm's high-level objective. B) a company should not have specialized departments. C) each department in an organization should do what it does best. D) all departments—not just marketing—should be guided by customer needs. E) None of these answers is correct.

316)

In a firm that has a total company effort in implementing the marketing concept, A) there are "fences" around individual departments. B) not all departments impact customer satisfaction. C) the firm lacks a central focus. D) departments—even very specialized ones—are guided by what customers want. E) the firm is more production-oriented than marketing-oriented.

317) The numeric data that is used by marketing managers to evaluate performance against a set target or goal is referred to as A) market information. B) production statistics. C) the triple bottom line. D) marketing metrics. E) standardization and grading.

318)

Which of the following reasons best describes why a firm would use marketing metrics?

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A) to understand customer satisfaction B) to determine how well a marketing strategy is performing C) to ascertain the effectiveness of different departments within the firm D) to set marketing targets and goals E) to decide what products are easiest to produce

319) The owner of a food truck implemented a new location strategy so that she would be better positioned near a crowded office park during the lunch hour. How should she evaluate her new location strategy? A) She should use marketing metrics to compare performance between the old location and the new location. B) She should use customer satisfaction surveys to evaluate performance between the two locations. C) She need only compare the revenue numbers between the new and old locations. D) She should analyze the effectiveness of the universal functions of marketing. E) She should compare the triple bottom line of both locations.

320)

Which of the following is a basic idea of the marketing concept? A) A production orientation must guide the whole system. B) An organization should build "fences" around its own departments. C) Survival and success require a profit. D) A firm should "give customers what it produces best." E) A firm is obliged to have a positive effect on society.

321)

Adoption of the marketing concept

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A) is easy for most firms. B) occurred first in the service industry. C) has been universal. D) has been slow for producers of industrial commodities. E) happened last among consumer product companies.

322) Whiz Bang Cinema is a restaurant. Whiz Bang’s owners worry about the environment, using paper products made from recycled paper and recycling everything possible. Whiz Bang also gives its employees every Sunday off to be with family, and the restaurant sponsors many local sports teams. It does this while also making sure it is profitable. Whiz Banks seems to operate with a A) sustainable focus. B) production orientation. C) triple bottom line. D) strong profit motive. E) marketing department approach.

323)

The marketing concept can be applied by A) a nurses' association. B) cosmetics manufacturers. C) nonprofit hospitals. D) national parks. E) All these answers are correct.

324)

The marketing concept can be applied by

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A) nonprofit hospitals. B) symphony orchestras. C) private universities. D) manufacturers of consumer products. E) All these answers are correct.

325)

Which of the following is the best example of the marketing concept in action?

A) A product manager tells her sales force, "The inventory in the warehouse must be sold if we are to make a profit, so redouble your sales efforts." B) A manufacturer of industrial chemicals adapts its formulas and goes after the big consumer cleaning market. C) A cleaning supplies firm learns that many consumers are having trouble hiring maids, so it develops a plan to offer customers complete house cleaning services. D) An Internet retailer finds that shoppers are abandoning their shopping carts before checking out, so it promotes its $10 discount on each customer's first purchase. E) A student group wants to hold an awards banquet, so it buys Krispy Kreme donuts and sells them to friends who want to help the club achieve its objectives.

326)

A public utility that has adopted the marketing concept would be most likely to

A) set up a special service to help consumers reduce expensive peak-hours energy consumption. B) lower prices until almost all consumers felt that prices were fair. C) advertise its "public service role" to improve its image with the public. D) use email to send customers a personal apology when blackouts occur. E) None of these answers is correct.

327)

A local symphony group that has adopted the marketing concept would be most likely to

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A) lower ticket prices until all its concerts sell out. B) advertise so consumers know about the quality of the musicians who play in its concerts. C) find out what kind of music local residents want to hear. D) use only its best musicians to handle solo performances.

328)

Which of the following illustrates the marketing concept in action?

A) Three pediatricians set up a group practice, so that at least one is always available for emergencies. B) Bank ATMs that dispense cash are placed in fast-food restaurants. C) The Nevada auto registration office mails license tags to people, to reduce inconvenient waiting in line. D) A veterinarian has office hours in the evening to see pets whose owners must work during the day. E) All these answers are correct.

329)

Which of the following illustrates the marketing concept in action?

A) A young lawyer gives free legal advice to poor people. B) A local police department organizes a "community crime watch" program in a neighborhood that has had many burglaries. C) Several lawyers set up a group practice—so that the costs of the office and equipment can be shared. D) None of these illustrate the marketing concept in action.

330)

A local theater group that has adopted the marketing concept would be MOST likely to

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A) promote the sale of subscriptions, so that patrons can buy tickets at a reduced price for several plays at one time. B) use publicity to announce upcoming plays. C) do a survey to find out what new shows patrons would like to see. D) sell tickets via the Internet.

331) FlyFar Airlines uses marketing research to determine customer needs and assess how well the company meets them. This suggests that FlyFar managers exhibit A) a marketing orientation. B) social responsibility. C) separation of information. D) the innovation concept. E) a production orientation.

332) Which of the following practices would suggest that Acme Tools practices a marketing orientation? A) It sets inventory levels with customer requirements and costs in mind. B) It sells products that it can easily make for its customers. C) It focuses its advertising efforts on product features and how products are made. D) It views customer service as an activity required to reduce consumer complaints. E) It ends its relationship with customers when a sale is made.

333)

A firm with a marketing orientation is MOST likely to A) view advertising as an unnecessary expense. B) recognize that effective advertising is the key to sales. C) advertise how a product meets customers' needs. D) focus its advertising on product features. E) eliminate advertising as a strategy.

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334) Which of the following is not likely to be found in a company with a marketing orientation? A) The company sells whatever it can make. B) The company sees customer credit as a service. C) The company designs its packaging as a selling tool. D) The company uses marketing research to see if it is satisfying its customers. E) The company focuses on locating new opportunities.

335) Which of the following is not an example of a marketing orientation, as opposed to a production orientation? A) The role of the company's marketing research is to determine customer needs and how well the company is satisfying them. B) The relationship with the customer is based on customer satisfaction before and after a sale, leading to a profitable long-run relationship. C) The firm's focus is on reducing its costs. D) The role of the company's customer service is to satisfy customers after the sale, so they'll come back again. E) Company costs that do not add value to customers should be eliminated.

336) Which of the following is not an example of a production orientation, as opposed to a marketing orientation? A) The company sells what it can make easily. B) Advertising focuses on the benefits of the product to customers. C) The relationship with the customer ends with the sale of the product to the customer. D) The purpose of customer service is to reduce customer complaints. E) Advertising focuses on the features of the product.

337)

In a firm with a production orientation,

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A) customer needs determine company plans. B) relationships with customers extend beyond a single sale. C) costs that do not give value to customers are eliminated. D) marketing research, if used at all, is for determining customers' reactions. E) advertising is focused at the need-satisfying benefits of goods and services.

338) ________ refers to the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. A) Operating cost B) Profit margin C) Customer value D) Net value E) Satisfaction

339)

Which of the following statements about customer value is true?

A) Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. B) The greater the competition, the less important customer value is. C) The sure way to achieve high customer value is to offer a lower price. D) It is the manager's view of customer value that matters, not the customer's. E) None of these statements is true.

340)

Which of the following statements about customer value is true?

A) It can't be applied in competitive situations. B) It considers price but no other elements of the marketing mix. C) It applies to goods but not services. D) Its emphasis on what the customer sees as the positive things about a marketing mix means that the negatives are likely to be ignored. E) None of these statements is true.

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341) Customer value typically would not be impacted by a marketing manager's decisions concerning A) product. B) place. C) promotion. D) price. E) Any of these might impact customer value.

342)

Which of the following best ascertains customer value? A) customer monetary costs plus firm profits B) customer benefits minus customer costs C) customer costs plus customer benefits D) customer effort to receive a benefit minus the time delay to receive the benefit E) firm benefits minus customer costs

343)

In evaluating customer value, which of the following is MOST important? A) the customer’s view of costs and benefits B) the price of the market offering C) a firm’s understanding of customer costs and benefits D) high profit margins E) the market offering with the least cost to customers

344)

A functional benefit that a customer may receive from a market offering would

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A) offer top-quality aesthetics. B) save the customer time. C) lower the customer’s anxiety. D) give the customer hope. E) provide a sense of belonging.

345)

Which of the following is the best example of a life-changing customer benefit?

A) A coffee shop redesigns its drive-through window service to cut back on customer wait times. B) An office supply store institutes a loyalty card program in which customers can use earned points for discounts on future purchases. C) A restaurant redecorates to make its space more comfortable. D) A grocery store decides to lower the prices on all produce. E) A gym institutes a buddy program in which a staff member checks in weekly with new enrollees to offer encouragement and advice.

346) Which of the following is not an example of a customer cost that plays a role in a customer’s view of value? A) the interest rate B) potential rewards C) associated fees D) wait time to receive a benefit E) effort required to receive a benefit

347)

Which of the following statements about price and customer value is accurate?

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A) Customer value is only achieved from a low price. B) Customer value is uninfluenced by price. C) A low price trumps all other customer benefits. D) A high price is acceptable when it obtains desired benefits. E) A customer will never accept a higher price market offering.

348)

Which of the following statements about customer value is true?

A) Building relationships with customers means providing customer value before, but not after the purchase of a product or service. B) Retaining current customers is usually less costly than taking customers away from a competitor. C) A firm's advertising department cannot be expected to develop ads to convince a customer to buy from the firm more than once. D) People in the organization who are not in the sales or customer service areas should never be called upon to help resolve a customer's problem. E) None of these statements is true.

349) In order to build relationships with customer value, firms must do all of the following EXCEPT A) ensure that everyone in a firm works together to provide customer value before and after each purchase. B) brief their advertising people to develop ads that try to convince a customer to buy once. C) attract customers in the first place—and keep them satisfied after they buy. D) try to adopt the marketing concept. E) try to eliminate costs that do not give value to customers.

350)

Customer value

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A) is greater if costs exceed benefits. B) becomes less important as competition increases. C) is the same thing as low price. D) affects a customer's relationship with a firm before and after a sale. E) None of these answers is correct.

351) The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits is called customer A) bias. B) cost. C) price. D) value. E) loyalty.

352)

Which of the following is not true about a firm practicing the marketing concept? A) Everyone in the organization focuses on satisfying customers. B) Offering superior customer value attracts customers. C) Satisfying customers leads to customers defecting to the competition. D) Firms build profitable customer relationships. E) All of these are true.

353)

Nonprofit organizations

A) do not have a profit objective, so the marketing concept does not apply. B) can benefit by adopting the marketing concept. C) are fundamentally different than business firms—so they should embrace a production orientation rather than a marketing orientation. D) do not need to be concerned with marketing activities. E) None of these answers is correct.

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354)

Which of the following is true of business firms and nonprofit organizations?

A) Unlike a business firm, a nonprofit organization needs resources and support to survive and achieve its objectives. B) Unlike a business firm, a nonprofit organization must take in as much money as it spends or it won't survive. C) A nonprofit organization does not measure "profit" in the same way as a business firm does. D) Nonprofit organizations face competition for customers; business firms do not. E) Unlike a business firm, a nonprofit organization gets support directly from those who receive the benefits.

355)

In nonprofit organizations, the marketing concept A) is not relevant. B) has different measures of success. C) is usually easy to adopt because of how nonprofits organize for marketing. D) can be implemented without considering customer needs. E) operates with a production orientation.

356) Given the nature of their work, which of the following should have a marketing orientation? A) Girl Scouts of America B) Dallas–Fort Worth Symphony C) American Cancer Society D) University of Wisconsin E) All of these organizations should have a marketing orientation.

357)

Which of the following organizations should apply the marketing concept?

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A) National Park Service B) National Federation of the Blind C) Christian Children's Fund D) United States Postal Service E) All of these organizations should apply the marketing concept.

358)

Which of the following describes the micro–macro dilemma? A) What is good for some producers and consumers may not be good for society as a

whole. B) Marketing people are unsure about individual activities versus social processes. C) In a multiproduct company, which product is to be emphasized over another is unclear. D) Most people don't want much freedom of choice in buying products. E) Intermediaries facilitate exchange, but they add to the cost of goods.

359)

According to the concept of social responsibility, a firm has a duty to A) communicate regularly with the public. B) satisfy consumer needs at any cost. C) place profit above all other considerations. D) place customer satisfaction above all other considerations. E) work in a way that is always good for society as a whole.

360)

Which of the following is not a challenge related to social responsibility?

A) There is little agreement on who gets to determine what is "good" for society. B) Actions that may seem good for society may be costly to a firm. C) Some consumers make purchases based on the perceived societal benefits of a product or service. D) It is impossible to know what impact a firm's actions will have on future generations. E) Acting to satisfy one group of stakeholders may anger another group of stakeholders.

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361)

The term "micro–macro dilemma" means that

A) most people are both producers and consumers. B) marketing people cannot agree on whether marketing should be viewed as activities or as a social process. C) macro-marketing is just a small part of a larger micro-marketing system. D) the micro view of marketing is concerned with the flow of goods and services from producers to consumers—while the macro view is not. E) what is "good" for some producers and consumers may not be good for society as a whole.

362) Trying to balance the interests of people who want to consume alcoholic drinks and the dangers of drunk driving is an example of A) the role of a central market. B) subsistence marketing. C) political action. D) the macro–micro dilemma. E) the exchange process in marketing.

363) The fact that many Americans want the convenience of driving gas-guzzling trucks and sport utility vehicles that also contribute disproportionately to pollution and global warming is an example of A) the micro–macro dilemma. B) discrepancies in customer value. C) marketing ethics. D) the responsibilities of the marketer. E) the marketing concept.

364) The city of St. Louis is encouraging its residents to drink tap water instead of filling landfills with plastic water bottles, even though some consumers prefer the convenience of plastic water bottles. This is an example of Version 1

A) customer value. B) economies of scale. C) the storing function. D) innovation. E) the micro–macro dilemma.

365)

Which of the following is an example of the micro–macro dilemma?

A) Disposable packages are convenient but contribute to environmental problems. B) Children like to ride bicycles, but accidents are common. C) Sulfites help to keep restaurant salads looking fresh, but some people have a dangerous allergic reaction to sulfites. D) Jet skis can be fun but can also be dangerous to the driver and others. E) All of these are examples of the micro–macro dilemma.

366)

Which of the following is the BEST example of the micro–macro dilemma? A) Many consumers buy imported cars, even though they say they like American cars

better. B) High performance cars are fun to drive but may be dangerous to others. C) Imported cars may cost buyers more to buy now but may have better resale value later. D) A fuel-efficient car may cost more to buy but less to operate. E) The economy may be growing, but many people still are not able to buy a new car.

367)

Which of the following is the BEST example of the micro–macro dilemma?

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A) Pepsi Blue sales went up, but total sales of all soft drinks went down. B) A small group of loyal consumers really like RC Cola best, but most consumers don't like it at all. C) The deposit on returnable soft drink bottles is about equal to the cost of the bottle. D) Paper cups for soft drinks are convenient, but they often end up as litter along the highway. E) Snapple beverages are more popular in Texas than in the rest of the United States.

368)

Which of the following is an example of the micro–macro dilemma?

A) A homeowner purchases a ladder but falls off it because he didn't set up the ladder according to the safety instructions posted on it. B) A person gets a speeding ticket because she was talking on her cell phone while driving and didn't notice a speed limit sign. C) A person drives without fastening his seat belt even though a warning light and chime remind him to "buckle up." D) A person is injured while using a power lawn mower because of a small stone that is hurled from the discharge chute. E) A restaurant owner uses plastic containers to keep "take-out" food warm for customers, but the containers cannot be reused or recycled.

369)

Which of the following is not an example of the micro–macro dilemma?

A) Many people like beer and wine, but drunk driving is a big social problem. B) Some people like to eat a lot but later feel guilty about eating too much. C) A "good" lawn mower can be produced cheaply, but its price must be higher if its design must be safe for "ignorant" users. D) A smoker may enjoy a cigar, but the smell can make other people sick. E) Downhill snow skiing is fun, but it is really quite dangerous.

370) ________ refers to a firm's obligation to improve its positive effects on society and reduce its negative effects.

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A) The nonprofit orientation B) The micro–macro dilemma C) Marketing ethics D) Legal obligations E) Social responsibility

371)

Which of the following statements is true regarding social responsibility in marketing?

A) Being socially responsible usually leads to a negative response from customers. B) Being socially responsible can conflict with a firm's profit objective. C) Companies tend to avoid developing written codes of ethics because standards for professional behavior are ambiguous by nature. D) Firms tend to advance their own short-term interests at the expense of customers.

372) A marketing manager made a speech in which he described his organization as having "really embraced the marketing concept over ten years ago." A critic in the audience argued that the manager didn't understand the "socially conscious" view of the marketing concept. Given the critic's argument, the marketing manager may work for A) a fruit processor. B) the public library. C) a firm that recycles aluminum cans. D) a soap producer. E) a motorcycle producer.

373)

Moral standards that guide marketing decisions and actions are called A) civil laws. B) macro dilemmas. C) micro dilemmas. D) marketing ethics. E) laws.

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374)

Which of the following is true concerning marketing ethics? A) Individuals develop moral standards based on their own values. B) Opinions about what is right or wrong vary from one society to another. C) The prevailing practice of most businesspeople is to be fair and honest. D) Marketing ethics has its critics. E) All of these answers are true.

375) In the American Marketing Association's Statement of Ethics, which ethical value stresses a firm's attempts to balance the needs of its buyers with the interests of sellers? A) honesty B) fairness C) responsibility D) citizenship E) openness

376) In the American Marketing Association's Statement of Ethics, which ethical value stresses a firm's attempts to recognize the basic human dignity of its customers? A) citizenship B) respect C) honesty D) openness E) responsibility

377) Which of the following criticisms focuses most directly on a macro view of marketing, rather than on a micro view?

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A) Products often wear our right after the warranty expires. B) Much TV advertising is annoying. C) Marketing exploits the poor and the uneducated. D) Prices for very similar products vary a lot from store to store. E) Door-to-door salespeople are trained to be pushy.

378) Firms develop ________ to promote fair and honest dealings with all stakeholders inside and outside of the organization. A) marketing plans B) marketing departments C) codes of ethics D) intermediaries E) a marketing orientation

379) Which of the following is a common criticism of marketing in the United States and other developed societies? A) Marketing motivates people toward “things” instead of social needs. B) Marketing only focuses on the necessities. C) Marketing exploits those with resources to spend. D) Marketing promotes the “safety” of products, which increases prices. E) Marketing makes it more difficult for people to buy things that they want instead of need.

380)

In the marketing context, a “better world” includes all of the following EXCEPT

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A) sellers make a profit without having to consider sustainability. B) buyers’ consumption choices allow them to experience a better quality of life. C) marketing strategy decisions address some of the world’s most challenging problems. D) sellers and buyers make decisions that have less adverse impacts on others. E) buyers and sellers make better and healthier decisions.

381)

Marketing that seeks to make the world a better place, A) can still be profitable. B) is just a ploy to get people to buy stuff they don’t need. C) is a charitable endeavor. D) does not address the world’s real problems. E) is totally ineffective.

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Answer Key Test name: Chap 01_17e 1) FALSE Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 2) FALSE Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 3) FALSE Making goods or performing services is called production. Marketing is a much bigger process, involving the flow of need-satisfying goods and services from producer to consumer. 4) FALSE Estimating what price consumers are willing to pay for a product and assessing whether the firm can make a profit selling at that price is an example of a marketing activity. 5) TRUE Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 6) TRUE Marketing plays an essential role in providing consumers with needsatisfying goods and services and, more generally, in creating customer satisfaction. 7) TRUE Version 1

Customer satisfaction is the extent to which a firm fulfills a consumer's needs, desires, and expectations. 8) FALSE Marketing helps make sure that the right goods and services are produced and find their way to customers. 9) TRUE In advanced economies, marketing costs about 50 cents of every consumer dollar. 10) FALSE In advanced economies, marketing costs about 50 cents of every consumer dollar. 11) TRUE Marketing encourages innovation, which is the development and spread of new ideas, goods, and services. 12) FALSE Marketing encourages innovation, which is the development and spread of new ideas, goods, and services. 13) TRUE We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 14) FALSE We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 15) FALSE Version 1

We can view marketing in two ways: from a micro view as a set of activities performed by organizations and from a macro view as a social process. 16) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 17) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 18) TRUE Marketing in micro view is defined as the performance of activities that seek to accomplish an organization's objectives. 19) FALSE Marketing applies to both profit and nonprofit organizations. 20) FALSE Marketing applies to both profit and nonprofit organizations. 21) FALSE Marketing applies to both profit and nonprofit organizations. 22) FALSE Marketing applies to both profit and nonprofit organizations. 23) TRUE

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Marketing, rather than production, should begin with determining what goods and services are to be developed to satisfy customer needs. 24) FALSE Marketing, rather than production, should determine what goods and services are to be developed. 25) FALSE Marketing should begin with potential customer needs and not with the production process. 26) TRUE Marketing involves a flow of need-satisfying offerings from a producer to a customer, which implies that there is an exchange of the offering for something else, such as the customer's money. 27) TRUE In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 28) FALSE A marketing exchange is often part of an ongoing relationship, not just a single transaction. 29) FALSE The marketing flow of need-satisfying goods and services is not just for a single transaction but rather is part of building a long-lasting relationship that benefits both the firm and the customer. 30) TRUE The emphasis with macro-marketing is on how the whole marketing system works, which includes looking at how marketing affects society and vice versa. Version 1

31) FALSE Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 32) FALSE Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 33) TRUE The emphasis with macro-marketing is not on the activities of individual organizations. Instead, the emphasis is on how the whole marketing system works. 34) FALSE The emphasis with macro-marketing is not on the activities of individual organizations. Instead, the emphasis is on how the whole marketing system works. 35) TRUE Macro-marketing is concerned with the flow of need-satisfying goods and services from producers to consumers. 36) TRUE The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. 37) TRUE

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Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. 38) FALSE Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways such as space, time, information and values, and ownership. 39) TRUE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 40) FALSE Most firms specialize in producing and selling large amounts of a narrow assortment of goods and services, which allows them to take advantage of mass production with its economies of scale. 41) FALSE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 42) TRUE Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 43) FALSE In an advanced economy, a narrow assortment of goods and services can be produced with mass production and its economies of scale. 44) TRUE This statement requires an understanding of the material in Exhibit 1–1. 45) TRUE

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The purpose of a macro-marketing system is to overcome the discrepancies and separations using the universal functions of marketing. 46) TRUE The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 47) FALSE The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 48) FALSE The universal functions of marketing must be performed in all macromarketing systems and may differ among nations and economic systems. 49) TRUE Producers and consumers sometimes handle some of the marketing functions. However, exchanges are often easier or less expensive when a marketing specialist performs some of the marketing functions. 50) FALSE Intermediaries specialize in trade rather than production. 51) TRUE Intermediaries can help to make the whole macro-marketing system more efficient and effective by the savings of time, effort, and expense that would be involved without them. 52) FALSE

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Although intermediaries charge for services they provide, this charge is usually offset by the savings of time, effort, and expense that would be involved without them, thus making the whole macro-marketing system more efficient and effective. 53) FALSE Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 54) FALSE Exchanges are often easier or less expensive when a marketing specialist performs some of the marketing functions. 55) TRUE All the marketing functions must be performed by someone, either by shifting or sharing; but no function can be completely eliminated. 56) FALSE All societies must provide for the needs of their members and hence every society needs some sort of economic system. 57) TRUE An economic system is the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society. 58) FALSE Every society needs some sort of economic system that must develop some method to decide what and how much is to be produced and distributed by whom, when, to whom, and why. 59) TRUE Countries with command economies often had little variety, so consumers had few choices. Version 1

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60) FALSE In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 61) FALSE In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 62) TRUE In a market-directed economy, prices in the marketplace are a rough measure of how society values particular goods and services. 63) TRUE In contrast with command economies, consumers in a market-directed economy choose from a range of options that may meet their needs. 64) FALSE Consumers in a market-directed economy enjoy great freedom of choice, but it is not complete freedom of choice. They are still required to buy goods and services that must be provided for the good of society. 65) FALSE New consumer needs that can be served profitably—not just the needs of the majority—will probably be met by some profit-minded businesses. But profit, survival, and growth are not guaranteed. 66) FALSE The American economy and most other Western economies are mainly market-directed, but not completely. 67) FALSE

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The American economy and most other Western economies are mainly market-directed, but not completely. 68) FALSE The American economy and most other Western economies are mainly market-directed, but not completely. 69) TRUE The simple trade era was a time when families traded or sold their "surplus" output to local distributors. These specialists resold the goods to other consumers or other distributors. This was the early role of marketing. 70) TRUE The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. 71) TRUE From the Industrial Revolution until the 1920s, most companies were in the production era. 72) FALSE The sales era is a time when a company emphasizes selling because of increased competition. It is in the marketing department era that all marketing activities are brought under the control of one department to improve short-run policy planning and to try to inte-grate the firm’s activities. 73) FALSE

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Marketing departments are not formed until someone is needed to tie together the efforts of research, purchasing, production, shipping, and sales. This does not occur until firms have already gone through both the production era and the sales era. 74) TRUE The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 75) FALSE The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept. 76) TRUE The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and the whole company effort is guided by the marketing concept. 77) TRUE The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. 78) FALSE The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 79) FALSE The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 80) TRUE

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The marketing concept means that an organization aims all its efforts at satisfying its customers, but at a profit. 81) TRUE A production orientation means making whatever products are easy to produce and then trying to sell them and thinking of customers as existing to buy the firm's output rather than of firms as existing to serve customers. 82) FALSE A production orientation means making easy-to-produce products and then trying to sell them. Consumers of these products exist to buy the firm's output, rather than the firm existing to serve customers. 83) TRUE A marketing-oriented firm tries to offer customers what they need, and a production-oriented firm makes whatever products are easy to produce and then trying to sell them. 84) FALSE Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success) and not just sales—as an objective. 85) TRUE Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—and not just sales—as an objective. 86) FALSE

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Three basic ideas are included in the definition of the marketing concept: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success) and not just sales—as an objective. 87) FALSE Three basic ideas are included in the definition of the marketing concept: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—and not just sales—as an objective. 88) FALSE In the marketing concept, profit and/or other measures of long-term success can and should be the objective. 89) FALSE Adoption of the marketing concept is not universal. The marketing concept provides a guiding focus that all departments adopt. 90) FALSE Departments may still exist because specialization often makes sense, while the marketing concept provides a guiding focus that all departments adopt. 91) TRUE Marketing metrics refer to the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 92) FALSE Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long-term success. 93) TRUE Version 1

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Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long-term success. 94) FALSE Adoption of the marketing concept is not universal because producers of industrial commodities like steel, coal, and chemicals have tended to remain production oriented. 95) TRUE When an industry gets competitive, consumers have choices and flock to those that deliver customer satisfaction. This provides an incentive for more firms to practice the marketing concept. 96) FALSE Adoption of the marketing concept is not universal. 97) FALSE A manager who adopts the marketing concept sees customer satisfaction as the path to profits. 98) TRUE Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. 99) FALSE Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. Satisfaction occurs when you give the customers what they need. 100) TRUE A good or service that doesn't meet a customer's needs results in low customer value, even if the price is very low.

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101) FALSE Some people think that higher customer value comes from a low price. A high price may be more than acceptable when it obtains the desired benefits. 102) FALSE Some people think that higher customer value comes from a low price. A high price may be more than acceptable when it obtains the desired benefits. 103) TRUE A manager's objective and thorough analysis (opinion) of the benefits of the firm's offering may not accurately reflect the customer's impressions. It is the customer's view that matters. 104) FALSE A manager's objective and thorough analysis (opinion) of the benefits of the firm's offering may not accurately reflect the customer's impressions. It is the customer's view that matters. 105) TRUE A firm that offers superior customer value is likely to win the competition and keep customers. 106) TRUE Firms that embrace the marketing concept seek ways to build a profitable long-term relationship with each customer. 107) TRUE Trying to get new customers by taking them away from a competitor is usually more costly than retaining current customer relationships by really satisfying their needs. 108) TRUE Version 1

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Building lasting relationships with customers requires that everyone in a firm work together to provide customer value before and after each purchase. 109) FALSE The long-term relationship with the customer is threatened unless everyone works together to make things right for the customer. 110) TRUE The marketing concept is as important for nonprofit organizations as it is for business firms. 111) FALSE The marketing concept is as important for nonprofit organizations as it is for business firms. In fact, marketing applies to all sorts of public and private nonprofit organizations. 112) TRUE Support for nonprofit organizations often does not come directly from those who receive the benefits the organization produces. 113) TRUE As with a business, a nonprofit organization must take in as much money as it spends or it won't survive. 114) TRUE A nonprofit organization does not measure "profit" in the same way as a firm. 115) TRUE The micro–macro dilemma means what is "good" for some firms and consumers may not be good for society as a whole. 116) TRUE Version 1

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The micro–macro dilemma means what is "good" for some firms and consumers may not be good for society as a whole. 117) TRUE The micro–macro dilemma occurs when a firm focuses its efforts on satisfying some consumers to achieve its objectives, which may result in negative effects on society. 118) FALSE A firm's obligation to improve its positive effects on society and reduce its negative effects is called social responsibility. 119) FALSE A firm's obligation to improve its positive effects on society and reduce its negative effects is called social responsibility. 120) TRUE A manager cannot be truly consumer-oriented and at the same time intentionally unethical. 121) TRUE Marketing ethics are the moral standards that guide marketing decisions and actions. 122) TRUE Marketing ethics are the moral standards that guide marketing decisions and actions. 123) TRUE Each individual develops moral standards based on his or her own values, which helps explain why opinions about what is right or wrong often vary from one person to another, from one society to another, and among different groups within a society, and why it is sometimes difficult to say whose opinions are "correct." Version 1

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124) FALSE A manager should be criticized for making an unethical marketing decision, because managers have a duty to be fully informed before making decisions. 125) TRUE As stated in Exhibit 1–7, the American Marketing Association's code of ethics sets specific ethical standards for many aspects of marketing. 126) TRUE As stated in Exhibit 1–7, the American Marketing Association's code of ethics sets specific ethical standards for many aspects of marketing. 127) A Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 128) D Building a facility to manufacture furniture is part of production, not marketing. In contrast with production, marketing helps make sure that the right goods and services are produced and that they find their way to consumers. 129) C Marketing should begin with potential customer needs. Marketing should try to anticipate needs and then determine what goods and services are to be developed to meet those needs. 130) C Although it's true that selling and advertising are parts of marketing, marketing is much more than that. 131) B Production is actually making goods or performing services. Version 1

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132) C Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 133) E Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 134) B Marketing provides needed direction for production and helps make sure that the right goods and services are produced and find their way to consumers. 135) B Customer satisfaction is the extent to which a firm fulfills a customer's needs, desires, and expectations. 136) E In advanced economies, marketing costs about 50 cents of every consumer dollar. For some goods and services, the percentage is much higher. 137) C In advanced economies, marketing costs about 50 cents of every consumer dollar. For some goods and services, the percentage is much higher. 138) A Marketing affects almost every aspect of your daily life. 139) C

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Marketing affects almost every aspect of daily life, is important to your job, affects innovation and consumers’ standard of living and also plays a big part in economic growth and development. Production involves actually making the goods that people need. 140) D Marketing encourages research and innovation, the development and spread of new ideas, goods and services. 141) D The development and spread of new ideas, goods, and services for the marketplace is called innovation. 142) B Marketing should handle storing, advertising, designing the packaging, setting the price of the product, etc. Making goods or performing services is called production. 143) A Marketing is a set of activities done by an individual organization to satisfy its customers. 144) D Marketing from a micro view is a set of activities performed by organizations, and from a macro view it is a social process. 145) C Marketing from a micro view is a set of activities performed by organizations, and from a macro view it is a social process. 146) A

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Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 147) E Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 148) D Marketing is the performance of activities that seek to accomplish an organization's objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client. 149) D Marketing from a micro view is a set of activities performed by organizations. 150) D Marketing should begin with potential customer needs and not with the production process. 151) C Marketing should begin with potential customer needs and not with the production process. 152) C

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Marketing from a micro view is a set of activities performed by organizations. The American Red Cross is an organization that performs activities such as seeking more blood donors. The other alternatives deal with macro-marketing issues. 153) E Marketing from a micro view is a set of activities performed by organizations. The other alternatives deal with macro-marketing issues. 154) A Marketing applies to both profit and nonprofit organizations. 155) C Marketing applies to both profit and nonprofit organizations. 156) A Marketing applies to both profit and nonprofit organizations. 157) E The aim of marketing is to identify customers' needs and provide needsatisfying products, whether the product is a physical good, a service, or even an idea. 158) D The aim of marketing is to identify customers' needs and meet those needs so well that the product almost "sells itself." 159) B Marketing should begin with potential customer needs and not with the production process. 160) B

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Marketing should determine what goods and services are to be developed, including decisions about product design and packaging; prices or fees; transporting and storing policies; advertising and sales policies; and, after the sale, installation, customer service, warranty, and perhaps even disposal and recycling policies. 161) C Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 162) D Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 163) E Marketing doesn't occur unless two or more parties are willing to exchange something for something else. 164) C In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 165) A In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 166) A In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 167) A Version 1

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In a pure subsistence economy, when each family unit produces everything it consumes, there is no need to exchange goods and services and no marketing is involved. 168) E A marketing exchange is often part of an ongoing relationship, not just a single transaction. 169) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 170) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 171) D Macro-marketing examines how the whole marketing system works. It does not pertain to the individual marketing plans and challenges of individual organizations. 172) A The emphasis with macro-marketing is not on the activities of individual organizations; instead, the emphasis is on how the whole marketing system works. 173) C

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Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 174) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. 175) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers. 176) A Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society. 177) C The emphasis with macro-marketing is not on the activities of individual organizations; instead, the emphasis is on how the whole marketing system works. 178) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 179) E

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The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 180) B The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 181) A The role of a macro-marketing system is to effectively match the heterogeneous supply and demand and at the same time accomplish society's objectives. The other alternatives deal with individual firms. 182) B Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. 183) E Effective marketing in an advanced economy is difficult because producers and consumers are often separated in several ways. As Exhibit 1–1 shows, exchange be-tween producers and consumers is hampered by spatial separation; separation in time; separation of information; separation in values; and separation of ownership. 184) E Exchange between producers and consumers is hampered by spatial separation, separation in time, separation of information and values, and separation of ownership. 185) C

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The transporting function involves the movement of goods from one place to another, and the storing function involves holding goods until customers need them. These functions help to overcome the spatial separation caused by the tendency of producers to locate where it is economical to produce, while consumers are located in many scattered places. 186) D Purchasing cheese from five different manufacturers overcomes discrepancies of assortment; purchasing from around the world overcomes spatial separation; and customers being able to satisfy their needs at different prices overcomes separation of values. 187) D In spatial separation, producers tend to locate where it is economical to produce while consumers are located in many scattered places. 188) A In separation of information, producers do not know who needs what, where, when, and at what price; and consumers do not know what is available from whom, where, when, and at what price. 189) C In separation in values, producers value goods and services in terms of costs and competitive prices while consumers value them in terms of satisfying needs and their ability to pay. 190) A Discrepancies of quantity occur when producers prefer to produce and sell in large quantities and consumers prefer to buy and consume in small quantities. 191) A Version 1

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Discrepancies of assortment occurs when producers specialize in producing a narrow assortment of goods and services, but consumers need a broad assortment. 192) D Discrepancies of assortment occur when producers specialize in producing a narrow assortment of goods and services, but consumers need a broad assortment. 193) B Separation of ownership occurs when producers hold title to goods and services that they themselves do not want to consume while consumers want goods and services that they do not own. 194) C Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 195) B Economies of scale means that as a company produces larger numbers of a particular product, the cost of each unit of the product goes down. 196) B From the macro-marketing perspective, the marketing function that overcomes the spatial separation between a manufacturer and overseas consumers is transporting. Macro-marketing is a social process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand. 197) C The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. Version 1

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198) A While producers handle some of the marketing functions themselves, exchanges are often easier or less expensive when a marketing specialist, or intermediary, performs some of the marketing functions. 199) C The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 200) A The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 201) A The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 202) A The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. 203) B The universal functions of marketing must be performed in all macromarketing systems. How these functions are performed and by whom may differ among nations and economic systems. 204) E

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The universal functions of marketing are buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information. Most of these functions were performed by Ben. 205) D The selling function involves promoting the product, use of personal selling, advertising, customer service, and other direct and mass selling methods. 206) B The selling function involves promoting the product, use of personal selling, advertising, customer service, and other direct and mass selling methods. 207) B Market information function involves the collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm's own neighborhood or in a market overseas. 208) D The standardization and grading function involves sorting products according to size and quality. 209) C The standardization and grading function involves sorting products according to size and quality. 210) C The standardization and grading function involves sorting products according to size and quality. 211) C

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The buying function means looking for and evaluating goods and services. 212) C Producers, consumers, and marketing specialists perform the universal functions of marketing. 213) E Producers, consumers, and marketing specialists perform the universal functions of marketing. Intermediaries and collaborators are marketing specialists. 214) C The universal functions of marketing must be performed in all macromarketing systems and may differ among nations and economic systems. The two kinds of economic systems are command economies and market-directed economies. 215) D An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process. 216) B An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process by saving some of the time, effort, and expense that would be involved without them. 217) B An intermediary is someone who specializes in trade rather than production and plays an important role in the exchange process for a large number of customers. 218) E Version 1

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Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 219) E Collaborators are firms that facilitate or provide one or more of the marketing functions other than buying or selling. 220) E Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 221) E Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 222) D Collaborators include advertising agencies, marketing research firms, independent product-testing laboratories, Internet service providers, public warehouses, transporting firms, communications companies, and financial institutions. 223) B Marketing intermediaries and collaborators are often able to perform the marketing functions better and at a lower cost than producers or consumers can, which makes the whole macro-marketing system more efficient and effective. 224) D

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Internet-based intermediaries like Amazon.com and eBay.com help cut the costs of many marketing functions. 225) B Responsibility for performing the marketing functions can be shifted and shared in a variety of ways. 226) B From a micro viewpoint, not every firm must perform all of the functions; however, responsibility for performing the marketing functions can be shifted and shared in a variety of ways. 227) A From a macro-marketing viewpoint, all of the marketing functions must be per-formed by someone—an individual producer or consumer, an intermediary, a market-ing collaborator, or, in some cases, even a nation’s government. No function can be completely eliminated. 228) A From a macro-marketing viewpoint, all of the marketing functions must be performed by someone—an individual producer or consumer, an intermediary, a marketing collaborator, or, even a nation’s government. No function can be completely eliminated. 229) E Economic system is the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society. 230) C The role of a macro-marketing system is to effectively match supply and demand and at the same time accomplish society's objectives. 231) A Version 1

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In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 232) E In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 233) D In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. The economy often has little variety, so consumers have few choices. 234) E In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. 235) A In a command economy, government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why. These decisions are usually part of an overall economic plan directed by the government. 236) D While all societies have economic systems, how an economic system operates depends largely on the nature of the society's political institutions. 237) E

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In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 238) C In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 239) C In a market-directed economy, consumers decide what is to be produced and by whom—through their dollar "votes." 240) A In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. 241) B Prices in the marketplace are a rough measure of how society values particular goods and services. 242) B Prices in the marketplace are a rough measure of how society values particular goods and services. 243) E All these statements are true regarding the role of price in a marketdirected economy. 244) A Consumers in a market-directed economy are free to choose from a range of options that may meet their needs.

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245) D In a market-directed economy, the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy. Government officials decide what and how much is to be produced and distributed in a command economy. 246) B The citizens in a market-directed economy are taxed for goods or services provided for the good of society such as national defense, public schools, police and fire protection, roads, and public health services. 247) E In a market-directed economy, prices are determined in the marketplace. Setting prices is not likely to be a role of government. 248) D In a market-directed economy, consumers decide what is to be produced and by whom—through their dollar "votes." 249) A Consumers in a market-directed choose from a range of options that may meet their needs. They are not forced to buy any goods or services, except those judged as good for society—such as national defense, police and fire protection, roads, public schools, etc. 250) B The American economy and most other Western economies are mainly market-directed, but not completely. 251) A

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The rise of digital and social media gives customers more power in the market. If a customer feels that they have been wronged by a company, their review on a website or in a social media post may be read by hundreds or thousands of people. 252) A Prospective customers often search the web to learn about companies before buying. They can easily find positive or negative information on the Internet, which gives companies an extra incentive to play by the socially accepted rules of the game. 253) A The American and most other Western economies are mainly marketdirected—but not completely. Society assigns supervision of the system to the government, which sets and enforces the “rules of the game.” 254) D In many Western economies, public interest groups and consumers provide an additional check on a market-directed economy. For example, the Center for Science in the Public Interest (CSPI) is a consumer watchdog group that pressures food companies to make healthier products. 255) E Consumers can report their satisfaction or dissatisfaction with companies by posting reviews on websites. Potential customers can easily find positive and negative information on the Internet, giving firms an extra incentive to play by the socially accepted "rules of the game." 256) C

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Producers are free to do whatever they wish, provided that they stay within the rules set by government and receive enough dollar "votes" from consumers. But profit, survival, and growth are not guaranteed. 257) C In a command economy, prices are set by government planners, not supply and demand. 258) A As reflected in Exhibit 1–2, checks on the market-directed macromarketing system include: (1) customers voting with their dollars based on prices charged; (2) customers voicing satisfaction and dissatisfaction; (3) public interest groups sharing information; and (4) the government setting the “rules of the game.” 259) A As bartering became more difficult, societies moved into the simple trade era, a time when families traded or sold their surplus output to local distributors. These specialists resold the goods to other consumers or other distributors. 260) E The five stages in marketing evolution are: (1) the simple trade era, (2) the production era, (3) the sales era, (4) the marketing department era, and (5) the marketing company era. 261) A The five stages in marketing evolution are: (1) the simple trade era, (2) the production era, (3) the sales era, (4) the marketing department era, and (5) the marketing company era. 262) D

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The simple trade era is a time when families traded or sold their "surplus" output to local distributors. 263) B From the Industrial Revolution until the 1920s, most companies were in the production era, since companies focused on production of a few specific products. 264) C The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 265) E "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 266) C "If we can make it, it will sell" is management thinking characteristic of the production era, due to product shortages. 267) E The production era is a time when a company fo-cuses on production of a few specific products—perhaps because few of these products are available in the market. "If we can make it, it will sell" is management thinking characteristic of the production era. 268) B The sales era is a time when a company emphasizes selling because of increased competition. 269) A

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The sales era is a time when a company emphasizes selling because of increased competition. 270) B Advanced production capabilities led to a sales era, in which a company emphasizes selling to win customers because of increased competition. 271) E The sales era is a time when a company emphasizes selling because of increased competition. 272) D The sales era is a time when a company emphasizes selling because of increased competition. 273) B The sales era is a time when a company emphasizes selling because of increased competition. 274) C The sales era is a time when a company emphasizes selling because of increased competition. 275) C By about 1930, in the sales era, most companies in the industrialized Western nations had more production capability than ever before. 276) D Advanced production capabilities led to a sales era, in which a company emphasizes selling to win customers because of increased competition. 277) C The sales era is a time when a company emphasizes selling because of increased competition. Version 1

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278) B The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 279) C The marketing department era is a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm's activities. 280) D In marketing company era, the whole company effort is guided by the marketing concept that aims all its efforts at satisfying its customers. 281) C The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 282) A The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 283) B The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead. 284) A

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The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans and decide where to put the company's effort. 285) B The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead. 286) E In the five stages in marketing evolution, the marketing department era makes short-run planning only; the first era to evolve was the simple trade era; the marketing company era makes both short-run and long-run planning; and the production era is a time when a company focuses on a few specific products—perhaps because few of these products are available in the market. 287) C The marketing company era is a time when, in addition to short-run marketing planning, marketing people develop long-range plans— sometimes five or more years ahead—and the whole company effort is guided by the marketing concept. 288) B For most firms in advanced economies, the sales era continued until at least 1950. 289) B The marketing concept means that an organization aims all its efforts at satisfying its customers based on their needs. This contrasts with the production orientation, in which managers make and sell whatever products are easy to produce.

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290) E The marketing concept is distinct from other approaches to business in that it views organizations as existing to serve customers and the needs of society. Firms that apply the marketing concept direct all their efforts at satisfying customers. 291) B Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 292) C Some organizations explicitly consider a triple bottom line, which measures an organization's economic, social, and environmental outcomes as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 293) E The marketing concept means that an organization aims all its efforts at satisfying its customers—but at a profit. 294) D The marketing concept means that an organization aims all its efforts at satisfying its customers—but at a profit. Making whatever products are easy to produce and then trying to sell them is a production orientation. 295) C Making whatever products which are easy to produce and then trying to sell them is a production orientation. 296) B

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Production orientation occurs when managers think of customers existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society. 297) A Production orientation occurs when managers think of customers as existing to buy the firm's output rather than of firms existing to serve customers. 298) B Making whatever products are easy to produce and then trying to sell them is found in a production-oriented firm. 299) C Production orientation occurs when managers think of customers as existing to buy the firm's output rather than of firms existing to serve customers and—more broadly—the needs of society. 300) B A production orientation means making whatever products that are easy to produce and then trying to sell them; and thinking of customers as existing to buy the firm's output rather than of firms existing to serve customers. 301) E A production orientation means making whatever products that are easy to produce and then trying to sell them; and thinking of customers as existing to buy the firm's output rather than of firms existing to serve customers. 302) A A marketing orientation means trying to carry out the marketing concept. Version 1

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303) C A marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 304) E Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 305) B Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 306) C Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 307) B Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit (and/or other measures of long-term success)—not just sales—as an objective. 308) E Three basic ideas of the marketing concept are: (1) customer satisfaction, (2) a total company effort, and (3) profit—not just sales—as an objective. 309) D The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. Version 1

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310) B The marketing concept means that an organization aims all its efforts at satisfying its customers—at a profit. 311) A A marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 312) A In a firm that follows marketing concept, every department may directly or indirectly impact customer satisfaction. 313) E Making whatever products are easy to produce and then trying to sell them is a production orientation. "Production orientation" refers to anyone who doesn't acknowledge customer needs. 314) A The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 315) D The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 316) D The marketing concept provides customer orientation as a guiding focus that all departments adopt and should be a philosophy of the whole organization, not just an idea that applies to the marketing department. 317) D Version 1

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Marketing metrics refers to the numeric data that allow marketing managers to evaluate performance, often against a set target or goal. 318) B Marketing metrics allow marketing managers to calculate how well a strategy is performing. They are often used to evaluate performance against targets or goals that are already set. 319) A The food truck owner can use marketing metrics to compare the performance at her new and old locations. 320) C Profit is the difference between a firm's revenue and its total costs and acts as the balancing point that helps the firm determine what needs it will try to satisfy with its total effort. 321) D Some industries with limited competition, including electric utilities, cable television providers, and industrial commodities producers, have also been slow to adopt the marketing concept. 322) C Some organizations explicitly consider a triple bottom line—which measures an organization's economic, social, and environmental outcomes—as a measure of long‐term success. Together, these are sometimes referred to as measures of people, planet, and profit. 323) E Any organization that follows the three basic ideas of marketing concept is said to have adopted the marketing concept. 324) E

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Any organization that follows the three basic ideas of marketing concept is said to have adopted the marketing concept. 325) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 326) A The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 327) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 328) E The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 329) B The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. 330) C The marketing concept means that an organization aims all its efforts at satisfying its customers, at a profit. Doing a survey is the best choice because it involves trying to determine needs. 331) A Marketing-oriented firms try to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 332) A

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Marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 333) C As stated in Exhibit 1–4, a marketing-oriented firm tries to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 334) A As stated in Exhibit 1–4, a company makes what it can sell in a marketing-oriented firm, trying to offer customers what they need instead of just trying to get customers to buy what the firm has produced. 335) C As stated in Exhibit 1–4, in a marketing orientation, a firm's focus is on locating new opportunities and not on reducing its costs. 336) B As stated in Exhibit 1–4, in a production orientation, advertising focuses on the features of the product and not on the benefits of the product to customers. 337) D As stated in Exhibit 1–4, marketing research used in a production orientation determines the customer reaction. 338) C Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. 339) A Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. Version 1

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340) E Customer value reflects both benefits and costs (positives and negatives) and is applicable to both goods and services. It considers all elements of the marketing mix, not just price, and competition does matter. 341) E Customer value considers all elements of the marketing mix. 342) B As seen in Exhibit 1–5, customer value equals customer benefits minus customer costs. Customer value is the difference between what a customer sees from a market offering and the costs of obtaining those benefits. 343) A It is the customer’s view of costs and benefits that is important. Customer value depends on the customer’s perception. 344) B As reflected in Exhibit 1–5, a functional benefit of a market offering could save the customer time or effort. 345) E According to Exhibit 1–5, life-changing benefits include those that give hope, offer motivation, or provide a sense of affiliation or belonging. Having a gym staff member check in on new enrollees may provide all these benefits to gym customers. 346) B Examples of different types of costs, as seen in Exhibit 1–5, include monetary costs (money, interest rates, fees) and inconvenience (time delay and effort required to receive a benefit). Rewards are an example of an emotional benefit. Version 1

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347) D A high price may be more than acceptable when it obtains the desired benefits. A good or service that doesn’t meet a customer’s needs results in low customer value, even if the price is very low. 348) B Trying to get new customers by taking them away from a competitor is usually more costly than retaining current customers by really satisfying their needs. 349) B The firm's advertising might encourage a customer to buy once, but if the firm doesn't deliver on the benefits promised in its ads, the customer is likely to go elsewhere the next time the need arises. 350) D Building and maintaining relationships with customers require that everyone in a firm work together to provide customer value before and after each purchase. 351) D Customer value is the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits. For example, any readily available glue that performs the job effectively at the least cost will have high customer value to a scrapbook hobbyist. 352) C

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Exhibit 1–6 summarizes these ideas. In a firm that has adopted the marketing concept, everyone focuses on customer satisfaction. They look for ways to offer superior customer value. That helps attract customers in the first place—and keeps them satisfied after they buy. So when they are ready to make repeat purchases, the firm is able to keep them as customers. Sales may increase further because satisfied customers are likely to buy other products offered by the firm. In this way, the firm builds profitable relationships with its customers. 353) B The marketing concept is as important for nonprofit organizations as it is for business firms. 354) C A nonprofit organization does not measure "profit" in the same way as a firm. 355) B All nonprofit organizations seek to achieve different objectives and need different measures of success. 356) E Marketing applies to all sorts of public and private nonprofit organizations ranging from government agencies, health care organizations, educational institutions, and religious groups to charities, political parties, and fine arts organizations. 357) E Marketing applies to all sorts of public and private nonprofit organizations ranging from government agencies, health care organizations, educational institutions, and religious groups to charities, political parties, and fine arts organizations.

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358) A The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 359) E Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects, both for present and future generations. 360) C While making marketing decisions based on social responsibility can add costs to a firm, it can also increase profits. Some consumers purchase products based on the perceived benefits of those products to society and the natural environment. 361) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 362) D The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 363) A The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 364) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 365) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. Version 1

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366) B The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 367) D The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 368) E The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 369) B The micro–macro dilemma refers to how what is "good" for some firms and consumers may not be good for society as a whole. 370) E Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects. 371) B Social responsibility is a firm's obligation to improve its positive effects on society and reduce its negative effects. There are times when being socially responsible can increase not only a firm's profits, but also its costs. 372) E Some consumers want products that may not be safe or good for society in the long run. Companies that produce such products follow the marketing concept to satisfy customer needs but fail to be socially responsible. A good example is a motorcycle manufacturer. 373) D

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Marketing ethics are the moral standards that guide marketing decisions and actions. 374) E Marketing ethics are the moral standards that guide marketing decisions and actions. Each individual develops moral standards based on his or her own values, which explains why opinions about what is right or wrong often vary from one society to another. Marketing ethics also help most businesspeople practice fair and honest business. 375) B As stated in Exhibit 1–7, fairness helps to balance justly the needs of the buyer with the interests of the seller. 376) B As stated in Exhibit 1–7, respect stresses acknowledgement of the basic human dignity of all stakeholders. 377) C The criticism that marketing exploits the poor and the uneducated is a macro-marketing issue, not a micro-marketing issue. 378) C To be certain that standards for marketing ethics are as clear as possible, many organizations develop their own written codes of ethics, which state the ethical standards that everyone in the firm should follow in dealing with customers and other people. 379) A As reflected in the sample criticisms of marketing in Exhibit 1–8, some criticize marketing for making people too materialistic and for motivating people toward “things” instead of social needs. 380) A Version 1

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A better world is one where: (1) buyers and sellers make better decisions, are healthier, and through their consumption choices (or decision not to consume) experience a better quality of life; (2) buyers and sellers make decisions that have less adverse impacts on others; and (3) marketing strategy decisions address some of the world’s most challenging problems—including hunger, poverty, and climate change. 381) A Most companies are stepping up their efforts to use marketing to create a better world. Such efforts are not necessarily charitable endeavors, and are often profitable.

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CHAPTER 2 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Planning, implementation, and control are basic jobs of all managers. ⊚ ⊚

true false

Controlling the marketing plan is the first step of the marketing management process. ⊚ ⊚

true false

3) The three basic jobs in the marketing management process are planning, implementation, and control. ⊚ ⊚

true false

4) The marketing management process consists of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. ⊚ ⊚

true false

Strategic planning is a top management job that includes planning only for marketing. ⊚ ⊚

true false

6) Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. ⊚ ⊚

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true false

7) Strategic (management) planning is a managerial process of developing and maintaining a match between the resources of the production department and its product opportunities. ⊚ ⊚

true false

8) Finding attractive opportunities and developing profitable marketing strategies are tasks included in the marketing manager's marketing strategy planning job. ⊚ ⊚

true false

9) Marketing strategy planning is the process of deciding how best to sell the products the firm produces. ⊚ ⊚

10)

true false

A marketing strategy specifies a target market and a related marketing mix. ⊚ ⊚

true false

11) A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. ⊚ ⊚

true false

12) A marketing strategy is composed of two interrelated parts—planning and implementation. ⊚ ⊚

13)

true false

The two parts of a marketing strategy are an attractive opportunity and a target market.

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⊚ ⊚

14)

true false

A target market consists of a group of consumers who are usually quite different. ⊚ ⊚

true false

15) A marketing mix consists of the uncontrollable variables that a company puts together to satisfy a target market. ⊚ ⊚

16)

true false

Target marketing aims a marketing mix at some specific target customers. ⊚ ⊚

true false

17) Mass marketing means focusing on some specific customers, as opposed to assuming that everyone is the same and will want whatever the firm offers. ⊚ ⊚

18)

The mass marketing approach is more production-oriented than marketing-oriented. ⊚ ⊚

19)

true false

The terms mass marketing and mass marketers mean the same thing. ⊚ ⊚

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true false

20)

"Mass marketers" like Target usually try to aim at clearly defined target markets. ⊚ ⊚

21)

The problem with target marketing is that it limits the firm to small market segments. ⊚ ⊚

22)

true false

Potential customers are all alike. ⊚ ⊚

true false

23) The basic reason to focus on some specific target customers instead of all possible customers is so that managers can develop a marketing mix that satisfies those customers' specific needs better than they are satisfied by some other firm. ⊚ ⊚

24)

The "Four Ps" are Product, Promotion, Price, and Personnel. ⊚ ⊚

25)

true false

The "Four Ps" of the marketing mix are Product, Position, Promotion, and Price. ⊚ ⊚

26)

true false

The "Four Ps" of the marketing mix are People, Products, Price, and Promotion. ⊚ ⊚

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true false

27) Product, Place, Promotion, and Price are the four major variables (decision areas) in a firm's marketing mix. ⊚ ⊚

true false

28) The customer is a part of the marketing mix and should be the target of all marketing efforts. ⊚ ⊚

true false

29) Although the customer should be the target of all marketing efforts, customers are not part of a marketing mix. ⊚ ⊚

30)

true false

The customer should not be considered part of a "marketing mix." ⊚ ⊚

true false

31) The Product area is concerned with developing the right physical good, service, or blend of both for the target market. ⊚ ⊚

true false

32) According to the text, a firm that sells a service rather than a physical good does not have a product. ⊚ ⊚

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true false

33) The Product area of the marketing mix may involve a service and/or a physical good, which satisfies some customers' needs. ⊚ ⊚

true false

34) The Place decisions are concerned with getting the right product to the target market at the right time. ⊚ ⊚

true false

35) Any series of firms (or individuals) from producer to final user or consumer is a channel of distribution. ⊚ ⊚

true false

36) A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. ⊚ ⊚

37)

A channel of distribution must include an intermediary. ⊚ ⊚

38)

true false

A channel of distribution must include several kinds of intermediaries and collaborators. ⊚ ⊚

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true false

39) Personal selling, mass selling, and sales promotion are all included in the Promotion area of the marketing mix. ⊚ ⊚

40)

true false

Promotion is composed of personal selling, advertising, publicity, and sales promotion. ⊚ ⊚

true false

41) Personal selling involves direct personal communication to get the sale, but personal attention is seldom required after the sale. ⊚ ⊚

true false

42) Customer service is needed when a customer wants the seller to resolve a problem with a purchase. ⊚ ⊚

true false

43) Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. ⊚ ⊚

true false

44) Sales promotion can involve point-of-purchase materials, store signs, contests, catalogs, and circulars. ⊚ ⊚

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true false

45) Sales promotion refers to those promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. ⊚ ⊚

46)

true false

Personal selling and advertising are both forms of sales promotion. ⊚ ⊚

true false

47) The "Four Ps" are used by marketing managers to deliver customer value to a target market. ⊚ ⊚

48)

Promotion is the most important of the "Four Ps." ⊚ ⊚

49)

true false

In general, no single element of the "Four Ps" is more important than the others. ⊚ ⊚

51)

true false

Price is the most important of the "Four Ps." ⊚ ⊚

50)

true false

The marketing mix should be set before the best target market is selected. ⊚ ⊚

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true false 8

52) As in the Toddler University case, the needs of a target market virtually determine the nature of an appropriate marketing mix. ⊚ ⊚

53)

true false

Marketing plan and marketing strategy mean the same thing. ⊚ ⊚

true false

54) A marketing strategy and all the time-related details for carrying out the strategy is a "marketing plan." ⊚ ⊚

true false

55) A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. ⊚ ⊚

56)

true false

Implementation means putting the marketing plan into operation. ⊚ ⊚

true false

57) Short-run decisions that stay within the overall guidelines set during strategy planning are called implementation decisions. ⊚ ⊚

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true false

58) plan.

Marketing strategy planning should specify all the operational decisions to implement the ⊚ ⊚

true false

59) Companies such as the Campbell Soup Company can only implement one marketing strategy at a time. ⊚ ⊚

true false

60) Marketing analytics is used to evaluate marketing performance in order to maximize efficiency and effectiveness. ⊚ ⊚

61)

true false

Most companies implement only one marketing strategy at a time. ⊚ ⊚

true false

62) A marketing program blends all of the firm's marketing plans into one "big" plan and is the responsibility of the whole company. ⊚ ⊚

63)

A marketing program blends all of a firm's marketing plans into one "big" plan. ⊚ ⊚

64)

true false

A marketing program may consist of several marketing plans.

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⊚ ⊚

65)

true false

A successful marketing program benefits the firm by increasing customer equity. ⊚ ⊚

true false

66) Customer lifetime value (CLV) represents the total profits a single customer contributes to a firm over the length of the relationship. ⊚ ⊚

true false

67) One way to increase customer equity is to find cost-effective ways to serve current customers so they buy more. ⊚ ⊚

true false

68) One way to increase customer equity is to find cost-effective ways to add new customers for the firm's products. ⊚ ⊚

true false

69) The best way to increase customer equity is to find cost-effective ways to increase earnings from current customers while bringing profitable new customers into the fold. ⊚ ⊚

true false

70) The customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's short-term profits—just for the next quarter or year.

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⊚ ⊚

true false

71) Enhancing customer value by increasing their purchases is a potential source of new revenue. ⊚ ⊚

true false

72) The retention rate is the amount it costs to attract a new customer compared to the amount it costs to retain customers. ⊚ ⊚

true false

73) If a local deli had 2,000 customers in its first year in business and 200 of those customers returned the following year, its retention rate is 80 percent. ⊚ ⊚

74)

true false

Acquisition cost is the expense that is required to acquire each new customer. ⊚ ⊚

true false

75) If a firm spent $5,000 in advertising to obtain 50 new customers, its acquisition cost would be $100 per customer. ⊚ ⊚

true false

76) The single most important factor in screening possible marketing opportunities is the long-run trends facing the company.

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⊚ ⊚

true false

77) Attractive opportunities for a particular firm are those that the firm has some chance of doing something about—given its resources and objectives. ⊚ ⊚

true false

78) A breakthrough opportunity is an opportunity that helps innovators develop long-term, hard-to-copy marketing strategies that will be very profitable. ⊚ ⊚

true false

79) Breakthrough opportunities are those that help innovators develop hard-to-copy marketing strategies that will be profitable for a long time. ⊚ ⊚

true false

80) A firm with a "competitive advantage" has a marketing mix that the target market sees as better than a competitor's mix. ⊚ ⊚

true false

81) Finding competitive advantages is important because they are needed for survival in increasingly competitive markets. ⊚ ⊚

true false

82) It is useful to think of the marketing strategy planning process as a narrowing-down process.

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⊚ ⊚

true false

83) The marketing strategy planning process starts with a narrow look at a market and becomes broader the closer the firm comes to developing a marketing mix. ⊚ ⊚

84)

true false

There are usually more different strategy possibilities than a firm can pursue. ⊚ ⊚

true false

85) Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. ⊚ ⊚

true false

86) A S.W.O.T. analysis is one way to zero in on a marketing strategy that is well-suited to the firm. ⊚ ⊚

true false

87) A S.W.O.T. analysis identifies the "special weapons or tactics" used by the competitor in a product market that has the most profitable marketing mix. ⊚ ⊚

true false

88) S.W.O.T. analysis is based on the idea that one of the best ways to develop a strategy is to identify and copy the marketing "strategies, weapons, outlook, and tactics" of the firm's most effective competitor.

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⊚ ⊚

true false

89) A good S.W.O.T. analysis helps a manager focus on a strategy that takes advantages of the firm's opportunities and strengths while avoiding its weaknesses and threats to its success. ⊚ ⊚

true false

90) The letters in "S.W.O.T." analysis are an abbreviation for the first letters of the words "strengths, weaknesses, opportunities, and threats." ⊚ ⊚

true false

91) The letters in "S.W.O.T." analysis are an abbreviation for the first letters of the words "special weapons or tactics." ⊚ ⊚

true false

92) Segmentation is the process a manager goes through to decide which subgroups of customers to select. ⊚ ⊚

true false

93) Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. ⊚ ⊚

94)

true false

Differentiation means that the firm's marketing mix is similar to its competitors' mixes.

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⊚ ⊚

true false

95) Differentiation often requires a firm to fine-tune its marketing mix to meet the specific needs of its target market(s). ⊚ ⊚

96)

Differentiation emphasizes uniqueness rather than similarity. ⊚ ⊚

97)

true false

Differentiation emphasizes similarity rather than uniqueness. ⊚ ⊚

true false

98) The external market environment doesn't play a role in the marketing strategy planning process because it exists outside of the company. ⊚ ⊚

true false

99) It is useful to think of the marketing strategy planning process as a process that begins with a narrow focus but then broadens to embrace unlimited opportunities and options. ⊚ ⊚

true false

100) The first two letters in "S.W.O.T." analysis help managers examine customers, competition, and the external marketing environment. ⊚ ⊚

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true false

101) The last two letters in "S.W.O.T." refer to "opportunities" and "threats" related to factors outside the company, including customers, competition, and the external marketing environment. ⊚ ⊚

true false

102) Marketing opportunities involving present products and present markets are called "market penetration" opportunities. ⊚ ⊚

true false

103) Market penetration means trying to increase sales of a firm's present products in its present markets—probably through a more aggressive marketing mix. ⊚ ⊚

true false

104) A firm that tries to increase sales by selling new products in new markets is pursuing "market development" opportunities. ⊚ ⊚

true false

105) A market development opportunity would involve a firm offering new or improved products to its present markets. ⊚ ⊚

true false

106) When a firm tries to increase sales by offering new or improved products to its present markets, this is called "product development." ⊚ ⊚

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true false

107) Nike moved beyond shoes and sportswear to offer its athletic target market a running watch with a customized Nike app. This is an example of a market development strategy. ⊚ ⊚

true false

108) The ArrowPoint Company has just modified and enlarged its product line to meet the changing needs of its current customers. This is an example of "market development." ⊚ ⊚

true false

109) When Cadillac added a new sports utility vehicle called Escalade to the "luxury-oriented" selection at its existing dealers, it was seeking "market development" opportunities. ⊚ ⊚

true false

110) If Burger King added tacos to the "burger-oriented" menu in its existing restaurants, it would be seeking "market development" opportunities. ⊚ ⊚

true false

111) Marketing opportunities that involve moving into totally different lines of business are "diversification" opportunities. ⊚ ⊚

true false

112) The least risky—but most challenging—marketing opportunities are diversification opportunities. ⊚ ⊚

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true false

113)

Often, attractive opportunities are fairly close to markets the firm already knows. ⊚ ⊚

true false

114) When it comes to choosing among different types of opportunities, most firms tend to be production-oriented and usually think first of diversification. ⊚ ⊚

true false

115) Of the four types of opportunities firms can pursue, diversification is the easiest to evaluate and involves the least risk. ⊚ ⊚

true false

116) Advances in e-commerce, transportation, and communications have had little impact on creating international opportunities. ⊚ ⊚

true false

117) If customers in other countries are interested in the products a firm offers, or could offer, serving them may improve economies of scale. ⊚ ⊚

true false

118) Unfavorable trends in the domestic market environment may make the international marketing environment very attractive. ⊚ ⊚

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true false

119) International opportunities should be considered in the strategy planning process, but they don't always survive as the most attractive ones that are turned into strategies. ⊚ ⊚

true false

120) Marketing managers usually find that opportunities in international markets are less profitable than in domestic markets. ⊚ ⊚

true false

121) When a firm's domestic market is prosperous, marketing managers are less likely to pursue opportunities in international markets. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 122) The three basic tasks of all managers, according to the text, are A) planning, staffing, and evaluating. B) marketing, production, and finance. C) execution, feedback, and control. D) hiring, training, and compensating. E) planning, implementation, and control.

123)

Controlling is vital to the marketing management process because

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A) marketing managers need to control their subordinates. B) controlling examines a firm's strengths, weaknesses, opportunities, and threats. C) gathering feedback on a plan's results may lead to beneficial adjustments or entirely new plans. D) controlling involves identifying a target market. E) controlling is part of the marketing mix.

124)

Which of the following duties would NOT be performed by a firm's marketing managers? A) planning activities B) directing the implementation of plans C) controlling plans D) overseeing the firm's financial statements E) developing marketing mixes for target markets

125)

Which of the following is one of three basic marketing management jobs? A) directing the implementation of plans B) controlling the plans in actual operation C) planning marketing activities D) All these answers are correct.

126)

The marketing management process is the process of A) planning marketing activities. B) implementing marketing plans. C) controlling marketing plans. D) All these answers are correct.

127) Which of the following refers to the managerial process of developing and maintaining a match between an organization’s resources and its market opportunities? Version 1

A) marketing mix decisions B) strategic (management) planning C) advertising and promotional activities D) marketing management process E) effective marketing strategy

128)

What sets the tone and direction for the whole company? A) expansion plan B) manager’s qualification C) marketing plan D) management process E) sales and promotion

129)

Marketing strategies A) are not whole-company plans. B) ensure that every opportunity is good for every company. C) do not specify target markets and related marketing mixes. D) ensure sales and profit for the company. E) provide a limited picture of what a firm will do in some market.

130) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called A) management by objective. B) marketing programming. C) marketing strategy planning. D) strategic (management) planning. E) market planning.

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131) ________ is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. A) Strategic (management) planning B) Target marketing C) Mass marketing D) Resource allocation E) Marketing control

132)

"Marketing strategy planning" means A) finding attractive opportunities and developing profitable marketing strategies. B) finding attractive opportunities and selecting a target market. C) selecting an attractive target market. D) selecting an attractive marketing mix. E) selecting a target market and developing a marketing strategy.

133)

Marketing strategies A) enable marketing managers to be satisfied just planning present activities. B) ensure that every opportunity is good for every company. C) do not specify target markets and related marketing mixes. D) provide a limited picture of what a firm will do in some market. E) are not whole-company plans.

134)

A marketing strategy A) specifies a target market and a related marketing mix. B) provides a focused but narrow picture of what a firm will do in some market. C) is a market-oriented, whole-company plan. D) includes two interrelated parts: product mix and product development. E) includes the marketing mix, but does not specify customers.

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135)

A marketing strategy specifies A) a target market and a related marketing mix. B) all the company's resources. C) a target market. D) a target market and the company's objectives. E) a marketing mix.

136)

A marketing strategy specifies A) a marketing mix. B) a target market and a related marketing mix. C) a target market. D) the resources needed to implement a marketing mix.

137)

A target market and a related marketing mix make up a A) marketing plan. B) marketing strategy. C) marketing program. D) marketing analysis. E) marketing proposal.

138) Which of the following refers to a fairly homogeneous (similar) group of customers to whom a company wishes to appeal? A) related market B) target market C) typical market D) mix market E) trial market

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139) Herbal Essences tries to sell its hair shampoos and conditioners to young women in their late teens and early 20s. These women represent Herbal Essences' primary A) marketing strategy. B) "Four Ps." C) target market. D) marketing mix. E) channel of distribution.

140) What term refers to the controllable variables the company puts together to satisfy a target group? A) target marketing B) marketing strategy C) direct marketing D) mass marketing E) marketing mix

141)

In contrast to mass marketing, target marketing A) assumes all customers have the same needs. B) assumes everyone is a potential customer. C) focuses only on small market segments. D) tailors a marketing mix to fit some specific group of customers. E) makes it more likely that a firm will face direct competition.

142)

Which of the following statements about target marketing is NOT correct?

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A) Target marketing is not mass marketing. B) Mass marketers like Kraft and Walmart may conduct target marketing. C) Target marketing is not limited to small market segments. D) Target marketing assumes that everyone is different and specifies some particular target customers. E) Target marketing is associated with the typical production-oriented approach that aims at everyone with the same marketing mix.

143)

The difference between target marketing and mass marketing is that target marketing

A) means focusing on a small market. B) focuses on short-run objectives, while mass marketing focuses on long-run objectives. C) focuses on specific customers, while mass marketing aims at an entire market. D) does not rely on e-commerce, but mass marketing does. E) aims at increased sales, while mass marketing focuses on increased profits.

144)

In contrast to mass marketing, target marketing A) ignores the need for the firm to obtain a competitive advantage. B) ignores markets that are large and spread out. C) is limited to small market segments. D) assumes that all customers are basically the same. E) None of these answers is correct.

145)

Target marketing A) is a production-oriented approach to marketing. B) is essentially the same as mass marketing. C) considers everyone a potential customer. D) assumes that everyone is the same. E) specifies some particular group of customers.

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146) ________ assume(s) that everyone is the same and consider(s) everyone to be a potential customer. A) Mass marketers B) Target marketing C) Mass marketing D) Target marketers E) Objective marketing

147)

Which type of marketing aims to sell to everyone? A) controlled marketing B) target marketing C) oriented marketing D) direct marketing E) mass marketing

148)

Marketing managers should view potential customers as A) all alike. B) all having the same needs. C) always wanting to meet needs in the same way. D) grouped into segments of similar consumers. E) being of different types, but all having the same characteristics.

149)

Good marketing strategy planners know that

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A) firms like Nabisco and Walmart are too large to aim at clearly defined target markets. B) target marketing does not limit one to small market segments. C) mass marketing is often very desirable and effective. D) the terms "mass marketing" and "mass marketer" mean basically the same thing. E) target markets cannot be large and spread out.

150)

In contrast to mass marketing, target marketing A) is limited to small market segments. B) assumes that all customers are basically the same. C) ignores markets that are large and spread out. D) assumes that what they give is what customers want. E) focuses on fairly homogeneous market segments.

151)

Which of the following statements about target marketing is NOT correct?

A) Target marketing is not mass marketing. B) Mass marketers cannot do target marketing. C) Target marketing can mean big markets and profits. D) Marketing-oriented managers practice "target marketing." E) Target marketing aims at a marketing mix that is tailored to fit specific target customers.

152)

The marketing mix

A) includes four variables: People, Place, Promotion, and Price. B) includes the target market. C) helps to organize the marketing strategy decision areas. D) includes four variables: advertising, personal selling, customer service, and sales promotion. E) does not focus on target customers.

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153)

The "Four Ps" of a marketing mix are A) Production, Personnel, Price, and Physical Distribution. B) Promotion, Production, Price, and People. C) Potential Customers, Product, Price, and Personal Selling. D) Product, Price, Promotion, and Profit. E) Product, Place, Promotion, and Price.

154)

A marketing mix consists of A) Policies, Procedures, Plans, and Personnel. B) the customer and the "Four Ps." C) all variables, controllable and uncontrollable. D) Product, Price, Promotion, and Place.

155)

A firm's "marketing mix" decision areas do NOT include A) Promotion. B) People. C) Price. D) Product. E) Place.

156)

A firm's marketing mix decision areas do NOT include A) Price. B) Promotion. C) Product. D) Place. E) Profit.

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157)

Which of the following is NOT one of the four variables in a marketing mix? A) Price B) Product C) Promotion D) Payment E) Place

158)

Which of the following is true?

A) The Product "P" in the marketing mix stands only for physical goods. B) The Product "P" in the marketing mix stands for both physical goods and services. C) The Product "P" in the marketing mix stands only for tangible merchandise. D) The Product "P" in the marketing mix stands only for physical merchandise. E) The Product "P" in the marketing mix stands strictly for physical goods and tangible merchandise.

159)

What is important to remember when developing the “right” product? A) The product must be competitive in the market. B) The product must bring in good profit. C) The product must be unique to the market. D) The product must be easily available in the market. E) The product must satisfy the customers’ needs.

160)

"Product" is concerned with

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A) branding. B) packaging and warranty. C) physical goods. D) services. E) all of these might be involved with Product.

161)

"Product" is concerned with A) branding and warranties. B) physical goods and/or services. C) packaging. D) developing the right new product for a market. E) All of these might be involved with "Product."

162)

"Product" is concerned with A) services. B) developing products that will satisfy some customers' needs. C) designing, packaging, and branding new products. D) physical goods. E) All of these might be involved with "Product."

163)

"Product" is NOT concerned with A) quality level. B) branding. C) wholesale price. D) packaging. E) warranty.

164)

Which of the following is NOT a Product-area decision?

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A) quality level B) market exposure C) instructions D) packaging E) branding

165)

Which of the following is considered a product? A) tax advice from a financial consultant B) a computer C) a haircut D) a chair E) All of these are considered products.

166) Henry Ford told prospective customers of his Model T car, "You can have any color as long as it is black." Which aspect of the marketing mix was he stressing? A) Promotion B) Product C) Place D) Price E) People

167) The packaging design for a new flavor of Ben and Jerry's ice cream is an aspect of which component of the marketing mix? A) Place B) Price C) Product D) Promotion E) People

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168) Suzuki's 3-year/36,000-mile new car warranty is part of which marketing mix decision area? A) Price B) Target Market C) Place D) Product E) Promotion

169) Dell, Inc. wants to offer customers televisions in addition to computers. This is a change in its ________ strategy. A) Pricing B) Promotion C) Personnel D) Product E) Placement

170) Big Fizz Co., a manufacturer of cola-flavored drinks, wants to add packaged fruit juices to its existing product line. Big Fizz needs to make some decisions regarding packaging and branding of the fruit juices. These decisions would fall under which variable of the marketing mix? A) Product B) Place C) Promotion D) Price E) Personal Selling

171) When one considers the strategy decisions organized by the "Four Ps," branding is related to packaging as

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A) branding is to pricing. B) production is to marketing. C) store location is to sales force selection. D) personal selling is to mass selling. E) pricing is to promotion.

172) A firm's decisions regarding channel type, market exposure, and kinds of intermediaries would fall under the marketing mix variable of A) Product. B) Place. C) Promotion. D) Price. E) People.

173) The ________ area of the marketing mix is concerned with decisions about getting the "right" product to the target market when and where it's wanted. A) Product B) People C) Promotion D) Price E) Place

174)

"Place" is concerned with A) intermediaries. B) transporting. C) channel members. D) storing. E) All of these might be involved with Place.

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175)

"Place" is concerned with A) getting the product to its intended market. B) intermediaries located between producers and consumers. C) where, when, and by whom goods are offered for sale. D) when and where products are wanted. E) All of these might be involved with Place.

176)

"Place" is NOT concerned with A) storing. B) intermediaries. C) transporting. D) channels of distribution. E) sales reps.

177)

"Place" is NOT concerned with A) who handles storing and transporting. B) when and where products are wanted. C) kinds of intermediaries needed to reach customers. D) telling the target market what products are available and where. E) channels of distribution.

178) Hewlett-Packard sells personal computers through specialty computer stores, electronics superstores, and its own Internet site. The marketing mix variable that is being considered here is

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A) Price. B) Promotion. C) Personnel. D) Product. E) Place.

179) Scott Paper uses many intermediaries to reach its target markets; Citibank uses none. Which of the marketing mix variables is being considered here? A) Penetration B) Product C) Promotion D) Place E) Price

180) Any series of firms or individuals that participate in the flow of products from producer to final user or consumer is known as A) customer service. B) a packaging line. C) a production line. D) a channel of distribution. E) mass marketing.

181)

A channel of distribution A) usually has three members—a manufacturer, a distributor, and a retailer. B) is any series of firms (or individuals) from producer to final user or consumer. C) should be as short as possible. D) is not involved if a firm sells directly from its own website to final customers.

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182) Herbal Essences tries to get shelf space in Target and Walmart because young women frequently shop there for hair care products. This is an example of which of the "Four Ps"? A) Price B) Product C) Promotion D) Place E) People

183) A detailed plan for handling transportation and storage of a new product that is now being distributed to wholesalers nationwide is an aspect of which part of the "Four Ps"? A) Place B) Product C) Promotion D) Price

184) An office supplies producer sells a variety of office supplies to final consumers and businesses using its own mail order catalog. Here, A) there is no channel of distribution. B) there is no opportunity to apply target marketing. C) no promotion is involved. D) a production orientation is just as effective as a marketing orientation. E) None of these of these answers is correct.

185) The ________ area of the marketing mix includes decisions related to telling the target market or others in the channel of distribution about the "right" product.

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A) Product B) Place C) Promotion D) Price E) Communication

186)

"Promotion" may include A) personal selling to channel members. B) point-of-purchase materials. C) mail-order selling. D) advertising on the Internet. E) All of these may be included in Promotion.

187)

"Promotion" includes A) advertising. B) personal selling. C) sales promotion. D) publicity. E) All of these may be included in Promotion.

188)

Marketing strategy decisions concerning Promotion include decisions about A) packaging and branding. B) the kinds of intermediaries to use. C) training for salespeople. D) transporting and storing. E) discounts and allowances.

189)

"Promotion" is NOT concerned with

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A) creating billboard ads. B) designing new products. C) publicity. D) television commercials. E) personal selling.

190) Personal selling lets the salesperson adapt the firm's marketing mix to a specific customer. This is an aspect of which marketing mix variable? A) Price B) Place C) Promotion D) Product

191)

________ is direct spoken communication between sellers and potential customers. A) Personal selling B) Sales promotion C) Advertising D) Publicity E) Mass selling

192)

From the perspective of the "Four Ps," personal selling is to advertising as A) mass selling is to branding. B) Place is to Product. C) sales promotion is to pricing. D) warranties are to channel type. E) geographic terms are to price allowances.

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193) ________ refers to personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. A) Advertising B) Sales promotion C) Publicity D) Personal selling E) Customer service

194)

Advertising is

A) the designing and distribution of novelties, point-of-purchase materials, store signs, contests, catalogs, and circulars. B) direct communication between sellers and potential customers. C) any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. D) the main form of publicity. E) All of these are included in Advertising.

195) A popular television show, The Unexpected, achieved skyrocketing ratings after moralist Tom Bowman attempted to have it removed from the air. This is an example of mass selling through A) advertising. B) publicity. C) unethical means. D) personal selling. E) media hype.

196)

Sales promotion

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A) lets the salesperson adapt the firm's marketing mix to each potential customer. B) is the main form of advertising. C) can assist the personal selling and mass selling people. D) is free. E) consists of both advertising and personal selling.

197)

Catalogs, point-of-purchase materials, and free samples are all examples of A) publicity. B) personal selling. C) sales promotion. D) advertising. E) marketing.

198)

Coupons, samples, and point-of-purchase materials are examples of A) advertising. B) publicity. C) specialty services. D) personal selling. E) sales promotion.

199) When Herbal Essences offers "dollar-off coupons" to adult women to try to get them to try its shampoos and conditioners, it is an example of A) publicity. B) sales promotion. C) product development. D) market penetration. E) distribution.

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200) Ford Motor Co. "loaned" new Fiestas to social trendsetters who drove the cars as part of their Meals on Wheels responsibilities. When Ford asked them to write about their driving experiences on Facebook and Twitter, it was emphasizing which aspect of the "Four Ps"? A) Product B) Place C) Price D) Promotion E) People

201) The owner of the new Sharp Scissors hair salon gave coupons to potential customers walking by her store to stimulate interest and offer a trial of her new hair salon. The coupons are an example of A) advertising. B) publicity. C) sales promotion. D) a channel of distribution. E) media.

202) To help cosmetic company RedRain Inc. launch a new line of lipstick, tickets that can be redeemed for prizes are enclosed in some of the lipstick packages. This activity is best classified as A) advertising. B) publicity. C) sales promotion. D) personal selling. E) mass marketing.

203) The company 3M sent samples of Breathe Right Nasal Strips to NFL trainers. This was an example of a ________ strategy.

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A) price B) promotion C) personnel D) product E) place

204)

"Price" A) is affected by the kind of competition in the target market. B) includes markups and discounts, but not allowances and freight charges. C) is not affected by customer reactions. D) is the most important part of a marketing mix.

205)

While setting the price of a product, what must managers consider? A) cost of the whole marketing mix B) buying capacity of the customers C) profit it should bring the company D) transportation cost E) personnel cost to the company

206)

The Price area of the marketing mix

A) requires consideration of the cost of the marketing mix and the competition facing the firm when setting prices. B) does not involve estimating consumer reaction to possible prices. C) refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. D) does not include the consideration of geographic terms in price setting. E) None of these answers is correct.

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207)

When developing a marketing mix, a marketing manager should remember that A) "Promotion" includes only personal selling and publicity. B) a channel of distribution includes at least one intermediary. C) "Price" includes markups, discounts, allowances, and geographic terms. D) "Product" includes physical goods but not services. E) customers’ needs are all the same.

208) When Ford Motor Co. introduced its Escape hybrid SUV, it offered a $1,000 rebate as an incentive to attract new buyers. This was an example of which aspect of the marketing mix? A) Price B) Promotion C) Place D) Product E) People

209) In which of the following ways would a marketing manager seek to deliver customer value to a target market? A) increased product features B) lower price C) more convenient buying options D) effective communication about product value E) All these answers are correct.

210)

The most important variable in a firm's marketing mix is

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A) Product. B) Price. C) Promotion. D) Place. E) None of these answers is correct, since all contribute to one whole.

211)

An appropriate marketing mix should be determined primarily by A) what has worked for the company in the past. B) the needs of a target market. C) the budget available to spend. D) the past experiences of the marketing manager. E) what product the firm can produce with economies of scale.

212)

Ideally, a good marketing mix should A) be very similar to the marketing mix typically used by key competitors. B) be determined by which marketing mix costs the least. C) not include much advertising, because it's expensive and usually isn't very effective. D) flow logically from all the relevant dimensions of a target market. E) bring big profits to the company.

213)

The text's Toddler University example shows that

A) parents are not price sensitive when it comes to assuring that their kids will get a good college education. B) the needs of a target market determine the nature of the appropriate marketing mix. C) a small producer can't compete effectively against large competitors. D) in the long run, a firm cannot make a profit without its own production facilities. E) All of these answers are correct.

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214)

The text's Toddler University example shows that A) no mass market exists for general-purpose baby shoes. B) the needs of a target market determine the nature of the appropriate marketing mix. C) a small producer can't compete effectively against large competitors. D) no target market exists for high-quality baby shoes. E) All these answers are correct.

215)

In the text's Toddler University (TU) example,TU's marketing plan included A) a detailed description of the marketing mix to be offered. B) a description of the resources required to carry out the plan. C) expected results of the plan. D) control procedures. E) All these answers are correct.

216)

The main difference between a "marketing strategy" and a "marketing plan" is that A) time-related details are included in a marketing plan. B) a marketing plan includes several marketing strategies. C) a marketing strategy provides more detail. D) a marketing strategy omits pricing plans. E) a marketing plan does not include a target market.

217) Which of the following refers to a written statement of a marketing strategy and the timerelated details for carrying out the strategy? A) marketing mix B) marketing program C) marketing plan D) marketing design E) marketing direction

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218)

A marketing plan is A) a marketing program. B) a marketing strategy. C) a marketing strategy plus the time-related details for carrying it out. D) a target market and a related marketing mix. E) a plan that contains the necessary operational decisions.

219)

A marketing plan A) is just another term for "marketing strategy." B) consists of several "marketing programs." C) includes the time-related details for carrying out a marketing strategy. D) is a strategy without all the operational decisions. E) ignores implementation and control details.

220)

A marketing plan should include A) some control procedures. B) what company resources will be needed, and at what rate. C) what marketing mix is to be offered to whom, and for how long. D) what sales and profit results are expected. E) All of these are included in a marketing plan.

221)

Which of the following is part of a complete marketing plan? A) competitors' marketing strategies B) what company resources (costs) are required and at what rate C) how different marketing mixes (for different target markets) relate to each other D) All of these are parts of a complete marketing plan.

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222)

Which of the following would probably NOT be in a proposed marketing plan? A) a list of what company resources (costs) would be required B) a statement of how frequently the design of the website will be changed C) expected sales and profit results D) a description of the target market and marketing mix

223)

Which of the following is included in a marketing plan? A) the control procedures to be used B) the costs involved C) the results expected D) what marketing mix is to be offered E) All of these should be included in a marketing plan.

224)

________ refers to putting marketing plans into operation. A) Delivery B) Implementation C) Operational planning D) Strategy planning E) Control

225)

Short-run decisions to help implement strategies are best known as A) actionable items. B) strategic decisions. C) marketing plans. D) operational decisions. E) dependencies.

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226)

Managers should make operational decisions

A) within the guidelines set down during strategy planning. B) with great care, as these decisions are the same as strategic decisions. C) for the long-run, to help formulate strategic plans. D) while keeping in mind that these decisions should always lead to changes in the basic strategy. E) on a month-to-month basis, never daily or weekly.

227)

Which of the following statements about operational decisions is FALSE? A) They help to carry out a marketing strategy. B) They are short-run decisions. C) They are part of the implementation process. D) They usually require ongoing changes in the basic strategy to be effective.

228) Which of the following statements is a strategy decision, rather than an operational decision? A) "We will change the colors of our selection of shirts at the end of the season." B) "We will cut prices as needed to in order to protect our market share." C) "We will increase the number of training sessions for new sales associates from two to three." D) "We will hire a merchandising specialist this month to help remodel our older stores." E) "We will place a special ad in the Sunday newspaper promoting our upcoming sale."

229) Which of the following statements by a marketing manager refers to an operational decision, rather than to a strategy decision?

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A) "Our target customers view most existing luxury sedans as dull, and they want performance as well as luxury." B) "Newspaper ads will be more cost effective than 30-second radio ads, given the price increase for radio this month." C) "We hope to earn a 15 percent return on investment with our plan." D) All of these statements refer to operational decisions.

230)

Which of the following is an operational decision rather than a strategy decision? A) a decision to seek distribution only through the best retailers B) selection of a specific target market C) a decision to maintain a "one price" policy D) selection of a specific cable TV channel on which to advertise E) selection of a niche market

231)

Which of the following is an example of an operational decision? A) Focus promotion on the economy of the product. B) Make the product available in every possible retail outlet. C) Have a salesperson visit the manager of a new hardware store that will open next

week. D) Set a price that is no higher than competitors' prices. E) None of these is an example of an operational decision.

232) Which of the following would NOT require an operational decision for a leading hair color manufacturer? A) Solicit orders from any new, financially attractive, salons. B) Drop colors that are losing appeal. C) Create a fresh ad for each Sunday newspaper. D) Set a competitive price if a primary competitor offers a special discount. E) Promote the fair price and satisfactory quality of the product.

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233) Happy Feet shoe company's strategic policy states "Carry as limited a line of colors, styles, and sizes as will satisfy the target market." This policy best relates to which decision area of the marketing mix? A) People B) Place C) Promotion D) Price E) Product

234) One of the strategic policies of camera maker Zoom Cameras states: "We will communicate the key benefits and value of our cameras' unique zoom lenses and demonstrate how they meet customer needs." This policy best fits which marketing mix decision area? A) Product B) Place C) Promotion D) Price E) People

235) A retailer's operational decision to hire new salespeople would best relate to the marketing mix decision area of A) Product. B) Place. C) Promotion. D) Price. E) People.

236) When fast food restaurant Tommy's Tacos had poor sales in Central City, marketing managers closed one outlet on the east side of town and opened two new locations on the south side of town. These moves represent

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A) operational decisions in the Product decision area. B) strategy policies in the Place area. C) strategy policies in the Product area. D) operational decisions in the Place area. E) strategy policies in the Promotion area.

237) The practice of measuring, managing, and analyzing market performance to maximize efficiency and effectiveness is known as A) marketing analytics. B) marketing metrics. C) a marketing plan. D) publicity. E) differentiation.

238) What is the best way for a marketing manager to measure a firm’s marketing performance? A) compare the firm’s marketing plans B) perform marketing analytics C) develop a marketing plan D) create a single marketing strategy E) initiate a marketing plan

239)

A marketing program A) blends all of a firm's marketing plans into one big plan. B) is a description of a firm's marketing mix. C) is a detailed plan of how to implement a strategy. D) is a marketing strategy plus the time-related details. E) None of these answers is correct.

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240)

Which of the following blends all of a firm's marketing plans into one big plan? A) marketing program B) marketing mix C) marketing statement D) marketing overview E) marketing flow

241) ________ is the total profits a single customer contributes to a firm over the length of the relationship. A) Customer equity B) Profit C) Net worth D) Customer lifetime value E) A premium price

242) The profits a single customer contributes to a firm over the length of the relationship is called customer A) equity. B) lifetime value. C) service. D) satisfaction. E) feedback.

243) Estimating a customer's lifetime purchasing potential is important because it helps marketers to

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A) make a quick sale on a product. B) decide whether to place ads online or in magazines. C) recognize that mass marketing is the best way to reach customers. D) select the right channel of distribution. E) devise long-range plans and strategies for building customer relationships.

244) When a customer who buys two Apple iPhones, an Apple iMac computer, and Apple TV over a period of several years, Apple's marketing managers should be thinking about A) diversification. B) mass marketing. C) differentiation. D) customer lifetime value. E) customer feedback loops.

245)

Customer lifetime value

A) emphasizes a short-run approach to marketing management. B) is basically a historical measure of how profitable a firm has been in the past. C) applies to firms that target final consumers but not to firms that target business customers. D) will increase if a firm increases its market share with a particular strategy. E) considers the total profits a customer contributes to the firm over the length of the relationship.

246) When the manager of a Denny's Restaurant offers a customer a coupon for a free meal as compensation for slow service, the manager is focusing on

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A) differentiation. B) product development. C) short-term profits. D) a diversification strategy. E) customer lifetime value.

247) ________ is the expected earnings stream of a firm's current and prospective customers over some period of time. A) Profit B) Earnings C) Operating profit D) Customer equity E) Net value

248)

The difference between customer lifetime value and customer equity is that

A) customer equity takes a financial approach where customer lifetime value does not. B) customer lifetime value looks at specific target markets. C) customer equity takes into account a firm's current and future customers and the costs associated with each. D) customer equity reflects the total stream of purchases that a customer could contribute to a company over the length of the relationship. E) customer lifetime value focuses on purchases over the next year, while customer equity takes into account a longer time horizon.

249) Which of the following is NOT a reason the marketing program should build customer equity?

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A) Marketing strategies do not contribute to customer equity. B) Expected profits depend on customer equity. C) Firms expect financial returns. D) Profit growth comes from customers. E) Customers are the source of revenue.

250)

Which of the following is most likely to increase a firm's customer equity? A) The firm offers a more costly marketing mix that attracts more customers. B) The firm offers customer value that is at least as good as what competitors offer. C) The lifetime value of the firm's individual customers increases. D) The competition in the firm's market increases. E) The firm cuts costs by reducing promotion efforts.

251)

The customer equity concept

A) encourages a manager to consider both the costs and the revenue from a marketing strategy. B) recognizes that customers are satisfied at a cost. It is basically an estimate of a firm's future earnings. C) applies even to firms that pursue several different strategies. D) focuses on earnings as well as sales. E) All of these are part of the customer equity concept.

252)

Which of the following statements about customer equity is FALSE?

A) It focuses on the revenues and the costs of acquiring, retaining, and enhancing customers. B) If the parts of a firm's marketing program work well together, it should increase the firm's customer equity. C) Expected profits depend on customer equity. D) Customer equity benefits customers but not the company.

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253) The customer equity approach suggests three potential paths for growth. Which of the following is not one of these paths? A) shedding inactive customers B) acquiring new customers C) enhancing customer value by increasing customer purchases D) retaining current customers

254)

What are two marketing metrics used to estimate customer lifetime value? A) retention rate and acquisition cost B) revenue and profit C) price and quantity D) revenue and retention rate E) acquisition cost and customer satisfaction

255) All of the following marketing metrics are needed to estimate customer lifetime value except A) market share. B) average profit margin. C) retention rate. D) acquisition cost.

256)

How would a marketing manager determine a firm’s retention rate?

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A) by determining the percentage of existing customers that a firm keeps as compared to its total number of customers B) by figuring out the expense to the firm of attaining a new customer C) by considering the revenues and costs of retaining customers over the long term D) by analyzing the firm’s customer base as compared to the forecast in the firm’s marketing plan E) by determining the average profit margin for each of the firm’s customers per year

257) Which of the following pieces of information would be necessary to determine a firm’s retention rate? A) how many customers returned to a company’s website and bought something after an initial purchase B) the revenue and costs that are associated with every current and future customer that visits a firm’s retail location C) how much it costs to attract each new customer for each promotion activity D) the efforts of a company to enhance the benefits it provides for each existing customer E) the deviation between what a firm planned and its actual overall performance

258) Donna opened an exclusive clothing store, which had 2,000 customers in its first year. Of those 2,000 customers, 500 patronized Donna’s clothing store the following year. This reflects a 25 percent A) retention rate. B) acquisition cost. C) profit margin. D) lifetime value. E) customer equity.

259) If the local sandwich shop had 1,000 customers last year, and this year 250 of those same customers are still going to the sandwich shop for lunch, what is the shop’s retention rate?

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A) 10 percent B) 50 percent C) 20 percent D) 25 percent E) 75 percent

260)

Which of the following refers to the expense required to obtain a new customer? A) retention cost B) acquisition cost C) customer equity D) CLV E) market development

261) If a firm spends $5,000 per year on advertising and attracts 50 new customers, what is the acquisition cost for each customer? A) $100 per customer B) $50 per customer C) $500 per customer D) $10 per customer E) $20 per customer

262) An outdoor retailer spent $20,000 on Internet and print advertisements promoting its new line of sports and travel gear. From the promotion, it gained 500 new customers. This results in a(n) ______ of $40 per customer. A) acquisition cost B) retention rate C) profit margin D) lifetime value E) customer value

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263)

It is best to think of breakthrough opportunities as opportunities that A) appeal to the mass market. B) will quickly create a whole new industry of firms competing with similar marketing

mixes. C) help innovators develop hard-to-copy marketing mixes. D) increase sales. E) will take profits to the highest level.

264) ________ help(s) innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. A) Opportunity segments B) Competitive decisions C) Breakthrough opportunities D) Competitive marketing E) Operational decisions

265)

Which of the following best illustrates a breakthrough opportunity?

A) A recording company's new artist gets unexpected national publicity on YouTube, and almost every teenager wants to download it on Spotify. B) A drug company develops a patented pill that people can take once a year and safely avoid catching a cold. C) A bank puts its credit card machines in convenient drive-up locations so they will be more convenient for customers. D) A nurse realizes that the growing number of older people will increase the demand for nursing home services, so she quits her job and opens a quality nursing center for the elderly. E) A wireless phone company introduces a new service that offers more free weekend minutes than any other service in its market area.

266)

Which of the following would be likely to help you develop a breakthrough opportunity?

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A) a two-month advantage over competitors in introducing a new product B) an idea for a new website animation that will attract consumer attention C) accurate marketing research information about how much of a planned product the target market is likely to buy D) None of these would help you develop a breakthrough opportunity.

267)

Which of the following could be a breakthrough opportunity?

A) a unique technical invention that competitors could not legally copy B) a contract with the best intermediaries to reach your market, ensuring that they will handle your product and no competitors' offerings C) a head start in a market, so you can win target customers who will be loyal to your firm and its offering D) All of these could be breakthrough opportunities.

268) A pharmaceutical company spent a significant amount of money developing a new drug to combat high blood pressure. The drug did not cause any of the typical side effects usually associated with blood pressure medications. It was forecasted to be a "blockbuster" medication that would achieve over $1 billion in sales. It would also be difficult for other firms to duplicate, at least in the short run, because of patent protection and the substantial research and development costs required. The introduction of this new drug would best be described as A) diversification. B) market development. C) a breakthrough opportunity. D) "hit-or-miss" marketing. E) market penetration.

269) ________ means that a firm has a marketing mix that the target market sees as better than a competitor's mix.

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A) Competitive advantage B) Strategic policy C) Customer equity D) Comparative opportunity E) Market development

270)

Breakthrough opportunities are opportunities that A) help innovators develop hard-to-copy marketing strategies. B) may be turned into marketing strategies that will be profitable for a long time. C) help the firm develop a competitive advantage. D) help a firm satisfy customers better than some competitor. E) All of these apply to breakthrough opportunities.

271)

Breakthrough opportunities

A) are so rare that they should be pursued even when they do not match the firm's resources and objectives. B) seldom occur within or close to a firm's present markets. C) are especially important in our increasingly competitive markets. D) are those that a firm's competitors can copy quickly. E) are best achieved by trying to hold onto a firm's current market share.

272)

Which of the following statements regarding marketing strategies is FALSE?

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A) It is useful to think of the marketing strategy planning process as a narrowing-down process. B) These strategies must meet the needs of target customers, and a firm is likely to get a competitive advantage if it just meets needs in the same way as some other firm. C) Developing successful marketing strategies doesn't need to be a hit-or-miss proposition. D) These strategies require decisions about the specific customers the firm will target and the marketing mix the firm will develop to appeal to that target market. E) Most companies implement more than one marketing strategy and related marketing plan at the same time.

273)

Developing a set of specific qualitative and quantitative screening criteria

A) increases the different opportunities—and strategy possibilities—in the market. B) can make it difficult to zero in on the best target market and marketing mix. C) cannot help eliminate the potential of strategies that are not well suited for the firm. D) can help a manager define in which business and markets the firm wants to compete. E) highlights advantages of a strategy but does not make it clear why you should select that strategy.

274)

A S.W.O.T. analysis includes A) strengths. B) weaknesses. C) opportunities. D) threats. E) All of these are included in a S.W.O.T analysis.

275)

Which of the following statements about S.W.O.T. analysis is true?

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A) It is a useful aid for identifying relevant screening criteria and for zeroing in on a feasible strategy. B) S.W.O.T. is simply an abbreviation for the first letters of the words: strengths, weaknesses, opportunities, and threats. C) It identifies and lists the firm's strengths and weaknesses and its opportunities and threats. D) It helps managers focus on a strategy that takes advantage of the firm's strengths and opportunities while avoiding its weaknesses and threats to its success. E) All of these statements about S.W.O.T. analysis are true.

276)

A S.W.O.T. analysis

A) seeks to improve strategy planning by "Scanning for Warnings, Omens, and Tips" about competitors' plans. B) is not necessary if competitors have already entered the market. C) defends against potential competitive threats by planning specific "safeguards, weapons, or tactics." D) should help a manager develop a strategy that leads to a competitive advantage. E) limits the competitive edge of the company.

277)

A S.W.O.T. analysis can help a marketing manager

A) define in which business and markets the firm wants to compete. B) narrow down to a specific target market and marketing mix from the many alternatives available. C) see the pros and cons of different possible strategies. D) develop a competitive advantage. E) All of these can help a marketing manager who is using a S.W.O.T. analysis.

278)

A S.W.O.T. analysis

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A) focuses on what a firm plans to do to "Satisfy Wishes of a Target" customer. B) summarizes a firm's "strategy, wishes (of its customers), outlook, and tactics." C) helps defend against potential competitors by developing a set of competitive "safeguards, weapons, offensives, and tactics." D) identifies a firm's "strengths, weaknesses, opportunities, and threats." E) seeks to reduce the risk of competitive surprises by scanning the market for "signals, warnings, omens, and tips."

279) "A firm has adequate resources." With which element of the S.W.O.T analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats E) limitation

280) "A firm is in a fast-growing industry." With which element of the S.W.O.T. analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats

281) "A firm is vulnerable to recession." With which element of the S.W.O.T. analysis tool does this statement fit?

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A) strengths B) weaknesses C) opportunities D) threats E) limitation

282) "A firm is falling behind in research and development." With which element of the S.W.O.T. analysis tool does this statement fit? A) strengths B) weaknesses C) opportunities D) threats

283) ________ means that the marketing mix is distinct from what is available from a competitor. A) Operational B) Visible C) Differentiation D) Competitive E) Diversification

284)

Differentiation of a firm's marketing mix

A) means the firm's marketing mix is hard to distinguish from a competitor. B) may provide the firm with a competitive advantage in the marketplace. C) makes it harder for consumers to notice if there is a consistent theme across all elements of the marketing mix. D) is usually not necessary in order for the firm to succeed.

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285) Differentiation refers to the ________ of the firm's marketing mix to meet the needs of the target market. A) similarity B) uniqueness C) unsuitability D) willingness E) adaptability

286)

Differentiation

A) helps a firm get a competitive advantage if it just meets needs in the same way as other firms. B) means that the marketing mix is similar to what is available from a competitor. C) often requires that the firm fine-tune all the elements of its marketing mix to the specific needs of a distinctive target market. D) is less obvious to target customers when there is a consistent theme integrated across the "Four Ps" decision areas. E) can only be based on one important element of the marketing mix.

287) The company iRobot got its start by developing high-tech robots for military uses, but itlater started making futuristic robots that clean and wax floors in homes everywhere. Which of the four types of opportunity does this illustrate? A) market penetration B) market development C) diversification D) opportunity cost E) golden opportunity

288) Of the four types of opportunities firms can pursue, market penetration often appeals to marketers because

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A) it requires the creation of new products. B) it involves selling current products in familiar markets. C) it involves selling current products in unfamiliar markets. D) it doesn't require a more effective use of the marketing mix. E) it is guaranteed to succeed.

289)

Which of the following firms is exploring a market development opportunity?

A) The Coleman camping gear company boosts sales of popular lanterns by setting up promotional displays at well-attended outdoor events. B) Campbell's targets health-conscious consumers with a new line of low-sodium soups. C) McDonald's opens two upscale hotels in Switzerland to serve families and business travelers. D) The E-Z-Go golf cart company begins selling golf carts for use in malls, factories, and airports. E) Mammoth Mountain Ski Resort offers horseback riding and a mountain bike park for summer visitors.

290) ________ means trying to increase sales of a firm's present products in its present markets. A) Differentiation B) Product development C) Market development D) Diversification E) Market penetration

291) When Colgate encourages its current customers to brush more often by taking their toothbrush and toothpaste to work with them, which market opportunity is Colgate pursuing?

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A) market development B) product development C) diversification D) market penetration

292) Lipton has increased sales by developing ads that encourage its current customers to drink Lipton tea instead of coffee at morning "coffee breaks." This effort focuses on A) diversification. B) market penetration. C) product development. D) mass marketing. E) market development.

293) Tropicana is trying to get its customers to drink orange juice more often with ads that say, "It's not just for breakfast anymore." What type of opportunity is the company pursuing? A) market penetration B) diversification C) market development D) product development E) mass marketing

294) Kraft Foods recently increased its advertising and couponing to its present cheese customers. It appears that Kraft is pursuing what kind of opportunity? A) market penetration B) product development C) market development D) mass marketing E) diversification

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295) If Frito-Lay (which has products in almost all the submarkets for snack foods) were to try to increase its share of one of its markets, it would be pursuing a ________ opportunity. A) diversification B) market penetration C) product development D) mass marketing E) market development

296) Coca-Cola runs an advertising campaign on morning radio shows encouraging current customers to "have a Coke in the morning" instead of their morning coffee. This is an example of A) market development. B) product development. C) diversification. D) market penetration. E) mass marketing.

297) Pop Soda Co. wants to increase sales of its existing carbonated drinks by making them more convenient, so it's making the drinks available at more stores in its present areas. This is an example of A) market penetration. B) differentiation. C) product development. D) diversification. E) market development.

298) When a customer goes online to register Adobe's Acrobat Reader, the Web page promotes other related products, including its popular Photoshop software. This is an example of

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A) product development. B) screening opportunities. C) mass marketing. D) differentiation. E) market penetration.

299)

________ means trying to increase sales by selling present products in new markets. A) Differentiation B) Market development C) Product development D) Diversification E) Market penetration

300) When a firm tries to increase sales by selling its present products in new markets, it is called A) product development. B) diversification. C) market penetration. D) mass marketing. E) market development.

301)

A company expanding globally is an example of A) market development. B) product development. C) diversification. D) market penetration. E) mass marketing.

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302) When AT&T advertises in The Wall Street Journal that smartphones using its technology can make calls from more than 200 countries in the world, which market opportunity is AT&T pursuing? A) market penetration B) product development C) diversification D) market development

303) The Wall Street Journal has been trying to attract new customers by promoting its newspaper for student use in business courses. This is an example of A) product development. B) diversification. C) market penetration. D) market development.

304) An Embassy Suites hotel offers an inexpensive "Family Luncheon Buffet" on Sundays to get customers for its restaurant that is filled by business travelers during weekdays. This effort to get new customers for the available facility is an example of A) a production orientation. B) product development. C) market development. D) diversification. E) market penetration.

305) Coca-Cola is taking advantage of an increased willingness of African leaders to engage in international trade by marketing its soft drinks in certain African nations. What type of opportunity is Coca-Cola pursuing?

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A) market development B) diversification C) product development D) market penetration E) product reorientation

306) Avon, which in the past relied on door-to-door personal selling, is trying to reach new customers by distributing mail-order catalogs, adding toll-free telephone ordering, and opening online retail sites. Avon is pursuing a ________ opportunity. A) market development B) market penetration C) target marketing D) product development E) mass marketing

307) A mail-order marketer of flower bulbs to gardening hobbyists decides to sell the bulbs in grocery stores, to reach nonhobbyists who might be interested in pretty flowers. This is an example of A) market development. B) diversification. C) market penetration. D) product development.

308) GreatGadgets, an Internet-based marketer of innovative gift items, decides to sell products in its own retail stores to reach consumers who don't like to buy without first seeing an item in person. This is an example of

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A) market development. B) diversification. C) market penetration. D) product development.

309) An Australian wine producer, facing declining sales at home, set up a new channel of distribution to sell wine in the United States. This seems to be an effort at A) market development. B) diversification. C) market penetration. D) product development.

310) E-Z-Go, a producer of golf carts, promotes its carts to other users by advertising them as an easy and quiet way for workers to get around malls, airports, and big factories. E-Z-Go is trying to increase its sales through A) market penetration. B) differentiation. C) product development. D) market development. E) diversification.

311) BeQuick, a fast-food restaurant, has always operated outlets in malls. With a new strategy that involves opening new outlets that sell the same menu but operate in airports, zoos, casinos, and military bases, BeQuick is pursuing what type of opportunity? A) product development B) market development C) differentiation D) market penetration E) diversification

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312) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a ________ opportunity. A) diversification B) market penetration C) product development D) mass marketing E) market development

313)

________ refers to offering new or improved products for present markets. A) Diversification B) Market development C) Differentiation D) Market penetration E) Product development

314) When a firm tries to increase sales by offering new or improved products to its present markets, it is called A) mass marketing. B) product development. C) market penetration. D) diversification. E) market development.

315) If Wendy's decides to test-market a hot dog in several stores to determine if it can make more profit from this menu item than from a "Wendy's single," which market opportunity is Wendy's pursuing?

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A) diversification B) market development C) market penetration D) product development

316) To compete more successfully with its many competitors offering packaged cookies, Famous Amos added its own line of "extra chunky" premium cookies. This seems to be an effort at A) combination. B) market penetration. C) market development. D) product development. E) diversification.

317) A producer of frozen pasta dinners finds that its current target customers select among its frozen pasta dinners, going to a pizza restaurant, or staying home and eating an Italian sub sandwich. So the company set up a chain of pizza restaurants that also serve Italian sub sandwiches. This seems to be an effort at A) market development. B) diversification. C) market penetration. D) product development.

318) Wendy's continues to test possible new toppings for hamburgers, including grilled mushrooms and provolone cheese. This suggests that Wendy's is pursuing

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A) marketing myopia. B) mass marketing. C) product development. D) market development. E) diversification.

319) Wendy's continues to come out with new offerings, like stuffed pitas. This suggests that Wendy's is pursuing A) marketing myopia. B) mass marketing. C) product development. D) market development. E) diversification.

320) Converse started selling its high-top canvas basketball shoes in colors such as hot pink, lime green, and purple, to accompany their traditional colors of black and white. Converse seems to be pursuing a ________ opportunity. A) market penetration B) market development C) product development D) diversification E) breakthrough

321) Heinz, in order to boost its sales, came up with ketchup in gross green and funky purple colors. It packaged the ketchup in EZ Squirt dispensers molded to fit little hands. This is an example of

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A) product development. B) market development. C) diversification. D) market penetration.

322) In developing trails for hiking and biking to bring its winter ski customers back in the summer, Mountain High Ski Resort is pursuing what type of opportunity? A) channel penetration B) diversification C) product development D) market development E) market penetration

323) Zippo is pursuing ________ opportunities with its Multi-Purpose Lighter that is designed to light candles, fireplaces, grills, and more. A) market penetration B) market development C) product development D) diversification E) channeling

324) Hewlett-Packard decided that too many other companies were attracting its customers by advertising their computer printers as "having all of the features of Hewlett-Packard's LaserJet." So Hewlett-Packard designed a new color printer with a completely new set of features that no competitors' equipment offered. Hewlett-Packard then introduced it to the same market with the hope that it could develop a larger and more profitable share. This was an effort at

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A) market development. B) diversification. C) market penetration. D) product development.

325) To improve its profits, Delta Tool Corp. has redesigned its entire line of rechargeable power drills—adding several new or improved features and three new models. Apparently, Delta Tool is pursuing a ________ opportunity. A) combiner B) market development C) product development D) diversification E) market penetration

326) Professional Dental Supply has been successfully selling dental instruments to dentists for the past twenty years and has developed strong customer relations. When looking for new marketing opportunities, Professional Dental Supply will most likely look first at A) market penetration. B) diversification. C) market development. D) product development. E) Professional Dental Supply will look at all opportunities equally.

327) ________ means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.

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A) Diversification B) Market development C) Product development D) Differentiation E) Market penetration

328) When a firm tries to increase its total sales by offering new products to new markets, it's pursuing A) diversification. B) product development. C) market development. D) market penetration. E) All these answers are correct.

329) When Sony Corp., an electronics producer, purchased the Pebble Beach golf course in California, it was pursuing what type of opportunity? A) diversification B) market development C) market penetration D) product development

330) Cheese manufacturer Ashe Mountain Corp. started a new chain of movie theaters called Ashe Mountain's Movie World. The theaters have been a major success and significantly increased the revenues of Ashe Mountain Corp. This is an example of A) diversification. B) market development. C) product penetration. D) differentiation. E) market penetration.

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331) A beer distributor concerned about increasing regulation of alcoholic beverages decides to start a new business distributing children's toys. This company seems to be pursuing A) market development. B) diversification. C) product development. D) market penetration.

332) Industrial Plastics Corporation has decided to manufacture and sell electric motors for fishing boats. The firm appears to be pursuing a ________ opportunity. A) combiner B) product development C) market development D) market penetration E) diversification

333) A producer of home burglar alarm devices decides to start manufacturing portable video cameras for use in industrial security situations. This is an example of A) market development. B) diversification. C) product development. D) market penetration.

334) If a cola producer bought out a mango juice producer in an attempt to appeal to healthconscious consumers who do not drink soft drinks, it would be pursuing a ________ opportunity.

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A) market development B) diversification C) market penetration D) product development

335)

The most risky and challenging opportunities usually involve A) market development. B) product development. C) diversification. D) market penetration. E) market modification.

336)

The most risky types of marketing opportunity to pursue usually involve A) market development. B) market penetration. C) diversification. D) product development. E) All of these are equally risky.

337) Because companies are likely to be most familiar with their own operations, ________ opportunities are usually the easiest to pursue. A) market penetration B) product development C) market development D) diversification E) All of these are equally easy.

338)

Which of the following statements about international opportunities in marketing is true?

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A) There is no need to consider international opportunities when the domestic market is prosperous. B) International trade is decreasing worldwide. C) A product with slow sales growth in a domestic market may experience faster growth in another country. D) Only large firms can engage in international marketing. E) All of these statements about international opportunities in marketing are true.

339) Which of the following is NOT among the reasons international opportunities should be considered by managers? A) The world is getting smaller. B) Serving international markets may improve economies of scale. C) Favorable trends at home and unfavorable trends in other countries make international marketing particularly attractive. D) Around the world, potential customers have needs and money to spend. E) It helps to develop a competitive advantage at home and abroad.

340)

Going global has become easier than ever for marketers, due to A) language differences between nations. B) cultural differences among ethnic groups around the world. C) advances in e-commerce, transportation, and communication. D) political and social unrest in various parts of the world. E) a worldwide economic recession.

341)

Which of the following represents a risk of operating in a foreign market?

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A) learning foreign regulations and culture B) finding better trends in variables C) getting an early start in a new market D) enjoying competitive advantage at home and abroad E) increasing ability to reach international customers

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Answer Key Test name: Chap 02_17e 1) TRUE In the marketing management process, planning, implementation, and control are basic jobs of all marketing managers. 2) FALSE Controlling marketing plans is the final step of the marketing management process. It involves measuring results and evaluating progress of plans after they have been devised and implemented. 3) TRUE The marketing management process is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 4) TRUE The marketing management process is the process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 5) FALSE Strategic planning includes planning not only for marketing but also for production, finance, human resources, and other areas. 6) TRUE Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. It includes planning not only for marketing but also for production, finance, human resources, and other areas.

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7) FALSE Strategic planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 8) TRUE The marketing manager's marketing strategy planning job involves finding attractive opportunities and developing profitable marketing strategies. 9) FALSE Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. 10) TRUE A marketing strategy specifies a target market and a related marketing mix. It is a broad view of what a firm will do in some market. 11) TRUE The two interrelated parts that make up a marketing strategy are (1) target market, and (2) marketing mix. 12) FALSE A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. 13) FALSE A marketing strategy is composed of two interrelated parts—a target market and a marketing mix. 14) FALSE A target market consists of a fairly homogeneous group of customers. 15) FALSE Version 1

A marketing mix is the set of controllable variables that a company puts together to satisfy a target group. 16) TRUE Target marketing aims a marketing mix at some specific target customers. 17) FALSE Mass marketing vaguely aims at everyone with the same marketing mix. It assumes that everyone is the same—and it considers everyone a potential customer. 18) TRUE Mass marketing is the typical production-oriented approach that vaguely aims at everyone with the same marketing mix. 19) FALSE Mass marketing means trying to sell to everyone, whereas mass marketers aim at clearly defined target markets. 20) TRUE Unlike mass marketing, which aims at trying to sell to everyone, mass marketers aim at clearly defined target markets. 21) FALSE Target marketing is not limited to small market segments, only to fairly homogeneous ones. 22) FALSE Mass marketing assumes that everyone is the same and considers everyone a potential customer. 23) TRUE

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Since everyone is different, marketers need to focus efforts on some specific target customers instead of all customers. Target marketing allows marketers to develop a marketing mix that satisfies the needs of select consumers. 24) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 25) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 26) FALSE The "Four Ps" in a firm's marketing mix are Product, Price, Place, and Promotion. 27) TRUE Product, Place, Promotion, and Price are the four important variables in a firm's marketing mix. 28) FALSE The customer is the target of all marketing efforts and is not part of the marketing mix. 29) TRUE The customer is not part of the marketing mix, but instead the focus of all marketing efforts. 30) TRUE The customer is not part of the marketing mix, but instead the focus of all marketing efforts. 31) TRUE Version 1

The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 32) FALSE The Product area is concerned with developing the right product, which may involve a physical good, a service, or both. 33) TRUE The Product area is concerned with developing the right product, which may involve a physical good, a service, or both. 34) TRUE Place is concerned with all the decisions involved in getting the right product to the target market at the right time. A product isn't much good to a customer if it isn't available when and where it's wanted. 35) TRUE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. 36) TRUE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. 37) FALSE A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. It may or may not include an intermediary, depending on the industry and type of products offered. 38) FALSE Version 1

A channel of distribution is any series of firms (or individuals) that participate in the flow of products from producer to final user or consumer. It may or may not include an intermediary, depending on the industry and type of products offered. 39) TRUE Promotion includes personal selling, mass selling, and sales promotion. It is the marketing manager's job to blend these methods of communication. 40) TRUE Promotion includes personal selling, mass selling (advertising, and publicity), and sales promotion. It is the marketing manager's job to blend these methods of communication. 41) FALSE Personal selling involves direct spoken communication between sellers and potential customers. Such sales often require personal attention even after the sale is made. 42) TRUE Customer service is personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. 43) TRUE Advertising refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 44) TRUE Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This includes use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. Version 1

45) TRUE Sales promotion refers to those promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 46) FALSE Sales promotion refers to those promotion activities other than advertising, publicity, and personal selling those stimulate interest, trial, or purchase. Therefore, neither personal selling nor advertising is a form of sales promotion. 47) TRUE Customer value increases when customers perceive more benefits or lower costs. Marketing managers use the "Four Ps" to deliver customer value to a target market. 48) FALSE No single element of the marketing mix is more important another. All four are equally important. 49) FALSE No single element of the marketing mix is more important than another. All four are equally important. 50) TRUE No single element of the marketing mix is more important than the other. All four are equally important. 51) FALSE Selecting a target market and developing a marketing mix are interrelated. Both parts of a marketing strategy must be decided together. 52) TRUE

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The Toddler University case shows how the needs of a target market, in this case the attentive parents target market, determine the nature of an appropriate marketing mix. 53) FALSE A marketing strategy is a big picture of what a firm will do in some market. A marketing plan is a written statement of a marketing strategy. 54) TRUE A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 55) TRUE A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 56) TRUE Implementation refers to putting marketing plans into operation. 57) FALSE Operational decisions refers to short-run decisions that stay within the guidelines set down during strategy planning made to help implement strategies. 58) FALSE Operational decisions should stay within the guidelines set down during strategy planning, but operational decisions are made regularly, sometimes daily, and should not be confused with planning strategy. 59) FALSE Campbell's has developed different soups that are targeted to the specific needs of different target markets. The marketing plan for each type of soup is different and fits into its overall marketing program.

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60) TRUE Marketing analytics is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. 61) FALSE Most companies implement more than one marketing strategy, and related marketing plan, at the same time. One such company is Procter & Gamble. 62) TRUE A marketing program blends all of the firm's marketing plans into one "big" plan. Its success is based on the care that goes into planning individual strategies. 63) TRUE A marketing program blends all of the firm's marketing plans into one "big" plan. Its success is based on the care that goes into planning individual strategies. 64) TRUE A marketing program blends a firm's various marketing plans into one combined plan. 65) TRUE Customer equity is the expected earnings stream of a firm's current and prospective customers over a period of time. A successful marketing program is expected to identify opportunities that will lead to an increase in a firm's customer equity. 66) TRUE Customer lifetime value (CLV) represents the total profits a single customer contributes to a firm over the length of the relationship. Version 1

67) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. This includes finding cost-effective ways to serve current customers so they buy more in the future. 68) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. This means that marketing strategies can focus on attracting new customers using cost-effective methods. 69) TRUE Increasing customer equity requires marketing managers to place an emphasis on long-term profits. To achieve this, marketing strategies can focus on attracting new customers as well as retaining and growing current customers. 70) FALSE The customer equity approach guides the marketing manager to make marketing decisions that enhance the firm's long-term profits—not just for the next quarter or year. By estimating the impacts that different marketing strategies and marketing programs have on customer equity, a firm can make marketing decisions with long-run financial implications in mind. 71) TRUE Acquiring new customers, retaining current customers, and enhancing the customer value by increasing their purchases are potential sources of new revenue. 72) FALSE Retention rate is the percentage of customers retained as compared to the total number of customers.

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73) FALSE Retention rate is the percentage of customers retained as compared to the total number of customers. If 200 of the deli’s 2,000 customers returned the following year, its retention rate would be 10 percent (200/2,000 = 10%). 74) TRUE Acquisition cost is the expense required to acquire a new customer. 75) TRUE Acquisition cost is the expense required to acquire a new customer. If a firm spent $5,000 in advertising to attract 50 new customers, the acquisition cost would be $100 per customer ($5,000/50 = $100). 76) FALSE Attractive opportunities for a given firm are those that the firm has some chance of exploiting given its resources and objectives. An opportunity that is attractive for one firm may not be attractive for another. 77) TRUE Attractive opportunities for a given firm are those that the firm has some chance of exploiting given its resources and objectives. 78) TRUE Breakthrough opportunities are opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 79) TRUE Breakthrough opportunities are opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 80) TRUE Version 1

Competitive advantage means that a firm has a marketing mix that the target market sees as better than a competitor's mix. 81) TRUE Even if a firm can't find a breakthrough opportunity, it should try to obtain a competitive advantage to increase its chances for profit or survival. 82) TRUE The marketing strategy planning process narrows down from broad opportunities to specific strategy. 83) FALSE The marketing strategy planning process starts with a broad look at a market and narrows down towards specific strategy such as marketing mixes. 84) TRUE There are usually more different opportunities and strategy possibilities than a firm can pursue—each with its own advantages and disadvantages. 85) TRUE Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. This can be derived from an analysis of the company's objectives and resources. 86) TRUE With a S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 87) FALSE Version 1

S.W.O.T. analysis is one that identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 88) FALSE S.W.O.T. analysis is one that identifies and lists the firm's strengths, weaknesses, opportunities, and threats. A marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 89) TRUE S.W.O.T. analysis helps a marketing manager identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 90) TRUE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. 91) FALSE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. 92) TRUE Segmentation is the reason why a manager may decide to serve some subgroups of customers and not others. 93) TRUE Differentiation means that the marketing mix of a firm is distinct from what is available with a competitor. 94) FALSE Differentiation means that the marketing mix of a firm is distinct from what is available with a competitor.

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95) TRUE Differentiation often requires that the firm fine-tune all of the elements of its marketing mix to the specific needs of a distinctive target market. 96) TRUE Differentiation should emphasize the differences so target customers will think of the firm as being in a unique position to meet their needs. 97) FALSE Differentiation should emphasize the differences so target customers will think of the firm as being in a unique position to meet their needs. 98) FALSE While the external market environment is outside of the company, it is comprised of trends and forces that can make a potential marketing opportunity more or less attractive or likely to succeed. 99) FALSE It is useful to think of the marketing strategy planning process as a narrowing-down process. The process begins with a broad look at a market but then narrows as marketers evaluate specific qualitative and quantitative screening criteria that help zero in on the best target market and marketing mix. 100) FALSE The first two letters of S.W.O.T. analysis stand for "strengths and weaknesses" and guide managers to look inward to assess a company's internal capabilities and resources. 101) TRUE

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Whereas the first two letters of S.W.O.T. analysis focus on strengths and weaknesses related to a company's internal resources and capabilities, the last two letters examine "opportunities and threats" outside the firm related to customers, competition, and the external marketing environment. 102) TRUE Market penetration means trying to increase sales of a firm's present products in its present markets. 103) TRUE Market penetration means trying to increase sales of a firm's present products in its present markets through a more aggressive marketing mix. 104) FALSE Market development means trying to increase sales by selling present products in new markets. 105) FALSE Market development means trying to increase sales by selling present products in new markets. 106) TRUE Product development means offering new or improved products for present markets. 107) FALSE This is an example of product development, which means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 108) FALSE

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Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 109) FALSE Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 110) FALSE Product development means offering new or improved products for present markets. By knowing the present market's needs, a firm may see new ways to satisfy customers. 111) TRUE Diversification means moving into totally different lines of business. It could be entirely unfamiliar products, markets, or even levels in the production-marketing system. 112) FALSE Products and customers that are very different from a firm's current base may look attractive, but these opportunities are usually hard to evaluate. That's why diversification usually involves the biggest risk. 113) TRUE Most firms think first of greater market penetration and usually find the most attractive opportunities in markets they already know. 114) FALSE Most firms tend to think first of greater market penetration when they think of diversification. 115) FALSE

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100

Since diversification opportunities require moving into totally different lines of business—perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system—such opportunities are hard to evaluate and involve the greatest risk. 116) FALSE Advances in e-commerce, transportation, and communications are making it easier and cheaper to reach international customers. With a website and e-mail, even the smallest firm can provide international customers with a great deal of information—and easy ways to order—at very little expense. 117) TRUE If customers in other countries are interested in the products a firm offers, or could offer, serving them may improve economies of scale. Lower costs and prices may give a firm a competitive advantage both in its home markets and abroad. 118) TRUE Unfavorable trends in the market environment at home or favorable trends in other countries may make international marketing particularly attractive. 119) TRUE Marketing managers should consider international opportunities, but risks are often higher in foreign markets. Many firms fail because they don't know the foreign country's culture. 120) FALSE Unfavorable trends in the market environment at home—or favorable trends in other countries—may make international marketing particularly attractive. However, managers must assess both the risks and opportunities. Version 1

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121) TRUE Marketers who are attaining success in domestic markets often fall into the trap of ignoring opportunities in international markets. 122) E Planning, implementation, and control are basic jobs of all managers. 123) C Controlling is vital to the marketing management process because gathering feedback on a plan's results may lead to beneficial adjustments or entirely new plans. 124) D Marketing managers oversee all aspects of the marketing management process, including planning marketing, directing the implementation of the plans, and controlling these plans. Overseeing a firm's financial statements is a duty for financial officers and accountants. 125) D The marketing management process is (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 126) D The marketing management process refers to (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling these plans. 127) B The job of planning strategies to guide a whole company is called strategic (management) planning—the managerial process of developing and maintaining match between an organization’s resources and its market opportunities. This is a top-management job. Version 1

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128) C Although marketing strategies are not whole-company plans, company plans should be market-oriented. The marketing plan often sets the tone and direction for the whole company. 129) A Marketing strategies are not whole-company plans, but company plans should be market-oriented. 130) D Strategic (management) planning is the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 131) A Strategic (management) planningis the managerial process of developing and maintaining a match between an organization's resources and its market opportunities. 132) A Marketing strategy planning means finding attractive opportunities and developing profitable marketing strategies. 133) E Marketing strategies are not whole-company plans, but company plans should be market-oriented. 134) A A marketing strategy has two interrelated parts (1) a target market, (2) a marketing mix. 135) A A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. Version 1

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136) B A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. 137) B A marketing strategy specifies a target market and a related marketing mix. It is a big picture of what a firm will do in some market. 138) B A target market is a fairly homogeneous (similar) group of customers to whom a company wishes to appeal. 139) C A target market is a fairly homogeneous group of customers to whom a company wishes to appeal. 140) E A marketing mix consists of the controllable variables the company puts together to satisfy a target group. 141) D Target marketing says that a marketing mix is tailored to fit some specific target customers. 142) E Mass marketing is a typical production-oriented approach that aims generally at everyone using the same marketing mix. In contrast, target marketing sees everyone as different and says that a marketing mix is tailored to fit some specific target customers. 143) C Target marketing involves a marketing mix tailored to fit some specific target customers. In contrast, mass marketing vaguely aims at "everyone" with the same marketing mix. Version 1

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144) E Target marketing involves a marketing mix tailored to fit some specific target customers. In contrast, mass marketing vaguely aims at "everyone" with the same marketing mix. Mass marketing assumes that everyone is the same and considers everyone a potential customer. 145) E Target marketing involves a marketing mix tailored to fit some specific target customers. 146) C Mass marketing, with its typical production-oriented approach, assumes that everyone is the same and considers everyone a potential customer. 147) E Mass marketing is the typical production-oriented approach, which vaguely aims at “everyone” with the same marketing mix. Mass marketing assumes that everyone is the same—and it considers everyone to be a potential customer. 148) D Not all potential customers have the same needs, nor do they always want their needs met in the same way. In spite of the many possible differences, there often are segments of consumers who are similar and could be satisfied with the same marketing mix. 149) B Target marketing is not limited to small market segments, only to fairly homogeneous ones. A very large market, sometimes called the "mass market," may be fairly homogeneous, and a target marketer will deliberately aim at it. 150) E Version 1

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Target marketing is not limited to small market segments, only to fairly homogeneous ones. A very large market, sometimes called the "mass market," may be fairly homogeneous, and a target marketer will deliberately aim at it. 151) B Target marketing says that a marketing mix is tailored to fit some specific target customers. However, mass marketers like Kraft Foods and Walmart aim at clearly defined target markets. The confusion with mass marketing occurs because their target markets usually are large and spread out. 152) C The variables of the marketing mix help organize marketing related decisions and simplify the selection of marketing mixes. 153) E The different variables of the marketing mix are Product, Place, Promotion, and Price. 154) D The different variables of the marketing mix are Product, Place, Promotion, and Price. 155) B The different variables of the marketing mix are Product, Place, Promotion, and Price. 156) E The different variables of the marketing mix are Product, Place, Promotion, and Price. 157) D

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The different variables of the marketing mix are Product, Place, Promotion, and Price. 158) B The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 159) E The important thing to remember is that your good or service should satisfy some customers’ needs. 160) E Products include physical goods and/or services and product-related decisions include branding, packaging, and warranties. 161) E Products include physical goods and/or services and product-related decisions include branding, warranties, and packaging. Developing the right new product is also included in "Product." 162) E Apart from the physical product, a service, or a blend of both, productrelated decisions include developing, designing, packaging, and branding. 163) C Price, whether a wholesale price or a consumer price, is not part of Product. 164) B "Market exposure" is part of Place, not Product. 165) E Version 1

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The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 166) B The Product area is concerned with developing the right product for the target market. This offering may involve a physical good, a service, or a blend of both. 167) C "Packaging design" is part of Product. 168) D "Warranty" is part of Product. 169) D The Product area is concerned with developing the right product for the target market. Dell offers its customers various products. 170) A Packaging and branding are part of Product. 171) D Branding and packaging are important elements of Product-area decisions, while personal selling and mass selling are important elements of Promotion-area decisions. 172) B Place is concerned with all the decisions involved in getting the right product to the target market's place. A product reaches customers through a channel of distribution. Other important decisions include channel type, market exposure, kinds of intermediaries, etc. 173) E Version 1

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Place is concerned with all the decisions involved in getting the right product to the target market's place. 174) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 175) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 176) E Sales reps are a part of the Promotion variable of the marketing mix. 177) D Telling the target market what products are available and where is part of Promotion. 178) E Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 179) D Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 180) D A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. Version 1

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181) B A channel of distribution is any series of firms or individuals that participate in the flow of products from producer to final user or consumer. 182) D Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 183) A Place is concerned with decisions involving channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, service levels, etc. 184) E There is a channel of distribution, albeit short; there is target marketing; there is promotion; and a marketing orientation is always more effective. 185) C Promotion is that element of the marketing mix that is concerned with telling the target market or others in the channel of distribution about the "right" product. 186) E Promotion is concerned with telling the target market or others in the channel of distribution about the "right" product. Promotion includes personal selling, mass selling, and sales promotion. 187) E Promotion includes personal selling, mass selling (advertising and publicity), and sales promotion. 188) C Version 1

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Promotion includes "training for salespeople." "Packaging and branding" are part of Product. "Kinds of intermediaries" is part of Place. "Discounts and allowances" are part of Price. 189) B Designing new products is a function of the Product variable of the marketing mix. Promotion deals with mass selling, personal selling, advertising, publicity, and sales promotion. 190) C Personal selling is part of Promotion. 191) A Personal selling involves direct spoken communication between sellers and potential customers. It may happen face-to-face, over the telephone, or even via a videoconference over the Internet. 192) E Personal selling and advertising are important components of Promotion, while geographic terms and price allowances are important components of Price. 193) E Customer service refers to personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase. This is often a key to building repeat business. 194) C Advertising refers to any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 195) B

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Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services, which includes getting favorable coverage in newspaper stories or on television as well as creating and placing content on the web for customers to find or pass along to others. 196) C Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. It aids the efforts of personal selling and mass selling. 197) C Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 198) E Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 199) B Sales promotion refers to those promotion activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 200) D Promotion tells the target customers and others in the channel about the product that has been designed for them. 201) C Version 1

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Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 202) C Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 203) B Sales promotion refers to those promotional activities that stimulate interest, trial, or purchase by final customers or others in the channel. This can involve use of coupons, point-of-purchase materials, samples, signs, contests, events, catalogs, novelties, and circulars. 204) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 205) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 206) A Price setting must consider the kind of competition in the target market and the cost of the whole marketing mix. A manager must also try to estimate customer reaction to possible prices. 207) C Version 1

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A manager must know current practices as to markups, allowances, discounts, and other terms of sale while developing a marketing mix. These practices are part of Price. 208) A Current practices such as markups, discounts (including rebates), and other terms of sale are part of Price. 209) E Marketing managers use the "Four Ps" to deliver customer value to the target market. Customers may perceive more value with increased product features (Product), a lower price (Price), more convenient buying options (Place), and effective communication about the product’s value (Promotion). 210) E All the "Four Ps" are needed in a marketing mix. No single variable of the marketing mix is more important than another; they all contribute to one whole. When a marketing mix is being developed, final decisions about the Ps should be made at the same time. 211) B The needs of a target market often virtually determine the nature of an appropriate marketing mix. Therefore, marketers must analyze their potential target markets with great care. 212) D A good marketing mix should ideally flow logically from all the relevant dimensions of a target market. 213) B

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In order to serve the "Attentive Parents" target market, the owner of Toddler University came up with an appropriate marketing mix that met this target market's needs. It did this by combining "fit and function with fun and fashion." 214) B In order to serve the "Attentive Parents" target market, the owner of Toddler University came up with an appropriate marketing mix that met this target market's needs. It did this by combining "fit and function with fun and fashion." 215) E TU's marketing plan spelled out the following details: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. 216) A A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 217) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. It should spell out the following in detail: (1) what marketing mix will be offered, to whom (that is, the target market), and for how long; (2) what company resources (shown as costs) will be needed at what rate (month by month perhaps); and (3) what results are expected (sales and profits perhaps monthly or quarterly, customer satisfaction levels, and the like). 218) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. Version 1

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219) C A marketing plan is a written statement of a marketing strategy and the time-related details for carrying out the strategy. 220) E An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. It should also include some control procedures so that whoever is to carry out the plan will know if things are going wrong. 221) B An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. 222) B An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. "How frequently the design of the website is changed" does not fall under one of these three questions. 223) E An ideal marketing plan should answer the following questions: (1) what marketing mix will be offered, to whom and for how long; (2) what company resources will be needed at what rate; and (3) what results are expected. It should also include some control procedures so that whoever is to carry out the plan will know if things are going wrong. 224) B

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Implementation refers to the manager's job of putting marketing plans into operation. 225) D Short-run decisions that help implement strategies are known as operational decisions. 226) A Managers should make operational decisions within the guidelines set down during strategy planning. But operational decisions are short-run decisions to help implement strategies. They do not change the basic strategy. They are made regularly, even daily or weekly. 227) A Operational decisions are short-run decisions that help implement strategies. They are part of the implementation process, but they do not require changes in the basic strategy. 228) B Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 229) B Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 230) D Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 231) C Version 1

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Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 232) E Operational decisions are short-run decisions that help implement strategies. Strategy decisions are long-term decisions that could contain one or more of the "Four Ps." 233) E "Carry as limited a line of colors, styles, and sizes as will satisfy the target market" is a strategic decision that pertains to the Product variable of the marketing mix. 234) C Promoting the benefits and value of the special design and how it meets customer needs is a strategic decision that pertains to the Promotion variable of the marketing mix. 235) C Hiring new salespeople is an operational decision that pertains to the Promotion variable of the marketing mix. 236) D In market areas where sales potential is not achieved, adding new retail outlets and/or dropping retailers whose performance is poor are operational decisions that pertain to the Place variable of the marketing mix. 237) A

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Marketing analytics is the practice of measuring, managing, and analyzing market performance to maximize its efficiency and effectiveness. Marketing metrics are the numeric data that are used to perform marketing analytics. 238) B Marketing managers use marketing metrics to perform marketing analytics, which is the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness. 239) A A marketing program blends all of the firm's marketing plans into one big plan. 240) A A marketing program blends all of the firm's marketing plans into one big plan. 241) D Many firms measure the customer lifetime value or the total profits a single customer contributes to a firm over the length of the relationship. 242) B Over a period of years, a single customer is likely to purchase multiple products from a company. The total profit that a customer could contribute to the company over the length of the relationship is called customer lifetime value. 243) E Calculating a customer's long-range purchasing potential can help marketers recognize the importance of devising plans that build and maintain customer relationships over a lifetime. 244) D Version 1

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Over a period of years, a single customer is likely to purchase multiple products from a company. The total profits a single customer contributes to the company over the length of the relationship is called customer lifetime value. 245) E Many firms measure the customer lifetime value or the total profits a customer contributes to the firm over the length of the relationship. 246) E Many firms measure the customer lifetime value or the total profits a customer contributes to the firm over the length of the relationship. In this situation, the restaurant manager is willing to lose money on a future meal to encourage return visits. 247) D Customer equity is the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time. 248) C We can take the idea of customer lifetime value a step further by taking into account all of a firm's current and future customers and the costs associated with each. Customer equity is the expected earnings stream (profitability) of a firm's current and prospective customers over some period of time. 249) A Customer equity is the expected earnings stream of a firm's current and prospective customers over some period of time. Top management expects marketing strategy planners to help identify opportunities that will lead to an increase in a firm's customer equity. 250) C Version 1

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A focus on customer equity allows a firm's marketing strategies for each of its products to work together to increase the lifetime value of that customer to the firm. 251) E Customer equity is the expected earnings stream of a firm's current and prospective customers over some period of time. Top management expects marketing strategy planners to help identify opportunities that will lead to an increase in a firm's customer equity. 252) D Customer equity does benefit the company because it increases the lifetime value of the customer to the firm. 253) A The customer equity approach suggests three potential paths for growth: (1) acquiring new customers, (2) retaining current customers, and (3) enhancing the customer value by increasing their purchases. 254) A Three marketing metrics are needed to estimate customer lifetime value: (1) retention rate; (2) acquisition cost; and (3) average profit margin. 255) A Three marketing metrics are needed to estimate customer lifetime value: (1) retention rate; (2) acquisition cost; and (3) average profit margin. 256) A Retention rate refers to the percentage of customers retained as compared to the total number of customers. 257) A

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The retention rate refers to the customers retained as compared to the total amount of customers. In determining its retention rate, an Internet retailer would need to know how many customers returned again to its website to make a purchase. 258) A The retention rate refers to the customers retained as compared to the total amount of customers. If Donna had 2,000 customers in her first year in business and 500 of those customers came back the following year, she had a 25 percent retention rate (500/2,000 = 25%). 259) D If the sandwich shop had 1,000 customers last year and retained 250 of those customers, its retention rate is 25 percent (250/1,000). 260) B Acquisition cost is the expense that is required to acquire a new customer. 261) A If a firm spends $5,000 a year on advertising and attracts 50 new customers, its acquisition cost per customer is $100 ($5,000/50). 262) A The acquisition cost is the expense required to acquire each new customer. If the retailer spent $20,000 on promotion and gained 500 new customers, the acquisition cost for each new customer is $40 ($20,000/500). 263) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 264) C Version 1

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Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 265) B Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 266) D Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. None of these options is significant enough to qualify as a breakthrough opportunity. 267) D Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. All of the options are significant enough to qualify as breakthrough opportunities. 268) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. 269) A Competitive advantage means that a firm has a marketing mix that the target market sees as better than a competitor's mix. It may result from efforts in different areas of the firm, such as cost cutting in production, innovative research and development, etc. 270) E

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Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. Even if a manager can't find a breakthrough opportunity, the firm should try to obtain a competitive advantage to increase its chances for profit or survival. 271) C Breakthrough opportunities help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time. Even if a manager can't find a breakthrough opportunity, the firm should try to obtain a competitive advantage to increase its chances for profit or survival. 272) B An advantage only succeeds if it allows the firm to provide superior value and satisfy customers better than some competitor. 273) D Developing a set of specific qualitative and quantitative screening criteria can help a manager define in which business and markets the firm wants to compete. 274) E A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 275) E A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. All these statements about S.W.O.T analysis are true. 276) D

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With S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. This should provide a competitive advantage. 277) E With a S.W.O.T. analysis, a marketing manager can begin to identify strategies that take advantage of the firm's strengths and opportunities while avoiding weaknesses and threats. 278) D A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. 279) A A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Having adequate resources is a strength any firm would like to have. 280) C A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Being in a fast-growing industry is an opportunity on which a firm should try to capitalize. 281) D A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Recessionary conditions pose a threat to nearly every firm. 282) B

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A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities, and threats. Firms must quickly remedy the situation of lagging behind in one or more departments, which is a potential weakness. 283) C Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. 284) B A marketing mix won't get a competitive advantage if it just meets needs in the same way as some other firm. Combining analyses of customers, competitors, and company help the marketing manager identify possible strategies that differentiate a marketing mix from the competition. 285) B Differentiation means that the marketing mix is distinct from and better than what is available from a competitor. This means its marketing mix is unique. 286) C Differentiation often requires that the firm fine-tune all of the elements of its marketing mix to the specific needs of a distinctive target market. 287) C Since iRobot has started manufacturing new products for non-military uses and markets, the company is pursuing a product diversification opportunity—the type of opportunity in which businesses create new products for new markets different from the firm's current base. 288) B

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Since firms prefer opportunities close to markets they already know, most managers pursue greater market penetration, which involves selling current products in familiar markets. Market penetration is appealing because firms want to increase profits and grow customer equity where they already have experience and strengths. 289) D A market development opportunity involves trying to increase sales by selling present products in new markets. The E-Z-Go golf cart company's push to sell golf carts for new non-golf settings is an example of market development. 290) E Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 291) D Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 292) B Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 293) A Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 294) A Version 1

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Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 295) B Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 296) D Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 297) A Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 298) E Market penetration means trying to increase sales of a firm's present products in its present markets, usually through an aggressive marketing mix. 299) B Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 300) E Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. Version 1

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301) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 302) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 303) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 304) C Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 305) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 306) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 307) A

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Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 308) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 309) A Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 310) D Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 311) B Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 312) E Market development means trying to increase sales by selling present products in new markets. This may involve searching for new uses for a product. 313) E Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. Version 1

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314) B Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 315) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 316) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 317) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 318) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 319) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 320) C

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Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 321) A Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 322) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 323) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 324) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 325) C Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. 326) D Product development means offering new or improved products for present markets. Knowing the present market's needs, a firm may see new ways to satisfy customers. Version 1

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327) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 328) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 329) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 330) A Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 331) B Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 332) E Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 333) B

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Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 334) B Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. 335) C Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. Products and customers that are very different from a firm's current base may look attractive but are usually hard to evaluate. That's why diversification usually involves the biggest risk. 336) C Diversification means moving into totally different lines of business, perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system. Products and customers that are very different from a firm's current base may look attractive but are usually hard to evaluate, making diversification very risky. 337) A Usually firms find attractive opportunities fairly close to markets they already know, making market penetration very attractive. 338) C A company (of any size) facing tough competition, thin profit margins, and slow sales growth at home may get a fresh start in another country where demand for its product is just beginning to grow. International trade is increasing worldwide. Version 1

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339) C Unfavorable trends in the market environment at home or favorable trends in other countries may make international marketing particularly attractive. 340) C Advances in e-commerce, transportation, and communications are making it easier and cheaper to reach international customers. With a website and e-mail, even the smallest firm can provide international customers with a great deal of information—and easy ways to order—at very little expense. 341) A There are good reasons to look for opportunities in international markets. However, marketing managers must weigh the risks of operating in foreign markets. Many firms fail because they don’t know the foreign country’s culture, and learning foreign regulations can be difficult and costly.

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CHAPTER 3 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The external market environment is shaped by these four areas: economics, technology, politics/law, and culture/society. ⊚ ⊚

The direct market environment includes customers, competitors, and the IRS. ⊚ ⊚

true false

A mission statement sets out the organization's basic purpose for being. ⊚ ⊚

true false

Company objectives should set the firm's course. ⊚ ⊚

true false

Company objectives should shape the direction and operation of the whole business. ⊚ ⊚

true false

The marketing manager can control the variables in the market environment. ⊚ ⊚

true false

A mission statement should focus on just the key goals for the organization.

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true false

8) A mission statement can help a manager decide which opportunities to pursue and which to screen out. ⊚ ⊚

true false

9) A mission statement sets out the strengths and weaknesses of a firm as well as the opportunities and threats that it faces. ⊚ ⊚

10)

A mission statement substitutes for more specific objectives. ⊚ ⊚

11)

true false

Company objectives should lead to a hierarchy of marketing objectives. ⊚ ⊚

true false

12) The objectives of a firm should direct the operation of the marketing department but aren't important to the rest of the business. ⊚ ⊚

13)

true false

Good marketing objectives should be ambitious and almost impossible to achieve. ⊚ ⊚

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true false

14)

Attractive opportunities should make use of a firm's resources and its unique strengths. ⊚ ⊚

true false

15) A large producer with economies of scale always has a competitive advantage over smaller firms. ⊚ ⊚

true false

16) If the cost of production per unit goes down as the quantity produced increases, small producers can be at a great cost disadvantage. ⊚ ⊚

true false

17) As compared to larger competitors, smaller firms benefit from lower unit costs, which they achieve with lower sales volumes. ⊚ ⊚

true false

18) Smaller producers always have a great advantage in competing with larger producers because of their flexibility. ⊚ ⊚

19)

true false

The opportunities a firm decides to pursue may depend on its resources and capabilities. ⊚ ⊚

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true false

20) The competitive environment has no relationship with the number and types of competitors the marketing manager must face and how they may behave. ⊚ ⊚

true false

21) Although the marketing manager cannot control the competitive environment, he or she can choose strategies that will avoid head-on situations. ⊚ ⊚

true false

22) When the competitive environment moves toward pure competition, producers offer very different products that consumers do not perceive as substitutes for each other. ⊚ ⊚

23)

Over the long run, most product-markets tend toward monopolistic competition. ⊚ ⊚

24)

true false

In market-directed economies, unregulated monopolies are rare. ⊚ ⊚

25)

true false

In monopolistic competition, one firm completely controls a broad product-market. ⊚ ⊚

true false

26) In monopolistic competition, managers sometimes try to differentiate very similar products by focusing on promotion or other elements of the marketing mix.

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⊚ ⊚

true false

27) In a competitor analysis, a current (or planned) target market and marketing mix is compared with what competitors are currently doing (or are likely to do). ⊚ ⊚

true false

28) Competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. ⊚ ⊚

true false

29) The major shortcoming of competitor analysis is that it focuses on the weaknesses of competitors but ignores their strengths. ⊚ ⊚

30)

The first step in a competitor analysis is to identify potential competitors. ⊚ ⊚

31)

true false

Competitive rivals are always easy to identify. ⊚ ⊚

true false

32) Market share is an important marketing metric used by marketing managers to track how well their product is doing in a particular market. ⊚ ⊚

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true false

33) Many people think that it is unethical to spy on competitors to obtain their trade secrets, but it is perfectly legal. ⊚ ⊚

34)

true false

Spying on competitors to obtain trade secrets raises moral issues, but it is not illegal. ⊚ ⊚

true false

35) The technological environment includes such things as national income, economic growth, and inflation. ⊚ ⊚

true false

36) The inflation rate experienced by the United States in recent years was just about the highest in the world. ⊚ ⊚

37) low.

Compared to some countries in Latin America, the rate of inflation in the United States is ⊚ ⊚

38)

true false

Technology is the application of science to convert an economy's resources to output. ⊚ ⊚

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true false

39)

Technology affects marketing through new products and new processes. ⊚ ⊚

40)

true false

Technology provides new opportunities and new challenges for marketers. ⊚ ⊚

true false

41) When a machine operates like a human with respect to learning and decision making, it is referred to as artificial intelligence. ⊚ ⊚

42)

true false

Artificial intelligence and intelligent agents are two separate and distinct technologies. ⊚ ⊚

true false

43) Through machine learning, a software program can learn a specific skill without actual programming. ⊚ ⊚

true false

44) Nationalism may affect marketing strategy planning by determining to whom and how much a firm may sell. ⊚ ⊚

true false

45) Placing the interests of individual consumers before the interests of business is nationalism.

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⊚ ⊚

true false

46) Nationalism—or the emphasis on a country's interests before anything else—may affect the work of some marketing managers. ⊚ ⊚

47)

true false

Strong sentiments of nationalism facilitate growth in importing and exporting. ⊚ ⊚

true false

48) Members of the European Union seek to simplify inter-European commerce by working to reduce conflicting laws, taxes, and other obstacles to trade within Europe. ⊚ ⊚

49)

Many European Union member countries use the same currency, the euro. ⊚ ⊚

50)

true false

The political environment may either block or promote new marketing opportunities. ⊚ ⊚

true false

51) A basic idea in the legal environment in the United States is that efforts by business to limit competition are considered contrary to the public interest. ⊚ ⊚

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true false

52)

Businesses and individual managers are subject to both criminal and civil laws. ⊚ ⊚

true false

53) A manager could be fined for violating the antimonopoly laws, but he or she could not be sent to jail. ⊚ ⊚

54)

The Sherman Act deals with product safety. ⊚ ⊚

55) Act.

true false

The Clayton Act deals with anticompetitive practices that did not fall under the Sherman ⊚ ⊚

true false

56) The Clayton Act focuses on practices that may substantially lessen competition, such as tying contracts, exclusive dealing contracts, and price discrimination by manufacturers. ⊚ ⊚

true false

57) The Consumer Product Safety Act provides for the creation of safety standards but has no power to set penalties for failure to meet these standards. ⊚ ⊚

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true false

58) The Consumer Product Safety Commission tries to encourage safe product design, but the commission has almost no power to deal with unsafe products. ⊚ ⊚

true false

59) In the United States, the Consumer Product Safety Commission sets and enforces product safety standards. ⊚ ⊚

true false

60) Because the Consumer Product Safety Commission has no power to force a product off the market, safety is not a very important consideration in product design. ⊚ ⊚

true false

61) Marketers should be aware of federal legislation, as well as state and local laws, when planning marketing strategy. ⊚ ⊚

62) do.

The cultural and social environment affects how and why people live and behave as they ⊚ ⊚

63)

true false

The cultural and social environment refers to where people live and their income. ⊚ ⊚

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true false

64) When shopping these days, many customers consider sustainability, which is the idea that it is important to meet present needs without compromising the ability of future generations to meet their own needs. ⊚ ⊚

true false

65) The majority of consumers are unwilling to pay more for a product even if it is deemed to be more sustainable. ⊚ ⊚

true false

66) The rate of growth of the U.S. population is lower than the rate of growth of some other countries' populations. ⊚ ⊚

67)

true false

There are over 316 million people living in the United States. ⊚ ⊚

true false

68) The U.S. population is over 316 million people, and the world population is more than 7 billion people. ⊚ ⊚

69)

India has more people than the United States, and China has more people than India. ⊚ ⊚

70)

true false

Less-developed countries usually experience the slowest population growth.

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⊚ ⊚

true false

71) In Argentina, Israel, and Singapore, for example, less than 20 percent of people live in urban areas. ⊚ ⊚

true false

72) The concentration of people in major cities often simplifies Place and Promotion decisions. ⊚ ⊚

true false

73) When considering international markets, income is often one of the most important demographic dimensions. ⊚ ⊚

true false

74) When considering international markets, income is usually not an important demographic dimension. ⊚ ⊚

75)

true false

Both GDP and GNI are measures of national income. ⊚ ⊚

true false

76) Gross domestic product is the total dollar value of a country's exports during a one-year period.

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⊚ ⊚

77)

true false

Gross domestic product includes foreign income earned in a country. ⊚ ⊚

true false

78) GNI is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. ⊚ ⊚

true false

79) GDP income measures can give the impression that people in less-developed nations have more income than they really do. ⊚ ⊚

true false

80) GNI income measures can give the impression that people in less-developed nations have less income than they really do. ⊚ ⊚

true false

81) Generally, the nations with the fastest growth in GDP are not the nations with the largest GDPs. ⊚ ⊚

true false

82) The fastest rate of growth in GDP is occurring in the nations with the largest current GDP.

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⊚ ⊚

true false

83) Even though the more developed industrial nations don't have the largest populations, they do have the biggest share of the world's GDP. ⊚ ⊚

true false

84) Countries where gross national income (GNI) per capita is low do not offer any opportunities for marketers. ⊚ ⊚

true false

85) Because almost all of the world’s population can read and write, international marketers have no problems in communicating with potential customers, no matter where they live. ⊚ ⊚

true false

86) Adoption of the Internet and cell phones is having its greatest impact in developing countries. ⊚ ⊚

87)

California is the U.S. state with the largest population. Texas is a distant second. ⊚ ⊚

88)

true false

New York is the U.S. state with the largest population, and California is a distant second. ⊚ ⊚

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true false

89) In the United States, the West and the Southeast are growing faster than the Northeast and the North Central areas. ⊚ ⊚

90)

In 1980, the median age of the U.S. population was 37. ⊚ ⊚

91)

true false

The median age in the United States increased from 30 in 1980 to 38 in 2018. ⊚ ⊚

92)

true false

Gen X is smaller in number when compared to the Baby Boomers that came before. ⊚ ⊚

true false

93) Gen Y is the result of the echo boom, and its members are more techno-savvy than any other group. ⊚ ⊚

94)

true false

Generation Z is described as "digital natives." ⊚ ⊚

true false

95) When developing a marketing strategy, marketing managers should focus on the generalizations about the different generations (Baby Boomers, Gen X, Millennials, etc.).

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⊚ ⊚

96)

Most changes in the cultural and social environment come slowly. ⊚ ⊚

97)

true false

Changes in the cultural and social environment tend to come about quickly. ⊚ ⊚

true false

98) When evaluating opportunities, quantitative screening criteria help a manager decide what kind of opportunities to pursue. ⊚ ⊚

true false

99) Product-market screening criteria should be mainly quantitative in nature, because qualitative criteria are too subjective. ⊚ ⊚

true false

100) Screening criteria should be in quantitative form—based on factors such as profit and expected sales—so that they are objective and not subject to qualitative judgments and interpretations by different managers. ⊚ ⊚

true false

101) Forecasts of the probable results of implementing whole strategic plans are needed to apply quantitative screening criteria.

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⊚ ⊚

true false

102) The General Electric "strategic planning grid" forces company managers to make threelevel judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. ⊚ ⊚

true false

103) GE's strategic planning grid considers two dimensions—industry attractiveness and business strengths—to identify opportunities that may be categorized as growth, borderline, or no growth. ⊚ ⊚

true false

104) Opportunities that fall into the red boxes of General Electric's "strategic planning grid" are growth opportunities. ⊚ ⊚

true false

105) Using the General Electric strategic planning grid, an opportunity rated "medium" in terms of both industry attractiveness and business strengths is an opportunity that the firm should always avoid. ⊚ ⊚

true false

106) The General Electric "strategic planning grid" relies on subjective judgments about business strengths and industry attractiveness. ⊚ ⊚

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true false

107) The GE "stoplight" evaluation method is a very objective approach because GE feels there are too many possible errors if it tries to use subjective criteria for judging "attractiveness" or "strength." ⊚ ⊚

true false

108) In international markets, marketing managers usually have an easier time understanding the variables in the market environment. ⊚ ⊚

true false

109) Consumer products that are linked to cultural variables tend to be lower risk when entering international markets. ⊚ ⊚

true false

110) Most industrial products tend to be near the "insensitive" end of the continuum of environmental sensitivity. ⊚ ⊚

true false

111) The "continuum of environmental sensitivity" suggests that industrial products are more sensitive to the cultural environments in which they are placed than consumer products that are linked to other cultural variables. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 112) Marketing managers should remember that there are many variables in the ________ that affect strategy planning.

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A) economic and technological environments B) competitive environment C) cultural and social environment D) political and legal environments E) All these environments have variables that affect strategy planning.

113)

When planning a marketing strategy, managers have control over A) the political and legal environment. B) the cultural and social environment. C) the economic environment. D) their response to forces in the external market environment. E) consumers.

114)

Which of the following is/are among the forces that shape the direct market environment? A) competitors B) economic environment C) demographic trends D) technological environment E) cultural environment

115)

Which of the following is among the major areas of the external market environment? A) technological environment B) company objectives C) competitor strategies D) customer base E) company resources

116)

In the short run, a marketing manager usually cannot control

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A) the competitive environment. B) the cultural environment. C) the legal environment. D) the economic environment. E) All of the answers are correct.

117)

The direct market environment A) includes customers, the company, and competitors. B) consists of variables that can be controlled. C) is broader in scope than the external environment. D) includes economic and technological environments. E) is made up of the political, legal, and social environments.

118)

All of the following are part of the direct market environment except A) customers. B) competitors. C) the company itself. D) the technological environment.

119)

Which of the following is not a part of the direct market environment for Starbucks? A) McDonald's and its coffee B) the Starbucks objective to open 50 new stores in the United States in 2019 C) rising interest rates worldwide D) high awareness of the Starbucks brand name E) growing interest in brewed cacao as a prospective competitor for coffee

120) The objectives that are expected to shape the direction and operation of the whole business are known as ________ objectives. Version 1

A) R&D B) collective C) price D) personal selling E) company

121) Setting objectives and strategies for the whole company is a job performed by the company's A) marketing department. B) accountants. C) top executives. D) shareholders. E) middle managers.

122)

Which of the following is true of the mission statement of an organization?

A) It focuses on embracing all goals of the organization. B) It encourages managers to hold conflicting objectives in crisis situations. C) It sets out the organization's basic purpose for being. D) It serves as a substitute for more specific objectives guiding the screening of possible opportunities. E) It does not require any revision, even when the market environment changes.

123) In its annual report, Nike claims "The reasons every Nike employee comes to work every day are to create great product, to lead the athletic industry in innovation, and to serve the athlete." This is Nike's

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A) competitive analysis. B) technology environment. C) portfolio management. D) objective analysis. E) mission statement.

124)

Which of the following is true of company objectives? A) They should be set within the framework of marketing objectives. B) They should be set outside the resource limits for better goals. C) They should always be overly ambitious. D) They should only be revised every five years. E) They should guide managers as they search for and evaluate opportunities.

125)

Which of the following could serve as a firm's mission statement?

A) Green is good. B) Promote all brands using viral videos. C) We aim to boost annual sales by 15 percent. D) Create three new product lines. E) We exist to provide customers with the best shopping experience anywhere in cyberspace.

126)

A mission statement

A) should never be revised. B) sets out the organization's basic purpose for being. C) should embrace everything rather than focusing only on a few key goals. D) substitutes for more specific objectives. E) supplies guidelines for general situations but not for situations where managers face difficult decisions.

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127)

Overall company objectives should A) be specific. B) be realistic. C) be realistic and achievable. D) provide guidance in screening possible opportunities. E) All of the answers are correct.

128)

Which of the following statements about company objectives is true?

A) Company objectives should be stated in vague terms to provide flexibility to lowerlevel managers. B) Company objectives should be set by top management with no input from marketing managers. C) A good mission statement can substitute for more specific company objectives. D) Company objectives should be realistic and not overly ambitious. E) All these statements about company objectives are true.

129)

Company objectives A) should be set within the framework of marketing objectives. B) are made redundant by mission statements. C) should always be overly ambitious. D) should only be revised every five years. E) should guide managers as they search for and evaluate opportunities.

130) Typically, firms need a hierarchy of objectives. Which of the following best represents a correct hierarchy of a firm's objectives?

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A) company objectives, sales promotion objectives, marketing objectives, promotion objectives B) marketing objectives, company objectives, promotion objectives, sales promotion objectives C) company objectives, marketing objectives, promotion objectives, sales promotion objectives D) marketing objectives, promotion objectives, sales promotion objectives, company objectives E) promotion objectives, sales promotion objectives, company objectives, marketing objectives

131) Of the following types, the LAST objectives that a firm should specify are its ________ objectives. A) marketing B) sales promotion C) price D) company E) promotion

132)

Of the following, the last that a firm should specify are its A) company objectives. B) marketing objectives. C) promotion objectives. D) publicity objectives. E) price objectives.

133) Which of the following would a firm need to specify BEFORE deciding on its sales promotion objectives?

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A) company objectives B) production objectives C) product objectives D) marketing objectives E) All these objectives would need to be specified beforehand.

134) Along with studying trends in the environment, a first step in looking for attractive opportunities is to A) understand the resources and objectives of the firm. B) decide which product-markets the firm will enter. C) find new markets for present products. D) estimate product-market potentials. E) hire a marketing strategy planner.

135) An energy company that has expertise in drilling for oil would also likely have the resources to A) manufacture automobiles. B) operate a chain of gas stations. C) drill for natural gas. D) sell office supplies. E) make medical devices.

136)

A first step in evaluating marketing opportunities is to A) decide which markets the firm wishes to enter. B) consider the objectives and resources of the firm. C) hire a "futurist" as a marketing consultant. D) estimate market and sales potentials. E) find out if potential competitors are larger.

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137) When looking for attractive opportunities, a marketing manager should consider the firm’s A) producing capability and flexibility. B) financial strengths. C) existing marketing resources. D) present products and markets. E) All of the answers are correct.

138)

Which of the following would not be a marketing strength for a local coffee shop? A) a well-recognized brand B) a patented coffee blend C) established relations with local businesses D) access to large amounts of capital from a long-term relationship with a local bank E) counter staff that knows and understands customer preferences

139)

When a new firm does not have any "in-house" manufacturing for its brand, it is likely to A) have a production cost advantage. B) enjoy less competitive pricing. C) attract potential new markets. D) have the advantage of flexibility. E) fail in marketing research.

140) The environment that affects the number and types of competitors a marketing manager must face and how they might behave is called the ________ environment.

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A) cultural B) social C) economic D) political E) competitive

141) A(n) ________ is a marketing mix that customers see as better than a competitor's mix and that cannot be quickly or easily copied. A) resource combination B) sustainable competitive advantage C) objective-centered approach D) competitor analysis plan E) competitor matrix

142) The competitive environment that most marketing managers experience in developed economies is A) monopoly. B) monopolistic competition. C) pure competition. D) oligopoly. E) regulated competition.

143) When conducting a competitor analysis, it is important for managers to take the viewpoint of A) competitors. B) the CEO. C) target customers. D) supply-chain partners. E) the industry leader.

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144)

Regarding the competitive environment, a marketing manager usually can A) choose strategies to avoid head-on competition. B) control it with the help of the legal environment. C) control it in the short run. D) control it with the help of the political environment. E) control it in the long run.

145) The market situation in which only a few large firms compete in offering very similar marketing mixes to customers is called A) pure competition. B) oligopoly. C) capitalistic competition. D) monopolistic competition. E) monopoly.

146)

Most product-markets head toward ________ over the long run. A) pure competition B) monopolistic competition C) capitalistic competition D) monopoly E) collectivism

147)

Which of the following statements about the competitive environment is false?

Version 1

A) Competition-free environments are rare. B) Marketing managers should choose strategies that avoid head-on competition. C) A firm that has a marketing mix that its target market sees as better than its competitors has a competitive advantage. D) Over the long run, most product-markets tend toward monopolistic competition. E) In a competitor analysis, the firm's first step should be to identify all potential competitors.

148) The situation in which competitors offer very similar marketing mixes that customers see as close substitutes, and managers just compete with lower and lower prices as profit margins shrink, is called A) capitalistic competition. B) pure competition. C) monopoly. D) monopolistic competition. E) collectivist competition.

149) The market situation in which one firm completely controls a broad product-market is called A) monopoly. B) oligopoly. C) pure competition. D) monopolistic competition. E) collectivist competition.

150)

Which of the following represents a monopolistic competition?

Version 1

A) One firm completely controls a broad product-market. B) Each competitor tries to get control in its "own" target market. C) Competitors offer the same marketing mix. D) Different marketing mixes are nevertheless seen as the same by all customers. E) All customers view various alternatives as substitutes.

151) When conducting a competitor analysis, it is important for managers to take the viewpoint of A) competitors. B) the CEO. C) target customers. D) supply-chain partners. E) producers.

152)

Which of the following observations is not true of monopolistic competition?

A) A number of different firms offer marketing mixes that at least some customers see as different. B) Marketing managers try to differentiate very similar products by relying on other elements of the marketing mix. C) Each competitor tries to get a monopoly in its own target market. D) Most marketing managers in developed economies do not face monopolistic competition. E) Competition exists because some customers see various alternatives as substitutes.

153) Swanson Beverages, Inc., asks its marketing managers to compare the strengths and weaknesses of its current target market and marketing mix with what its competitors are doing (or are likely to do). In this context, what is the approach of Swanson Beverages?

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A) competitor clustering B) scenario analysis C) brand positioning D) marketing mix review E) competitor analysis

154)

Which of the following is true regarding the competitive environment?

A) It is easy to find environments that are "competitor-free." B) Monopoly situations are more common than are situations characterized by monopolistic competition. C) "Competitive rivals" are a firm's closest competitors. D) Competitor analysis should begin with an identification of competitors from the viewpoint of the manager rather than the consumer.

155) The firms that are considered to be the organization's closest challengers are called ________ rivals. A) aggressive B) competitive C) formal D) passive E) indirect

156) The portion of all Dell laptop computers sold in the United States as compared to all laptops sold in the United States in the same period is referred to as A) market share. B) marketing analytics. C) competitor analysis. D) market penetration. E) acquisition cost.

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157) Which of the following statements about the sale of Toyota cars best describes market share? A) the percent of Toyota sedans sold in the United States as compared to all sedans sold in the United States over the same period B) the stream of purchases that a Toyota customer could contribute to the company over the length of their relationship with the company C) a measure of Toyota's long-term market success, including its economic, social, and environmental outcomes D) the percentage of Toyota's new sedan customers in the United States as compared to its total number of customers worldwide E) the expected profitability of Toyota's current and prospective sedan-buying customers over a given period of time

158)

Why would it be important for a marketing manager to track market share? A) to monitor how well a product is doing in a particular market B) to assess progress against competitive rivals C) to compare how market share changes over time D) to understand the product's share of the market in different geographic regions E) All of the answers are correct.

159) A marketing manager may ethically and actively seek information about current or potential competitors by A) searching a firm's public website. B) waiting at a landfill for competitors' trash to find copies of confidential company reports. C) using computer "hackers" to break into a competitor's computer network. D) hiring people from competing firms and then asking them confidential information about the competitor. E) spying on competitors to obtain trade secrets.

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160)

Which of the following is true of the economic environment? A) It has no relationship to the technological environment. B) It is not affected by the way the parts of the macro-marketing system interact. C) It refers to micro-economic factors that do not affect business spending. D) It can change very rapidly. E) It never requires marketing managers to make immediate changes in strategy.

161) A firm that is unable to obtain financing to manufacture new products is likely encountering negative pressures from A) the competitive environment. B) the technological environment. C) the economic environment. D) the political/legal environment. E) the cultural/social environment.

162) Low consumer spending and a lack of adequate financing are conditions that arise mostly due to factors in A) the competitive environment. B) the cultural and social environment. C) the technological environment. D) the political environment. E) the economic environment.

163)

To what does the term economic environment refer?

Version 1

A) It refers to the unique micro-economic factors of local markets. B) It refers to the application of science to convert resources to output. C) It refers to the evaluation of the strengths and weaknesses of current competitors' marketing strategies. D) It refers to a marketing mix that customers see as better than a competitor's mix. E) It refers to the macroeconomic factors that affect patterns of consumer and business spending.

164) X-Brand Bikes, a manufacturer of off-road bicycles, carefully developed a strategy for moving into South America. The strategy had poor results after interest rates and inflation rose rapidly in most of its South American markets, demonstrating the influence of the ________ environment on marketing strategy. A) political B) technological C) social D) legal E) economic

165) A change in the ________ environment can affect consumer purchases of homes, cars, and other items usually bought on credit. A) legal B) political C) social or cultural D) technological E) economic

166)

Rising costs and inflation are part of the uncontrollable ________ environment.

Version 1

A) technological B) economic C) competitive D) legal E) social

167)

Which of the following is true of interest rates? A) They often change with changes in the economy. B) They affect consumer markets, but not business customers. C) They usually decrease during periods of inflation. D) They do not directly affect the total price borrowers must pay for loans. E) They do not affect the prices buyers pay.

168) The marketing manager for a financial services firm knows that customer preferences for mutual funds and bond accounts will differ depending on the current interest rate. She must plan her offerings with the ________ environment in mind. A) economic B) social C) technological D) cultural E) legal

169) Increased demand for new homes due to low interest rates is an example of the impact of the ________ environment. A) technological B) cultural C) competitive D) economic E) social

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170) When a local bank in Kansas City makes loans to its small business customers, it charges them an interest rate for borrowing money. Interest rates are part of the ________ environment. A) cultural and social B) economic C) legal D) political E) competitive

171) The scientific way in which an economy's resources are converted to output is part of the ________ environment. A) competitive B) economic C) political D) technological E) social

172) Which of the following demonstrates how the technological environment is changing the way marketers promote products? A) Marketing aimed at youth is increasingly regulated by governments. B) Search engines match consumer searches with relevant banner ads. C) Marketers make routine claims that products are eco-friendly. D) Manufacturers partner with local retailers to buy ads that feature both firms. E) New laws regulate consumer privacy.

173)

Underlying any economic environment is technology that affects

Version 1

A) how the economy's resources are converted to output. B) how quickly technological developments lead to new consumer protection laws. C) how competitors react to each other. D) how aggressive competitors are in planning new marketing strategies. E) how fast consumer attitudes change.

174) Which of the following is not primarily an example of the influence of technology on the external market environment? A) A camera producer finds a way to enable a camera to store digital pictures—without film. B) Machines are developed to assemble defect-free electronic components. C) Robots on a production line make it possible to lower costs. D) A manufacturer of frozen food is finding that consumers prefer containers that can go from the freezer direct to a microwave oven. E) The government passes a law that prohibits the use of cell phones while driving a vehicle.

175) Which of the following is an example of how the technological environment might affect marketing management? A) A manufacturer uses a computer to send orders directly to a supplier's computer. B) A retailer installs a computerized checkout scanner to replace a manual cash register system. C) A firm develops a substitute for saturated fat in manufactured foods. D) All of these are examples of how the technological environment might affect marketing management.

176) AT&T reacted to the popularity of the smartphone by adding several smartphone models to its line of phones. The availability and popularity of smartphones most likely came about due to changes in the ________ environments.

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A) political and cultural B) technological and legal C) legal and economic D) social and technological

177)

Which of the following best describes the use of artificial intelligence?

A) Google Photos automatically labels your photos using image recognition. B) Dell upgrades its computers to allow for faster computer processing. C) An ATM can dispense money from your account with the use of your bank card and PIN number. D) A home office uses Wi-Fi to access the Internet. E) A Facebook user is able to receive messages from contacts through Facebook Messenger.

178)

Which of the following statements about intelligent agents is accurate? A) Intelligent agents observe an environment and act to achieve a goal. B) Intelligent agents are a separate and distinct technology from artificial intelligence. C) Intelligent agents are devices that allow for faster computer processing. D) Intelligent agents are not currently used by everyday consumers. E) All of the answers are correct.

179)

Which of the following is an example of a use of artificial intelligence? A) voice assistance from Apple's Siri or Amazon's Alexa B) image recognition on Facebook C) shopping recommendations on Amazon D) movie suggestions on Netflix E) All of the answers are correct.

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180) Which of the following statements about artificial intelligence (AI) in marketing is most accurate? A) AI can create customer value by delivering better service to customers. B) Most firms have exhausted the use of AI with customers. C) AI can be helpful in some aspects of marketing but should not be used with customers directly. D) AI should only be used by firms whose target market is Millennials. E) The use of AI in marketing should be avoided until it is proven successful.

181) Which of the following best refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming? A) machine learning B) regression analysis C) GPS D) adaptive intelligence E) data mining

182) In machine learning, which of the following is most necessary to help a software program learn a specific skill? A) a large amount of relevant data B) computer programming by an expert in the field C) a human decision maker inputting correct answers D) hand-picked data E) constant consultation with both computer programmers and subject matter experts

183) A large financial services firm uses technology that analyzes millions of transactions and teaches itself to discern between legal and illegal transactions. This best exemplifies

Version 1

A) machine learning. B) database management. C) data mining. D) customer relationship management. E) reactive intelligence.

184)

A country's emphasis on its own interests before everything else is known as A) socialism. B) democracy. C) nationalism. D) capitalism. E) entrepreneurship.

185) In the political environment, a country's emphasis on its own interests before everything else is called A) elitism. B) socialism. C) extremism. D) regionalism. E) nationalism.

186)

"Nationalism" is an issue in the ________ environment. A) competitive B) political C) economic D) cultural E) technological

Version 1

187)

Which of the following statements is true about political environments?

A) Consumers in the same country usually share differing political environments. B) The attitudes and reactions of people have no effect on the political environment. C) The political environment can affect local opportunities but not international opportunities. D) Social critics and governments can affect the political environment. E) Nationalistic feelings always increase sales drastically in international markets.

188)

A "Buy American" campaign is an example of A) transnationalism. B) nationalism. C) environmentalism. D) consumerism. E) federalism.

189)

Which of the following was likely an effect of the unification of European markets?

A) Many of the taxes and rules that had limited trade among member countries of the European Union were eliminated. B) The need to adjust strategies to reach submarkets of European consumers disappeared. C) Firms operating in Europe had more difficulty obtaining access to large markets. D) Consumer prices rose and job opportunities became limited. E) The unification complicated inter-European commerce and trade directly.

190) The North American Free Trade Agreement (NAFTA), and its later replacement the United States–Mexico–Canada Agreement (USMCA),

Version 1

A) provides a plan to reshape the rules of trade among Germany, the United States, and Colombia. B) has reshaped the rules of trade among the United States, Canada, and Mexico. C) eliminates the need for companies to adjust strategies. D) makes it more difficult to resolve trade disputes among the participating countries.

191) A newspaper article with which of the following headlines would be least likely to involve the political environment? A) U.S.-Vietnamese Joint Ventures in the Future B) Egg Sales Fall as Consumers Switch to Low Cholesterol Diets C) U.S. Signs Trade Agreement with Venezuela D) FDA Adopts New Regulations for Generic Drugs E) Consumers Urged to "Buy American"

192) Which of the following best characterizes the current stance toward free trade in the United States? A) moving toward more trade restrictions B) moving toward less trade restrictions C) reaching a point of absolute free trade D) reaching a point of total isolationism E) status quo toward free trade for the past few decades

193) Which of the following is a reason for the recent movement toward the imposition of more trade restrictions in the United States? A) jobs moving outside of the United States B) American workers seeking greater job protection C) complaints about lax laws in emerging economies D) environmental and labor concerns E) All of the answers are correct.

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194)

American economic and legislative thinking is based on the idea that A) encouraging competition harms the public interest. B) competition among many firms helps the economy. C) attempts by business to limit competition aids large firms during recessions. D) the economic environment provides a base for the technological environment. E) changes in the legal environment lead to changes in the political environment.

195) true?

Which of the following statements about the legal environment in the United States is

A) Individual managers are subject to criminal penalties. B) The Food and Drug Administration (FDA) has no right to seize any product even if it violates the regulations. C) Many laws try to limit competition among firms. D) Consumer protection laws were introduced in the United States after 1940. E) Businesses managers are not subject to civil laws.

196)

A firm may use all of the following methods for beating the competition

except

A) applying for patents. B) seeking a monopoly. C) developing a sustainable competitive advantage. D) conducting a competitor analysis. E) utilizing advanced technology.

197) The largest producer of "fuzz-busters" (radar detectors) sees that many states are increasing the penalty for using them. Clearly, this firm's marketing strategy may have to adapt to these changes in the

Version 1

A) economic and technological environments. B) resources and objectives of the firm. C) competitive environment. D) political and legal environments. E) cultural and social environments.

198)

The ________ environment sets the basic rules for how a business can operate in society. A) legal B) social C) economic D) technical E) cultural

199)

American legislative and economic thinking assumes that A) competition among many firms helps the economy. B) firms must have their prices approved by the Federal Trade Commission. C) the free enterprise system is dying. D) laws are needed to prevent firms from competing with similar ("me-too") products. E) government officials are needed to run the economy.

200)

The Sherman Act was A) intended to protect large producers. B) designed to limit competition. C) passed during the rash of corporate takeovers of the 1980s. D) intended to focus on monopoly or anticompetitive practices. E) passed to prohibit fake advertising allowances.

201)

Which of the following is true of the Sherman Act?

Version 1

A) It was intended to protect large producers. B) It was passed to prohibit deceptive pricing. C) It was passed after the Depression of the 1930s. D) It focuses on consumer protection. E) It was aimed at efforts to restrain trade or lessen competition.

202)

The Sherman Act sought to A) prevent monopolies and anticompetitive practices. B) establish a Federal Consumer Protection Agency. C) eliminate price differences among different competing suppliers. D) prevent fraud on the Internet. E) restrict importing into the United States.

203)

The Sherman Act is primarily designed to A) prevent monopolies or anticompetitive practices. B) stop the flow of foreign products into the United States. C) prevent unfair or deceptive acts or practices in commerce. D) reduce price discrimination by manufacturers. E) eliminate deceptive selling practices.

204)

The ________ Act prohibits monopoly or conspiracy in restraint of trade. A) Sherman B) Magnuson-Moss C) Robinson-Patman D) Antimerger

205)

Which of the following U.S. antimonopoly laws deals with conspiracy to fix prices?

Version 1

A) Clayton Act (1914) B) Magnuson-Moss Act (1975) C) FTC Act (1914) D) Sherman Act (1890) E) Wheeler-Lea Amendment (1938)

206) Act.

The ________ focused on anticompetitive practices that did not fall under the Sherman

A) Antimerger Act B) Clayton Act C) Magnuson-Moss Act D) Wheeler-Lea Amendment E) Federal Trade Commission Act

207)

The Clayton Act is concerned with A) product warranties. B) deceptive pricing. C) buying competitors. D) anticompetitive practices. E) buying producers or distributors.

208) Which of the following is not a consumer protection built into the English and U.S. common law systems? A) requirement that seller protect consumer privacy B) requirement that seller tell the truth C) requirement that seller abide by contracts D) requirement that seller stand behind the firm’s product

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209)

Under the common law system, which of the following is expected to protect consumers? A) vigorous competition in the marketplace B) business monopolies C) a system of comprehensive consumer protections D) intense government regulation E) buyers’ desire for good will

210) Despite an Antimerger Act, there has been some leniency in allowing mergers between firms that have been competitors. When considering a merger, companies should take this aspect of the ________ environments into consideration. A) legal and political B) cultural and economic C) technological and legal D) social and cultural E) political and economic

211)

Safety standards for products such as bicycles are set by the A) Consumer Product Safety Commission. B) U.S. Department of Transportation. C) Federal Trade Commission. D) Environmental Protection Agency. E) Food and Drug Administration.

212)

The Consumer Product Safety Commission is responsible for

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A) developing and enforcing safety standards for consumer products. B) developing and enforcing environmental protection standards. C) preventing the distribution and sale of adulterated or misbranded foods, drugs, and cosmetics. D) None of the answers is correct.

213) If the Climbing High Ladder Company produced ladders that were unstable and caused many injuries, the ________ has the power to force the company to recall its product. A) Consumer Product Safety Commission B) Food and Drug Administration C) Federal Trade Commission D) Environmental Protection Agency E) Consumer Protection Agency

214) Which of the following statements regarding the current legal environment facing U.S. marketing managers is true? A) State and local laws vary but contain important regulations. B) Some consumer protections are built into the common law system. C) Product safety is subject to the Consumer Product Safety Act. D) Businesses and individual managers are subject to both criminal and civil laws. E) All of the answers are correct.

215)

The attitudes and behavior patterns of people are part of the A) political environment. B) social and cultural environment. C) competitive environment. D) firm's resources and objectives. E) economic and technological environment.

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216) Baby Boomers are among the fastest-growing demographic groups on Facebook. Marketers need to study such trends because A) people in this demographic are known for being techno-savvy. B) Baby Boomers typically have little money to spend. C) very large numbers of people make up this demographic. D) online ads are most effective when seen by people of all ages. E) Baby Boomers have played a major role in the social media revolution.

217) The languages people speak, the type of education they have, and their religious beliefs are aspects of the ________ environment. A) political B) economic C) cultural and social D) legal E) technological

218) Which of the following newspaper headlines is MOST likely to be seen as a result of changes in the cultural and social environment? A) McDonald's Changes Its Menu to Cater to Low-Carb Dieters B) General Motors Offers Original Equipment Car Stereos with Satellite Radio Service C) Treasury Department Introduces New Currency to Combat Counterfeiters D) New Projection TVs Are Thinner, Lighter than Traditional TVs E) Gasoline Prices Increase Sharply

219) A marketing analyst for a chicken processor reports that a rising percentage of people are eating chicken because it has less fat than beef. Clearly, this firm's opportunities may improve with this change in the

Version 1

A) technological environment. B) cultural and social environment. C) economic environment. D) political and legal environment. E) competitive environment.

220) Consumer emphasis on fitness has created opportunities for firms like Nike, Nautilus, and Schwinn, and illustrates the impact of the changing A) technological environment. B) economic environment. C) competitive environment. D) cultural and social environment. E) political and legal environment.

221) The recent interest in physical fitness has forced producers of food, clothing, and other products to reconsider their marketing strategies. Which of the following does this trend illustrate? A) economic and technological environments B) cultural and social environment C) existing business situation D) political and legal environment E) resources and objectives of the firm

222)

Which of the following is an example of the cultural and social environment? A) growing acceptance of women in business B) growing popularity of exercise C) increased desire for satisfaction with life D) All of the answers are correct.

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223) Which of the following is least likely a result of shifts in the cultural and social environment? A) Domino's Pizza finds that demand for pizza delivered at home has expanded as more consumers are willing to pay for more convenience. B) A toy manufacturer recalls a playpen with a defective latch, and Toys 'R' Us stores removes the playpens from the shelf. C) Haagen-Dazs introduces a nonfat yogurt that is also "low cal." D) Sony recruits more women graduates for sales management positions. E) BMW builds its new plant in South Carolina because of the willingness of "Sun Belt" workers to put in a "full day's work."

224) Few people in Europe diet; so the same soft drink that PepsiCo sells in the United States under the brand name of "Diet Pepsi" is sold in England under the brand name of "Pepsi MAX." This is an example of which area of the external market environment? A) competitive B) legal C) cultural and social D) political E) economic

225)

Which of the following can a firm do to be more sustainable?

A) Produce light bulbs with raw materials that consume more energy. B) Manufacture textiles using chrome and ammonium solutions. C) Use reusable containers for their products. D) Fly the national sales force to a meeting instead of using teleconferencing technology. E) Replace electric delivery vehicles with gas-powered ones.

226) One way that marketers can screen for opportunities that are good for society is to screen based on the criterion of Version 1

A) growth. B) profitability. C) sustainability. D) return on investment. E) business strengths.

227)

According to estimates, which of the following countries has 100 percent literacy? A) Norway B) Singapore C) Italy D) India E) Brazil

228) If you go into a restaurant in Vienna, Austria, and ask for a Diet Coke, the waiter may have no idea what you are ordering. This is an example of which area of the external market environment? A) political B) cultural and social C) legal D) economic E) competitive

229) According to projections, the population of ________ is likely to grow by 9 percent between 2013 and 2025. A) Japan B) Russia C) the United States D) China E) Egypt

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230)

Which of the following statements about world population trends is true?

A) In general, countries that have higher stages of development experience faster rates of growth than less-developed countries. B) The extent to which a country's population is clustered around urban areas does not vary much from country to country. C) People are moving from rural areas into urban areas. D) The trend toward urbanization has made companies less interested in international markets. E) The concentration of people in major cities often complicates Place and Promotion decisions.

231)

Which of the following statements about population growth is true?

A) The world's population growth varies dramatically from country to country. B) Between 2013 and 2025, population growth will be about 9 percent in the United States and 3 percent in China. C) The population of Ethiopia and Nigeria will likely increase by 35 percent or more between 2013 and 2025. D) All of the answers are correct.

232)

The greatest growth in the world's population over the next several years will come from A) Western Europe. B) Africa. C) Australia. D) Eastern Europe. E) Russia and nations of the former Soviet bloc.

233) Which of the following countries has the fastest projected population growth between 2013 and 2025?

Version 1

A) the United Kingdom B) Canada C) Germany D) the United States E) Ethiopia

234) According to projections, the population of ________ is likely to grow by 9 percent between 2013 and 2025. A) Japan B) Russia C) Singapore D) China E) the United States

235)

Which of the following countries is likely to see a population decline from 2013 to 2025? A) Germany B) Canada C) the United States D) the United Kingdom E) China

236) Which of the following statements about population density and population growth is not correct? A) Population density is important to marketers. B) In Ethiopia, more than 85 percent of people live in urban areas. C) People everywhere are moving from rural areas to urban areas. D) Population is very spread out in many of the African countries. E) The population growth rate is higher in the United States than in China.

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237)

Which of the following statements about population density is true? A) High population density occurs only in highly developed economies. B) Some Western European and Asian urban areas are more crowded than U.S. urban

areas. C) The United States is the only country with crowded urban areas. D) There is a worldwide movement back to rural areas. E) None of the statements is true.

238)

Which of the following countries has the highest population density? A) Switzerland B) the United States C) Australia D) Singapore E) Bangladesh

239)

One hundred percent of which country's population was in urban areas in 2013? A) the United States B) Singapore C) the United Kingdom D) Germany E) Italy

240) The total market value of goods and services provided in a country's economy per year by both residents and nonresidents of that country is its gross

Version 1

A) domestic product. B) national product. C) national income. D) domestic income. E) disposable income.

241) ________ refers to the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. A) Gross output B) Gross investment C) Gross national income D) Gross fixed capital formation E) Gross domestic product

242)

Gross domestic product (GDP) is the

A) total cost of producing all goods and services sold in a year. B) total market value of goods and services provided in an economy in a year by both residents and nonresidents of that country. C) total market value of goods (but not services) consumed in an economy in a year. D) total market value of goods and services consumed in a year. E) total market value of goods (but not services) produced in an economy in a year.

243)

Gross domestic product (GDP) is the

A) total market value of goods and services provided in an economy in a year by both residents and nonresidents of that country. B) manufacturers' selling price of goods (but not services) produced in a year. C) total market value of goods (but not services) produced in an economy in a year. D) total market value of goods and services consumed in a year. E) None of the answers is correct.

Version 1

244)

Gross domestic product

A) is the total market value of goods, but not services, produced in a year. B) is an excellent basis for comparing consumer well-being across different cultures and economies. C) is a widely used measure of income for different countries. D) is the total market value of services, but not goods, produced in a year. E) All of the answers are correct.

245)

One widely used measure of income in most countries is A) gross domestic product. B) total consumption expenditures. C) disposable personal product. D) population times GDP. E) socioeconomic product.

246)

Gross domestic product (GDP) A) is affected by economic conditions and the productivity of workers in the country. B) usually rises when there are bad economic conditions in an economy. C) is the amount of new capital invested in business in a year. D) is the total cost of producing all goods and services in a year. E) is the total market value of goods and services consumed in an economy in a year.

247) Which of the following statements about gross domestic product (GDP) and gross national income (GNI) is true?

Version 1

A) GDP income measures can give the impression that people in less-developed nations have more income than they really do. B) GDP includes foreign income earned in a country, but GNI does not. C) Both GDP and GNI are widely used measures of national income. D) GDP and GNI are highest in the more developed industrial nations. E) All of the answers are correct.

248)

Gross national income (GNI) is the total

A) cost of producing all goods and services sold in a year. B) market value of goods and services provided in an economy in a year by residents of that country. C) market value of goods (but not services) consumed in an economy in a year. D) market value of goods and services consumed in a year. E) market value of goods (but not services) produced in an economy in a year.

249)

Gross national income (GNI) is the

A) total market value of goods and services provided in an economy in a year by residents of that country. B) manufacturers' selling price of goods (but not services) produced in a year. C) total market value of goods (but not services) produced in an economy in a year. D) total market value of goods and services consumed in a year. E) None of the answers is correct.

250)

Gross national income (GNI)

Version 1

A) is the total market value of goods, but not services, produced in a year. B) is an excellent basis for comparing consumer well-being across different cultures and economies. C) is a measure similar to GDP, but it does not include income earned by foreigners who own resources in that nation. D) is the total market value of services, but not goods, produced in a year. E) All of the answers are correct.

251)

One widely used measure of income in most countries is A) gross national income. B) total consumption expenditures. C) disposable personal product. D) population times GNI. E) socioeconomic product.

252)

Gross national income (GNI) A) is affected by economic conditions and the productivity of workers in the country. B) usually rises when there are bad economic conditions in an economy. C) is the amount of new capital invested in business in a year. D) is the total cost of producing all goods and services in a year. E) is the total market value of goods and services consumed in an economy in a year.

253)

Unlike the GDP, the GNI

A) includes foreign income. B) is the total market value of all goods and services provided in a country's economy in a year by nonresidents. C) includes the income earned by residents who do not own resources in that nation. D) does not include income earned by foreigners who own resources in that nation. E) is a measure of regional income.

Version 1

254) If American firm Boeing sets up a factory in China, then the GDP figure for China ________ include those profits and the GNI ________. A) would; would as well B) would; would not C) would not; also would not D) would not; would E) would; would only measure actual sales

255)

Which statement pertaining to GNI per capita is not true? A) The GNI per capita in the United States is the highest in the world. B) The GNI per capita is quite high in the United States, Japan, and Germany. C) GNI per capita gives some idea of the income level of people in that country. D) Many managers see great potential in countries where GNI per capita is low. E) Managers see less competition where GNI per capita is low.

256) true?

Which of the following observations concerning different measures of national income is

A) GDP does not include income earned by foreigners who own resources in that nation. B) Using GNI can give the impression that people in less-developed countries have more income than they really do. C) GNI per capita is a useful figure because it gives some idea of the income level of people in the country. D) The less-developed nations account for the biggest share of the world's GDP. E) GDP is the only measure of national income.

257)

Which of the following countries have the highest GNI per capita?

Version 1

A) Saudi Arabia and Iran B) Mexico and Spain C) the United States and Australia D) India and China E) Japan and Germany

258)

Which of the following countries have the lowest GNI per capita? A) Japan and Switzerland B) Mexico and Spain C) Ethiopia and Haiti D) India and Pakistan E) Germany and the United States

259) Literacy studies show that ________ percent of adults worldwide (aged 15 or older) cannot read and write. A) 10 B) 14 C) 38 D) 50 E) 60

260)

Which of the following countries has the highest literacy rate? A) Russia B) Egypt C) Haiti D) Algeria E) Libya

Version 1

261)

Which of the following countries has the lowest literacy rate? A) the United Kingdom B) Italy C) Bangladesh D) France E) Egypt

262)

According to estimates, which of the following countries has 100 percent literacy? A) Norway B) Singapore C) Italy D) India E) China

263) As of 2015, which of the following countries does not have more than 80 percent of its population using the Internet? A) Norway B) Germany C) Italy D) Finland

264)

The current U.S. population is largest in which of the following states? A) California B) Florida C) Illinois D) New York E) Texas

Version 1

265) Between 2010 and 2020, the highest growth rate in population in the United States occurred in A) the western states. B) the northeastern states. C) the northwestern states. D) the midwestern states.

266)

Which statement about the median age of the U.S. population is true?

A) It was 37 in 1980. B) It was about 30 by 2010. C) It is decreasing because the percentage of population in older age groups has decreased. D) It is growing because the percentage of population in older age groups has increased. E) It has not changed since 1980.

267) The largest projected increase in the U.S. population, between 2005 and 2025, is projected to occur in the ________ age group. A) 50–59 B) 65-and-over C) 10–19 D) 0–9 E) 40–49

268) Baby Boomers are among the fastest-growing demographic groups on Facebook. Marketers need to study this trend because

Version 1

A) people in this demographic are known for being techno-savvy. B) Baby Boomers typically have little money to spend. C) very large numbers of people make up this demographic group. D) online ads are most effective when seen by people of all ages. E) most Baby Boomers have fewer considerations for buying.

269)

Which of the following age groups saw a decline in population from 2005 to 2015? A) 0–9 B) 10–19 C) 30–39 D) 40–49 E) 80+

270)

Generation Y refers to those born A) from 1978 to 1994. B) since 1994. C) from 1965 to 1997. D) from 1945 to 1964. E) before 1945.

271)

Generation X refers to those born A) from 1978 to 1994. B) since 1994. C) from 1965 to 1977. D) from 1945 to 1964. E) before 1945.

272)

Baby Boomers were born

Version 1

A) between 1978 and 1994. B) after 1994. C) between 1965 and 1997. D) between 1946 and 1964. E) before 1945.

273) Which of the following statements about demographic changes in the United States is not true? A) Demographic changes such as those in population groupings are difficult to anticipate. B) Senior citizens will grow in number rapidly from 2005 to 2025. C) The number of children aged 0–9 will grow from about 40 million to about 45 million from 2005 to 2025. D) In 2025 there will be fewer people over age 80 than under age 10. E) In 2005, the number of children aged 0–9 was about the same as the number of individuals in their 20s.

274)

Which of the following population groups is the most techno-savvy? A) seniors B) Gen X C) Baby Boomers D) Gen Y

275)

Which of the following is true of Generation Z? A) It is the generation born immediately following the Baby Boom. B) People belonging to this generation are also called Millennials. C) This group tends to have optimistic, as opposed to realistic, views of the world. D) This group is a part of a more ethnically diverse United States than their parents. E) This group appears to be less accepting of different cultures, races, and religions.

Version 1

276)

Generation Z refers to those born A) between 1965 and 1977. B) since 1995. C) between 1946 and 1964. D) in the generation immediately following the Baby Boom.

277) When developing a strategy, how should marketing managers use information on trends and patterns about the different generations, including Baby Boomers, Generation X, and Millennials? A) Marketing managers should use generalizations about generations as a starting point only. B) Marketing managers should ignore generational generalizations. C) Marketing managers should craft strategies solely using generational generalizations about their target market. D) Marketing managers should only use generational generalizations when it comes to decisions about technology. E) None of the answers is correct.

278)

Which of the following U.S. marketing managers is about to make a serious mistake?

A) "We are targeting 50- to 59-year-olds because we see this group as the fastestgrowing age group over the next decade." B) "We are refocusing on senior citizens, since they will be a growing market for many years." C) "We are developing special swimsuit designs for older women, as that market is very large and growing." D) "Our company is shifting to international markets, where the population will continue to grow at a more rapid rate." E) None of the marketing managers seems headed for a mistake.

279)

In which external environment(s) do changes usually occur most slowly?

Version 1

A) cultural and social environment B) political and legal environments C) resources and objectives of the firm D) competitive environment E) economic and technological environments

280) In the short run at least, which of the following is usually beyond the control of the marketing manager? A) political and legal environments B) economic environment C) cultural and social environment D) competitive environment E) All these environments are beyond the control of the marketing manager in the short run.

281) What is the first and most important question to ask when evaluating product-market opportunities? A) "How does it fit with our objectives and resources?" B) "What is the sales forecast for this product?" C) "How much profit will we make this year?" D) "How much do we need to invest in this product?" E) "How far along is our research and development effort in this area?"

282) When marketers select criteria to help screen for new market opportunities, they should include quantitative components such as

Version 1

A) what kind of business the firm wants to be in. B) what resources the firm should build upon. C) what weaknesses need to be avoided. D) what is an acceptable return on investment (ROI). E) what expertise the firm possesses.

283) Since IKEA is known for fashionable modern-style home furnishings, the company would be likely to screen out business opportunities in A) kitchenwares. B) antique furniture reproductions. C) bed and bath. D) rugs. E) interior lighting.

284) A firm's product-market screening criteria for evaluating existing plans and possible new opportunities should consider A) the objectives of top management. B) trends in the market environment. C) the firm's strengths. D) the firm's weaknesses. E) All of the answers are correct.

285)

Product-market screening criteria should A) be qualitative. B) summarize in one place what the firm wants to accomplish. C) be achievable. D) be stated in quantitative terms. E) All of the answers are correct.

Version 1

286)

Product-market screening criteria should be A) quantitative. B) qualitative. C) realistic and achievable. D) All of the answers are correct.

287)

When using screening criteria to evaluate opportunities,

A) marketers must try to match opportunities to the firm's resources and objectives. B) quantitative but not qualitative criteria should be considered. C) opportunities that are not expected to be profitable after one year of implementation should always be dropped. D) the firm's weaknesses should be ignored. E) All of the answers are correct.

288) All of the following are examples of quantitative components of screening criteria that are used to narrow down to marketing strategies except A) market share. B) number of units sold. C) strengths of the company. D) annual projected sales dollars. E) projected profit.

289)

Which of the following is a quantitative screening criterion for evaluating opportunities?

Version 1

A) weaknesses the firm should avoid B) kinds of business the firm wants to exclude C) kinds of business the firm wants to be in D) resources the firm should build on E) return on investment (ROI) target for the firm

290) When evaluating the potential of possible opportunities (product-market strategies), a marketing manager should A) evaluate each opportunity over the life of the project, since short-term losses may hide long-term profitability. B) avoid using quantitative criteria because they tend to oversimplify the problem. C) look at each opportunity on its own, since there is no good way to compare different plans. D) look only at internal resources, since they are controllable.

291) When a firm has multiple market opportunities from which to choose, marketers can use ________ to compare and identify the best ones. A) competitor analysis B) a competitor matrix C) focus groups D) S.W.O.T. analysis E) a strategic planning grid

292)

General Electric's "strategic planning grid" is an approach for A) evaluating possible marketing objectives. B) selecting target markets. C) evaluating existing and possible plans. D) developing new products. E) developing marketing mixes.

Version 1

293) The ________ dimension of the GE grid helps managers answer the following question: Does this product-market plan look like a good idea? A) business strengths B) quantitative criteria C) industry attractiveness D) relative positioning E) qualitative criteria

294)

The business strengths dimension of the GE grid focuses on A) market diversity. B) market growth rate. C) the ability of the company to pursue a product-market plan effectively. D) industry profitability. E) the social and legal environment.

295)

Which of the following is true about the General Electric strategic planning grid?

A) It supports the industry attractiveness dimension's focus on the ability of the company to pursue a product-market plan effectively. B) It encourages managers to follow an objective, single-factor approach. C) It allows the business strengths dimension's focus on whether the product-market plan looks like a good idea. D) It helps managers make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. E) It suggests that opportunities that fall into the red boxes are the firm's best growth opportunities.

296)

General Electric's strategic planning grid

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A) focuses on market share and market growth rate. B) ignores some important issues—such as competitive structure and the environmental impact of a plan. C) requires that all opportunities be judged either "High" or "Low." D) substitutes quantitative estimates for management judgment. E) None of the answers is correct.

297) Using General Electric's strategic planning grid, an opportunity rated "medium" in terms of industry attractiveness and "medium" in terms of business strengths would be evaluated as which of the following? A) yellow—borderline B) red, for no growth C) green, for growth D) It could be evaluated as yellow, red, or green—because the grid really doesn't deal with "medium" ratings.

298) Using General Electric's strategic planning grid, an opportunity rated "medium" in terms of industry attractiveness and "high" in terms of business strengths would be evaluated as which of the following? A) yellow—borderline B) red, for no growth C) green, for growth D) It could be evaluated as yellow, red, or green—because the grid suggests that opportunities with medium ratings need more analysis.

299) According to the General Electric strategic planning grid, an opportunity that is low on the "business strengths" dimension but high on the "industry attractiveness" dimension should be

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A) called a strategic business unit. B) supported if it is an existing business, but probably not supported if it is a new opportunity. C) immediately supported with large investment. D) sold off or discontinued. E) viewed as a "green" (high growth) opportunity.

300)

General Electric's strategic planning grid A) focuses on market share and market growth rate. B) requires subjective judgments about business strengths and industry attractiveness. C) requires that all opportunities be judged either "High" or "Low." D) substitutes quantitative estimates for management judgment. E) All of the answers are correct.

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GE's planning grid approach

A) doesn't work, because given the subjective evaluations involved, different managers usually come to different conclusions. B) is really the same thing as the total profit approach. C) overemphasizes short-term profitability. D) is superficial because it considers only size and expected market share and ignores other possibly important factors. E) could be adapted easily by another firm with different objectives.

302)

GE's planning grid approach to evaluating proposed and existing plans and businesses A) considers how profitable opportunities are likely to be. B) reflects the corporation's objectives. C) helps managers see why some ideas are supported and others are not. D) is a subjective, multiple-factor approach. E) All of the answers are correct.

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303) Evaluating opportunities in international markets is uniquely challenging for managers because A) international variables are confusing and unfamiliar to outsiders. B) there are so many opportunities from which to choose. C) marketing in other countries is entirely different from marketing in a domestic setting. D) international consumers rarely share the same needs. E) other nations do not welcome foreign businesses.

304) Which of the following would help prevent marketing mistakes in evaluating international market opportunities? A) Assume that all cultures around the world are the same. B) Do not "think locally." C) Use machine translators. D) Include local citizens in the evaluation process. E) Save money by cutting research into foreign markets.

305)

The "continuum of environmental sensitivity" suggests that

A) some products are more adaptable to international markets than others. B) it is extremely risky to sell basic commodities in international markets. C) industrial products need to be adapted more than consumer products for international markets. D) All of the answers are correct.

306) According to the "continuum of environmental sensitivity," which of the following types of products is less sensitive to environmental changes?

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A) "fad"-type consumer products B) industrial products C) basic commodity-type consumer products D) consumer products that are linked to cultural variables E) All of these types of products are equally sensitive to environmental changes.

307) Which of the following types of products is least sensitive to environmental changes, according to the "continuum of environmental sensitivity"? A) industrial products B) commodity-type consumer products C) consumer products linked to cultural variables D) "me-too" products E) fad products

308) According to the "continuum of environmental sensitivity," which of the following types of products would be most insensitive to environmental changes? A) basic commodity-type consumer products B) industrial products C) consumer products that are tied to cultural variables D) consumer products closely linked to social variables E) international products

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Answer Key Test name: Chap 03_17e 1) TRUE The external market environment includes four major areas: economic environment, technological environment, political/legal environment, and cultural/social environment. 2) FALSE The direct market environment includes customers, the company, and competitors. 3) FALSE Managers can't alter the variables of the market environment. 4) TRUE The objectives of a company should shape the direction and operation of the whole business. 5) TRUE Company objectives should shape the direction and operation of the whole business. 6) TRUE Many firms develop a mission statement, which sets out the organization's basic purpose for being. 7) TRUE A mission statement should focus on a few key goals rather than embracing everything. 8) TRUE

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A mission statement should supply guidelines that help managers determine which opportunities to pursue. 9) FALSE A mission statement is not a substitute for more specific objectives that provide guidance in screening possible opportunities. 10) FALSE A mission statement is not a substitute for more specific objectives. 11) TRUE Firms need a hierarchy of objectives, moving from company objectives to marketing department objectives. 12) FALSE Firms need a hierarchy of objectives, moving from company objectives to marketing department objectives. Firms also need objectives for each of the Four Ps. 13) FALSE Marketing objectives should be realistic and achievable. Overly ambitious objectives are useless if the firm lacks the resources to achieve them. 14) TRUE Every firm has some unique resources, and opportunities come from making use of these strengths. 15) FALSE Smaller firms can be at a great cost disadvantage if they try to win business from larger competitors. On the other hand, new or smaller firms sometimes have the advantage of flexibility. 16) TRUE Version 1

Smaller firms can be at a great cost disadvantage when the cost of producing and selling each unit decreases as the quantity increases. 17) FALSE Smaller firms can be at a great cost disadvantage if they try to win business from larger competitors when the cost of producing and selling each unit decreases as the quantity increases. 18) FALSE Sometimes but not always, new or smaller firms have the advantage of flexibility. 19) TRUE The opportunities a firm decides to pursue may depend on its resources and capabilities. 20) FALSE The number and types of competitors the marketing manager must face and how they may behave is affected by the competitive environment. 21) TRUE Although marketing managers usually can't control the competitive environment factors, they can choose strategies that avoid head-on competition. 22) FALSE When most product-markets head toward pure competition, competitors offer very similar products that consumers see as close substitutes. 23) FALSE Many product-markets head toward pure competition—or oligopoly— over the long run. 24) TRUE Version 1

Monopoly situations, in which one firm completely controls a broad product-market, are rare in market-directed economies. 25) FALSE In monopolistic competition, each competitor tries to get control in its own target market. But competition still exists because some customers see the various alternatives as substitutes. 26) TRUE In monopolistic competition, marketing managers sometimes try to differentiate very similar products by focusing on other elements of the marketing mix. 27) TRUE The basic approach to competitor analysis is to compare the strengths and weaknesses of the current (or planned) target market and marketing mix with what competitors are currently doing or are likely to do. 28) TRUE The basic approach to competitor analysis is to compare the strengths and weaknesses of the current target market. 29) FALSE Competitor analysis is an organized approach for evaluating the strengths and weaknesses of competitors' marketing strategies. 30) TRUE The initial step in competitor analysis is to identify potential competitors. 31) FALSE Competitive rivals offering similar products are usually easy to identify, but not always.

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32) TRUE Market share is the portion of total sales in a product category accounted for by a particular brand. Marketing managers often track market share over time to monitor how well a product is doing in a particular market. 33) FALSE Beyond the moral issues, spying on competitors to obtain trade secrets is illegal. 34) FALSE Beyond the moral issues, spying on competitors to obtain trade secrets is illegal. 35) FALSE The economic environment refers to macroeconomic factors that include national income, economic growth, and inflation. 36) FALSE In some Latin American countries, inflation has exceeded 400 percent a year in recent years. In contrast, in the last couple of decades, the United States and most developed countries have experienced inflation rates well below 5 percent. 37) TRUE In some Latin American countries, inflation has exceeded 400 percent a year in recent years. In contrast, in the last couple of decades, the United States and most developed countries have experienced inflation rates well below 5 percent. 38) TRUE Technology is the application of science to convert an economy's resources to output. 39) TRUE Version 1

Technology affects marketing in two basic ways: opportunities for new products and the development of new processes. 40) TRUE Marketing managers that anticipate changes in technology will be in a better position to take advantage of the opportunities that come from new technology. 41) TRUE Artificial intelligence (AI) refers to having machines operate like humans with respect to learning and decision making. 42) FALSE Artificial intelligence is implemented by an intelligent agent, which is a device that observes an environment and acts to achieve a goal. 43) TRUE Machine learning refers to a type of skill where a software application becomes more accurate in predicting outcomes without actual programming. 44) TRUE Nationalism can affect macro-marketing systems and how marketing managers work. It can reduce sales, or even block all marketing activity. 45) FALSE Nationalism is placing a country's interests before everything else. 46) TRUE Nationalism can affect how marketing managers work as well. 47) FALSE Strong sentiments of nationalism can reduce sales, or even block all marketing activity, in some international markets. Version 1

48) TRUE Important dimensions of the political environment are likely to be similar among nations that have banded together to have common regional economic boundaries—one such example being the unification of European markets. 49) TRUE Many of the member countries of the EU use the euro. 50) TRUE The political environment can affect opportunities at a local or international level. 51) TRUE American economic and legislative thinking is based on the idea that efforts by business to limit competition are considered contrary to the public interest. 52) TRUE Businesses and individual managers are subject to both criminal and civil laws. 53) FALSE Managers are subject to both criminal and civil laws, and where criminal law applies, jail sentences can be imposed. 54) FALSE The Sherman Act outlaws anticompetitive activities and actions that create or attempt to monopolize a market. 55) TRUE The Clayton Act (1914) deals with anticompetitive practices that did not fall under the Sherman Act.

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56) TRUE As stated in Exhibit 3–3, the Clayton Act focuses on practices that may substantially lessen competition, such as tying contracts, exclusive dealing contracts, and price discrimination by manufacturers. 57) FALSE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards and can impose penalties for failure to meet these standards. 58) FALSE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards and can impose penalties for failure to meet these standards. 59) TRUE The Consumer Product Safety Act set up the Consumer Product Safety Commission, which has the power to set safety standards. 60) FALSE The commission has the power to force a product off the market or require expensive recalls to correct problems, so it is obvious that safety must be considered in product design. 61) TRUE Besides federal legislation, marketers must be aware of state and local laws. 62) TRUE The cultural and social environment affects how and why people live and behave as they do. 63) FALSE

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The cultural and social environment affects how and why people live and behave as they do. 64) TRUE Sustainability—the idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs—has become increasingly more important to consumers. 65) FALSE Sustainability has become increasingly more important to consumers. Two out of three consumers are willing to pay more for a product that is deemed more sustainable. 66) TRUE The world's population is growing fast, but that population growth varies dramatically. For example, between 2013 and 2025, population is projected to grow 35 percent or more in Ethiopia and Nigeria and about 25 percent in Egypt, Singapore, and Bangladesh. During this same time, growth will be about 9 percent in the United States. 67) TRUE The United States has a current population of over 316 million people. 68) TRUE With a current population of over 316 million, the United States makes up only 4.9 percent of the world's population of over 7 billion people. 69) TRUE As stated in Exhibit 3–3, India has more people than the United States, and China has more people than India. 70) FALSE

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The world's population is growing fast, but that population growth varies dramatically from country to country. For example, between 2013 and 2025, the population is projected to grow more than 35 percent or more in both Ethiopia and Nigeria. 71) FALSE More than 90 percent of the population in Japan, Singapore, Israel, and Argentina live in urban areas. 72) TRUE The extent of urbanization varies widely and the concentration of people in major cities often simplifies Place and Promotion decisions, prompting increased interest in international markets. 73) TRUE Income is often one of the most important demographic dimensions when considering international markets. 74) FALSE Income is often one of the most important demographic dimensions when considering international markets. 75) TRUE There are a variety of different measures of national income. The most widely used are GDP and GNI. 76) FALSE Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in one year. 77) TRUE Gross domestic product includes income earned by foreigners who own resources in that nation.

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78) FALSE Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 79) TRUE Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. 80) FALSE Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. 81) TRUE Exhibit 3–3 gives an estimate of GDP for each country listed. The more developed industrial nations, including the United States, Germany, and Japan, have the largest GDPs; but it is the developing nations who have the fastest rate of growth in GDP. 82) FALSE Exhibit 3–3 gives an estimate of GDP for each country listed. The fastest rate of growth in GDP is occurring in the developing nations, not the more developed industrial nations. 83) TRUE The more developed industrial nations (including the United States, Japan, and Germany) do not have the largest populations, but they account for the biggest share of the world's GDP. 84) FALSE Many managers, however, see great potential and less competition where GNI per capita is low. 85) FALSE Version 1

The United Nations estimates that 14 percent of adults (age 15 or older) in the world cannot read and write. 86) TRUE Adoption of cell phone and Internet usage varies across the globe. While penetration is still low in many of the poorest nations, those countries are experiencing very fast adoption rates. 87) TRUE As shown in Exhibit 3–4, California is the state with the largest population, and Texas is a distant second. 88) FALSE As shown in Exhibit 3–4, California is the state with the largest population, and Texas is a distant second. 89) TRUE As shown in Exhibit 3–4, in the United States, the West and the Southeast are growing faster than the Northeast and the North Central areas. 90) FALSE In 1980, the median age of the U.S. population was 30, but by 2018 the median age had risen to 38. 91) TRUE In 1980, the median age of the U.S. population was 30, but by 2018 the median age had risen to 38. 92) TRUE Gen X is much smaller in number than the Baby Boomers it follows. 93) TRUE

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Gen Y refers to those born from 1978 to 1994; this group emerged from the echo boom and grew up with technology. 94) TRUE People of the Generation Z group were born into a world that already used text messaging, cell phones, and the Internet. They are part of a more ethnically diverse United States than their parents and appear to be more accepting of different cultures, races, and religions. 95) FALSE Marketing managers should be cautious about using generational generalizations as anything more than a starting point. When developing a strategy, marketing managers should focus on a more specific target. 96) TRUE The demographic data show that changes in related cultural values and social attitudes come slowly. 97) FALSE The demographic data show that changes in related cultural values and social attitudes come slowly. 98) TRUE The product-market screening criteria include both quantitative and qualitative components. The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. These help a manager decide what kind of opportunities to pursue. 99) FALSE The product-market screening criteria include both quantitative and qualitative components. 100) FALSE

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The product-market screening criteria include both quantitative and qualitative components. Screening criteria summarize in one place what the firm wants to accomplish; thus, marketing decisions are not just made or accepted based on intuition and gut feel. 101) TRUE Forecasts of the probable results of implementing a marketing strategy to apply the quantitative part of the screening criteria is needed because only implemented plans generate sales, profits, and return on investment. 102) TRUE General Electric's (GE) strategic planning grid forces company managers to make three-level judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. 103) TRUE General Electric's (GE) strategic planning grid forces company managers to make three-level judgments (high, medium, and low) about the business strengths and industry attractiveness of all proposed or existing product-market plans. 104) FALSE Opportunities that fall into the red boxes (lower right-hand corner of the grid) suggest a no-growth policy. 105) FALSE Yellow businesses are borderline cases, where opportunities are rated "medium" in terms of both industry attractiveness and business strengths. GE may continue to support an existing yellow business but will probably reject a proposal for a new one.

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106) TRUE GE's evaluation method is a subjective, multiple-factor approach. 107) FALSE GE's "stoplight" evaluation method is a subjective, multiple-factor approach. 108) FALSE In international markets it is often harder to fully understand the market environment variables. 109) FALSE The “continuum of environmental sensitivity” suggests that industrial products are more insensitive to the cultural environments in which they are placed than consumer products that are closely linked to social or cultural variables. 110) TRUE Most industrial products are near the insensitive end of the continuum of environmental sensitivity. 111) FALSE The "continuum of environmental sensitivity" suggests that industrial products are more insensitive to the cultural environments in which they are placed than consumer products that are linked to other cultural variables. 112) E Variables in the economic, technological, cultural, social, political, and legal environments affect strategy planning. 113) D

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Managers can't alter the variables of the market environment. However, they can select a strategy that leads the firm into a market where competition is not yet strong or where trends in the external market are likely to support market growth. 114) A The direct market environment includes customers, the company, and competitors. In contrast, the external market environment is made up of the economic environment, technological environment, political and legal environment, and cultural and social environment. 115) A There are four areas of the external market environment: technological, economic, cultural and social, and political and legal. 116) E Variables in the economic, competitive, cultural, and legal environments affect strategy planning, and since managers can't alter these variables, they are considered uncontrollable. 117) A The direct market environment includes customers, the company, and competitors. 118) D The direct market environment includes customers, the company, and competitors. 119) C The direct market environment includes customers, the company, and competitors. Interest rates are part of the economic environment, which is more broadly part of the external market environment. 120) E Version 1

Company objectives should shape the direction and operation of the whole business. It is difficult to set objectives that really guide the present and future development of a company. 121) C Setting whole company objectives is ultimately the responsibility of top management. Top management must look at the whole business, relate its present objectives and resources to the external environment, and then decide what the firm wants to accomplish in the future. 122) C A mission statement sets out the organization's basic purpose for being. A good mission statement focuses on a few key goals rather than embracing everything. 123) E A mission statement sets out the organization's basic purpose for being. A good mission statement should focus on a few key goals rather than embracing everything. 124) E Company objectives guide managers as they search for and evaluate opportunities—and later plan marketing strategies. 125) E The mission statement sets out the organization's basic purpose for being. A good mission statement should focus on a few key goals rather than providing specific detailed objectives. 126) B A mission statement sets out the organization's basic purpose for being. 127) E

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Overall company objectives should be specific, provide guidance in screening possible opportunities, and must be realistic and achievable. 128) D When setting objectives, managers should keep in mind what is realistic and achievable. Overly ambitious objectives are useless if the firm lacks the resources to achieve them. 129) E Company objectives should guide managers in determining which opportunities to pursue. 130) C As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then sales promotion objectives. 131) B As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then sales promotion objectives. 132) D Firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, and then advertising objectives. 133) E As stated in Exhibit 3–2, firms need a hierarchy of objectives, moving from company objectives to marketing objectives, promotion objectives, product objectives, and then sales promotion objectives. 134) A

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Every firm has some unique resources, and opportunities come from making use of these strengths. 135) C The opportunities a firm decides to pursue may depend on its resources and capabilities. A firm's expertise in drilling for oil can easily be expanded to capitalize on a new opportunity of drilling for natural gas. 136) B Every firm has some unique resources, and opportunities come from making use of these strengths. 137) E When looking for opportunities, a marketing manager should analyze the firm's present products and markets, producing capability and flexibility, financial strengths, and existing marketing resources. 138) D Access to large amounts of capital from a long-term relationship with a local bank would be a financial strength, not a marketing strength. 139) D Many new—or smaller—firms sometimes have the advantage of flexibility. They are not handicapped with large, special-purpose facilities that are obsolete or poorly located. Many firms increase flexibility by not having any "in-house" manufacturing for their brands. 140) E The competitive environment affects the number and types of competitors the marketing manager must face and how they may behave. 141) B

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Marketing managers should actively seek sustainable competitive advantage, a marketing mix that customers see as better than a competitor's mix and that cannot be quickly or easily copied. 142) B Most marketing managers in developed economies face monopolistic competition. In monopolistic competition, a number of different firms offer marketing mixes that at least some customers see as different. Each competitor tries to get control (a monopoly) in its own target market. But competition still exists because some customers see the various alternatives as substitutes. 143) C A competitor analysis is an organized approach for evaluating the strengths and weaknesses of competitors' marketing strategies. To identify potential competitors, it is useful to take the viewpoint of target customers. Companies may offer quite different products, but they are competitors if customers see them as offering close substitutes. 144) A The competitive environment affects the number and types of competitors the marketing manager faces and how they may behave. Although marketing managers usually can't control these factors, they can choose strategies that avoid head-on competition. 145) B In oligopoly there are a few large firms competing, whereas in pure competition there are often many firms. In oligopoly and pure competition, competitors offer very similar marketing mixes, and customers see the alternatives as close substitutes. 146) A Most product-markets head toward pure competition over the long run. Version 1

147) D Most product-markets head toward pure competition over the long run. 148) B In pure competition, competitors offer very similar marketing mixes. Because customers see the different available products as close substitutes, managers just compete with lower and lower prices, and profit margins shrink. 149) A In monopoly situations, one firm completely controls a broad productmarket. 150) B In monopolistic competition, different firms offer marketing mixes that at least some customers see as different. Each competitor tries to get control (a monopoly) in its "own" target market. 151) C A competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. To identify potential competitors, it is useful to take the viewpoint of target customers. Companies may offer quite different products, but they are competitors if customers see them as offering close substitutes. 152) D Most marketing managers in developed economies face monopolistic competition. 153) E

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Competitor analysis is an organized approach for evaluating the strengths and weaknesses of current or potential competitors' marketing strategies. 154) C Competitive rivals are firms that will be the closest competitors. 155) B Competitive rivals are firms that will be the closest competitors. 156) A Market share is the portion of total sales in a product category accounted for by a particular brand. The market share of Dell laptops in the United States is the portion of Dell laptops sold in the United States in a given period of time as compared to all laptops sold in the United States. 157) A Market share is the portion of total sales in a product category accounted for by a particular brand. The percent of Toyota sedans sold in the United States as compared to all sedans sold in the United States over the same period is an example of market share. 158) E A marketing manager would track market share for all of these reasons. 159) A A firm that puts all of its marketing information on a public website for customers also makes it readily available to competitors. 160) D The economic environment can, and does, change quite rapidly. It refers to macroeconomic factors that affect patterns of consumer and business spending.

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161) C The economic environment refers to macroeconomic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. While marketers encounter many challenges from the external market environment, the inability of firms to acquire financing is usually due to forces in the economic environment. 162) E Marketers that evaluate opportunities during an economic downturn can expect depressed consumer spending and a potential lack of financing from lending institutions. These considerations arise from within the economic environment. 163) E The economic environment refers to macroeconomic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending. 164) E Interest rates and inflation are part of the economic environment. 165) E Changes in the economy are often accompanied by changes in the interest rate. Many consumers borrow money to buy expensive purchases, like a new home or car, and then pay back the money with interest. Interest rates directly affect the total price borrowers must pay for products. So the interest rate affects when, and if, they will buy. 166) B Rising costs and inflation are part of the economic environment. 167) A Version 1

Changes in the economy are often accompanied by changes in the interest rate. 168) A In the economic environment, interest rates directly affect the total price borrowers must pay for products; so the interest rate affects when, and if, they will buy. 169) D In the economic environment, interest rates directly affect the total price borrowers must pay for products; so the interest rate affects when, and if, they will buy. 170) B Changes in the economy are often accompanied by changes in the interest rate. This is part of the economic environment. 171) D Technology is the application of science to convert an economy's resources to output. 172) B Technology has led to the increasing use of online advertising, most notably search-related advertising. 173) A Technology is the application of science to convert an economy's resources to output. 174) E Laws are part of the legal environment, not the technological environment. 175) D Version 1

Technology affects marketing in two basic ways: opportunities for new products and development of new processes. All the examples given illustrate new products or new processes. 176) D Technology affects marketing in two basic ways: opportunities for new products and development of new processes. 177) A Artificial intelligence refers to having machines operate like humans with respect to learning and decision making. The ability of Google Photos to automatically label photos using image recognition is the best example of artificial intelligence. 178) A Intelligent agents are devices that observe an environment and act to achieve a goal. 179) E All of these are examples of the use of artificial intelligence in our everyday lives. 180) A Many companies today use AI to deliver better customer service—and more value—to customers. 181) A Machine learning refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming. 182) A

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Machine learning refers to a type of computer algorithm where a software application becomes more accurate in predicting outcomes without actual programming. Through machine learning, a program makes predictions, receives feedback on whether it was correct or not, and then updates the program. With access to a lot of data, machine learning can help a software program learn a specific skill rather quickly. 183) A With access to a lot of data, machine learning can help a software program learn a specific skill rather quickly. 184) C Nationalism is an emphasis on a country's interests before everything else. 185) E In the political environment, nationalism is an emphasis on a country's interests before everything else. 186) B One issue in the political environment is nationalism. 187) D The attitudes and reactions of people, social critics, and governments all affect the political environment. Consumers in the same country usually share a common political environment, but the political environment can also affect opportunities at a local or international level. 188) B The "Buy American" policy in many government contracts and business purchases reflects nationalistic feelings in the United States and is an example of nationalism. Version 1

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189) A Twenty years ago, each country in Europe had its own unique trade rules and regulations but now almost 30 countries of the European Union (EU) are reducing conflicting laws, taxes, and other obstacles to trade within Europe. 190) B Since its inception in 1994, the North American Free Trade Agreement (NAFTA), and its later replacement the United States–Mexico–Canada Agreement (USMCA), has reshaped the rules of trade among the United States, Canada, and Mexico. 191) B "Egg Sales Fall as Consumers Switch to Low Cholesterol Diets" would be least likely to involve the political environment. It would instead involve the cultural and social environment. 192) A After a few decades of movement toward free trade, the United States and some other countries have recently begun to impose trade restrictions. 193) E After free trade moved many jobs out of the country, American workers sought greater protection for their jobs. Emerging economies often have fewer laws that protect workers and the environment, opponents of free trade argue that this subjects women and children to grueling working conditions and degrades natural resources. 194) B American economic and legislative thinking is based on the idea that competition among many firms helps the economy.

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195) A Businesses and individual managers are subject to both criminal and civil laws. Penalties for breaking civil laws are limited to blocking or forcing certain actions—along with fines. 196) B Attempts by business to limit competition are considered contrary to the public interest. More than a century ago, Congress passed a series of antimonopoly laws that were designed to keep one company from dominating the market. 197) D A tapestry of state and local laws may necessitate adapting marketing strategies to local requirements. 198) A The legal environment regulates marketing practices for the purpose of protecting consumers, promoting competition, or prohibiting deceptive marketing practices. 199) A American economic and legislative thinking is based on the idea that competition among many firms helps the economy. 200) D The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 201) E The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. Version 1

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202) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 203) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 204) A The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 205) D The Sherman Act (1890) outlawed anticompetitive activities (for example, when two or more companies conspire to set prices) and actions that create or attempt to monopolize a market. 206) B The Clayton Act (1914) focused on anticompetitive practices that did not fall under the Sherman Act. 207) D The Clayton Act (1914) focused on anticompetitive practices that did not fall under the Sherman Act. 208) A

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Some consumer protections are built into the English and U.S. common law systems. A seller must tell the truth (if asked a direct question), abide by contracts, and stand behind the firm’s product (to some reasonable extent). The legislature has introduced laws in situations where the average consumer may not have the ability to make informed judgments, as in the case of consumer privacy. 209) A Beyond the few protections built into the common law system, it is expected that vigorous competition in the marketplace will protect careful consumers. 210) A The legal environment exists of laws that promote competition among other things. 211) A The Consumer Product Safety Act (of 1972) set up the Consumer Product Safety Commission. 212) A The Consumer Product Safety Act (of 1972) set up the Consumer Product Safety Commission. The CPSC has broad power to set safety standards and can impose penalties for failure to meet these standards. 213) A The Consumer Product Safety Commission has the power to force a product off the market or require expensive recalls to correct problems. 214) E

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Besides federal legislation and consumer protections built into the English and U.S. common law systems, marketers must be aware of state and local laws, which vary but contain important regulations. Prosecution is serious, and businesses and individual managers are subject to both criminal and civil laws. 215) B The cultural and social environment affects how and why people live and behave as they do. 216) C Baby Boomers born between 1946 and 1964 are a powerful demographic force, as there are large numbers of people in this group. 217) C The cultural and social environment affects how and why people live and behave as they do. Some examples are the languages people speak; the type of education they have; and their religious beliefs. 218) A Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 219) B Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family.

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220) D Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. Fitness is a variable in this environment, also. 221) B Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. Physical fitness is a variable in this environment, also. 222) D Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 223) B The example of the toy manufacturer recalling a playpen is part of the legal environment. 224) C Many variables make up the cultural and social environment. Some examples are the languages people speak; the type of education they have; their religious beliefs; what type of food they eat; the style of clothing and housing they have; and how they view work, marriage, and family. 225) C Version 1

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Many organizations now screen opportunities on sustainability—the idea that it's important to meet present needs without compromising the ability of future generations to meet their needs. Many major firms are testing reusable containers for their products. PepsiCo now uses refillable glass bottles for its Tropicana orange juice. 226) C Many organizations now screen opportunities on sustainability—the idea that it's important to meet present needs without compromising the ability of future generations to meet their own needs. 227) A As shown in Exhibit 3–3, Norway has 100 percent literacy. 228) B Many variables make up the cultural and social environment, including the types of food that different people eat. 229) C Between 2013 and 2025, population growth will be about 9 percent in the United States. 230) C Just 50 years ago about two-thirds of the world's population lived in rural areas. Today about half live in urban areas as more people move to cities for better job opportunities. 231) D The world's population is growing fast, but that population growth varies dramatically from country to country. Between 2013 and 2025, population is projected to grow more than 35 percent in Ethiopia and Nigeria. During this same period, growth will be about 9 percent in the United States and 3 percent in China. Version 1

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232) B Between 2013 and 2025, population is projected to grow 35 percent or more in Ethiopia and Nigeria. 233) E Between 2013 and 2025, the population is projected to grow more by 35 percent in Ethiopia. 234) E Between 2013 and 2025, population growth will be about 9 percent in the United States. 235) A See Exhibit 3–3. Between 2013 and 2025, some European countries like Germany will experience declining populations. 236) B In Ethiopia, 25 percent or less of the population lives in urban areas. 237) B See Exhibit 3–3. Population density in the U.S. is only 35 per square kilometer, but in Singapore, for example, it is 7,807. 238) D As shown in Exhibit 3–3, Singapore has the highest population density. 239) B As shown in Exhibit 3–3, 100 percent of Singapore's population was in urban areas. 240) A Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. Version 1

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241) E Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 242) B Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 243) A Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. 244) C There are a variety of different measures of national income. One widely used measure is gross domestic product (GDP). 245) A There are a variety of different measures of national income. One widely used measure is gross domestic product (GDP). 246) A GDP is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country; thus, it is affected by economic conditions and the productivity of the country's workers. 247) E

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Two widely used measures of national income are GDP and GNI. GNI does not include income earned by foreigners, but GDP does include foreign income. Using GDP income measures can give the impression that people in less-developed countries have more income than they really do. Both GDP and GNI are highest in more developed industrial nations. 248) B Gross domestic product (GDP) is the total market value of all goods and services provided in a country's economy in a year by both residents and nonresidents of that country. Gross national income (GNI) is a measure that is similar to GDP but does not include income earned by foreigners. 249) A Gross national income (GNI) is a measure that is similar to GDP but does not include income earned by foreigners. 250) C Gross national income (GNI) is one of the widely used measures of income for different countries. 251) A Gross national income (GNI) is one of the widely used measures of income for different countries. 252) A GNI is affected by economic conditions and the productivity of workers in the country. 253) D GNI is a measure that is similar to GDP but does not include income earned by foreigners. 254) B Version 1

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GNI does not include income earned by foreigners, but GDP does include foreign income. 255) A Exhibit 3–3 gives the GNI per capita in the United States as $55,980, but it shows a higher GNI per capita in both Norway and Australia. 256) C GNI per capita (per person) is a useful figure because it gives some idea of the income level of people in the country. 257) C Of the choices given, the United States and Australia have the highest GNI per capita. See Exhibit 3–3. 258) C Of the choices given, Ethiopia and Haiti have the lowest GNI per capita. See Exhibit 3–3. 259) B The United Nations estimates that 14 percent of adults (aged 15 or older) in the world cannot read and write. 260) A As shown in Exhibit 3–3, Russia (and Norway) have the highest literacy rate. 261) C Of the choices given, Bangladesh has the lowest literacy rate. See Exhibit 3–3. 262) A As shown in Exhibit 3–3, Norway (and Russia) have 100 percent literacy. Version 1

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263) C See Exhibit 3–3. Italy had just 66 percent of its population using the Internet in 2015. 264) A As shown in Exhibit 3–4, California is the state with the largest population. 265) A The greatest growth is in the western and southeastern United States. 266) D The median age is growing because the percentage of the population in older age groups has increased. 267) B As shown in Exhibit 3–5, three age bands show a large increase by 2025:60–69, 70–79, and 80+. 268) C Baby Boomers born between 1946 and 1964 are a powerful demographic force, as there are large numbers of people in this group. 269) D See Exhibit 3–5. 270) A Generation Y, sometimes called Millennials, refers to the generation born from 1978 to 1994. 271) C Generation X, sometimes called Gen X, refers to the generation born immediately following the baby boom—from 1965 to 1977. 272) D Version 1

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Baby Boomers are those born between 1946 and 1964. 273) A See Exhibit 3–5. 274) D Of the choices given, Generation Y, sometimes called Millennials, is the most techno-savvy. 275) D Generation Z refers to those born since 1995. This group is still young, so ideas about its emerging values are speculative. The Zs are part of a more ethnically diverse United States than their parents and appear to be more accepting of different cultures, races, and religions. 276) B Generation Z refers to those born since 1995. This group is still young, so ideas about its emerging values are speculative. 277) A Marketing managers need to be cautious when using generational generalizations as anything more than a starting point. When developing a strategy, marketing managers should focus on a more specific target market. 278) A The 50- to 59-year-old age group is actually going to decline in population between 2015 and 2025. See Exhibit 3–5. 279) A Changes in related cultural values and social attitudes come slowly. 280) E

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Managers can't alter these uncontrollable variables of the market environment. 281) A The first thing to do when evaluating product-market opportunities is to analyze the firm's resources and the objectives of top management. 282) D When developing product-market screening criteria, managers should include quantitative components such as sales, profit, and return on investment (ROI). 283) B Since modern design is a key strength at IKEA, the company would be likely to screen out business opportunities in antique furniture reproductions. 284) E A set of product-market screening criteria should analyze the firm's resources (for strengths and weaknesses), the environmental trends the firm faces, and the objectives of top management. 285) E Product-market screening criteria should include both quantitative and qualitative components, be achievable, and summarize in one place what the firm wants to accomplish. 286) D Product-market screening criteria should include both quantitative and qualitative components and should be realistic and achievable. 287) A When evaluating product-market opportunities, marketers must analyze the firm's resources and the objectives of top management. Version 1

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288) C The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. The qualitative components summarize what kinds of businesses the firm wants to be in, what businesses it wants to exclude, what weaknesses it should avoid, and what resources (strengths) and trends it should build on. 289) E The quantitative components summarize the firm's objectives: sales, profit, and return on investment (ROI) targets. The qualitative components summarize what kinds of businesses the firm wants to be in, what businesses it wants to exclude, what weaknesses it should avoid, and what resources (strengths) and trends it should build on. 290) A When evaluating the potential of possible opportunities (product-market strategies), it is important to evaluate similar things—that is, whole plans over longer time periods. 291) E When a firm has many scenarios to evaluate, it usually has to compare quite different ones. This problem is easier to handle with graphical approaches such as the nine-box strategic planning grid used by many companies. 292) C General Electric's (GE) strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. 293) C

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The industry attractiveness dimension helps managers answer this question: Does this product-market plan look like a good idea? 294) C The business strengths dimension of the GE focuses on the ability of the company to pursue a product-market plan effectively. 295) D General Electric's strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness. 296) E General Electric's strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness and focuses on the ability of the company to pursue a product-market plan effectively. It is a subjective, multiple-factor approach. 297) A In a General Electric's strategic planning grid, yellow businesses are borderline cases wherein opportunities are rated "medium." 298) C GE feels opportunities that fall into the green boxes of the grid are its best growth opportunities. 299) B When an opportunity is low on the business strengths dimension but high on industry attractiveness, GE may continue to support an existing business but will probably reject a proposal for a new one. 300) B GE's evaluation method is a subjective, multiple-factor approach. Version 1

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301) E GE's planning grid approach could be adapted by another firm that might modify the evaluation to emphasize other screening criteria, depending on its objectives and the type of product-market plans it is considering. 302) E General Electric's (GE's) strategic planning grid forces company managers to make three-level judgments about the business strengths and industry attractiveness of all proposed or existing product-market plans. GE's "stoplight" evaluation method is a subjective, multiple-factor approach. 303) A Due to their lack of familiarity, managers have difficulty understanding the market environment variables of other nations. 304) D A local citizen who knows the market environment may be able to identify an obvious problem ignored even in a careful analysis; thus, it is very useful for the analysis to include inputs from locals. 305) A The "continuum of environmental sensitivity" suggests that some products are more adaptable to international markets than others. 306) B Most industrial products are near the insensitive end of continuum of environmental sensitivity. 307) A Most industrial products are near the insensitive end of the continuum of environmental sensitivity. Version 1

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308) B Most industrial products are near the insensitive end of the "continuum of environmental sensitivity." Consumer products closely linked to other social or cultural variables are near the sensitive end of this continuum.

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CHAPTER 4 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) A market is a group of two or more sellers who offer substitute ways of satisfying customer needs. ⊚ ⊚

true false

A market is a group of competitors selling similar products. ⊚ ⊚

true false

3) The main difference between a "product-market" and a "generic market" is whether customer needs are similar or different. ⊚ ⊚

true false

A generic market description looks at markets broadly and from a customer's viewpoint. ⊚ ⊚

true false

5) A generic market is a market in which sellers offer substitute products which are so similar that customers see them as "all the same." ⊚ ⊚

true false

6) A product-market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. ⊚ ⊚

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7) A firm's "relevant market for finding opportunities" should be bigger than the present product-market but not so large that it couldn't expand and still be an important competitor. ⊚ ⊚

true false

Product type describes the goods and/or services that customers want. ⊚ ⊚

true false

9) The definition of a product-market includes a product type, while the definition of a generic market does not include a product type. ⊚ ⊚

10)

true false

A generic market description includes customer needs and product-type terms. ⊚ ⊚

true false

11) Effective market segmentation is a two-step process that starts with naming broad product-markets and then goes on to segmenting these broad product-markets into more homogeneous submarkets. ⊚ ⊚

true false

12) Market segmentation is a two-step process that involves naming broad product-markets and segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. ⊚ ⊚

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13) Market segmentation says that target marketers should develop one good marketing mix aimed at a fairly large market. ⊚ ⊚

14)

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Marketing-oriented managers think of segmenting as a disaggregating process. ⊚ ⊚

true false

15) Marketing-oriented managers see segmenting as a process of aggregating people with similar needs into a group. ⊚ ⊚

true false

16) Ideally, segmenters should start with the idea that each person is "one of a kind" and can be described by a special set of dimensions that may be used to aggregate similar customers together. ⊚ ⊚

true false

17) One of the difficult things about segmenting is that not every customer will neatly fit into some market segment. ⊚ ⊚

true false

18) The correct number of submarkets in a broad product-market is usually obvious, so the likelihood of managerial error is small. ⊚ ⊚

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19) A "good" market segment should be composed of people who are as homogeneous as possible with respect to their likely responses to marketing mix variables. ⊚ ⊚

true false

20) "Homogeneous within" means that the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. ⊚ ⊚

true false

21) "Good" market segments should be homogeneous (similar) within, heterogeneous (different) between, substantial, and operational. ⊚ ⊚

22)

true false

"Good" market segments should be heterogeneous within and homogeneous between. ⊚ ⊚

true false

23) If a product-market segment is "homogeneous within," it is called a "substantial" target market. ⊚ ⊚

24)

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A "substantial" market segment is one that is big enough to be profitable. ⊚ ⊚

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25) Saying that a market segment is "substantial" means that it contains customers from a variety of demographic variables. ⊚ ⊚

true false

26) Planning the Place and Promotion elements of a marketing mix is especially difficult if the dimensions of a product-market are not operational. ⊚ ⊚

27)

true false

A product-market segment is "operational" if it is big enough to be profitable to the firm. ⊚ ⊚

true false

28) A personality trait like moodiness is a good example of an "operational" segmenting dimension. ⊚ ⊚

true false

29) With the "multiple target market approach," the marketer combines two or more homogeneous submarkets into one larger target market as a basis for one strategy. ⊚ ⊚

true false

30) The combined target market approach involves segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix. ⊚ ⊚

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31) A manager who aggregates all potential customers into a single product-market segment is likely to find that the segment is not homogeneous. ⊚ ⊚

true false

32) The more heterogeneous a firm's target market becomes, the more likely the firm will see competition from an innovative segmenter. ⊚ ⊚

true false

33) A segmenter is more likely than a combiner to really satisfy a target market and build such a close relationship with customers that it faces no real competition. ⊚ ⊚

true false

34) A profit-oriented firm will usually want to continue aggregating potential customers into larger submarkets until every consumer fits neatly into some segment. ⊚ ⊚

true false

35) Making a very specific marketing mix for a particular group is always less profitable than a more general marketing mix that appeals to a larger segment. ⊚ ⊚

true false

36) Cost considerations usually favor more aggregating and larger market segments, but smaller segments may be required to satisfy needs more exactly. ⊚ ⊚

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37) Dimensions that should be considered when segmenting consumer markets are: geographic location and other demographic characteristics; behavioral needs; urgency to get needs satisfied; and willingness to compare and shop. ⊚ ⊚

true false

38) When segmenting markets, one should look at geographic location and demographic characteristics, as well as customers' desire and willingness to compare and shop; but behavioral needs aren't important for this purpose. ⊚ ⊚

true false

39) Segmenting a broad product-market usually requires using several segmenting dimensions at the same time. ⊚ ⊚

true false

40) Market segmentation applies only to consumer goods and services; it cannot be applied to business products. ⊚ ⊚

true false

41) Qualifying dimensions are those that actually affect the customer's purchase of a specific brand in a product-market. ⊚ ⊚

true false

42) A determining dimension for segmenting markets actually affects the purchase of a specific brand in a product-market.

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⊚ ⊚

true false

43) A marketing manager who is able to use qualifying dimensions in forming market segments will not need to worry about determining dimensions. ⊚ ⊚

true false

44) The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. ⊚ ⊚

45)

true false

International marketing typically requires less segmenting than domestic markets. ⊚ ⊚

true false

46) A firm involved in international marketing should pay even more attention to segmenting than a firm that sells only in the United States. ⊚ ⊚

true false

47) The first step in segmenting international markets is to group countries that are close to each other into "common markets." ⊚ ⊚

48)

true false

Clustering techniques try to find similar patterns within sets of data. ⊚ ⊚

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49) Clustering is a technique that divides a large group of people into smaller groups, so that each small group is as diverse as the large group from which it was formed. ⊚ ⊚

true false

50) Clustering techniques can be used in segmenting to help find similar patterns within sets of data to identify homogeneous groups of people. ⊚ ⊚

true false

51) Computer-aided segmenting approaches eliminate the need for managerial judgment and intuition in selecting segmenting dimensions. ⊚ ⊚

true false

52) A firm is most likely to rely on customer relationship management (CRM) approaches when it does not have a database of information on individual customers. ⊚ ⊚

53)

CRM is a variation of the positioning approach. ⊚ ⊚

54)

true false

CRM approaches are based on information from detailed customer databases. ⊚ ⊚

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55) Many e-commerce companies have the ability to track and store real-time data on a customer in order to continuously update a customer’s placement in a market segment. ⊚ ⊚

true false

56) By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. ⊚ ⊚

true false

57) "Positioning" shows how proposed and/or present brands are located in a market as seen by customers. ⊚ ⊚

true false

58) "Positioning" means using a map to show where a firm's products are distributed geographically. ⊚ ⊚

true false

59) Positioning issues are especially important when competitors in a market appear to be very similar. ⊚ ⊚

60)

A positioning analysis is a product-oriented approach. ⊚ ⊚

61)

true false

Positioning analysis may lead a firm to segmenting, rather than combining.

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⊚ ⊚

true false

62) Marketing managers for Mountain Dew used a positioning statement to help focus efforts and gain market share in a competitive environment. ⊚ ⊚

true false

63) Sometimes marketing managers use a positioning statement to provide focus for a marketing mix. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 64) A "market" consists of A) customers who are willing to exchange something of value. B) a group of potential customers with similar needs. C) sellers offering various ways of satisfying customer needs. D) All of the answers are correct.

65)

The process of marketing strategy planning is about

A) identifying as many market opportunities as can be imagined. B) narrowing down possible market opportunities to the most attractive ones. C) creating products that managers like. D) choosing the most profitable market opportunity, regardless of the firm's current abilities and resources. E) figuring out how to offer products at the lowest possible price.

66)

When identifying a company's market, managers need to avoid the mistake of

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A) finding out what customers need. B) thinking of a market as a group of customers with similar needs who will exchange money for goods and services that meet those needs. C) trying to identify specific target markets within a general market. D) describing their markets solely in terms of the products they sell. E) thinking of the issue from the customer's point of view.

67) To understand the narrowing-down process, it is useful for managers to think in terms of a ________ market and a ________ market. A) generic; product B) buyer's; seller's C) goods; services D) primary; secondary E) risky; certain

68) A market in which sellers offer various, often diverse, ways of satisfying needs is called a ________ market. A) product B) diverse C) general D) relevant E) generic

69) A ________ is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services.

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A) segment B) market C) product D) consumer forum E) generic industry

70)

A marketing manager has just learned about generic markets. This may lead the manager

A) to see a larger set of potential competitors. B) to put less emphasis on market penetration or market development opportunities and more emphasis on product development opportunities. C) to think about new ways of satisfying the needs of his or her current customers. D) All of the answers are correct.

71)

Compared to a product-market, a generic market A) is more narrowly defined. B) has sellers offering a more diverse set of products. C) can never help marketers identify opportunities. D) None of these answers is correct.

72)

Which of the following is most likely to happen in a generic market? A) Sellers offer various, often diverse, ways of satisfying broadly similar needs. B) Consumers are offered various close substitute ways of satisfying needs. C) Everything is the same as in a product-market. D) Customers have very diverse needs. E) Sellers produce unbranded products.

73) A ________ market is a market with broadly similar needs and sellers offering various— and often diverse—ways of satisfying those needs. Version 1

A) planned B) target C) central D) generic E) relevant

74) A ________ market is a market with broadly similar needs and sellers offering various— and often diverse—ways of satisfying those needs. A) homogeneous B) product C) relevant D) generic E) target

75)

A generic market A) may include sellers who compete in different product-markets. B) would probably be broader than the firm's target market. C) might be composed of several different product-markets. D) has sellers offering a more diverse set of products. E) All of the answers are correct.

76)

In a generic market, A) diverse types of products may compete for customers. B) customers have broadly similar needs. C) there may be many ways to satisfy customers' needs. D) sellers may compete in different product-markets. E) All of the answers are correct.

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77)

A generic market is one in which

A) products from different industries compete for customers by trying to satisfy the same basic need. B) no firm can establish a competitive advantage. C) a number of firms are all offering new or improved products in an effort to increase sales. D) one seller has a patent for a superior product and other competitors imitate the leader with inferior products. E) None of the answers is correct.

78)

A generic market A) related to a consumer's functional need is smaller than a related product-market. B) might involve competition among skis, roller blades, bicycles, and ice skates. C) might logically include rubber, cement, a lamp, and a CD player. D) is usually narrower than the firm's target market. E) All of the answers are correct.

79) A digital camera, a computer video camera, and a computer scanner might compete in the same A) single target market. B) generic market. C) multiple target market. D) combined target market. E) product-market.

80) A smartphone, a subscription to Spotify, and a portable CD player might compete in the same

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A) single target market. B) multiple target market. C) product-market. D) combined target market. E) generic market.

81)

A pencil, a dictating machine, and a computer might compete in the same A) target market. B) generic market. C) product-market. D) Any of the answers could be correct.

82)

Which of the following is the best example of a generic market? A) the senior citizen recreation market B) the designer shoes market C) the frozen yogurt market D) the transportation market E) the Hispanic-American market

83)

Which of the following is the best example of a generic market? A) the meat market B) the minivan market C) the e-commerce market D) the beer market E) the "singles" entertaining market

84)

Which of the following is the best example of a generic market?

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A) the adult "personal expression" market B) the roller blade market C) the female exercise shoes market D) the sports drink market E) the sporting goods market

85) Which of the following is least likely to compete in the same generic market with the others? A) garlic powder B) pepper C) Tabasco sauce D) salt E) potato chips

86) Which of the following is least likely to compete in the same generic market with the others? A) long-stem roses B) tomatoes C) champagne D) greeting cards E) telegrams

87) Which of the following is least likely to compete in the same generic market with the others? A) popcorn B) soft drinks C) napkins D) cookies E) ice cream

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88) Which of the following is least likely to compete in the same generic market as the others? A) ice cream B) apple pie C) fruit salad D) chocolate chip cookies E) pretzels

89)

Which of the following is the worst example of a generic market? A) the information storage market B) the recreation market C) the designer jeans market D) the home improvement market E) the entertainment market

90)

What is the main difference between a generic market and a product-market?

A) A generic-market involves a less similar set of needs than does a product-market. B) A product-market is usually larger than a generic market. C) Product-markets usually don't involve competition, but generic markets do. D) Sellers in a generic market are more concerned with prices than sellers in a productmarket. E) There is no difference between the two.

91)

One basic difference between a generic market and a product-market is seen in

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A) whether or not sellers in the market rely on e-commerce. B) how similar the competing sellers' products are. C) whether customer needs are similar or different. D) whether the market includes only buyers—or both buyers and sellers. E) There is no difference—the terms mean the same thing.

92) A ______ is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. A) generic market B) standard market C) target market D) global market E) product-market

93)

Which if the following describes a product-market most accurately?

A) Exchanges are based on barter rather than money. B) One seller has a patent for a superior product and other firms try to imitate the leader the best they can. C) All the customers want the same product but will consider a substitute if their preferred brand is not available. D) Competing sellers offer physically or conceptually similar products. E) No intermediaries operate in the market.

94)

A product-market is one in which

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A) products from different industries compete for customers by trying to satisfy the same basic need. B) price is the determining factor in deciding which brand to buy. C) all the customers want the exact same product but will consider a substitute if their preferred brand is not available. D) one seller has a monopoly and there is no competition. E) None of the answers is correct.

95)

A product-market is one in which

A) demand is inelastic. B) products that are close substitutes for each other compete for customers by trying to satisfy very similar needs. C) breakthrough opportunities are no longer possible. D) one seller has a patent for a superior product and other competitors try to imitate the leader. E) All of the answers are correct.

96)

A product-market is a market in which A) all sellers offer exactly the same product. B) one firm has achieved a competitive advantage. C) all sellers offer products that are unique and innovative. D) sellers offer very close substitute ways of satisfying potential customers' needs. E) sellers offer substitute products that are quite different, physically or conceptually.

97)

Which of the following is not true of a product-market? A) Competing suppliers offer close substitutes to satisfy needs. B) Customers in a product-market have very similar needs. C) Very different types of products may compete for consumer dollars. D) Naming product-markets includes consideration of where the customers are.

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98)

Which of the following is the best example of a product-market? A) the smartphone market B) the young adult exercise market C) the software market D) the convenience market E) the status symbol market

99) When you are "in the market" for a new car and are considering different brands to purchase, what type of market is involved? A) product-market B) qualifying market C) generic market D) determining market

100)

A firm's "relevant market for finding opportunities" should

A) have no geographic boundaries. B) be bigger than the firm's present product-market—but not so big that the firm couldn't be an important competitor. C) be no larger than the firm's present product-market. D) usually be named in product-related terms. E) have no strong competitors.

101)

Which of the following is true of a firm's "relevant market for finding opportunities"?

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A) It should be limited to products the firm already produces. B) It should be bigger than the firm's present product-market—but not so big that the firm could not be an important competitor. C) It should have no geographic boundaries. D) It should be as large as possible. E) It should be no larger than the firm's present product-market.

102)

A complete product-market definition includes all the following descriptions except A) what is the product type. B) who are the firm's competitors. C) what customers' needs will be satisfied. D) which customer types will desire the product. E) in which geographic region will the firm compete for customers.

103)

A product-market definition should include A) product type. B) customer types. C) customer needs. D) geographic area. E) All of the answers are correct.

104)

Which of the following is not part of a product-market definition? A) information about consumer needs B) information about the final customer (or user) of the product C) information about which specific retailers will sell the product D) a description of the type of product

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105) A complete product-market definition includes a four-part description comprising all of the following except A) geographic area. B) customer needs. C) customer types. D) product type. E) marketing mix.

106)

Unlike a generic market description, a product-market definition includes A) customer needs. B) customer types. C) geographic area. D) product type. E) an organization chart.

107)

A generic market definition includes all of the following except A) customer needs. B) product type. C) geographic area. D) customer type.

108)

The customer type component of the product-market should include A) the buyer of the product. B) the type of good and service. C) the user of the product. D) the geographic area in which customers live. E) the guarantees offered.

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109)

Customer type A) should be defined by identifying the buyer instead of the user. B) should be assigned a nickname that describes all potential types of customers. C) must always consider intermediaries even if they are not final users. D) refers to the final consumer or user of a product type. E) None of the answers is correct.

110)

A generic market definition includes A) customer (user) needs, customer types, geographic area, and product type. B) customer (user) needs, customer types, and geographic area. C) customer (user) needs, customer types, product design, and product type. D) customer types, product design, and product type. E) customer types, product design, product type, and customer needs.

111)

A generic market description should not include A) customer needs. B) geographic area. C) product type. D) customer types.

112)

A generic market description should not include A) customer needs. B) geographic area. C) competitors' names. D) customer types.

113)

One helpful way to find new opportunities is to

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A) use generic market names. B) use product-type terms in the market description. C) stick to a product-market description. D) define markets in terms of current products. E) avoid market segmentation.

114) For a product-market, which of the following refers to where a firm competes, or plans to compete, for customers? A) product type B) user needs C) customer types D) geographic area E) warranty period

115)

Why are product-market boundaries important? A) They provide focus. B) They identify similar needs. C) They specify marketing mix variables. D) They define the strategy. E) They compare competitor offers.

116) ________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. A) Market segmentation B) Strategic planning C) Mass marketing D) Market positioning E) Implementation

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117)

The process of market segmentation involves A) identifying small target markets and expanding them into broad product-markets. B) identifying broad product-markets and segmenting then into narrower target markets. C) identifying target groups with the fewest potential customers. D) selecting a marketing mix to reach everyone. E) identifying target markets based on consumers' gender alone.

118)

Which of the following is not a valid criterion of a "good" market segment? A) homogeneous within B) heterogeneous between C) substantial D) remarkable E) operational

119) ________ is the process of naming broad product-markets and then segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. A) Market positioning B) Market segmentation C) Mass marketing D) Diversification E) Strategic planning

120) The process of naming broad product-markets and then segmenting them in order to select target markets and develop suitable marketing mixes is called

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A) market penetration. B) market segmentation. C) market development. D) market research. E) market pioneering.

121)

The first step in market segmentation should be A) deciding what new product you could develop. B) evaluating what segment(s) you currently serve. C) finding a demographic group likely to use your products. D) listing features of your current products. E) defining some broad product-markets where you may be able to operate profitably.

122)

Which is the first step in market segmentation? A) finding one or two demographic characteristics to divide up the whole mass market B) clustering people with similar needs into a market segment C) naming a broad product-market of interest to the firm D) evaluating market segments to determine if they are large enough E) None of the answers is correct.

123)

Which of the following statements about market segmentation is not true? A) It starts by segmenting broad product-markets. B) It involves naming broad product-markets. C) A market grid with submarkets can be a visual aid to market segmentation. D) It segments broad product-markets in order to develop suitable marketing mixes. E) Segmenting is an aggregating process.

124)

The disaggregating step in market segmentation involves

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A) brainstorming about very different solutions to various generic needs. B) looking for similarities in needs. C) selecting target markets. D) developing suitable marketing mixes. E) selecting a target marketing approach.

125) The marketing management team for Dada Motors brainstormed a variety of solutions to the problem of how to transport people in the world. This process came during the ________ step in the market segmentation process. A) disaggregating B) market definition C) segmenting D) aggregating E) approach selection

126)

Which of the following is the most accurate characterization of segmenting? A) It is a disaggregating or "breaking down" process. B) It assumes that each person should be treated as a separate target market. C) It assumes that all customers can be clustered into profitable market segments. D) It is an aggregating process. E) It uses scientific rules to decide how many submarkets exist.

127)

Segmenting is best viewed as a(n) ________ process. A) assorting B) mechanical, nonjudgmental C) "clustering" or aggregating D) "breaking apart" or disaggregating E) combining

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128) What is the main difference between naming broad product-markets and market segmentation? A) Naming is a computerized process, while segmentation requires more thought. B) Naming is concerned with customers, while segmentation is concerned with product features. C) Naming involves breaking down markets, while segmentation involves aggregating customers with similar needs. D) Naming involves looking for similarities, while segmentation involves looking for differences. E) Naming identifies popular terms associated with the product, while segmentation identifies a market.

129)

The segmenting step of the segmentation process involves A) brainstorming possible marketing mixes. B) fitting potential customers neatly into market segments. C) disaggregating all possible needs. D) selecting a target marketing approach. E) looking for similarities in needs.

130) Which of the following is not likely to be a part of the segmenting step in market segmentation? A) looking for similarities rather than basic differences in needs B) naming a broad product-market of interest to the firm C) clustering people with similar needs into a "market segment" D) determining an appropriate number of segments E) aggregating individual customers into market segments

131) A ________ is a relatively homogeneous group of customers who will respond to a marketing mix in a similar way.

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A) market segment B) market grid C) consumer network D) market network E) generic market

132)

One visual aid used in market segmentation is called the A) marketing grid. B) target market. C) market boundary. D) homogenous market. E) heterogeneous market.

133)

Market segmentation A) means the same thing as marketing strategy planning. B) assumes that most submarkets can be satisfied by the same marketing mix. C) is the same thing as positioning. D) tries to identify homogeneous submarkets within a product-market. E) None of the answers is correct.

134) Given its interest in the broad product-market for "ready-to-eat, health-conscious snack foods," which of the following should the Good Health Foods Co. do first? A) develop a plan for getting support from intermediaries B) develop each of the Four Ps at the same time C) segment the product-market to try to identify homogeneous submarkets and select an attractive target market D) determine whether to compete on a price basis E) decide what low-fat product or products it will offer

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135)

"Good" market segments are those that are A) heterogeneous between. B) operational. C) substantial. D) homogeneous within. E) All of the answers are correct.

136)

"Good" market segments are those that are A) homogeneous between. B) heterogeneous within. C) operational and substantial. D) international in nature. E) substantial all the time.

137) Marketing managers want market segments to have each of the following characteristics except to be A) as similar as possible within segments. B) as different as possible between segments. C) as numerous as possible. D) useful for identifying marketing mix variables. E) large enough to be profitable.

138) Which of the following criteria should a marketing manager use when segmenting a broad product-market?

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A) The segments should be substantial (big enough to be profitable) and operational (useful for identifying customers and deciding on marketing mix variables). B) The people within a market segment should be as homogeneous as possible with respect to the segmenting dimensions and their likely response to marketing mix variables. C) The people in different market segments should be as heterogeneous as possible with respect to the segmenting dimensions and their likely response to marketing mix variables. D) All of the answers are correct.

139) Which of the following criteria should a marketing manager use when segmenting a broad product-market? A) The segments should be operational—i.e., only quantitative dimensions are useful. B) The people in different segments should be as heterogeneous as possible with respect to their likely response to marketing mix variables. C) The people within a market segment should be as heterogeneous as possible with respect to their likely response to marketing mix variables. D) The market segments should be substantial—i.e., big enough to minimize the firm's costs. E) The market should always be homogenous in nature.

140)

Saying that a good market segment should be "heterogeneous between" means that

A) the customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. B) the customers in a market segment should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. C) the customers in different segments should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. D) the customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. E) the segmenting dimensions should be useful for identifying different customers and deciding on marketing mix variables.

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141)

Saying that a good market segment should be "substantial" means that A) the company does not have to worry about substantial competition for a long time. B) people should have substantially different reactions to marketing mix variables. C) it should be large enough to be profitable. D) people in different market segments should be as different as possible. E) the product and its offerings are substantial in nature.

142) Use of which of the following segmenting dimensions is least likely to result in segments that will meet the criteria that product-market segments should be "operational"? A) geographic region B) personality C) family size D) age E) income level

143) A company plans to sell its products to a market segment consisting of "outgoing personalities." This will likely not be a good market segment, primarily because of which of the following criteria? A) homogeneous within B) heterogeneous between C) generic D) operational E) substantial

144)

A market-oriented strategy planner applies the ________ target market approach.

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A) combined B) multiple C) single D) Any of theanswers could be correct.

145)

Target marketers create marketing mixes for A) all customer needs. B) some generic market. C) multiple generic markets. D) one broad product-market. E) homogeneous product-market segments.

146) A target marketer who uses a single marketing mix strategy to appeal to both office tablet computer users and home tablet computer users is applying the A) broad market approach. B) single target market approach. C) multiple target market approach. D) combined target market approach. E) generic market approach.

147) A target marketer who uses two different marketing mix strategies to make two separate appeals to office tablet computer users and home tablet computer users is applying the A) broad market approach. B) single target market approach. C) multiple target market approach. D) combined target market approach. E) generic market approach.

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148)

Target marketers who are "segmenters"

A) increase the size of their target markets by combining two or more segments. B) use one marketing mix to appeal to multiple submarkets, even though the submarkets have some distinct differences. C) believe that one marketing mix works well enough with multiple submarkets, even though the target groups have some distinct differences. D) use one single marketing mix to appeal to an individual market segment and do not attempt to combine or merge segments together. E) are called mass marketers.

149) Which of the following does not identify one of the target marketing approaches for developing market-oriented strategies in a broad product-market? A) multiple B) single C) exclusive D) combined

150) Gina wanted to start a decorating business. She identified several possible target markets, but decided to serve a market composed of recently married couples that owned their first home. Gina appears to be following the ________ approach. A) multiple target market B) single target market C) combined target market D) mass marketing E) niche market targeting

151) A food processing company considering snack-food opportunities identified three possible market segments and gave them "nicknames": the dieters, the health faddists, and the nutrition-conscious parents. It developed a marketing mix around a line of good-tasting, nutritious children's snacks. The firm is apparently

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A) relying on cluster analysis techniques. B) using a multiple target market approach. C) using a single target market approach. D) using a combined target market approach. E) ignoring the criteria that good market segments should be operational.

152) Electro Technologies, Inc. (ETI) has limited capital and wants to reduce the risk of competitors taking customers if it invests in a new product-market. Its broad product-market consists of three reasonably distinct submarkets. To identify a target market, ETI should probably focus on using the ________ approach. A) combined target market B) mass marketing C) multiple target market D) single target market E) None of these is a good choice for Electro Technologies, Inc.

153) A large firm with ample resources wants to minimize the risk of "inviting" competitors to "chip away" at its target market(s). It has segmented its broad product-market and identified several homogeneous submarkets—each of which is large enough to offer attractive sales and profit potential. Which of the following approaches should the firm use? A) multiple target market approach B) mass marketing approach C) combined target market approach D) single target market approach E) niche market targeting approach

154) Jazzy Tile Co. segmented its broad product-market and decided to aim at two different segments, offering each segment a different marketing mix. Jazzy Tile Co. is following the ________ approach.

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A) mass marketing B) multiple target market C) combined target market D) single target market E) None of the answers is correct.

155) When Procter & Gamble offers both Pantene and Vidal Sassoon shampoos to its customers, which target market approach is Procter & Gamble using? A) multiple B) single C) combined D) generic E) clustering

156) When a firm develops a marketing mix for teenage boys that is different from its marketing mix for teenage girls, which target market approach is it using? A) single B) generic C) combined D) clustering E) multiple

157) Watson's Bakery found five different market segments among customers for its bakery goods. When developing a market-oriented strategy, the marketing manager used a ________ approach, putting two target markets together and developing a single marketing mix that would meet the needs of the new larger segment.

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A) particular target market B) multiple target market C) combined target market D) product-market target market E) specialty targeting

158) Merging two or more submarkets into one larger target market as a basis for one strategy is known as the ________ target market approach. A) particular B) multiple C) combined D) compound E) blended

159)

Combiners A) look at various submarkets for differences rather than similarities. B) try to increase the size of their target markets by merging two or more segments. C) aim at one or more market segments and offer each different marketing mixes. D) have decided to sacrifice profits for sales volume. E) aim at one submarket with a specialized marketing mix.

160)

Combiners (as opposed to segmenters)

A) try to satisfy target customers "very well" rather than "pretty well." B) try to develop a different marketing mix for each submarket. C) want to avoid "inviting" competition. D) are not target marketers—they aim at everybody. E) try to increase the size of their target markets by combining two or more market segments.

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161)

Which of the following statements about the combined target market approach is true?

A) Combiners feel that two or more segments are similar enough that—together—they can be treated as one large target market. B) Combiners try to extend their basic offering to satisfy customers from multiple segments with a single marketing mix. C) Combiners may fall victim to an innovative segmenter that offers a more attractive marketing mix to a segment of the combined target market. D) All of these statements about the combined target market approach are true.

162)

The combined target market approach

A) tends to focus on small, homogeneous market segments. B) aims at several target markets and offers each target market a unique marketing mix. C) tries to improve the general appeal of a firm's basic marketing mix rather than tailor it to meet the strongly felt needs of some people. D) works well only when each submarket of a product-market has a different demand curve. E) None of the answers is correct.

163)

A combined target market approach A) sacrifices possible economies of scale. B) requires more investment than a multiple target market approach. C) may not satisfy customers as well as the multiple target market approach. D) trades off sales volume to provide a small market superior value. E) aims at two or more segments with multiple marketing mixes.

164) Quality Ceramic, Inc. (QCI) defined five submarkets within its broad product-market. To obtain some economies of scale, QCI decided not to offer each of the submarkets a different marketing mix. Instead, it selected two submarkets whose needs are fairly similar, and is counting on promotion and minor product differences to make its one basic marketing mix appeal to both submarkets. QCI is using the Version 1

A) combined target market approach. B) single target market approach. C) multiple target market approach. D) mass marketing approach. E) None of the answers is correct.

165) Having segmented its broad product-market, Blue Chip, Inc. feels that three segments are similar enough that together they can be treated as one large target market and offered the same marketing mix. Blue Chip, Inc. is following the ________ approach. A) mass marketing B) multiple target market C) combined target market D) single target market E) None of the answers is correct.

166) In segmenting the smart watch product-market, smart watch maker Super Watch found one segment that valued sending text messages from their watch and another that wanted their watch to record their daily activity. The firm developed a single watch for both market segments and used the same marketing mix in targeting both segments. For this product-market, Super Watch operated as a A) combiner. B) value operator. C) market leader. D) segmenter. E) multisegmenter.

167) ________ aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.

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A) Combiners B) Segmenters C) Segment aggregators D) Segment combiners E) Multipliers

168) A producer of electrical components combined electrical supply wholesalers and manufacturers of electrical equipment into the same market segment—one of several segments it was targeting. Soon it lost the manufacturers' business to a competitor. It seems that the firm failed to consider the risk of A) too much aggregating. B) insulting the manufacturers by putting them in the same market segment with the wholesalers. C) picking market segments based on qualifying dimensions. D) selecting market segments that were not substantial. E) using too many segmenting dimensions.

169) Which of the following is a possible danger when using a combining approach to target marketing? A) Competitors may do a better job appealing to submarkets. B) Coordinating the different marketing mixes for the different segments is difficult. C) The target market may become larger over time. D) Economies of scale may develop. E) Effective product marketing mix variables are not achieved.

170)

"Too much" aggregating in market segmenting

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A) ignores the criterion that product-market segments should be substantial. B) leaves the firm vulnerable to competitors. C) is usually not a very serious error because it results in economies of scale. D) usually makes segments more homogeneous. E) always tends to make the segments heterogeneous.

171)

How is "segmenting" different from "combining"?

A) Combiners usually have more sales potential than segmenters. B) A combiner tries to meet the demand in several segments. C) Segmenters try to develop a marketing mix that will have general appeal for several market segments to obtain economies of scale. D) A segmenter assumes that a broad product-market consists of a fairly homogeneous group of customers. E) Both segmenters and combiners try to satisfy some people very well rather than a lot of people fairly well.

172)

Which of the following statements about segmenting is true?

A) Segmenting is usually a riskier approach than combining. B) Segmenters try to satisfy consumers "very well" instead of "pretty well." C) Segmenting limits a firm to smaller sales potential and lower profits. D) A segmenter with limited resources may have to use the multiple target market approach instead of the single target market approach. E) All of the answers are correct.

173)

Segmenting, in contrast to combining,

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A) tends to focus more on customer similarities than on differences. B) tries to identify homogeneous submarkets and develop different marketing mixes for each submarket. C) usually means settling for a smaller sales potential. D) relies more on promotion appeals and minor product differences to create general customer appeal among several submarkets. E) All of the answers are correct.

174)

Segmenters, in contrast to combiners, A) try to aim at homogeneous submarkets of larger product-markets. B) see one aggregate demand curve for a generic market. C) are accepting the likelihood of lower sales. D) assume that everyone in a broad product-market has the same needs. E) develop general-purpose marketing mixes that appeal to several submarkets.

175)

Which of the following statements about market-oriented strategy planning is true? A) Segmenters aim at more heterogeneous markets than combiners. B) Both "segmenters" and "combiners" can be target marketers. C) All segmenters follow the single target market approach. D) Combiners follow a mass marketing strategy. E) Most combiners follow a substantial market approach.

176)

How do combiners make compromises in developing the marketing mix?

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A) Combiners identify two or more segments and treat each as a separate market with differences. B) Combiners pick one of the many homogenous market segments as the firm's target market. C) Combiners look for similarities in the submarkets and try to extend or modify the basic offering. D) Combiners include demographic dimensions such as age, sex, income, location, and family size. E) Combiners look for operational markets that are homogenous within and heterogeneous in between.

177)

Which of the following tasks should a segmenter be engaged in? A) assuming a whole market with a similar set of customers B) fine-tuning the marketing mix for each target market C) merging various submarkets together to satisfy them more easily D) selecting a marketing mix that works fairly well with each segment E) providing a unique brand name that does not become common

178)

Which of the following offers a firm the greatest potential for profit? A) mass marketing B) the multiple target market approach C) the combined target market approach D) the single target market approach E) These can all offer profit potential equally—depending on the situation.

179)

When segmenting broad product-markets, cost considerations tend to

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A) encourage managers to disregard the criterion that a product-market segment should be substantial. B) lead to more aggregating. C) be unimportant as long as the segmenting dimensions are operational. D) lead to a large number of small, but very homogeneous, product-market segments. E) dissuade segmenters from exploring other variables in the market.

180) When segmenting markets, cost considerations typically encourage a company to ________ and ________. A) disaggregate; combine segments B) aggregate; use different segments C) disaggregate; use different segments D) aggregate; combine segments E) disaggregate; use one segment

181)

When deciding how far to carry the segmenting process,

A) profit should be the balancing point—determining how unique of a marketing mix the firm can offer to some target market. B) it is easier to develop effective marketing mixes for larger, more heterogeneous segments. C) cost considerations encourage less aggregating. D) the threat of potential competitors suggests more aggregating. E) segmenters should consider the demographic attributes of the target customers.

182) Which of the following statements about approaches to market-oriented strategy planning is not true?

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A) It is usually safer to be a combiner. B) Cost considerations encourage aggregating. C) Demand considerations encourage less aggregating. D) The approach a firm uses depends in part on the firm's resources. E) Generally, it is better to try and satisfy some customers very well instead of many just fairly well.

183)

Segmenting dimensions A) are useful for segmenting consumer markets, but not business markets. B) help guide marketing mix planning. C) are always demographic or geographic. D) fall into two general categories: qualifying and purchasing. E) may be called qualifying or non-qualifying.

184)

Marketers segment broad markets into smaller target segments based on a variety of A) marketing grids. B) positioning maps. C) dimensions. D) qualifiers. E) data.

185)

Target market dimensions should influence all the following strategy decisions except A) what product features and assortments will be offered. B) what prices should be set. C) where products will be available for purchase. D) which types of advertising and promotion will be utilized. E) which industry a firm should choose.

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186)

What is a qualifying dimension for people who consider purchasing a pill for pain relief? A) the region of the country in which they live B) income level C) physiological need D) ethnicity E) occupation

187) Which of the following would be a determining dimension for a customer who needs to buy a marketing textbook for school? A) avid reader B) status as college student C) income level D) traveler E) age

188)

Ideally, product-markets should be described in terms of

A) behavioral needs, attitudes, and how present and potential goods or services fit into customers' consumption patterns. B) the urgency to get needs satisfied and desire and willingness to compare and shop. C) geographic location and other demographic characteristics of potential customers. D) All of the answers are correct.

189) If geographic location and other demographic characteristics are used as target market dimensions, which potential strategy decision area is mostly likely to be affected?

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A) promotion—what potential customers need B) target markets—size C) price—what customers might be willing to pay D) product line assortment E) product—which features to include

190) Strategy decisions pertaining to product features, packaging, product line assortment, and branding will be most affected by which target market dimension? A) geographic location B) urgency to get need satisfied C) behavioral needs and attitudes of consumers D) demographic characteristics of potential customers E) geodemographic characteristics of potential customers

191) Which of the following would best aid a marketing manager to better identify segmenting dimensions? A) answering why, what, and who questions about customers B) understanding the when and how of customer purchases C) disregarding all behavioral dimensions of the consumer market D) focusing only on one dimension of a broad product-market E) homing in on customers' determining dimensions

192)

With regard to segmenting dimensions, which of the following statements is accurate?

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A) Why, what, and who questions can help a marketing manager identify segmenting dimensions. B) Segmenting dimensions are ancillary to marketing mix planning. C) Only one segmenting dimension should be considered at a time. D) Segmenting dimensions remain constant across submarkets within broad productmarkets. E) All of the answers are correct.

193)

The most useful dimensions for segmenting markets are A) geographic and demographic dimensions. B) brand familiarity and consumption patterns. C) social class. D) benefits sought. E) The most useful depends on what product-market one is segmenting.

194)

Behavioral (as opposed to demographic) segmenting dimensions include A) family life cycle. B) geographic location. C) education. D) social class. E) purchase relationship.

195)

Behavioral (rather than demographic) segmenting dimensions include A) type of problem-solving. B) kind of shopping. C) brand familiarity. D) benefits sought. E) All of the answers are correct.

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196)

Which of the following is a behavioral segmenting dimension? A) needs B) region of the world or country C) income D) education E) ethnicity

197) Sanders Beverages, Inc. is targeting non-juice drinkers with a new line of healthy fruit juices. Which segmenting dimension is most likely being used by Sanders Beverages? A) geographic B) behavioral C) geodemographic D) demographic E) urgency to get need satisfied

198)

Which of the following possible segmenting dimensions is a demographic dimension? A) benefits sought B) social class C) purchase relationship D) brand familiarity E) rate of use

199)

Which of the following is a demographic segmenting dimension?

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A) rate of use B) brand familiarity C) type of problem solving D) benefits sought E) family life cycle

200)

Which of the following is a consumer market demographic dimension? A) income distribution B) stage in family life cycle C) family size D) ethnic group E) All of the answers are correct.

201)

Which of the following is a consumer market demographic dimension? A) gender B) age C) occupation D) education E) All of the answers are correct.

202) Tom and Sally Jones are preparing to purchase a new car. Tom currently has a Toyota Camry and Sally has a Honda Accord. They now have two children under age 5, so they plan to trade in Sally's car to purchase a minivan. Sally and Tom decide on a Honda Odyssey because Sally is familiar with Hondas and thinks they are very reliable. In this purchase situation, Tom and Sally's family life cycle stage is a ________ segmenting dimension, and the benefit Sally seeks (reliability) is a ________ segmenting dimension.

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A) geographic; demographic B) demographic; behavioral C) geographic; behavioral D) demographic; geographic E) behavioral; demographic

203) Coorgs Coffee, Inc. has substantial market share in South America but seeks growth. Its managers want to expand into North America and target cities with populations of 50,000– 99,999. Which segmenting dimension is most likely being used by Coorgs Coffee? A) geographic B) behavioral C) urgency to get need satisfied D) demographic E) attitudes of consumers

204) When Hallmark stores offer a product line that includes everything you need to have a Spiderman-themed birthday party, what is the primary segmenting dimension that Hallmark is using? A) gender B) family size C) benefits sought D) rate of use E) size of city

205) When Hallmark designs its website so that a teenage girl can send a theme card to her boyfriend's cell phone, what is the primary segmenting dimension that Hallmark is using?

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A) rate of use B) age C) family size D) income E) education

206) When major airlines target business travelers because they travel often and typically pay at least three times the price for a ticket as leisure travelers, these airlines are segmenting the market primarily on A) income. B) education. C) rate of use. D) ethnicity. E) age.

207) Manufacturer, service provider, government agency, wholesaler, etc., are designations used to segment business and organizational markets according to A) kind of relationship. B) type of customer. C) demographics. D) product use. E) buying situation.

208) When a company segments its business customers on the basis of whether or not they require contract bids over the Internet, what segmenting dimension is the company using?

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A) kind of relationship B) demographics C) type of customer D) how customer will use product E) purchasing methods

209) ________ segmenting dimensions help decide whether a person might be a potential customer, but not which specific products or brands that person might buy. A) Determining B) Qualifying C) Operational D) Customer-related E) Situation-related

210) Deciding whether a group of customers should be included in a target market is the purpose of ________ dimensions. A) behavioral B) demographic C) determining D) qualifying E) geographic

211)

Qualifying dimensions, in contrast with determining dimensions,

A) are the only kind of dimensions useful for marketing strategy planning. B) indicate whether a person might be a potential customer but do not show which product or brand that person might buy. C) are the customer-related dimensions in a product-market. D) affect the product or brand a person is likely to purchase. E) None of the answers is correct.

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212)

Qualifying dimensions A) need to be very specific. B) help identify the "core benefits." C) work in isolation in marketing strategy planning. D) affect the customer's purchase of a particular product. E) affect the customer's brand choice.

213) ________ segmenting dimensions are those that actually affect a person's purchase of a specific product type or brand in a product-market. A) Operational B) Qualifying C) Customer-related D) Determining E) Situation-related

214) ________ dimensions actually affect the customer's purchase of a specific product or brand in a product-market. A) Behavioral B) Demographic C) Determining D) Qualifying E) Geographic

215)

Compared to qualifying dimensions, determining dimensions

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A) are more likely to be related to whether a customer will make a purchase in the product-market at all. B) help identify the "core benefits" offered to everyone in the product-market. C) are usually much more specific. D) are relevant to including a customer type. E) None of the answers is correct.

216) Which of the following is most likely to be a determining dimension with respect to purchase of a particular brand of coffee? A) taste B) income C) age D) sex E) None of the answers is likely to be a determining dimension in this situation.

217) James is a prospective car buyer. In his context, which of the following statements would reflect a determining dimension? A) He must have enough money, or credit, to buy a car and insure it. B) He needs to have a valid driver's license. C) He has kids who have to be carpooled. D) He needs a safe car. E) His office is 2.5 miles from home.

218)

Product-type determining dimensions A) are generally relevant to purchasing behavior. B) affect the customer's purchase of a specific product brand. C) affect the customer's choice of a specific kind of product. D) are relevant to including a customer type in the product-market. E) are less specific than qualifying dimensions.

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219) Marketers at General Mills found that many people try to check e-mail or drive a car while eating breakfast or lunch. For many of these target customers the real ________ dimension in picking a snack is whether it can be eaten "one-handed." A) potential B) qualifying C) determining D) geodemographic E) time

220)

What are buyer personas? A) fictional depictions of customers in each target segment B) artificial intelligence that behaves like potential customers C) the façades used by consumers use when pretending interest in a product D) actual individuals in each segment who buy a firm’s products E) all of a firm’s target customers

221)

Planning marketing strategies for international markets

A) is usually most effective when the marketing manager uses the same marketing strategy for all markets. B) is often easier than planning domestic strategies because economic, political, and other uncontrollable variables are less important. C) is "easy" because each country should be treated as one target market. D) None of the answers is correct.

222)

Segmenting international markets, as contrasted with domestic markets,

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A) is more complicated because qualifying dimensions are not helpful. B) may be more difficult because critical data may not be available or dependable. C) usually involves less risk because more potential target markets are available. D) usually involves fewer segmenting dimensions. E) None of the answers is correct.

223) Segmenting in international markets can be more challenging than segmenting in domestic markets because A) there is less diversity in the key segmenting dimensions. B) there is often more data available about key segmenting dimensions. C) critical data is often less available and less dependable. D) profit is the balancing point that determines the marketing mix; and the markets are homogenous between and heterogeneous within.

224)

Segmenting international markets can be more difficult because

A) the concepts and approaches for segmenting domestic markets simply do not apply. B) there are more dimensions and many unfamiliar variables. C) there are fewer useful dimensions. D) a manager must rely entirely on his or her own judgments about people in other countries. E) the quantity and quality of available market data are usually greater.

225)

The first step in segmenting international markets is to

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A) develop a marketing mix. B) treat all the countries in the "foreign market" as one segment. C) segment by country or region—looking at demographic, cultural, and other characteristics. D) list the suppliers who serve the market. E) consider the number, size, kind, and location of business and organizational customers.

226)

When evaluating international markets, the marketing manager should

A) focus primarily on consumer markets because foreign business markets are in general too risky. B) not worry very much about segmenting because marketing concepts are not very well developed in most other economies. C) consider the whole "foreign market" as a segment. D) use broad criteria, such as geographic region or stage of economic development, to define submarkets before further segmenting. E) treat each foreign market as a separate segment.

227) When moving to international markets, some firms insist that local operations and decisions should be handled by natives because A) their operations and decision making can be centralized. B) international markets are less particular about segmenting dimensions. C) the needs and preferences of target customers are the same in all submarkets. D) their local responsiveness can be reduced. E) the natives have a feel for the market.

228) true?

In the context of segmenting international markets, which of the following statements is

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A) Segmenting based on demographic, cultural, and other characteristics helps find regional or national submarkets that are similar. B) Qualifying and determining dimensions of segmenting work independent of each other in marketing strategy planning. C) It is not possible for each different submarket within a broad product-market to be motivated by a different set of segmenting dimensions. D) Segmenting dimensions become less specific when the target market segment seeks to purchase a particular brand of a product. E) Critical data is easily available and highly dependable as firms move into international markets.

229)

Clustering techniques applied to segmenting markets

A) usually require computers to group people based on data from market research. B) remove the need for managerial judgment. C) eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers. D) affect the customer's purchase of specific product or brand. E) include the specialty markets that the segmenters are working with.

230)

The clustering techniques that can be used in segmenting A) eliminate the need for management intuition and judgment. B) group people together into heterogeneous product-market segments. C) try to find similar patterns within sets of data. D) allow managers to ignore segmenting dimensions. E) None of the answers is correct.

231)

Clustering techniques

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A) help sellers fine-tune the marketing effort with information from a detailed customer database. B) establish how customers think about proposed or present brands in a market. C) try to find similar patterns within sets of data. D) group customers into heterogeneous segments. E) use intuition and judgment to do what was previously done by computers.

232) A detailed customer database, containing past purchases and other segmenting information, is used to focus marketing efforts on individual customers in a A) clustering management system. B) product positioning matrix. C) product differentiation matrix. D) diversification management system. E) customer relationship management system.

233) Alpine Auto Repair keeps a record of customer oil changes and sends a reminder postcard to its customers when it's time for the next oil change. This is an example of a ________ system. A) customer relationship management B) qualifying dimensions C) positioning matrix D) geographic targeting E) clustering

234) A variant of the clustering approach relies on ________, where the seller adjusts the marketing effort with information from a database with customer information.

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A) customer relationship management B) corporate governance C) social audit D) cluster sampling E) data warehouse management

235) Every new customer at Five Elements Spa is asked to register his or her personal details, which includes the customer's age, purpose of visit, and contact information. With this information, the company regularly keeps in touch with its customers, reminding them of their next appointments, new spa offers, and any other promotions. The database is used to predict a customer's next visit to the spa based on his or her previous visits. It also helps the company design service packages to suit the customer's individual needs. In this scenario, Five Elements Spa is using A) corporate governance. B) social audit. C) customer relationship management. D) supply chain management. E) service design prototyping.

236) When a customer orders a book at Amazon.com, the online retailer recommends related books that have been purchased by other customers who bought that book. Amazon is using a(n) A) aggregating approach. B) CRM database. C) clustering approach. D) disaggregating approach. E) generic market.

237)

Customer relationship management (CRM) helps consumer marketers

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A) limit their personalization efforts. B) treat all submarkets as a single huge market. C) reduce their focus on local customers. D) deliver the same marketing mix to all customer segments. E) treat customers individually as segments of one.

238)

Customer relationship management (CRM) data is generally used by firms to A) reduce their focus on local customers. B) treat all submarkets as a single huge market. C) develop a prediction score for each customer. D) limit the need for customization. E) deliver the same marketing mix to all customer segments.

239)

The ultimate in personalization occurs when A) merging multiple submarkets. B) targeting a segment of one. C) identifying generic markets. D) creating opportunities in niche markets. E) offering extended warranties.

240)

Customer relationship management (CRM) helps consumer marketers A) limit their personalization efforts. B) treat all submarkets as a single huge market. C) reduce their focus on local customers. D) deliver a different marketing mix to different customer segments. E) ignore the differences in the needs and preferences of target customers.

241)

Business-to-business markets, with very large customers, have typically

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A) treated customers individually as segments of one. B) mass marketed the same products to all customer segments. C) delivered the same marketing mix to all customer segments. D) reduced their personalization efforts to the lowest levels possible. E) avoided applying the principles behind customer relationship management.

242) Which of the following best describes the use of real-time data to continuously update a customer’s placement in a market segment? A) dynamic behavioral segmentation B) clustering technique C) positioning D) machine learning E) competitor analysis

243) Each time a customer visits the Jayco’s website, the site’s CRM records their clicks and analyzes their behavior. Jayco uses this real-time data to send a “pop-up” message based on the customer’s placement in a market segment. This is best described as A) dynamic behavioral segmentation. B) a single target market approach. C) generic marketing. D) qualifying dimensions. E) a competitor analysis.

244) The benefits of focusing on a specific target market (with the aid of marketing segmentation) do not include which of the following?

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A) Marketers can fine-tune their marketing mixes, thus providing superior value to customers. B) Marketers can build a competitive advantage by effectively meeting customers' needs. C) Customers will view the firm's offerings as uniquely suited to their preferences and needs. D) Managers can identify the best technology for improving production methods. E) Managers will gain a clear, shared vision for how to proceed with marketing mix decisions.

245) How customers think about the various brands in a market can be graphically represented and tracked through A) segmenting. B) positioning. C) targeting. D) researching. E) clustering.

246)

Positioning maps are based on A) the actual objective characteristics of products. B) the opinions of the marketing managers. C) the potential places where a product may be sold and purchased. D) the prices of competing products. E) customers' perceptions of products.

247)

A marketer will likely need to reposition a product if

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A) very few competitors offer similar products. B) customers see the product as distinct from other products in the market. C) marketers see the product as distinct from other products in the market. D) customers see the product as very similar to other products in the market. E) marketers see the product as very similar to other products in the market.

248)

Differentiating the marketing mix is important for which of the following reasons?

A) It can help the firm build a competitive advantage with a group of target customers. B) It can help target customers to view the firm's position in the market as uniquely suited to their preferences and needs. C) It can clarify the position the firm wants to achieve with customers. D) It can contribute to better blending of marketing mix decisions to achieve desired objectives. E) All of the answers are correct.

249) When a company becomes aware that a new product is being test marketed by one of its competitors in St. Louis, it decides to create a similar product and rush it to market. This company can be described as a(n) A) copycat. B) innovator. C) me-too imitator. D) first mover. E) early adopter.

250) ________ is a marketing management aid that refers to how customers think about proposed and/or present brands in a market.

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A) Brand familiarity B) Positioning C) Market scanning D) Market segmentation E) Customer relationship management (CRM)

251)

________ refers to how customers think about proposed or present brands in a market. A) Differentiating B) CRM C) Clustering D) Positioning E) Dimensioning

252)

Positioning is a marketing management aid that refers to

A) a product's ability to provide both immediate satisfaction and social responsibility. B) how customers think about proposed and/or present brands in a market. C) a firm's ability to distribute products through intermediaries who are in the right position to reach target customers. D) how a firm approaches customer relationship management. E) All of the answers are correct.

253)

Positioning is a marketing management aid that refers to A) how closely existing products match customers' ideal preferences. B) how customers think about proposed and/or present brands in a market. C) whether some products are viewed as very similar. D) All of the answers are correct.

254)

When considering positioning, a marketing manager should

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A) avoid targeting strategies. B) focus on specific product features of all generic competitors. C) rely on how customers think about proposed and/or existing brands in a market. D) plan physical product changes rather than image changes. E) None of the answers is correct.

255)

Positioning A) applies to new products but not existing products. B) helps strategy planners see how customers view competitors' offerings. C) is concerned with obtaining the best shelf space in retail outlets. D) is useful for combining but not for segmenting. E) eliminates the need for judgment in strategy planning.

256) Ford Motor Co. asks members of its target market to rate its cars and those of General Motors and Chrysler on a 7-point scale in terms of two dimensions (comfortable seats and engine power) so that it can establish a quadrant-grid map of these ratings. What type of analysis is Ford conducting? A) positioning B) combining C) qualifying D) dimensional E) insight management

257)

Positioning might lead a marketing manager to

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A) introduce a new product for a segment with unsatisfied needs. B) change a product's promotion to make its image fit more closely with the needs and attitudes of the target market. C) shift attention to another market segment where competition is weaker. D) physically change his or her product to compete more effectively with a competitor aiming at the same target market. E) All of the answers are correct.

258)

Which of the following statements about positioning is not true?

A) Positioning techniques position products on a graph based on price level and quantity demanded. B) Positioning requires a firm to collect data about consumer perceptions of products. C) Positioning techniques are sometimes called "perceptual mapping" techniques. D) Positioning techniques typically rely on a "product space" diagram to show the relationship among various products. E) Positionining may use information about consumers' "ideal" products, so that the preferences of different segments of consumers can be considered.

259)

Which of the following statements about positioning is FALSE?

A) Positioning often makes use of techniques such as perceptual mapping. B) Positioning refers to how customers think about proposed or present brands in a market. C) Positioning issues are especially important when competitors in a market are highly dissimilar. D) Positioning helps marketing managers know how customers view the firm's offering. E) Managers make graphs for positioning decisions by asking consumers to make judgments about different brands.

260)

Which of the following statements about positioning is true?

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A) Positioning refers to how managers think about proposed or present brands in a market. B) Positioning issues are not important when competitors in a market appear to be very similar. C) Usually, the positions of products are related to six or seven product features that are important to product managers. D) None of the answers is correct.

261)

Positioning analysis A) helps managers understand the actual characteristics of their products. B) is not a product-oriented approach. C) is a visual aid to understanding a product-market. D) shows that managers and customers usually view present brands similarly. E) always leads a firm to segmenting and not combining.

262) A company provides its advertising agency with a statement about a new product to use in designing an advertising campaign, and this statement includes a description of the target market, the product type, the primary benefits of using the product, and how this product is different from, and better than, competitive products. What type of statement is this? A) qualifying B) positioning C) determining D) clustering E) combining

263) When PepsiCo asked its advertising agency to develop an advertising program for its Mountain Dew soft drink, it gave the agency a statement describing the age and fun-loving spirit of its target market and the one-of-a-kind citrus flavor of the new product. What type of statement was this?

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A) clustering B) determining C) combining D) positioning E) qualifying

264)

Why is it not always possible for marketing managers to keep their offerings unique? A) The market segment is quite broad. B) There are too many competitors. C) The customers do not care. D) The market is in "segments of one." E) The customer is a copycat.

265)

When is repositioning needed? A) when the direction of the marketing strategy is not clear or focused B) when customers are not viewing the brand the desired way C) when each market segment has its own preferences D) when ethical issues arise in selecting segmenting dimensions E) when markets become homogenous between

266) "For ( our target market), ( our brand) of all ( product type) delivers ( key benefit or point of differentiation) because ( our brand) is ( reasons to believe)." This is A) a positioning statement. B) a marketing plan. C) a competitor analysis. D) a mission statement. E) target marketing.

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267)

What purpose does a positioning statement serve? A) to provide focus for a marketing mix B) to find patterns within sets of data C) to identify segmenting dimensions D) to set out a firm's basis purpose for being E) to compare marketing strategies among competitors

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Answer Key Test name: Chap 04_17e 1) FALSE A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 2) FALSE A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services. 3) FALSE A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 4) TRUE A generic market description looks at markets broadly and from a customer's viewpoint. 5) FALSE A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 6) FALSE A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 7) TRUE Version 1

The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 8) TRUE Product type describes the goods and/or services that customers want. Sometimes the product type is strictly a physical good or strictly a service. 9) TRUE A product-market definition includes a product type that describes the goods and/or services that customers want, whereas a generic market definition doesn't include any product-type terms. 10) FALSE A generic market description doesn't include any product-type terms. It consists of only three parts of the product-market definition—without the product type. 11) TRUE Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 12) TRUE Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 13) FALSE Market segmentation deals with segmenting broad product-markets in order to select target markets and develop suitable marketing mixes. 14) FALSE Version 1

Marketing-oriented managers think of segmenting as an aggregating process. 15) TRUE Marketing-oriented managers think of segmenting as an aggregating process—clustering people with similar needs into a "market segment." 16) TRUE Segmenters start with the idea that each person is one of a kind but that it may be possible to aggregate some similar people into a productmarket. Segmenters see each of these one-of-a-kind people as having a unique set of dimensions. 17) TRUE The difficulty with segmenting is that some potential customers just don't fit neatly into market segments. Forcing them into one of the groups would make these segments more heterogeneous and harder to please. 18) FALSE Under broad product-market, a segmenter may aggregate submarkets into arbitrary numbers that are relatively homogeneous. 19) TRUE The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 20) TRUE The customers in a market segment should be as similar as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 21) TRUE Version 1

"Good" market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. 22) FALSE "Good" market segments meet the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial, and operational. 23) FALSE "Good" market segments meet the following criteria: (1) homogenous within; (2) heterogenous between; (3) substantial; and (4) operational. "Substantial" means that the segment is big enough to be profitable. 24) TRUE A substantial market segment is one that should be big enough to be profitable. 25) FALSE A substantial market segment is one that should be big enough to be profitable. 26) TRUE Operational segment dimensions should be useful for identifying customers and deciding on marketing mix variables like Place and Promotion. 27) FALSE A product-market segment is "substantial" if it is big enough to be profitable to the firm. 28) FALSE Moodiness might be related in some way to purchases, but it would not be a useful dimension for segmenting. Version 1

29) FALSE The multiple target market approach deals with segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix. 30) FALSE The combined target market approach involves combining two or more submarkets into one larger target market as a basis for one strategy. 31) TRUE Aggregating all potential customers into a single product-market segment is dangerous because the more aggregating, the less homogeneous the customers in the single segment. Generally, it is safer for a firm to try to provide a smaller segment that is very homogeneous with superior value, and thus satisfy it better. 32) TRUE A segmenter wants to aggregate individual customers into some workable number of homogeneous (not heterogeneous) target markets so that it can target them more successfully and avoid competition. 33) TRUE A segmenter that really satisfies the target market can often build such a close relationship with customers that it faces no real competition. 34) FALSE Some people are simply too unique to be catered to and may have to be ignored. A profit-oriented firm will continue aggregating potential customers until the segment is substantial (that is, the segment is big enough to be profitable). 35) FALSE

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A segmenter that offers a marketing mix precisely matched to the needs of the target market can often charge a higher price that produces higher profits. Customers are willing to pay a higher price because the whole marketing mix provides better customer value. 36) TRUE Cost considerations usually encourage more aggregating and favor combining, as costs often drop due to economies of scale. On the other hand, many customers prefer to have their needs satisfied more exactly—and will be more satisfied by a segmenter that develops a marketing mix that more closely matches their needs. 37) TRUE Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers' consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics. 38) FALSE Behavioral needs are important. Potential target market dimensions include (1) behavioral needs and attitudes, and how present and potential goods and services fit into customers' consumption patterns; (2) urgency to get needs and desires satisfied and willingness to seek information, compare, and shop; and (3) geographic location and other demographic characteristics. 39) TRUE Regardless of whether customers are final consumers or organizations, segmenting a broad product-market usually requires using several different dimensions at the same time. 40) FALSE Version 1

Market segmentation can be applied to business products. Exhibit 4–9 shows the dimensions for segments markets when the customers are businesses, government agencies, or other types of organizations. 41) FALSE Qualifying dimensions are those relevant to including a customer type in a product-market. 42) TRUE Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 43) FALSE The more specific you want to be, the more particular the determining dimensions may be. The determining dimensions may seem minor. However, they are important. 44) TRUE The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 45) FALSE Success in international marketing requires even more attention to segmenting. There are over 192 nations with their own unique cultures, and they differ greatly in language, customs, beliefs, religions, race, and income distribution patterns. 46) TRUE Success in international marketing requires even more attention to segmenting. There are over 192 nations with their own unique cultures, and they differ greatly in language, customs, beliefs, religions, race, and income distribution patterns. 47) FALSE Version 1

Segmenting international markets may require more dimensions. First, marketers segment by country or region—looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 48) TRUE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 49) FALSE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 50) TRUE Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 51) FALSE Clustering approaches use computers to search all the data for homogeneous groups of people, but when the computer finds them, marketers then study the characteristics of the people in the groups to determine why the computer clustered them together. This involves managerial judgment and intuition. 52) FALSE With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information. Version 1

53) FALSE A variation of the clustering approach is based on customer relationship management methods. 54) TRUE With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information. 55) TRUE Through the use of dynamic behavioral segmentation, firms can use realtime data to continuously update a customer’s placement in a market segment. 56) TRUE By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. When this happens, target customers view the firm's position in the market as uniquely suited to their preferences and needs. 57) TRUE Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 58) FALSE Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate.

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59) TRUE Positioning issues are especially important when competitors in a market appear to be very similar. 60) TRUE In positioning analysis, once you know what customers think, you can then decide whether to leave the product alone or reposition it. 61) FALSE Positioning analysis may lead a firm to combining—rather than segmenting—if managers think they can make several general appeals to different parts of a "combined" market. 62) TRUE The marketing strategy based on Mountain Dew's positioning statement helped it gain market share with 16- to 24-year-old males, its target market. 63) TRUE A positioning statement concisely identifies the firm's desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claims. It is sometimes used by marketing managers to provide focus for the marketing mix. 64) D A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 65) B The marketing strategy planning process involves careful evaluation of the market opportunities and then narrowing down to focus on the most attractive target market and marketing mix. Version 1

66) D When identifying a company's market, some managers get into trouble because they describe their markets solely in terms of products they sell. 67) A To understand the narrowing-down process, it is useful to think of two basic types of markets. A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 68) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 69) B A market is a group of potential customers with similar needs who are willing to exchange something of value with sellers offering various goods or services—that is, ways of satisfying those needs. 70) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Any one of many very different products may satisfy those needs so this would be a reason to emphasize product development opportunities more. 71) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs.

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72) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 73) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 74) D A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 75) E A generic market is a market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs. It may be composed of several different product-markets and its sellers may also compete in different product-markets. By definition, a generic market is likely broader than the firm's target market. 76) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers also compete in different product-markets. 77) A A generic market is a market with broadly similar needs—sellers offering various, often diverse, ways of satisfying those needs. 78) B A generic market is a market with broadly similar needs—amd sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 79) B Version 1

A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 80) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Different product types may compete with each other. 81) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. 82) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A generic market description looks at markets broadly and from a customer's viewpoint. 83) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. Sellers in a generic entertainment-seeker market have to focus on the needs the customers want satisfied. 84) A A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A "personal expression" market is an example of a generic market. 85) E

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A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 86) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 87) C A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. 88) E A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. It is sometimes hard to understand and define generic markets because quite different product types may compete with each other. In this case, four of the choices are all desserts. 89) C A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. A generic market description looks at markets broadly and from a customer's viewpoint. 90) A

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A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 91) B A generic market is a market with broadly similar needs—and sellers offering various, often diverse, ways of satisfying those needs. In contrast, a product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 92) E A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 93) D A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. In a product-market concerned with specific products, consumers compare them with similar products that may satisfy their needs. 94) E A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 95) B A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 96) D A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 97) C Version 1

A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 98) A A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. 99) A A product-market is a market with very similar needs and sellers offering various close substitute ways of satisfying those needs. Many brands may compete with each other for the customer's dollars. 100) B The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 101) B The relevant market for finding opportunities should be bigger than the firm's present product-market—but not so big that the firm couldn't expand and be an important competitor. 102) B When evaluating opportunities, a product-market definition does not include an identification of a firm's competitors. 103) E A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. 104) C A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area.

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105) E A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. 106) D A complete product-market definition includes a four-part description: product type; customer needs; customer types; and geographic area. A generic market description doesn't include any product-type terms. 107) B A generic market description doesn't include any product-type terms. It consists of only three parts of the product-market definition—without the product type. 108) C Customer type refers to the final consumer or user of a product type. To define customer type, marketers should identify the final consumer or user of the product type, rather than the buyer—if they are different. 109) D Customer type refers to the final consumer or user of a product type. To define customer type, marketers should identify the final consumer or user of the product type, rather than the buyer—if they are different. 110) B A generic market definition includes customer needs, customer types, and geographic area. A generic market description doesn't include any product-type terms. 111) C A generic market definition includes customer needs, customer types, and geographic area. A generic market description doesn't include any product-type terms. Version 1

112) C A generic market definition includes customer needs, customer types, and geographic area. It does not include any competitors' names. 113) A Generic market names open up new opportunities. The generic market, by leaving out the product type, opens the idea of using other products to address customer needs. 114) D The geographic area is where a firm competes, or plans to compete, for customers. Naming the geographic area may seem trivial, but understanding the geographic boundaries of a market can suggest new opportunities. 115) A This idea of making a decision about the boundaries of a market applies not just to geographic areas served but also to decisions about customer needs and product and customer types. Thus, naming the market is not simply an exercise in assigning labels. Rather, the manager's market definition sets the limits of the market(s) in which the firm will compete. 116) A Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 117) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 118) D Version 1

Good market segments are homogeneous within, heterogeneous between, substantial, and operational. 119) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 120) B Market segmentation is a two-step process of (1) naming broad productmarkets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes. 121) E Marketers must break apart—disaggregate—all possible needs into some generic markets and broad product-markets in which the firm may be able to operate profitably. 122) C The first step in effective market segmentation involves naming a broad product-market of interest to the firm. Marketers must break apart— disaggregate—all possible needs into some generic markets and broad product-markets in which the firm may be able to operate profitably. 123) A The first step in effective market segmentation involves naming a broad product-market of interest to the firm, not segmenting broad productmarkets. 124) A

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The naming—disaggregating—step involves brainstorming about very different solutions to various generic needs and selecting some broad areas—broad product-markets—where the firm has some resources and experience. 125) A The naming—disaggregating—step involves brainstorming about very different solutions to various generic needs and selecting some broad areas—broad product-markets—where the firm has some resources and experience. 126) D Marketing-oriented managers think of segmenting as an aggregating process—clustering people with similar needs into a "market segment." 127) C Segmenting is an aggregating process—clustering people with similar needs into a "market segment." 128) C Naming involves breaking down markets (disaggregating), whereas segmenting is an aggregating process—clustering people with similar needs into a "market segment." 129) E Segmenting is an aggregating process—clustering people with similar needs into a "market segment." 130) B

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Segmenting is an aggregating process—clustering people with similar needs into a "market segment." Segmenters look for similarities rather than basic differences in needs. They determine an appropriate number of segments and aggregate some similar people into a product-market. Naming a broad product-market is not likely a part of the segmenting step. 131) A A market segment is a (relatively) homogeneous group of customers who will respond to a marketing mix in a similar way. 132) A The market grid is a visual aid used in market segmentation. 133) D The segmenter wants to aggregate individual customers into some workable number of relatively homogeneous target markets and then treat each target market differently. 134) C The segmenter wants to aggregate individual customers into some workable number of relatively homogeneous target markets and then treat each target market differently. 135) E A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. 136) C A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial; and operational. Version 1

137) C A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial—the segment should be big enough to be profitable; and operational—it should be useful for identifying marketing mix variables. 138) D A "good" market segment meets the following criteria: homogeneous (similar) within; heterogeneous (different) between; substantial—the segment should be big enough to be profitable; and operational—it should be useful for identifying marketing mix variables. 139) B In segmenting a broad product-market, the people in different segments should be as heterogeneous (different) as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 140) D "Heterogeneous (different) between" means that customers in different segments should be as different as possible with respect to their likely responses to marketing mix variables and their segmenting dimensions. 141) C A good market segment should be substantial—i.e., the segment should be big enough to be profitable. 142) B A "good" market segment should be operational. This leads marketers to include demographic dimensions such as age, sex, income, location (geographic region), and family size, but not personality. 143) D Version 1

A "good" market segment should be operational—i.e., segmenting dimensions should be useful for identifying customers and deciding on marketing mix variables. 144) D There are three basic ways to develop market-oriented strategies in a broad product-market: single target market approach; multiple target market approach; and combined target market approach. 145) E Once target marketers narrow down some generic market into a broad product-market, they then create marketing mixes for homogeneous product-market segments within that broad product-market. 146) D In the combined target market approach, target marketers formulate one marketing mix strategy to appeal to two or more submarkets within one broad product market. In this scenario, the broad product-market is tablet computer users, which is then segmented into two subsegments: office tablet users and home tablet users. When a target marketer uses one marketing mix strategy to appeal to both subsegments at the same time, the marketer is using the combined target market approach. 147) C In the multiple target market approach, target marketers formulate multiple marketing mix strategy to appeal to two or more submarkets within one broad product-market. In this scenario, the broad productmarket is tablet computer users, which is then segmented into two subsegments: office tablet users and home tablet users. Since the target marketer is treating each subsegment separately and formulating a different marketing mix for each, the marketer is using the multiple target market approach. Version 1

148) D Target marketers known as "segmenters" aim at one or more homogeneous segments and develop a different marketing mix for each segment. They do not attempt to combine or mix submarkets, but instead treat submarkets separately to better serve the needs of each group. 149) C There are three basic ways to develop market-oriented strategies in a broad product-market: single target market approach; multiple target market approach; and combined target market approach. "Exclusive" is not among the approaches. 150) B Gina appears to be following the single target market approach. It means segmenting the market and picking one of the homogeneous segments as the firm's target market. 151) C The firm is using a single target market approach. It means segmenting the market and picking one of the homogeneous segments as the firm's target market. 152) D ETI should probably focus on single target market approach—i.e., segmenting the market and picking one of the homogeneous segments as the firm's target market. 153) A The firm should use the multiple target market approach. It means segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix.

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154) B Jazzy Tile Co. follows the multiple target market approach, because it segments the market and chooses two or more segments, and then treats each as a separate target market needing a different marketing mix. 155) A Procter & Gamble is using the multiple target market approach, as it segments the market and chooses two or more segments, and then treats each as a separate target market needing a different marketing mix. 156) E The firm uses the multiple target market approach, which means segmenting the market and choosing two or more segments, and then treating each as a separate target market needing a different marketing mix. 157) C The marketing manager used a combined target market approach that deals with combining two or more submarkets into one larger target market as a basis for one strategy. 158) C Combining two or more submarkets into one larger target market as a basis for one strategy is known as the combined target market approach. 159) B Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. 160) E

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Combiners try to increase the size of their target markets by combining two or more segments. They try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 161) D Combiners try to increase the size of their target markets by combining two or more segments. They try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 162) C Combiners try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 163) C A combined target market approach doesn't try to fine-tune each element of the marketing mix to appeal to each of the smaller submarkets. 164) A Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. They don't try to fine-tune each element of the marketing mix to appeal to each of the smaller submarkets. 165) C Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences. Then they try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 166) A

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Combiners look at various submarkets for similarities rather than differences. Then they try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 167) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 168) A Cost considerations usually encourage more aggregating and favor combining, as costs often drop due to economies of scale. However, many customers prefer to have their needs satisfied more exactly and are vulnerable to competitors who offer them more targeted approaches. 169) A A segmenter that really satisfies the target market can often build such a close relationship with customers so that it faces no real competition. However, combiners are always vulnerable to competitors. 170) B Cost considerations usually encourage more aggregating and favor combining as costs often drop due to economies of scale; yet too much aggregating can leave the company vulnerable to competitors. 171) B Combiners look at various submarkets for similarities rather than differences. They then try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 172) B

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Segmenters usually fine-tune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. 173) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 174) A Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. 175) B Both combiners and segmenters are target marketers but their approaches are different. Combiners try to increase the size of their target markets by combining two or more segments. Segmenters usually fine-tune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. 176) C Combiners try to increase the size of their target markets by combining two or more segments. They look at various submarkets for similarities rather than differences, and they then try to extend or modify their basic offering to appeal to these "combined" customers with just one marketing mix. 177) B Segmenters aim at one or more homogeneous segments and try to develop a different marketing mix for each segment. They usually finetune their marketing mixes for each target market—perhaps making basic changes in the product itself—because they want to satisfy each segment very well. Version 1

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178) E Which approach offers the greatest profit potential is dependent on many factors not provided here, so it could be any of these. There is not enough information to give a reliable answer. 179) B Cost considerations usually encourage more aggregating and favor combining as costs often drop due to economies of scale. 180) D Cost considerations usually encourage more aggregating and favor combining submarkets as costs often drop due to economies of scale. 181) A Profit is the balancing point. It determines how unique a marketing mix the firm can afford to offer to a particular market segment. 182) A It's usually safer to be a segmenter—that is, to try to satisfy some customers very well instead of many just fairly well. 183) B Segmenting dimensions should help guide marketing mix planning. 184) C Marketers segment markets based on various dimensions. Dimensions used for segmenting consumer markets include a range of behavioral dimensions, geographic dimensions, and demographic dimensions. 185) E Target market dimensions (whether geographical, demographic, or behavioral) guide marketing mix planning including decisions about the Four Ps of Product, Price, Place, and Promotion.

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186) C Qualifying dimensions are those dimensions that are relevant to including a customer type in a product-market. Determining dimensions, on the other hand, motivate a consumer to buy a specific product or brand. A customer with the physiological need to relieve pain would be a candidate to buy this product. 187) B A consumer's status as a college student would be a determining dimension in the decision to purchase a marketing textbook. Determining decisions are those factors that actually affect the customer's purchase of a specific product. 188) D Potential target market dimensions include (1) behavioral needs; (2) urgency to get needs satisfied and desire and willingness to seek information; and (3) geographic location and other demographic characteristics. 189) B Geographic location and other demographic characteristics of potential customers affect the dimensions of target markets. 190) C Behavioral needs and attitudes of consumers affect product features, packaging, product line assortment, and branding. 191) A Answering why, what, and who questions allow a marketing manager to better identify the dimensions on which customers are similar and different. 192) A Version 1

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Basic why (Why are customers making a purchase decision?), what (What have customers done before making a decision?), and who (Who are the customers?) questions can help guide a marketing manager as they narrow down to particular segmenting dimensions. 193) E Whether customers are final consumers or organizations, segmenting a broad product-market usually requires using several different dimensions at the same time. It depends on what product-market is being segmented. 194) E Behavioral segmenting dimensions include purchase relationship. 195) E Behavioral segmenting dimensions include type of problem solving, kind of shopping, brand familiarity, and benefits sought. 196) A Customer needs are behavioral segmenting dimensions. 197) B In targeting non-juice drinkers, Sanders Beverages is using the behavioral segmenting dimension. 198) B Social class is a demographic segmenting dimension. 199) E Family life cycle is a demographic segmenting dimension. 200) E Income distribution, stage in family life cycle, family size, and ethnic group are all examples of the consumer market demographic dimension. Version 1

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201) E Gender, age, occupation, and education are examples of consumer market demographic dimensions. 202) B Demographic segmenting dimensions include income, gender, age, marital status, family size, family life cycle, occupation, education, ethnicity, and social class. Behavioral segmenting dimensions include needs, benefits sought, thoughts, rate of use, purchase relationship, brand familiarity, kind of shopping, type of problem solving, and information required. 203) A Geographic segmenting dimensions include region of world/country, region in country, and size of city. 204) C The primary segmenting dimension that Hallmark is using is benefits sought. 205) B The primary segmenting dimension that Hallmark is using is age. 206) C The airlines are segmenting the market primarily on rate of use. 207) B As stated in Exhibit 4–9, manufacturer, service producer, government agency, military, nonprofit, wholesaler or retailer are designations used to segment business and organizational markets according to type of customer. 208) E

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The company is using the purchasing method segmenting dimension— vendor analysis, purchasing specifications, Internet bids, negotiated contracts. 209) B Qualifying dimensions are those relevant to including a customer type in a product-market. The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 210) D Qualifying dimensions are those relevant to including a customer type in a product-market. The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 211) B The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 212) B The qualifying dimensions help identify the "core benefits" that must be offered to everyone in a product-market. 213) D Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 214) C Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 215) C

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Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. 216) A Determining dimensions are those that actually affect the customer's purchase of a specific product or brand in a product-market. How specific the determining dimensions are depends on whether you are concerned with a general product type or a specific brand. 217) D How specific the determining dimensions are depends on specific interests, such as the kind of safety, performance, or appearance the customer wants. 218) B How specific the determining dimensions are depends on whether you are concerned with a general product type or a specific brand. 219) C General Mills has figured out that for many of these target customers the real determining dimension in picking a snack is whether it can be eaten "one-handed." 220) A Buyer personas are fictional depictions of customers illustrative of each target segment. Buyer personas emerge from customer research and are used to help everyone across an organization (research and development, customer service, advertising, website development, etc.) to better empathized with target customers and develop a marketing orientation. 221) D

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Success in international marketing requires even more attention to segmenting and another step. There are over 192 nations with their own unique cultures. They differ greatly in language, customs (including business ethics), beliefs, religions, race, and income distribution patterns. 222) B Additional differences can complicate the segmenting process. Critical data is often less available and less dependable as firms move into international markets. 223) C Critical data is often less available and less dependable as firms move into international markets. 224) B Segmenting international markets may require more dimensions. Critical data is often less available and less dependable as firms move into international markets. 225) C Marketers segment by country or region looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 226) D Marketers segment by country or region looking at demographic, cultural, and other characteristics, including stage of economic development. 227) E

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Critical data is often less available—and less dependable—as firms move into international markets. This is one reason why some firms insist that local operations and decisions be handled by natives. They, at least, have a feel for their markets. 228) A Marketers segment international markets by country or region—looking at demographic, cultural, and other characteristics, including stage of economic development. This may help them find regional or national submarkets that are similar. 229) A The computer searches all the data for homogeneous groups of people. When it finds them, marketers then study the dimensions of the people in the groups to see why the computer clustered them together. The results sometimes suggest new, or at least better, marketing strategies. 230) C Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 231) C Clustering techniques try to find similar patterns within sets of data. Clustering groups customers who are similar on their segmenting dimensions into homogeneous segments. 232) E With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. This usually includes data on a customer's past purchases as well as other segmenting information.

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233) A With customer relationship management (CRM), the seller fine-tunes the marketing effort with information from a detailed customer database. The database stores information that is useful for segmentation. 234) A A variation of the clustering approach relies on customer relationship management (CRM), where the seller fine-tunes the marketing effort with information from a detailed customer database. The database stores information that is useful for segmentation. 235) C CRM data is generally used by firms to develop a prediction score for each customer. The database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. 236) B The CRM system at the website recommends related books that have been purchased by other customers who bought that book. A CRM system usually includes data on a customer's past purchases as well as other segmenting information. 237) E Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." CRM helps consumer marketers do the same. 238) C CRM data is generally used by firms to develop a prediction score for each customer. The database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. Version 1

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239) B The ultimate in personalization occurs when firms consider each customer his or her own segment. Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." 240) D A customer database stores information that is useful for segmentation. Analytic software aids in identifying customer segments, so that each can be delivered a different marketing mix. 241) A The ultimate in personalization occurs when firms consider each customer a unique segment. Business-to-business markets, with very large customers, have typically treated customers individually as "segments of one." 242) A Many firms utilize dynamic behavioral segmentation, which refers to the use of real-time data to continuously update a customer’s placement in a market segment. 243) A Many firms utilize dynamic behavioral segmentation, which refers to the use of real-time data to continuously update a customer’s placement in a market segment. 244) D Marketing segmentation's many benefits do not extend to identifying the most efficient or high-tech methods of production. Production techniques and processes are largely beyond the scope of the marketing function of any organization.

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245) B Positioning refers to how customers think about proposed or present brands in a market. Managers research this information by asking consumers to make judgments about different brands and then representing those perceptions graphically on a positioning map. 246) E Positioning maps are based on customers' perceptions of products, not actual characteristics of products. The actual characteristics of the products (as determined by a chemical test, for example) might be remarkably different from consumer perceptions. 247) D Positioning issues are especially important when competing products in a market appear to be very similar in the eyes of customers. Once managers know what customers think, they can choose to leave the product (and marketing mix) alone or reposition it. Repositioning a product can mean physical changes in the product or simply image changes based on promotion. 248) E By differentiating the marketing mix to do a better job meeting customers' needs, the firm builds a competitive advantage. Target customers view the firm's position in the market as uniquely suited to their needs and everyone in the firm is clear about what position it wants to achieve. 249) C The marketing manager may want customers to see the firm's offering as unique, which is not always possible. Me-too imitators may come along and copy the firm's strategy. 250) B Version 1

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Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 251) D Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 252) B Positioning refers to how customers think about proposed or present brands in a market. Without a realistic view of how customers think about offerings in the market, it's hard for the marketing manager to differentiate. 253) D Positioning refers to how customers think about proposed or present brands in a market. Positioning issues are especially important when competitors in a market appear to be very similar. Managers ask consumers to make judgments about different brands including their "ideal" brand. 254) C Positioning refers to how customers think about proposed or present brands in a market. Managers ask consumers to make judgments about different brands including their "ideal" brand. 255) B Positioning refers to how customers think about proposed or present brands in a market, thereby helping strategy planners see how customers view competitors' offerings. Version 1

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256) A Positioning maps are based on customers' perceptions—the actual characteristics of the products might be different. 257) E Physical changes to a product, or image changes based on promotion, could be a result of positioning. Also, introducing a new product or shifting attention to another less competitive segment are possible moves. 258) A Managers make graphs for positioning decisions by asking consumers to make judgments about different brands, including their "ideal" brand, and then use computer programs to summarize the ratings and plot the results. But managers do not position products on a graph based on price level and quantity demanded. 259) C Positioning analysis usually focuses on specific product features and brands that are close competitors in the product-market. 260) D Positioning usually focuses on specific product features and brands that are close competitors in the product-market and that are related to two or three product features that are important to product managers. Positioning refers to how customers, not managers, view brands in a market. 261) C

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A positioning analysis is a product-oriented approach that helps managers understand how customers see products. The actual characteristics of the products may be quite different from customer perceptions, and managers and customers may view the brands quite differently. Positioning analysis is a visual aid. It may lead to combining rather than segmenting. 262) B Some firms use a template like this to guide the creation of a positioning statement. 263) D A positioning statement concisely identifies the firm's desired target market, the product type, the primary benefit (or point of differentiation), and the main reasons a buyer should believe the firm's claims. 264) C Although the marketing manager may want customers to see the firm's offering as unique, that is not always possible. Me-too imitators may come along and copy the firm's strategy. Further, even if a firm's marketing mix is different, consumers may not know or care. They're busy and, simply put, the firm's product may not be that important in their lives. 265) B Sometimes research shows the marketing manager that target customers are not viewing the brand in the desired way—it needs to be repositioned. Changing customers' perceptions of a brand is not easy— and requires changes to the marketing mix. 266) A

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A positioning statement concisely identifies the firm's desired target market, the product type, the primary benefit or point of differentiation, and the main reasons a buyer should believe the firm's claims. Some firms use a template like the one given to aid in the preparation of a positioning statement. 267) A Positioning statements are sometimes used by marketing managers to provide focus for a marketing mix.

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CHAPTER 5 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Consumer buying decisions are influenced by economic needs, psychological variables, social influences, culture and ethnicity, and the purchase situation. ⊚ ⊚

true false

2) The economic-buyer theory assumes that consumers know all the facts and logically compare choices. ⊚ ⊚

true false

3) Economists sometimes assume that consumers are economic buyers who logically evaluate choices to get the greatest satisfaction from spending their time and money. ⊚ ⊚

true false

4) Economic needs include such things as self-respect, accomplishment, fun, freedom, and relaxation. ⊚ ⊚

true false

5) The economic buyer view of consumers says that individuals will only buy the cheapest goods and services available, regardless of quality. ⊚ ⊚

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Economic needs are concerned only with getting the best quality at the lowest price. ⊚ ⊚

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The median income of U.S. families in 2017 was about $61,822. ⊚ ⊚

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In 2017, half of all American households earned more than $75,442. ⊚ ⊚

true false

9) After taking inflation into account, the median income in the United States has been flat over the last two decades. ⊚ ⊚

10)

In 2017, 50 percent of U.S. families earned less than $61,822 in income. ⊚ ⊚

11)

true false

Discretionary income is the income from investments. ⊚ ⊚

13)

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Discretionary income is what is left after paying taxes. ⊚ ⊚

12)

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Discretionary income is the income adjusted to take out the effects of inflation. ⊚ ⊚

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14) Discretionary income is an elusive concept because the definition of necessities varies from family to family and over time. ⊚ ⊚

true false

15) Most marketing managers think that the economic-buyer theory explains buyer behavior very well. ⊚ ⊚

true false

16) Motivation, perception, learning, attitudes, trust, and lifestyle are psychological variables that affect consumer buying. ⊚ ⊚

true false

17) Family, social class, reference groups, and culture are the psychological variables that affect a consumer's buying decisions. ⊚ ⊚

18)

Wants are the basic forces that motivate a person to do something. ⊚ ⊚

19)

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Wants are needs that are learned during a person's life. ⊚ ⊚

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20)

A drive is a strong stimulus that encourages action to reduce a need. ⊚ ⊚

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Food, liquid, sex, and rest are examples of physiological needs. ⊚ ⊚

22)

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Examples of personal needs include accomplishment, fun, freedom, and relaxation. ⊚ ⊚

true false

23) The "hierarchy of needs" model suggests that most products must fill more than one need at the same time. ⊚ ⊚

true false

24) According to the hierarchy of needs, consumers are motivated to first satisfy their higherorder needs; then they will focus on their lower-level needs. ⊚ ⊚

true false

25) The hierarchy of needs suggests that a consumer would not try to satisfy physiological and safety needs until social and personal needs have been completely satisfied. ⊚ ⊚

26)

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The hierarchy of needs suggests that only one need can be satisfied at a time. ⊚ ⊚

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27)

Consumers do not usually see or hear all the stimuli that come their way. ⊚ ⊚

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28) In selective exposure we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. ⊚ ⊚

true false

29) Selective exposure refers to a person's ability to screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. ⊚ ⊚

30)

Learning is a change in a person's thought processes caused by prior experience. ⊚ ⊚

31)

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A cue is likely to result in a consumer response only if there is a drive to satisfy. ⊚ ⊚

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32) Reinforcement of a response decreases the likelihood of the same response the next time the drive occurs. ⊚ ⊚

33)

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Reinforcement strengthens the relationship between the cue and the response.

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34)

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Adding lemon scent to Pledge furniture polish is an example of using a positive cue. ⊚ ⊚

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35) A perfume ad that suggests that people who use the product have more appeal to the opposite sex is an example of a positive cue. ⊚ ⊚

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36) That "new car" smell that includes an aroma of leather and wood is an example of using a positive cue. ⊚ ⊚

true false

37) An attitude is a person's point of view about something, and usually involves liking or disliking. ⊚ ⊚

true false

38) The main difference between attitudes and beliefs is that beliefs always involve liking or disliking, but attitudes don't necessarily involve liking or disliking. ⊚ ⊚

39)

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Beliefs are not as action-oriented as attitudes. ⊚ ⊚

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40)

Beliefs are more action-oriented than attitudes. ⊚ ⊚

true false

41) Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. ⊚ ⊚

true false

42) A consumer's belief about a product may have a positive or negative effect on his or her attitude about the product. ⊚ ⊚

43)

Attitudes are very good predictors of intention to buy. ⊚ ⊚

44)

true false

An expectation is a future outcome or event that a person anticipates will happen. ⊚ ⊚

true false

45) Consumers may evaluate a product not just on how well it performs, but on how it performs relative to their expectations. ⊚ ⊚

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true false

46) In light of the relationships between consumer expectations and satisfaction, it's usually best for promotion to slightly "over promise" what the firm can actually deliver. ⊚ ⊚

true false

47) Trust is the confidence a person has in the promises or actions of another person, brand, or company. ⊚ ⊚

true false

48) Highly trusted people, brands, and companies have many disadvantages in the marketplace. ⊚ ⊚

49)

Activities, interests, and opinions are the AIO variables used in lifestyle analysis. ⊚ ⊚

50)

true false

Attitudes, income, and opinions are the AIO variables used in lifestyle analysis. ⊚ ⊚

true false

51) Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's activities, interests, and opinions. ⊚ ⊚

true false

52) Marital status, age, and the age of any children in a household are the three demographic dimensions that determine the stage of family life cycle.

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⊚ ⊚

true false

53) The stage of family life cycle is usually determined by two demographic dimensions: income and number of children. ⊚ ⊚

54)

true false

Singles and young couples seem less willing to try new products because they earn less. ⊚ ⊚

true false

55) Younger families with no children are a good market for durable goods such as automobiles and furniture. ⊚ ⊚

56)

Older people seem to be more open to new products and brands than younger people. ⊚ ⊚

57)

true false

Families with teenagers tend to spend more on durables than younger families. ⊚ ⊚

58)

true false

Teens play an increasingly minor role in shaping family purchases. ⊚ ⊚

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true false

59) Empty nesters are people whose children are grown and who are now able to spend their money in other ways. ⊚ ⊚

60)

true false

Empty nesters is a term that refers to young couples with no children. ⊚ ⊚

true false

61) Consumer buying decisions are affected by social influences such as motivation, perception, learning, attitudes, and personality. ⊚ ⊚

true false

62) Buying responsibility and purchase influence between husband and wife vary greatly depending on the product and the specific family. ⊚ ⊚

63)

true false

Income by itself is usually a pretty good measure of social class. ⊚ ⊚

true false

64) The U.S. social class system is usually measured in terms of occupation, education, and housing arrangements. ⊚ ⊚

true false

65) People who have the same amount of income but who are in different social classes tend to spend their income in the same way.

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⊚ ⊚

true false

66) Given the same income, consumers in different social classes will handle themselves and their money very differently. ⊚ ⊚

true false

67) The group of people to whom an individual looks when forming attitudes about a particular topic is his or her reference group for that topic. ⊚ ⊚

68)

A person normally has several reference groups. ⊚ ⊚

69)

true false

An associative reference group includes people an individual desires to be like. ⊚ ⊚

true false

70) A group that an individual does not want to be like is referred to as a dissociative reference group. ⊚ ⊚

true false

71) An opinion leader is usually wealthier and better educated than the people he or she influences. ⊚ ⊚

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true false

72) Opinion leaders for one subject or product are also usually opinion leaders for many other subjects or products. ⊚ ⊚

true false

73) Marketers who want to aim at people within several different cultures are usually able to use the same marketing mix for all of them. ⊚ ⊚

true false

74) In the United States, the number of ethnic consumers is growing at a faster rate than the rest of the United States. ⊚ ⊚

true false

75) Both the birthrate and the buying power of ethnic groups in the United States are increasing. ⊚ ⊚

true false

76) Among ethnic minorities in the United States, the birthrate is lower than the overall population. ⊚ ⊚

77)

true false

Hispanics are the largest ethnic group in the United States. ⊚ ⊚

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true false

78)

Asian Americans are the largest ethnic group in the United States. ⊚ ⊚

true false

79) Of all the major ethnic groups in the United States, Asian Americans have the highest average household income. ⊚ ⊚

80)

true false

African Americans have the highest median family income of the major ethnic groups. ⊚ ⊚

true false

81) By 2019, the buying power of Hispanics and African Americans will each exceed $1 trillion a year. ⊚ ⊚

true false

82) Planning for cultural differences in international markets is easier than in domestic markets. ⊚ ⊚

83)

true false

The reaction of Italian women to Swiffer is an example of cultural influence. ⊚ ⊚

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true false

84) Needs, benefits sought, attitudes, motivation, and even how a consumer selects certain products all vary depending on the purchasing situation. ⊚ ⊚

true false

85) Different purchase situations may require different marketing mixes, even when the same target market is involved. ⊚ ⊚

true false

86) The consumer decision process begins when a consumer becomes aware of an unmet need. ⊚ ⊚

true false

87) As part of the basic problem-solving steps, a consumer searches for information, identifies alternatives and what factors are important, and then evaluates one or more products before deciding how best to meet a need. ⊚ ⊚

true false

88) How much effort is put into a buying decision depends on economic needs, psychological variables, social influences, culture, purchase situation, and the amount of risk involved. ⊚ ⊚

true false

89) Consumers use extensive problem solving when they put even limited effort into deciding how to satisfy a need. ⊚ ⊚

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true false

90) Consumers use limited problem solving when they put much effort into deciding how to satisfy a need. ⊚ ⊚

true false

91) Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. ⊚ ⊚

true false

92) A consumer interested in making a low-involvement purchase is most likely to use limited problem solving, rather than one of the other levels of problem solving. ⊚ ⊚

true false

93) Limited problem solving is used when the consumer has a lot of experience in meeting a need and has no need for additional information. ⊚ ⊚

94)

true false

Routinized response behavior is typical for low-involvement purchases. ⊚ ⊚

true false

95) When finding their favorite brand of shampoo temporarily out of stock, a supermarket shopper is more likely to take part in routinized response behavior than limited problem solving. ⊚ ⊚

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true false

96) The idea of a decision process implies that consumers always apply rational processes in their buying decisions. ⊚ ⊚

true false

97) Dissonance takes place when an individual is not confident about the rightness of a decision. ⊚ ⊚

true false

98) After making a purchase, buyers often wonder if they made the right choice. The resulting tension is called dissonance. ⊚ ⊚

99)

true false

The power of negative purchase experiences is greater than that of positive experiences. ⊚ ⊚

true false

100) Adoption process refers to the steps that individuals go through on the way to accepting or rejecting a new idea. ⊚ ⊚

true false

101) The steps in the adoption process are awareness, interest, evaluation, trial, decision, and confirmation. ⊚ ⊚

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true false

102) In the evaluation stage of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. ⊚ ⊚

true false

103) In the confirmation stage of the adoption process, the adopter continues to rethink the decision and searches for support for the decision. ⊚ ⊚

104)

true false

In the adoption process, the confirmation step usually precedes the decision step. ⊚ ⊚

true false

105) To monitor how a new idea is being adopted by the market, a marketing manager may use marketing analytics. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 106) Which of the following would be most helpful for predicting why a final consumer selects one of several similar brands? A) population data B) consumer spending patterns C) behavioral principles D) consumer income E) All of the answers would be equally helpful.

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107)

Which of the following is true of consumer behavior?

A) Specific behaviors vary a great deal for different people, products, and purchase situations. B) Understanding consumer behavior is a simple and a straightforward procedure. C) Cataloging all the possibilities for consumer behavior is easy to do. D) Psychological variables are not relevant in the consumer decision process. E) In today's global markets, variations in specific behaviors are not very common.

108) Which of the following is not a need that affects the buying behavior of economic buyers? A) economy of purchase or use B) convenience C) dependability in use D) motivation E) efficiency in operation or use

109)

Discretionary income is the portion of a person's income that pays for A) rent. B) food. C) luxuries. D) taxes. E) insurance.

110)

Of the following appeals, the one that has the most relevance to an economic buyer is

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A) "I'm lovin' it" (McDonald's). B) "Expect great things" (Kohl's). C) "Live for now" (Pepsi). D) "Who doesn't want 50% more cash?" (Capital One Rewards Card). E) "Relentlessly protecting your identity" (LifeLock).

111)

An economic buyer is a person who A) compares choices to get the best deal. B) makes buying decisions based only on price. C) will not pay extra for convenience. D) always buys products at the lowest price possible. E) is averse to spending time and money.

112)

An economic buyer is a person who

A) makes buying decisions based on behavioral needs rather than economic needs. B) logically compares choices to get the greatest satisfaction from expenditures of time and money. C) always buys the product that has the lowest price. D) is not willing to pay extra for convenience. E) All of the answers are correct.

113)

The economic-buyer theory assumes that A) income data are very useful for predicting consumer behavior. B) buyers logically compare choices in order to maximize their satisfaction. C) consumers should purchase only low-priced products. D) buyers focus primarily on price. E) None of the answers is correct.

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114) ________ are concerned with making the best use of a consumer's time and money—as the consumer judges it. A) Economic needs B) Psychological needs C) Social influences D) Behavioral influences E) Perceptual needs

115)

Which of the following is an economic need? A) desire for self-satisfaction and convenience B) desire for efficiency in the consumer's investment plans C) desire for efficiency in the use of the consumer's time and money D) desire for prestige and paying a high price for the best quality E) desire for status and paying a high price for the best quality

116)

Which of the following is not an economic need? A) dependability in use B) hunger C) economy of use D) convenience E) efficiency in use

117)

Which of the following is not an economic need of consumers? A) convenience B) dependability in use C) economy of purchase D) efficiency E) hunger

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118) At Home Depot, a customer can purchase a gallon of one-coat paint that contains the ingredients for both a primer and a color. What is the primary economic need being satisfied by this type of paint? A) dependability in use B) economy of purchase C) improvement of earnings D) convenience

119) A magazine ad for GEICO car insurance shows the GEICO gecko lying down while the copy reads, "Don't take high car insurance rates lying down." What primary economic need is being satisfied in this magazine ad? A) convenience B) improvement of earnings C) dependability in use D) economy of purchase E) efficiency in operation

120) An app for the iPhone that includes voice directions for a built-in GPS system can be helpful in finding a motel that is "off the beaten track." What is the primary economic need being satisfied by this app? A) economy of purchase B) dependability in use C) efficiency in use D) convenience E) improvement of earnings

121) In a television commercial for Maytag appliances, the spokesperson "Old Lonely" acts bored because no one is calling him to schedule a repair of their appliances. What is the primary economic need being illustrated in this TV ad?

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A) dependability in use B) convenience C) economy of purchase D) improvement of earnings E) efficiency in operation

122) A busy mom stops at a 7-Eleven store on the way home from work to purchase some bread, milk, and ice cream. What primary economic need is being satisfied by the 7-Eleven? A) dependability in use B) economy of purchase C) efficiency in operation D) convenience

123)

In 2017, ________ percent of households reported an income of less than $30,001. A) 25 B) 77 C) 29 D) 10 E) 5

124)

The median family income in the United States in 2017 was a little over A) $35,000. B) $40,000. C) $60,000. D) $75,000. E) $100,000.

125)

Discretionary income is defined as

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A) total market value of goods and services produced. B) gross domestic product per capita. C) income available after taxes. D) income available before taxes. E) income available after taxes and necessities.

126)

Discretionary income is a family's A) income after taxes. B) total purchasing power. C) income spent on durable goods. D) income after paying taxes and paying for necessities.

127) The amount of income a family has left after paying taxes and paying for its necessities is called its ________ income. A) personal B) discretionary C) marginal D) family E) modified

128)

What is left of income after paying for taxes and paying for necessities? A) net income B) real income C) deductible income D) gross income E) discretionary income

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129) Misty Hancock is a sales rep for a computer producer. Her salary last year was $30,000, and she earned another $5,000 in sales commissions. She paid $6,000 in taxes, and spent $8,000 on food, housing, a car, and other "necessities." What is Misty's discretionary income? A) $21,000 B) $34,000 C) $15,000 D) $24,000 E) $8,000

130) A young working couple earned $55,000 last year. They paid $16,000 in taxes and $20,000 in rent, food, insurance and other necessities. What was their discretionary income for the year? A) $39,000 B) $55,000 C) $30,000 D) $35,000 E) $19,000

131) A young working couple earned $35,000 last year and paid $10,000 in taxes. They spent $13,000 on rent, food, insurance, and other "necessities." What is their discretionary income? A) $12,000 B) $35,000 C) $22,000 D) $25,000

132) Keith McPherson earned $20,000 last year as a carpenter. He paid $6,000 for food, rent, medical expenses, and other "necessities." There was little construction work in February, so he took a trip to the Caribbean and spent $4,000. What was Keith's discretionary income last year?

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A) $4,000 B) $20,000 C) $10,000 D) $12,000 E) The information given is insufficient.

133) As the owner of a women's clothing store, Caroline Lipscomb has an income of $75,000. She pays $30,000 per year in taxes and another $17,000 per year for grocery bills, home mortgage payments, and car payments. Last year she went on a holiday to Italy and spent an additional $4,000. What was Caroline's discretionary income last year? A) $45,000 B) $75,000 C) $26,000 D) $28,000 E) The information given is insufficient.

134) A young working couple earned $50,000 last year. Of that, they paid $16,000 in taxes and $15,000 in rent, food, insurance and other necessities. Their discretionary income for the year was A) $35,000. B) $50,000. C) $19,000. D) $34,000. E) $15,000.

135) Ginny Paulson was just promoted to marketing manager for her company. She also gets a big raise with the promotion. On which of the following might Ginny spend her increased discretionary income?

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A) furnace repairs B) automobile insurance C) a smart TV D) medical services E) grocery staples

136) As the owner of a Bluetooth specialties store, Alicia Fountainbleau has an income of $72,000. She pays $30,000 per year in taxes and another $22,000 per year in grocery bills, house mortgage, and car payment. Last year she spent an additional $4,000 on a two-week vacation at a Club Med in Rio de Janeiro. What was Alicia's discretionary income last year? A) $20,000 B) $4,000 C) $42,000 D) $26,000 E) $50,000

137) Bart Thunderheart has an annual income of $75,000 a year. He pays $25,000 in taxes and spends another $15,000 on his home, car, food, and other "necessities." Last year, he decided to really enjoy his annual vacation, so he spent $5,000 to go skiing in Austria. What was Bart's discretionary income last year? A) $20,000 B) $5,000 C) $35,000 D) $30,000 E) $50,000

138) Manuel Acala is a marketing analyst, but he made only $28,000 last year because he was employed only part of the year. He paid $5,000 in taxes and spent another $10,000 for food, housing, a car, and other "necessities." Manuel's discretionary income was

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A) $28,000. B) $13,000. C) $23,000. D) $18,000. E) The information given is insufficient.

139) Kira Johannson's salary as a sales rep was reduced to $32,000 last year, but she earned an additional $10,000 in sales commissions. Her tax bill was $14,000, and bills covering other necessities such as food, housing, and transportation amounted to $11,000. Kira's discretionary income last year was A) $17,000. B) $11,000. C) $32,000. D) $28,000. E) $42,000.

140) Alberto Romez earned $100,000 last year as a Mercedes sales rep. He paid $10,000 in taxes and another $25,000 on food, housing, and other necessities. Alberto's discretionary income was A) $75,000. B) $65,000. C) $55,000. D) $45,000. E) $35,000.

141)

The economic-buyer theory

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A) says that most consumers do not know the economic value of the products they purchase. B) explains why people behave the way they do. C) includes psychological variables and social influences. D) is too simplistic to explain consumer behavior. E) assumes that consumers always buy the lowest-price alternative.

142)

The economic-buyer model

A) is seen as too simplistic by most marketing managers. B) assumes that consumers Are Affected by psychological variables and social influences. C) suggests that men and women behave differently as buyers. D) assumes that buyers don't have enough information to make logical choices and, as a result, buy products that are not a good value. E) None of the answers is correct.

143) ADT commercials that advertise the value of having a home burglar alarm system appeals to consumers' A) personal needs. B) economic needs. C) social needs. D) safety needs. E) physiological needs.

144) Of the following, the firms most likely to attract consumers by making an appeal to social needs are

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A) tire companies. B) online dating sites. C) tax preparation services. D) banks. E) electric companies.

145) Many consumers mentally block out marketing messages that do not interest them. This phenomenon is part of a person's A) motivation. B) needs. C) perception. D) attitudes. E) learning.

146)

________ is one of the psychological variables that affects a person's buying behavior. A) Perception B) Family C) Social class D) Reference groups E) Convenience

147) Which of the following lists includes only psychological variables that affect consumer buying? A) motivation, learning, perception, attitudes B) culture, learning, perception, attitudes C) culture, personality, perception, attitudes D) attitudes, personality, learning, culture E) perception, personality, learning, culture

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148)

Which of the following is not a psychological variable? A) attitudes B) social class C) motivation D) learning E) perception

149)

Regarding consumer motivation, the text states that A) wants are the basic forces that motivate people to do something. B) all needs and wants are caused by drives. C) wants are learned needs. D) the terms needs and wants mean the same thing. E) None of the answers is correct.

150)

What are the basic forces that motivate a person to do something? A) desires B) drives C) actions D) aspirations E) needs

151)

Wants are A) an effort to satisfy a drive. B) more basic than needs. C) strong stimuli that encourage action to reduce a need. D) needs that are learned during a person's life. E) unchanging during a person's life.

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152) Marci Bello is status oriented. When she buys clothing, she only considers items with well-known labels that her friends will notice. This behavior illustrates A) satisfaction of a need. B) satisfaction of a want. C) satisfaction of a belief. D) the economic buyer model of buyer behavior. E) All of the answers are correct.

153)

A ________ is a strong stimulus that encourages action to reduce or satisfy a need. A) want B) motivation C) drive D) desire E) deed

154)

When a consumer actually purchases a particular product, it is the direct result of a A) need. B) want. C) drive. D) desire for physical well-being. E) None of the answers is correct.

155)

Good marketing managers know that

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A) marketing strategies can't influence consumer "wants." B) marketers can't create internal drives in consumers. C) it is not that difficult to develop a marketing strategy that gets consumers to do what they don't want to do. D) None of the answers is correct.

156) After working for 18 hours, Katrina arrived home exhausted and wanted to go straight to sleep. Katrina's need to sleep is a ________ need. A) psychological B) social C) physiological D) behavioral E) emotional

157) Frustrated by a lack of freedom to make decisions at her work, Betty quit her job to find one with greater independence. What type of need motivated Betty's actions? A) psychological B) social C) physiological D) economic E) cultural

158)

The four-level PSSP hierarchy of needs includes A) psychological needs, safety needs, social needs, and personal needs. B) physiological needs, safety needs, personal needs, and social needs. C) psychological needs, financial needs, social needs, and personal needs. D) physiological needs, psychological needs, social needs, and financial needs. E) physiological needs, psychological needs, safety needs, and personal needs.

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159)

As ranked from lowest level to highest level, the hierarchy of needs model includes A) personal, social, safety, and physiological needs. B) physiological, safety, social, and personal needs. C) safety, personal, social, and psychological needs. D) social, personal, safety, and psychological needs. E) physiological, safety, personal, and social needs.

160) According to the hierarchy of needs model, the first needs most people try to satisfy are their ________ needs. A) safety B) personal C) physiological D) social E) Any of the answers may be correct, depending on the culture.

161)

Physiological needs are concerned with A) protection and physical well-being. B) love, friendship, status, and esteem. C) an individual's need for personal satisfaction. D) biological needs. E) responsibility and independence.

162)

________ needs are concerned with things that involve a person's interaction with others.

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A) Physiological B) Safety C) Biological D) Personal E) Social

163) Needs such as accomplishment and relaxation, which are unrelated to what others think or do, are known as A) physiological needs. B) safety needs. C) social needs. D) personal needs. E) biological needs.

164)

Which of the following are examples of personal needs? A) food, liquid, and rest B) accomplishment, fun, and freedom C) solutions, protection, and physical well-being D) love and friendship E) status and connecting with others

165) L'Oreal advertises its hair color with the popular tagline, "So it costs a bit more. But I'm worth it!" Here, L'Oreal's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social needs B) safety needs C) physiological needs D) personal needs

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166) Newman's Own (a salad dressing brand) donates 100 percent of its after-tax profits to progressive causes. Newman's Own is focusing on satisfying which level in the hierarchy of needs? A) social needs B) personal needs C) safety needs D) physiological needs

167) Hallmark advertises its gift items with the popular tagline, "When you care enough to send the very best." Here, the marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal E) psychological

168) Harley Owners Group connects motorcycle riders to one another. This group is focusing on satisfying which level in the hierarchy of needs? A) safety B) physiological C) social D) personal

169) Allstate Insurance promotes its auto and home insurance by telling consumers, "You're in good hands with Allstate." Which of the following types of needs is Allstate trying to satisfy?

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A) personal needs B) social needs C) physiological needs D) safety needs E) behavioral needs

170) The American Heart Association promotes its awareness campaign with the popular tagline, "Learn and Live." Here, The American Heart Association's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal

171) On its website, Tylenol identifies the top headache triggers and offers solutions to headache sufferers. Tylenol is focusing on satisfying which level in the hierarchy of needs? A) physiological needs B) behavioral needs C) personal needs D) safety needs E) social needs

172) In the PSSP hierarchy of needs model, which level is illustrated by a Fidelity campaign on TV that proclaims its individual retirement account (IRA) is a sound investment for the future? A) personal needs B) physiological needs C) social needs D) safety needs

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173) The Cleveland Water Department promotes its safe water with a catchy tagline, "The label says Fiji because it's not bottled in Cleveland." Here, the Cleveland Water Department's marketing effort focuses on satisfying which level in the hierarchy of needs? A) physiological B) social C) safety D) personal

174) The California Dairy Association promotes its milk campaign with the popular tagline, "Got milk?" Here, the California Dairy Association's marketing effort focuses on satisfying which level in the hierarchy of needs? A) social B) safety C) physiological D) personal E) psychological

175) In the PSSP hierarchy of needs model, which level is illustrated by a "Got Milk?" magazine campaign that encourages customers to drink more milk? A) physiological needs B) safety needs C) social needs D) personal needs

176)

Which of the following statements about "needs" is true?

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A) A higher-level need may develop before lower-level needs are all satisfied. B) If lower-level needs are reasonably satisfied, those at higher levels become more dominant. C) A particular product may satisfy more than one need at the same time. D) All of the statements are true.

177)

When studying consumer needs, a marketer should

A) know that a product may be a want or a need depending on what the consumer has learned during his or her life. B) try to understand how the marketing mix can satisfy a set of needs, rather than only one. C) realize that he or she cannot create needs, merely identify them. D) All of the answers are correct.

178)

________ refers to how we gather and interpret information from the world around us. A) Retention B) Perception C) Attitude D) Learning E) Lifestyle analysis

179) us?

What selective processes are used in gathering and interpreting marketing stimuli around

A) selective exposure, selective perception, and selective attention B) selective attention, selective perception, and selective retention C) selective exposure, selective attention, and selective reception D) selective exposure, selective perception, and selective retention

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180)

Which of the following is not one of the selective processes? A) selective perception B) selective distribution C) selective exposure D) selective retention

181) The way our eyes and minds seek out and notice only information that interests us is called A) conscious cognition. B) selective exposure. C) selective retention. D) preconscious perception. E) selective perception.

182) Selective ________ refers to processes that screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. A) exposure B) learning C) retention D) attention E) perception

183) When consumers screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs, it is called

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A) cognitive perception. B) selective perception. C) selective retention. D) conscious perception. E) selective exposure.

184)

Consumers remembering only what they want to remember is called A) conscious response. B) selective retention. C) selective exposure. D) cognitive learning. E) selective perception.

185) While planning a vacation, Betty Jo visited the website of a package tour provider and closed a pop-up ad without even noticing what it was for. This is an example of selective A) retention. B) exposure. C) perception. D) learning. E) action.

186) When listening to music on the radio, many consumers automatically switch stations when commercials begin to run, and they search until they find another station that is playing music. This tendency is an example of selective A) exposure. B) perception. C) retention. D) learning. E) reception.

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187) Tammi Soloft has itchy eyes and a stuffy nose, and she suddenly becomes aware of many TV ads for allergy products that she never noticed before. This illustrates selective A) exposure. B) perception. C) retention. D) cognition. E) None of these answers is correct.

188) Carmela Sanchez is planning to buy a pair of running shoes. Recently, she has been noticing more Adidas advertising in magazines. This is an example of A) a physiological need. B) dissonance. C) need satisfaction. D) selective exposure. E) a consumer expectation.

189) On his way to a GM dealership to pick up a new truck he has purchased, Ian Mann hears a Ford ad that says that Ford trucks have more power than Chevy trucks. Ian thought that the ad said that the Chevys had more power. This illustrates A) selective perception. B) learning. C) selective retention. D) reinforcement. E) selective exposure.

190) After his Political Science class, Andre only remembered the parts of his professor's lecture that he agreed with. This is an example of selective

Version 1

A) retention. B) exposure. C) information. D) attention. E) action.

191)

________ is a change in a person's thought processes caused by prior experience. A) Selective retention B) Processing C) Wanting D) Learning E) Perception

192)

Which of the following is not a major step in the learning process? A) dissonance B) drive C) response D) cues E) reinforcement

193)

The order of the steps in the learning process is A) drive, cue, response, reinforcement. B) cue, response, drive, reinforcement. C) cue, response, reinforcement, drive. D) drive, response, reinforcement, cue. E) reinforcement, drive, cue, response.

194)

Which of the following statements about the learning process is true?

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A) A cue is a strong stimulus that drives an individual. B) Learning occurs only when a drive is satisfied. C) Cues are the causes of drives. D) Reinforcement strengthens the relationship between a cue and a response. E) All of the statements are true.

195)

Which of the following statements about learning is false?

A) Satisfaction with a product purchase is reinforcement. B) Repeated reinforcement is likely to lead to routine buying. C) A marketing manager can use a package as a cue. D) Reinforcement in the learning process weakens the relationship between a cue and a response. E) Almost all consumer behavior is learned.

196)

Which of the following statements concerning reinforcement is false?

A) Reinforcement of the learning process occurs when the response is followed by satisfaction. B) Reinforcement strengthens the relationship between the cue and the response. C) Reinforcement leads to satisfaction and an increase in the drive. D) Repeated reinforcement leads to development of a habit. E) If an experience is satisfactory, positive reinforcement occurs.

197)

Which of the following observations about learning is false? A) Learning is rarely based on direct experience. B) Consumer learning may result from things that marketers do. C) Learning can be based on indirect experience or associations. D) Consumer learning may result from stimuli that have nothing to do with marketing. E) Almost all consumer behavior is learned.

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198) A movie theater runs a film clip that shows pictures of candy, popcorn, and soft drinks prior to running the featured movie. The intent is to get theater patrons to make purchases at the concession stand in the theater lobby. This process is an example of which of the following behavioral influences on buying behavior? A) attitudes B) beliefs C) selective processes D) learning E) None of the answers is correct.

199) In the learning process, ________ can be in the form of products, signs, ads, and other stimuli in the environment. A) reinforcement B) responses C) signals D) retention E) cues

200)

Which of the following is an example of using a cue to attract consumers? A) using a label with red, white, and blue colors to stir patriotic feelings B) adding lemon scent to a soap C) using a package that looks like the one for a popular brand D) adding pine scent to a cleansing fluid E) All of the answers are correct.

201)

When Taco Bell shows a large close-up of a chicken taco in a television ad, it is

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A) encouraging selective retention. B) hoping to encourage extensive problem solving by the audience. C) appealing to the social needs of the audience. D) appealing to the economic needs of the audience. E) using a cue to encourage a particular response to the hunger drive.

202) A divorced dad commuting to work on a major highway notices a billboard for McDonald's any-size $1 soft drink. This billboard is an example of a(n) A) reinforcement. B) response. C) drive. D) cue. E) attitude.

203) A grocery store sprays an aerosol scent that smells like fresh baked bread near its packaged bakery items. This is A) a case of a manager developing a need. B) likely to have no effect because selective retention will eliminate any effect of the smell. C) a case of linking a response with a drive. D) an example of trying to link a cue with a marketing mix. E) a violation of the selective processes.

204)

An attitude is A) the same as an intention to buy. B) a person's point of view about something. C) easy to change. D) the same as a belief. E) All of the answers are correct.

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205) A(n) ________ is a person's point of view toward a product, an advertisement, a salesperson, a firm, or an idea. A) attitude B) belief C) preference D) impression E) cue

206)

Attitudes are A) things we believe strongly enough to be willing to take some action. B) more action-oriented than beliefs. C) reasonably enduring points of view about something. D) usually thought of as involving liking or disliking. E) All of the answers are correct.

207)

Which of the following statements about consumer buying behavior is true? A) Attitudes affect the selective processes, learning, and buying decisions. B) Many consumers with a favorable attitude toward a product may have no intention to

buy it. C) Beliefs are less action-oriented than attitudes. D) All of the statements are true.

208)

Some marketers stretch the meaning of "attitude" to include

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A) intention to buy. B) needs. C) beliefs. D) psychographics. E) actual purchasing behavior.

209)

Consumers' attitudes can be learned from A) exposure to the attitudes of others. B) promotion that is directed toward them. C) previous experiences. D) family and friends. E) All of the answers are correct.

210)

Which of the following observations concerning beliefs is false? A) Beliefs don't necessarily involve any liking or disliking. B) A belief is a person's opinion about something. C) Beliefs may help shape a consumer's attitudes. D) Beliefs are more action-oriented than attitudes.

211)

The statement "I like Southwest Air" is an example of a(n) A) belief. B) intention. C) attitude. D) drive. E) None of the answers is correct.

212)

The statement "Almond Joy is made with real almonds" is an example of a(n)

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A) belief. B) intention. C) attitude. D) cue. E) None of the answers is correct.

213)

The statement "I plan to see the new Tom Hanks movie" is an example of A) a drive. B) reinforcement. C) an attitude. D) a belief. E) an intention.

214)

Which of the following would be the most difficult task facing a marketing manager? A) discovering the attitudes of the firm's target market B) changing existing negative attitudes C) creating new attitudes toward his or her brand D) promoting existing attitudes E) strengthening existing positive attitudes

215)

When dealing with consumer attitudes, marketers should know that

A) it is usually easier to change a negative attitude about a product than to reinforce a positive attitude. B) consumer attitudes tend to be enduring. C) attitudes are very good predictors of how people will behave. D) consumer attitudes are less action-oriented than consumer beliefs. E) None of the answers is correct.

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216)

A(n) ________ is an outcome or event that a person anticipates or looks forward to. A) response B) need C) desire D) expectation E) attitude

217)

An expectation is A) an event that a person likes to remember. B) a positive cue. C) an unfulfilled need. D) an outcome that a person looks forward to. E) None of the answers is correct.

218)

Trust is the confidence a person has in the promises or actions of A) another person. B) a brand. C) a company. D) a recommender. E) All of the answers are correct.

219)

Psychographics may also be called A) personality analytics. B) social group dynamics. C) lifestyle analysis. D) opinion insight. E) attitude measures.

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220)

The AIO items used in lifestyle analysis include A) activities, intentions, and opinions. B) attitudes, intentions, and opinions. C) attitudes, income, and opinions. D) activities, interests, and opinions. E) attitudes, interests, and opinions.

221)

Psychographics, or lifestyle analysis, analyzes an individual's A) opinions. B) demographics. C) activities. D) interests. E) All of the answers are correct.

222) Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's A) safety, social, and personal needs. B) actions, interests, and occupation. C) activities, interests, and opinions. D) culture, beliefs, and attitudes. E) psychological and physiological needs.

223) Studying a consumer's psychographic characteristics will help marketers understand the target audience's hobbies, politics, and

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A) geographic area. B) age bracket. C) family size. D) income level. E) recreational interests.

224)

In psychographics AIO analysis, all of the following are examples of activities EXCEPT A) age. B) entertainment. C) club membership. D) shopping. E) hobbies.

225)

Consumer buying behavior is affected by A) opinion leaders. B) social class. C) physiological, safety, social, and personal needs. D) reference groups. E) All of theanswers affect consumer buying behavior.

226) Which of the following social influences will likely have the greatest impact on a teenager's purchase of a skateboard? A) family B) reference group C) culture D) ethnic group E) social class

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227) Parents who spent years limiting purchases to home necessities and kids' entertainment often embrace more luxury-oriented buying patterns later in life. This phenomenon is related to A) changes in purchase situation. B) selective retention. C) reinforcement. D) changed physiological needs. E) empty nester behavior.

228) The inclusion of multiple language options in automated bank teller machines illustrates how some marketers are responding to A) the growing singles market. B) emerging reference groups. C) situational buying. D) growing ethnic groups. E) social class fragmentation.

229) Marketers increasingly hire celebrities and even full-time bloggers to engage consumers in social media discussions about new products. A person who is able to influence followers to try products is a(n) A) channel captain. B) consumer advocate. C) marketer. D) figurehead. E) opinion leader.

230)

________ is a social influence that affects a person's buying behavior.

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A) Perception B) Family C) Motivation D) Learning E) Attitude

231)

Which of the following dimensions affects family spending? A) income B) age of children C) age of the couple D) marital status E) All of these dimensions affect family spending.

232)

Which of the following is not a stage in the traditional flow of the family life cycle? A) young single B) young married without children C) young divorced with children D) middle-aged married without dependent children E) young married with children

233) The traditional family flow, according to the family life cycle, does who are

not include people

A) middle-aged divorced without dependent children. B) young married with children. C) middle-aged married with children. D) middle-aged married without dependent children. E) young married without children.

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234)

Which of the following statements is true?

A) Divorced families usually have more discretionary income than traditional families. B) Singles and young couples are less willing to try new products than are older couples. C) Empty nesters are frequently big spenders. D) Buying responsibility and influence vary little from one family to another. E) None of the statements is true.

235)

Of the following, which are the most receptive to new products and new brands? A) families with small children B) older people with no children C) families with teenagers D) families whose children are grown E) younger people with no children

236)

Of the following, which are the most receptive to new products and new brands? A) young people B) senior citizens C) empty nesters D) middle-aged people E) All of these are equally receptive to new products and new brands.

237)

Regarding the family life cycle, singles and younger couples without children A) are more willing to try new products and brands. B) tend to be carefree shoppers who are not very price-conscious. C) often wait to buy basic durable goods until they have children. D) feel more financially squeezed than couples with young children. E) All of the answers are correct.

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238) Ted and Amy Balderas were married last year, at age 24. They have no children, and both are currently working hard to build their careers. Couples like Ted and Amy A) are likely to be a poor target for firms that are trying to market a new brand or new product concept. B) usually focus on buying durables, such as furniture and appliances. C) usually don't spend money on discretionary purchases. D) are unlikely to be careful, price-conscious shoppers. E) None of the answers is correct.

239) Which of the following statements is not true of the effect of marital status, age, and the age of any children in the family on how people spend their income? A) Singles and young couples are more willing than older married people to try new products and brands. B) Younger people usually earn more than older consumers but spend less on discretionary items. C) Only as children arrive and grow does family spending shift to soft goods and services. D) Young families with children often make more purchases on credit and save less of their income.

240)

Teenagers A) have no influence on the buying behavior of their parents. B) are not an attractive market because they do not spend much money. C) have become a target for many firms. D) have essentially the same buying habits as they had before reaching their teen years. E) None of the answers is correct.

241)

American teenagers

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A) are not interested in expensive clothes. B) are not involved in shopping. C) currently spend around $200 billion a year. D) develop recreation and education needs that are easy on the family budget. E) do not influence family purchases.

242)

U.S. teenagers spend about ________ per year. A) $100 billion B) $150 billion C) $200 billion D) $250 billion E) $300 billion

243)

Empty nesters A) are senior citizens. B) are people over 65 who live alone. C) often have high incomes and fewer required expenses. D) are singles and couples without children who have much discretionary income. E) None of the answers is correct.

244)

Empty nesters A) are usually in the 30 to 44 age group. B) are not an attractive market for any items. C) spend a larger percentage of their income on childcare. D) are people whose children are grown. E) disrupt the family life-cycle pattern.

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245) HomeFront Construction Company built large, single-family homes for 25 years. Then there was a shift toward more demand for small luxury condominiums, and HomeFront changed its focus. The change in demand could be explained by A) the increasing number of empty nesters. B) the fact that consumers in urban areas generally have higher incomes. C) the increasing number of people whose children are grown. D) All of the explanations could be relevant.

246)

Current consumer research suggests that the family's purchasing agent is now the A) husband. B) child or children. C) wife. D) It varies depending on the product and the family.

247) Peter Janca noticed, during his weekly grocery shopping, that 7-Up was on sale. Even though he could have saved money with the 7-Up, Peter bought Mountain Dew because that's the brand his children prefer. Peter was responding to A) selective exposure. B) dissonance. C) a marketing influence. D) a social influence. E) a drive.

248)

Your social class level does not depend directly on your

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A) housing location. B) income level. C) occupation. D) education. E) type of housing.

249)

The social class system in the United States A) does not affect how people spend, but it does affect how they save. B) may put people with the same income level in different social classes. C) is based on a person's educational level. D) is much more rigid than in Europe and Asia. E) does not affect people's attitudes.

250)

Social class in the United States is usually measured in terms of A) income. B) occupation, education, and housing arrangements. C) income, occupation, and education. D) race, religion, and occupation. E) income, occupation, and religion.

251) In the United States, social class groupings are typically based on all of the following EXCEPT A) type of housing. B) education. C) community participation. D) occupation. E) location of housing.

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252)

Which of the following statements about social class is

false?

A) The various classes tend to have different attitudes. B) The various classes tend to save money in different ways. C) Income by itself can be a pretty good measure of social class. D) The various classes tend to have different beliefs. E) The various classes tend to borrow money in different ways.

253)

Which of the following statements concerning social class is false? A) Income by itself is usually a good measure of social class. B) In most countries, social class is closely related to a person's occupation. C) In most countries, there is a general relationship between income level and social

class. D) Almost every society has some social class structure. E) People in different social classes often spend, save, and borrow money in very different ways.

254)

Which of the following statements about social class is false?

A) People in different social classes tend to have different beliefs and feelings. B) People with the same income level are always in the same social class. C) Variables such as occupation, education, and type of housing form the basis of simple approaches for measuring social class. D) A social class is a group of people who have approximately equal social position as viewed by others in the society.

255) ________ refers to the people to whom an individual looks when forming attitudes about a particular topic.

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A) Family B) Social class C) Ethnic group D) Focus group E) Reference group

256)

Which of the following statements about reference groups is true?

A) Reference group influence is so strong that a person normally has only one. B) Reference group influence is greatest for older people. C) Reference groups sometimes include people an individual does not want to be like. D) Reference group members may not even know the people who influence their values and attitudes. E) None of the statements is true.

257)

A good marketing manager knows that

A) there are different types of reference groups that might influence a decision. B) most consumers have only one reference group. C) a consumer's family is not a reference group. D) reference groups usually have the most influence on purchases of products that are not easily seen by others. E) None of the answers is correct.

258)

Which of the following observations about reference groups is false?

A) Reference groups are people to whom an individual looks when forming attitudes about a particular topic. B) An individual usually has a single reference group for all topics. C) An individual may make buying decisions based on what the group thinks. D) Reference group influence is stronger for products that others can observe. E) Reference group influence is stronger for products that relate to status in the group.

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259) Reference group influence would be weakest for determining which particular ________ a person buys. A) watch B) cosmetics C) clothing D) laundry soap E) car

260) Reference group influence is likely to have the strongest effect on the particular brand of ________ purchased. A) dishwasher detergent B) frozen peas C) batteries D) watch E) Reference group influence would be about the same for each of these products.

261) Natasha Talbott was interested in a new set of golf clubs. She discussed the various types with some knowledgeable friends and relied on their advice. Natasha's friends were acting as A) an economic influence. B) routinized decision makers. C) a social class. D) a lifestyle group. E) a reference group.

262) In the Jockey underwear ads showing young people on the beach and the slogan, "Let 'em know you're Jockey," the company is hoping to use ________ groups to influence consumer behavior.

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A) cultural B) family C) opinion D) reference E) social

263) When Ariat gave boots away to popular rodeo riders, other riders began asking for the Ariat brand, and Western stores were eager to sell the boots. Ariat used ________ groups to influence consumer behavior. A) social B) family C) reference D) cultural E) opinion

264) Marty plays pee-wee football in a small town in Massachusetts. He insists on wearing Under Armor clothing because it is endorsed by his favorite athlete, quarterback Tom Brady of the New England Patriots. This is an example of a(n) A) aspirational reference group. B) selective exposure. C) discretionary perception. D) routinized response behavior. E) associative reference group.

265) Which of the following is the best example of the influence of an associative reference group?

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A) Jada asked her mom to buy her Vans sneakers because all her friends got them for Christmas. B) Tyler no longer wears a t-shirt promoting a rock star who was recently arrested for domestic assault. C) Karen likes to wear Nike clothing because it is endorsed by her favorite athlete, Simone Biles. D) Warren is in the market for a Ford pickup truck and now they seem to be everywhere he looks. E) Kayla is a person who uses social media to influence others’ buying decisions.

266)

A ______ reference group includes people that an individual does not want to be like. A) dissociative B) aspirational C) associative D) selective E) dissonance

267)

Opinion leaders are A) usually better educated than others. B) usually wealthier than others. C) people who influence others. D) rarely involved in product-related discussions with the people who "follow" them. E) All of the answers are correct.

268)

Which of the following statements about opinion leaders is true?

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A) Opinion leaders are usually wealthier and better educated than others. B) Opinion leaders on one subject aren't necessarily opinion leaders on another. C) Firms always aim their marketing mixes at general consumers, not opinion leaders. D) Favorable publicity from opinion leaders rarely helps a marketing mix. E) Opinion leaders are the same as reference groups.

269) Which of the following is true of the impact that social media has on the consumer decision process? A) Marketing managers have direct control over social media influences. B) Social media limits consumers' exposure to a wide range of reference groups. C) Social media amplifies the voices of opinion leaders. D) Consumer adoption of the web and social media has had no significant effect on the consumer decision process. E) Marketing managers do not need to monitor the use of social media by opinion leaders.

270) Which of the following examples illustrates social media's amplification of the voice of opinion leaders? A) an e-commerce site providing attractive offers to its regular customers B) a retail store announcing a sweepstake on its company website C) a seasoned tourist posting a long, detailed, positive review at Hotels.com D) a podcast that receives thousand views and hits E) a brand sending a message about Twitter to its followers

271) A group of new-generation mothers blogging about products they like and dislike attracts a lot of readers, mainly those who are expecting a baby. These new-generation mothers are examples of

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A) message mediators. B) gatekeepers. C) liaisons. D) opinion leaders. E) category captains.

272) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous group of people is a(n) A) culture. B) family. C) evoked set. D) social class. E) reference group.

273) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people is a(n) A) tradition. B) class. C) society. D) culture. E) ethnicity.

274) The whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people is called a(n) A) personal environment. B) culture. C) motivation. D) learned set. E) opinion set.

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275)

Which of the following statements about culture and consumer behavior is true?

A) Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. B) Culture may exert many subtle influences on other aspects of consumer behavior. C) Different cultural subgroups are likely to require different marketing mixes. D) All these statements are true.

276)

People from different ethnic groups A) create challenges for marketers, not opportunities. B) do not play an important role in the American marketplace. C) may be influenced by very different cultural variables. D) have common needs. E) have similar ways of thinking.

277)

Which of the following statements is true of culture and international markets?

A) Assuming cultural homogeneity across nations almost guarantees success in international markets. B) Planning strategies that consider cultural differences in international markets are simple and straightforward. C) Treating each foreign market as a separate market with its own submarkets and culture is a useful method in marketing. D) General human tendencies do not vary across cultures; therefore, it is insignificant to consider cultural differences in international markets. E) Ignoring cultural differences is almost a guarantee of success in international markets.

278) U.S.-based Myva Foods Inc. is expanding its business to the Asian market. Which of the following will not be effective in the company's efforts to expand to international markets?

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A) paying close attention to the cultural differences between Myva's home country and the host countries B) finding new ways to blend the Four Ps of the marketing mix in the new market by making an effort to understand the local culture C) applying the same marketing mix Myva uses in the U.S. market to the Asian market D) putting more effort into planning strategies for the international markets, even though it has experienced success in the U.S. market

279)

Which of the following statements regarding ethnic shifts in the American market is true?

A) Estimates indicate that in 2019 the buying power of Hispanics will exceeded a trillion and half dollars. B) Estimates indicate that by 2019 the buying power of African Americans will exceed 1 trillion dollars. C) Estimates indicate that in 2018 Asian Americans had over 1 trillion dollars in buying power. D) The buying power of ethnic submarkets is increasing rapidly. E) All of the statements are true.

280)

Which of the following statements about ethnic dimensions of the U.S. market is true? A) Ethnic groups buy differently and have different needs. B) Many firms make the mistake of treating all consumers in an ethnic group as a single

group. C) The number of ethnic consumers is growing at a faster rate than the overall society. D) The buying power of ethnic submarkets is increasing rapidly. E) All of the statements are true.

281)

Ethnic markets are becoming more important to marketers because

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A) the buying power of ethnic submarkets has been decreasing. B) the median age of Asian Americans, African Americans, and Hispanics is much higher than that of whites. C) the number of ethnic consumers is growing at a much faster rate than the overall society. D) they make a clear segment with similar backgrounds and common language, religion, and culture. E) the birthrate of Asian Americans, African Americans, and Hispanics is lower than that of whites.

282)

Which of the following statements by marketing managers is not logical and true?

A) "We are planning to appeal more to Hispanic consumers, since this group has surged and is now over 15 percent of the population." B) "We're building supermarkets that will appeal to Hispanic consumers; it's a big investment, but the Hispanic population in the United States spends more than $1 trillion a year." C) "We are adapting our diaper promotion to target African American and Hispanic parents, since the birthrate in those groups is higher than for whites." D) "We will target Hispanics in California, New York, and Texas, since over half of their population in the United States is concentrated in those three states." E) "We are going to appeal to the African American group because it is a large, homogeneous target market."

283)

The largest ethnic minority group in the United States is composed of A) African Americans. B) Asian Americans. C) Native Americans. D) Polish Americans. E) Hispanics Americans.

284)

Which of the followings statements about the Hispanic population is false?

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A) More than half of all Hispanics in the United States live in three states. B) In 2017, over 25 percent of the U.S. population was Hispanic. C) The Hispanic population is much younger than the population in general. D) Hispanics are the largest ethnic group in the United States. E) In 2019, the buying power of U.S. Hispanics is estimated to exceed $1.5 trillion.

285) Compared to the other major ethnic groups in the United States, which of the following would an African American consumer be more likely to buy? A) a product tied to cultural traditions B) fragrances C) electronic goods D) dried grains E) a product sold online

286)

Which of the following statements about Asian Americans is false? A) Asian Americans are the largest and fastest-growing ethnic group in the United

States. B) One-third of all Asian Americans live in California. C) Asian Americans have the highest average household income of the major ethnic groups. D) Asian Americans make up 6 percent of the U.S. population. E) Asian Americans disproportionately buy more fresh produce, organic foods, and electronic goods, as compared with other groups.

287) A college student on her way to take an exam remembers that she doesn't have a pencil with an eraser, which the instructor asked everyone to bring. The store where she stops doesn't have regular pencils, but it does sell Scripto mechanical pencils priced at $2.95. That is what she buys. This case illustrates the effect of

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A) the personal environment. B) culture. C) the purchase situation. D) the learned set. E) dissonance.

288) A person who purchases flowers will select different floral arrangements for a retirement party, a funeral, and a Valentine's Day date. This illustrates the impact of ________ on purchase decisions. A) economic needs B) psychological variables C) social influences D) the purchase situation E) extensive problem solving

289) Which of the following illustrates time and surroundings as factors of the purchase situation that can greatly stimulate buying behavior? A) routine trip to grocery store B) using mass transit to travel to and from work C) Black Friday shopping D) buying online E) paying a monthly cell phone bill

290) A salesperson driving to visit a client located two hours away has a tire blow out on the highway. He walks about a mile to the next exit, where he finds a service station. The owner of the station says he can replace the blown tire, but it will cost twice as much as it would to purchase a tire in the salesperson's home city. The salesperson, not wanting to be late for his appointment, agrees to pay the higher price in order to get back on the road. This case illustrates the effect of ________ on buying behavior.

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A) cultural background B) social groups C) the purchase situation D) the learning situation E) reference groups

291)

________ is a time-related factor. A) Demographic intensity B) Urgency of a need C) Environmental viability D) Economy of purchase E) Sociological interest

292)

When the need for a product or service is urgent, customers are A) less inclined to evaluate a range of options. B) more likely to downplay convenience. C) less likely to be stimulated by impulse. D) more likely to be involved in extensive problem solving. E) more likely to extend the adoption process.

293)

In which of the following situations is time influencing the purchase situation the most?

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A) Jiah purchases a gift for his mother after viewing an online offer. B) Henry visits a discount store to compare the store's pricing with other regular stores before purchasing a lawn mower. C) Kelly visits the city's central mall and checks various brands of sunglasses before she decides to purchase one from the Lanezone brand. D) Beulah, on her way to work, realizes that her car has a flat tire. She gets it fixed at the nearest auto service station without evaluating other alternatives. E) Ronaldo reviews websites and a consumer magazine as he considers buying a new television.

294) An on-site auction may stimulate a different response than an online auction. This is an example of ________ affecting the purchase decision. A) demographics B) time C) surroundings D) task E) culture

295)

The consumer decision process begins with A) a routinized response. B) need awareness. C) information search. D) problem solving. E) alternative evaluation.

296) For a home-based purchase of a furnace, the consumer decision process typically begins when

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A) home heating commercials create product awareness. B) a furnace sale is advertised in coupon mailings. C) the first cold day of winter sets in. D) a malfunction occurs in an older furnace. E) ten years have passed since the last purchase.

297) Which of the following would have the least influence on a consumer purchase of a 5gallon waterproof sealant for wood decks and fences? A) the purchase situation B) social influences C) economic needs D) psychological variables E) opinion of an opinion leader

298) A consumer who seeks to purchase a 4K TV for the first time for a home entertainment theater is likely to A) use a routinized response behavior. B) engage in limited problem solving. C) engage in extensive problem solving. D) make a low-involvement purchase. E) seek the brand with the lowest prices.

299) Which of the following is an important problem-solving step for a consumer trying to satisfy a need? A) search for information B) identify alternatives C) set criteria D) evaluate alternatives E) All of the answers are correct.

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300) When consumers use a problem-solving process to make purchase decisions, what is the next step after they become aware of a problem? A) evaluating alternative solutions B) gathering information about possible solutions C) deciding on the appropriate solution D) evaluating the decision E) making the commitment to purchase a particular product or service

301) Alejandro Allende needs a new computer. He is researching the different brands by talking to friends, discussing it with his company's IT department, and looking at different computer-company websites. In terms of consumer problem solving, Alejandro is A) searching for information. B) identifying alternatives. C) setting criteria. D) evaluating alternatives. E) recognizing needs.

302) Which of the following is not one of the levels of consumer problem solving discussed in the text? A) dissonance problem solving B) routinized response behavior C) extensive problem solving D) limited problem solving

303) When a consumer puts much effort into deciding how to satisfy a need, the consumer engages in

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A) extensive problem solving. B) critical problem solving. C) routinized response behavior. D) limited problem solving. E) intensive problem solving.

304)

What is the likely level of involvement in a purchase decision for a new couch? A) extensive B) limited C) low D) moderate E) routine

305) Extensive problem solving probably would be required by a recent college graduate in the purchase of A) living room furniture. B) a new computer. C) a new home. D) a sports car. E) All of the answers are correct.

306) Extensive problem solving probably would not be required by young newlyweds in the purchase of a A) stereo system. B) soft drink. C) home. D) an Ultra HD TV. E) car.

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307) Lars Sorenson is a college student who needs to purchase a suit for job interviews. In the past his father has helped him buy suits. This time, he is the sole decision maker and is paying for the $450 suit with money he earned at his part-time job. Lars is concerned about good fit and good value, so he visits several stores before making his purchase. For Lars, this situation seems to be one of A) routinized response behavior. B) low-involvement purchasing. C) extensive problem solving. D) limited problem solving. E) adoption purchasing.

308) Chelsea is buying her first television. She wants to make the right decision, so she consults several websites for product reviews, talks to friends and salespeople at electronics stores, determines several key criteria, and evaluates six different sets. For her television purchase, Chelsea has used A) extensive problem solving. B) a focused information search. C) routinized response behavior. D) limited problem solving. E) low-involvement buying.

309)

Limited problem solving is used A) when consumers put much effort into deciding how to satisfy a need. B) for purchases that have little importance or relevance for the customer. C) by consumers when some effort is required in deciding the best way to satisfy a need. D) when consumers regularly select a particular way of satisfying a need when it occurs. E) mostly for impulse purchases.

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310) Monica does not find her regular brand of shampoo at the store. She looks at the bottles of three other brands before deciding on the Shine-On brand. Monica has engaged in ________ problem solving. A) limited B) intensive C) routinized D) extensive E) analytical

311) What is the likely level of involvement in a purchase decision for a small kitchen appliance? A) extensive B) limited C) low D) moderate E) routine

312)

The purchase of which of the following items involves routinized response behavior? A) a laptop B) a mattress C) a new suit D) a silver ring E) a fast-food restaurant meal

313)

Limited problem solving probably would be required by empty nesters in the purchase of

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A) sports clothes. B) a restaurant's services. C) a plumbing repair service. D) a replacement garbage disposer. E) All of the answers are correct.

314) Eddie Falco went to a grocery store to buy his favorite brand of ice cream; however, the store was temporarily out of that brand, so he looked over the other familiar brands and decided to try one that is well-advertised. This case illustrates A) routinized response behavior. B) intensive problem solving. C) limited problem solving. D) extensive problem solving. E) low-involvement behavior.

315)

Which type of problem solving is typical for a low-involvement purchase? A) extensive problem solving B) critical problem solving C) limited problem solving D) intensive problem solving E) routinized response behavior

316)

Routinized response behavior

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A) is most likely when past purchases of similar products have not satisfied the consumer's needs. B) is more likely when previous behavior has not yet been reinforced. C) is most common for purchases where the consumer has much experience in how to meet a need. D) increases the time required to make a purchase decision. E) is likely in a new purchase situation.

317) More than 600,000 loyal customers signed up in advance to purchase the new iPhone 8 in an Apple store the first day it was available for sale in the United States What type of response behavior were these Apple followers demonstrating? A) low-involvement buying B) limited problem solving C) extensive problem solving D) routinized response E) dissonance response

318) When Corey runs out of shampoo, he buys whatever brand is on sale at his local CVS drugstore. What is his level of involvement in the purchase decision for shampoo? A) extensive B) limited C) moderate D) modest E) routine

319)

Which of the following is least likely to be an example of routinized response behavior?

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A) buying a Coke B) purchasing a new pair of shoes C) buying soap at a convenient supercenter D) buying a burrito at Taco Bell E) filling the car with gasoline

320) Routinized response behavior would probably be used by many consumers in the purchase of A) soap. B) canned fruit. C) salt. D) milk. E) All of the answers are correct.

321) Which of the following products would probably involve the lowest-involvement purchase for most consumers? A) paper towels B) summer vacation C) smartphone D) sweater E) cough syrup

322)

Dissonance is a A) tension caused by uncertainty about the rightness of a decision. B) conflict between opinion leaders. C) confirmation in the learning process. D) kind of belief. E) form of social influence.

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323)

Which of the following is true of dissonance? A) It discourages a consumer from considering information once a purchase is made. B) It is likely to result in a consumer buying the same product next time. C) It is more likely to occur with low-involvement products. D) It is less likely to occur when a consumer has repeatedly purchased the same product. E) It occurs in the adoption process after a consumer becomes interested in a product.

324) Laurie Michaels just bought a smartphone after spending several weeks considering all the possibilities. She likes the new phone, but she still wonders if another brand at a slightly higher price would have been better. This is an example of A) the relationships among drives, cues, and reinforcement. B) dissonance. C) a reference group influence. D) the stimulus-response reaction. E) routinized response behavior.

325) After buying an expensive new mobile phone, Kevin experiences ________ when he has second thoughts and wonders if he made the right choice. A) attitude adjustment B) variance C) conflict D) dissonance E) evaluation

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326) Billy Longstreet bought a new car and was a bit uncertain about whether or not he had done the right thing. Two days after he purchased it, he decided to take it back to the dealer for installation of some additional optional equipment. When Billy returned to the dealership to pick up the car after the installation, the salesman who sold Billy the car said, "You know, in the last two hours three different customers told me how much they liked the looks of your new car. One of them even wanted to know if it was for sale!" This attempt by the salesman to confirm the wisdom of Billy's purchase decision seems to be aimed at reducing A) post-purchase regret. B) reference group influence. C) adoption jitters. D) a stimulus-response reaction. E) dissonance.

327) A consumer who purchases a new computer but encounters frustration with set up and technical support may experience A) limited problem solving. B) extensive problem solving. C) dissonance. D) evaluation. E) an information search.

328) For a long time, Jessica felt disappointment over a new pair of jeans that never fit quite right. Jessica experienced A) high-involvement purchasing. B) dissonance. C) post-purchase regret. D) confirmation. E) selective feedback.

329) Which of the following refers to a marketer countering negative publicity to save a product's image? Version 1

A) perceptual mapping B) dissonance process C) adoption process D) information filtering E) damage control

330)

Damage control is important for marketers because

A) the Internet limits the rights of people to share their opinions about a product or service with a large audience. B) many consumers share opinions about their good and bad experiences with a product or service. C) consumers are more likely to share stories about being satisfied than dissatisfied. D) recommendations from friends and family have no effect on consumers' purchase choices. E) car wrecks can be caused by shopping while driving.

331) Many firms use ________ to evaluate data in an attempt to forecast unknown future events. A) predictive analytics B) psychographics C) selective exposure D) market segmentation E) clustering techniques

332)

Which of the following is an example of the use of predictive analytics?

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A) Spotify recommends a new artist based on past listening history. B) Dropbox introduces online storage to a target market. C) Netflix unveils a new advertising campaign to differentiate itself from its competitors. D) An in-store promotion makes sure that Hershey's candy is put at point-of-purchase locations throughout the store. E) Sales associates at Nordstrom check out customers through the use of handheld devices so that customers do not need to wait in line.

333)

Predictive analytics is used to A) anticipate outcomes. B) adopt ideas. C) confirm decisions. D) reduce dissonance. E) reinforce behavior.

334)

The steps individuals go through in accepting or rejecting a new idea are known as A) the adoption process. B) the dissonance process. C) belief formation. D) information search. E) extensive problem solving.

335) A consumer who is interested in making the switch from a desktop computer to a tablet computer may require a prolonged learning and trial process known as

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A) the consumer decision process. B) limited problem solving. C) the adoption process. D) selective exposure. E) lifestyle analysis.

336)

In the adoption process, an individual moves through six definite steps. These steps are A) awareness, interest, evaluation, trial, decision, and confirmation. B) awareness, interest, involvement, trial, decision, and confirmation. C) involvement, interest, evaluation, trial, decision, and confirmation. D) evaluation, interest, awareness, trial, decision, and confirmation. E) evaluation, interest, involvement, trial, decision, and confirmation.

337)

Which of the following gives the correct order of the steps in the adoption process? A) interest, awareness, trial, decision, evaluation, dissonance B) awareness, interest, evaluation, trial, decision, confirmation C) awareness, interest, trial, evaluation, decision, dissonance D) awareness, interest, trial, decision, evaluation, confirmation E) awareness, interest, evaluation, decision, trial, confirmation

338) Consumers go through six steps when deciding to accept or reject a new idea. In this adoption process, the A) confirmation step follows the decision step. B) evaluation step follows the trial step. C) awareness step follows the interest step. D) trial step follows the awareness step. E) None of the answers is correct.

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339)

With regard to the adoption process, A) interest is the first step. B) decision is the final step. C) awareness follows interest. D) evaluation precedes trial. E) decision follows confirmation.

340)

In the adoption process, A) interest is the first stage. B) confirmation is the last stage. C) trial precedes evaluation. D) evaluation precedes interest. E) None of the answers is correct.

341)

The adoption process suggests that A) confirmation must come before the decision to adopt or reject. B) evaluation usually comes before trial and decision. C) the decision to reject may follow confirmation. D) confirmation comes from a satisfactory evaluation. E) decision usually follows trial and confirmation.

342) A marketing manager for a new brand of bar soap decides to mail free samples to consumers. The logic for using this approach is best explained by the A) economic-buyer model. B) stimulus-response model. C) typical consumer's adoption process. D) need to reduce dissonance. E) high level of problem solving required with such a product.

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343) In the ________ step of the adoption process, a consumer begins to give the product a mental trial by applying it to his or her personal situation. A) interest B) confirmation C) trial D) decision E) evaluation

344) Ken Prescott has noticed several television commercials for BestYet—a new brand of shampoo. While washing his hair, he thinks about what would happen if he replaced his current shampoo with BestYet. What stage in the adoption process has Ken reached? A) evaluation B) feedback C) decision D) interest E) awareness

345) In the ________ stage of the adoption process, the consumer may buy the product to experiment with it in use. A) interest B) awareness C) evaluation D) trial E) decision

346) A potential customer for a new Audi sedan takes the car for a two-hour test drive to see how it responds on the open road. This customer is at the ________ stage of the adoption process.

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A) awareness B) interest C) decision D) confirmation E) trial

347) In which step of the adoption process does the adopter continue to rethink the decision and search for support for the decision? A) interest B) evaluation C) trial D) confirmation E) awareness

348) Which of the following would most help a marketing manager in their attempt to monitor how a new idea is being adopted by the market? A) marketing analytics B) limited problem solving C) reference group analysis D) psychographics E) lifestyle analysis

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Answer Key Test name: Chap 05_17e 1) TRUE Consumer buying decisions are influenced by economic needs, psychological variables, social influences, culture and ethnicity, and the purchase situation. 2) TRUE The economic-buyer theory assumes that consumers are economic buyers—people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 3) TRUE Some economists assume that consumers are economic buyers—people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 4) FALSE Some examples of economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. 5) FALSE Economic buyers are people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. Some consumers look for the lowest price, but others will pay extra for convenience, etc. Some consumers may weigh price and quality for the best value. 6) FALSE

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Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. 7) TRUE In 2017, 25 percent of households had income of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 8) FALSE In 2017, 25 percent of households had incomes of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 9) TRUE After taking inflation into account, the median income in the United States has been flat over the last two decades. 10) TRUE In 2017, 25 percent of households had incomes of less than $30,001, and the median income—where half the households earned more and half earned less—was $61,822. 11) FALSE Discretionary income is what is left of income after paying taxes and paying for necessities. 12) FALSE Discretionary income is what is left of income after paying taxes and paying for necessities. 13) FALSE

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Discretionary income is what is left of income after paying taxes and paying for necessities. 14) TRUE Discretionary income is an elusive concept because the definition of necessities varies from family to family and over time. It depends on what they think is necessary for their lifestyle. 15) FALSE Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 16) TRUE Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. 17) FALSE Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables which affect consumer buying. 18) FALSE Needs are the basic forces that motivate a person to do something. Wants are "needs" that are learned during a person's life. 19) TRUE Wants are "needs" that are learned during a person's life. Needs are the basic forces that motivate a person to do something. 20) TRUE A drive is a strong stimulus that encourages action to reduce a need. In marketing, a product purchase results from a drive to satisfy some need. 21) TRUE

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Physiological needs are concerned with biological needs such as food, liquid, rest, and sex. 22) TRUE Personal needs are concerned with an individual's need for personal satisfaction, unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation, as well as a desire to make the world a better place. 23) TRUE A four-level "hierarchy of needs" model suggests that most products must fill more than one need at the same time. The lowest-level needs are physiological. After that come safety, social, and personal needs. 24) FALSE A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. 25) FALSE A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. A person can be motivated by more than one need at the same time. Further, more than one need can be satisfied at a time. 26) FALSE The four-level hierarchy of needs suggests that more than one need can be satisfied at a time. 27) TRUE We are constantly bombarded by stimuli, like ads, products, and stores; yet we may notice only a small number of these. 28) FALSE Version 1

In selective exposure our eyes and minds seek out and notice only information that interests us. 29) FALSE In selective exposure our eyes and minds seek out and notice only information that interests us. In selective perception we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 30) TRUE Learning is a change in a person's thought processes caused by prior experience. Learning is often based on direct experience. 31) TRUE Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response. A response is an effort to satisfy a drive. 32) FALSE Reinforcement occurs when the response is followed by satisfaction, that is, reduction in the drive. It may lead to a similar response the next time the drive occurs. 33) TRUE Reinforcement of the learning process occurs when the response is followed by satisfaction, that is, reduction in the drive. Reinforcement strengthens the relationship between the cue and the response. 34) TRUE

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Sometimes marketers try to identify cues that have positive associations from some other situation and relate them to their marketing mix. Companies often add lemon scent to household cleaning products (Clorox bleach and Pledge furniture polish) because it has these associations. 35) TRUE Sometimes marketers try to identify cues that have positive associations from some other situation and relate them to their marketing mix. Firms like Calvin Klein use ads suggesting that people who use their products have more appeal to the opposite sex. 36) TRUE Luxury-car makers try for a "new car" smell with an aroma of leather and wood, even though the car would really smell more like metal and adhesives as it comes off the production line in a factory. Marketers often use cues with positive associations in their marketing mix. 37) TRUE An attitude is a person's point of view toward something. Because attitudes are usually thought of as involving liking or disliking, they have some action implications. 38) FALSE Attitudes are usually thought of as involving liking or disliking. Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. 39) TRUE Because attitudes are usually thought of as involving liking or disliking, they have some action implications. Beliefs are not so action-oriented. 40) FALSE Version 1

Because attitudes are usually thought of as involving liking or disliking, they have some action implications. Beliefs are not so action-oriented. 41) TRUE Beliefs may help shape a consumer's attitudes but don't necessarily involve any liking or disliking. 42) TRUE Beliefs about a product may have a positive or negative effect in shaping consumers' attitudes. 43) FALSE Managers who must forecast how much of their brand customers will buy are particularly interested in the intention to buy. Forecasts would be easier if attitudes were good predictors of intentions to buy; unfortunately, it's not that simple. 44) TRUE An expectation is a future outcome or event that a person anticipates will happen. 45) TRUE Consumer expectations often focus on the benefits or value that the consumer expects from a firm's marketing mix. 46) FALSE A consumer is likely to be dissatisfied if his or her expectations are not met. Promotion that overpromises can create this problem. 47) TRUE Trust is the confidence a person has in the promises or actions of another person, brand, or company. 48) FALSE Version 1

Highly trusted people, brands, and companies have many advantages in the marketplace. Consumers prefer to buy from and are more loyal to brands they trust. 49) TRUE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 50) FALSE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 51) TRUE Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 52) TRUE Marital status, age, and the age of any children in the family have an especially important effect on how people spend their income. Put together, these dimensions tell us about the life-cycle stage of a family. 53) FALSE Marital status, age, and the age of any children in the family have an especially important effect on how people spend their income. Put together, these dimensions tell us about the life-cycle stage of a family. 54) FALSE Singles and young couples seem to be more willing to try new products and brands, and they are careful, price-conscious shoppers. 55) TRUE Version 1

Younger families, especially those with no children, accumulate durable goods, such as automobiles and home furnishings. 56) FALSE Singles and young couples seem to be more willing to try new products and brands, and they are careful, price-conscious shoppers. 57) FALSE Younger families, especially those with no children, accumulate durable goods, such as automobiles and home furnishings. Only as children arrive and grow does family spending shift to soft goods and services, such as education, medical, and personal care. 58) FALSE Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs that are hard on the family budget. 59) TRUE Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 60) FALSE Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 61) FALSE A consumer's family, social class, and reference groups are social variables that influence the consumer decision process. 62) TRUE Buying responsibility and influence vary greatly depending on the product and the family.

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63) FALSE People with the same income level may be in different social classes, so income by itself is usually not a good measure of social class. 64) TRUE In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 65) FALSE Various classes have different attitudes toward spending and saving, even when they have the same income level. 66) TRUE Various classes have different attitudes toward spending and saving, even when they have the same income level. 67) TRUE A reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. 68) TRUE People normally have several reference groups for different topics. 69) FALSE An aspirational reference group includes people an individual desires to be like. An associative reference group includes people who more realistically reflect and individual. 70) TRUE A dissociative reference group includes people that an individual does not want to be like. 71) FALSE Version 1

An opinion leader is a person who influences others. Opinion leaders aren't necessarily wealthier or better educated. 72) FALSE An opinion leader is a person who influences others. Opinion leaders on one subject aren't necessarily opinion leaders on another. 73) FALSE It is often useful to think of subcultures within cultural groupings. Failure to consider cultural differences, even subtle ones, can result in problems. 74) TRUE In the United States the number of ethnic consumers is growing at a much faster rate than the rest of the United States. 75) TRUE Ethnic minorities in the United States have a higher birthrate, and the buying power of these ethnic groups is increasing rapidly. 76) FALSE The growth of ethnic groups in the United States can be contributed to high birthrates. 77) TRUE Hispanics are the largest ethnic group in the United States. 78) FALSE Hispanics are the largest ethnic group in the United States. 79) TRUE Asian Americans have the highest average household income ($81,33) of the major ethnic groups. 80) FALSE Version 1

African Americans have a median household income of $40,258. By comparison, the median household income of Hispanics was $50,486. 81) TRUE The buying power of ethnic groups is increasing rapidly. Estimates indicate that by 2019 Hispanic and African American consumers will have more than $1 trillion a year in buying power. 82) FALSE Planning strategies that consider cultural differences in international markets can be a challenge, as each foreign market may need to be treated as a separate target market with its own submarket. Ignoring cultural differences almost guarantees failure in international markets. 83) TRUE Products that make cleaning easier have popular appeal in the United States, but many Italian women doubt that something that works easily will meet their standards for cleanliness. So, for the Italian market, Swiffer was modified, and beeswax was added. 84) TRUE Needs, benefits sought, attitudes, motivation, and even how a consumer selects certain products all vary depending on the purchase situation. 85) TRUE Different purchase situations may require different marketing mixes, even when the same target market is involved. 86) TRUE The consumer decision process begins when a consumer becomes aware of an unmet need. The consumer's problem-solving process then focuses on how best to meet that need. 87) TRUE Version 1

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A consumer may search for information, identify alternatives, decide what factors (criteria) are important, and then evaluate one or more alternative products that might meet the need. 88) TRUE How much effort is put into a buying decision depends in part on economic needs, psychological variables, social influences, culture, and purchase situation factors. It's also tied to the amount of risk a buyer sees in making a wrong choice. 89) FALSE Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need. Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. 90) FALSE Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need. Limited problem solving is used by consumers when only some effort is required in deciding the best way to satisfy a need. 91) TRUE Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. This is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 92) FALSE Routinized response behavior is typical for low-involvement purchases—purchases that have little importance or relevance for the customer, where less effort is required from the consumer.

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93) FALSE Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 94) TRUE Routinized response behavior is typical for low-involvement purchases—purchases that have little importance or relevance for the customer. 95) FALSE Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information. Here, the shopper needs to find a supermarket that has their favorite brand of shampoo in stock or they need to choose another brand. Therefore, they will take part in limited problem solving. 96) FALSE The idea of a decision process does not imply that consumers always apply rational processes in their buying decisions. 97) TRUE Dissonance is a feeling of uncertainty about whether the correct decision was made. 98) TRUE After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 99) TRUE When a post-purchase experience fails to live up to expectations, a customer will be disappointed. And consumers are more likely to share stories about being dissatisfied than satisfied. Version 1

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100) TRUE The adoption process is the steps individuals go through on the way to accepting or rejecting a new idea. 101) TRUE In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 102) TRUE In the evaluation step, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 103) TRUE In the confirmation step, the adopter continues to rethink the decision and searches for support for the decision—that is, further reinforcement. 104) FALSE In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation, respectively. 105) TRUE A marketing manager may use marketing analytics to monitor how a new idea is being adopted by the market. 106) C There are general behavioral principles—frameworks—that marketing managers can apply to better understand their specific target markets. 107) A

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Understanding consumer behavior can be a challenge. Specific behaviors vary a great deal for different people, products, and purchase situations. In today's global markets, the variations are countless. That makes it impractical to catalog all the possibilities. 108) D Motivation is not an economic variable but is a psychological variable. 109) C A family's purchase of luxuries comes from discretionary income—what is left of income after paying taxes and paying for necessities. 110) D Since economic buyers seek a good value for the money they spend, the Capital One Cash Rewards Card appeal has the most relevance. 111) A Economic buyers are those people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 112) B Economic buyers are those people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 113) B The economic-buyer theory assumes that consumers are economic buyers, which are people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money. 114) A

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Economic needs are concerned with making the best use of a consumer's time and money—as the consumer judges it. 115) C Economic needs are concerned with making the best use of a consumer's time and money—as the consumer judges it. 116) B Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. Hunger is not an economic need. 117) E Some economic needs are economy of purchase or use, efficiency in operation or use, dependability in use, improvement of earnings, and convenience. Hunger is not an economic need. 118) B Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Here, the paint is satisfying economy of purchase or use. 119) D Economic needs are concerned with making the best use of a consumer's time and money, as the consumer judges it. Here, the magazine ad is satisfying economy of purchase. 120) C Most consumers appreciate firms that offer products that are designed to work better, require less service, or last longer. Here, the iPhone app is satisfying efficiency in operation or use. 121) A

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Most consumers appreciate firms that offer them improved economic value for the money they spend. Products can be designed to work better, require less service, or last longer. This TV ad is illustrating dependability in use. 122) D Many firms adjust their marketing mixes for target markets that place a high value on convenience. The example illustrates the economic need of convenience. 123) A In 2017, 25 percent of households reported an income of less than $30,001. 124) C In 2017, the median income—where half the households earned more and half earned less—was $61,822. 125) E Discretionary income is what is left of income after paying taxes and paying for necessities. 126) D Discretionary income is what is left of income after paying taxes and paying for necessities. 127) B Discretionary income is what is left of income after paying taxes and paying for necessities. 128) E Discretionary income is what is left of income after paying taxes and paying for necessities.

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129) A Discretionary income is what is left of income after paying taxes and paying for necessities: $30,000 + $5,000 −$6,000− $8,000 = $21,000. 130) E Discretionary income is what is left of income after paying taxes and paying for necessities: $55,000− $16,000− $20,000 = $19,000. 131) A Discretionary income is what is left of income after paying taxes and paying for necessities: $35,000− $10,000− $13,000 = $12,000. 132) E Discretionary income is what is left of income after paying taxes and paying for necessities. Information on Keith McPherson's taxes is not given here. 133) D Discretionary income is what is left of income after paying taxes and paying for necessities: $75,000− $30,000− $17,000 = $28,000. 134) C Discretionary income is what is left of income after paying taxes and paying for necessities: $50,000− $16,000− $15,000 = $19,000. 135) C A family's purchase of "luxuries" comes from discretionary income— what is left of income after paying taxes and paying for necessities. A smart TV is a luxury. 136) A Discretionary income is what is left of income after paying taxes and paying for necessities: $72,000− $30,000− $22,000 = $20,000.

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137) C Discretionary income is what is left of income after paying taxes and paying for necessities: $75,000− $25,000− $15,000 = $35,000. 138) B Discretionary income is what is left of income after paying taxes and paying for necessities: $28,000− $5,000− $10,000 = $13,000. 139) A Discretionary income is what is left of income after paying taxes and paying for necessities: $32,000 + $10,000− $14,000− $11,000 = $17,000. 140) B Discretionary income is what is left of income after paying taxes and paying for necessities: $100,000− $10,000− $25,000 = $65,000. 141) D Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 142) A Most marketing managers think that buyer behavior is not as simple as the economic-buyer model suggests. 143) D Home alarms that protect people from burglaries appeal to consumers' safety needs. These needs are concerned with protection and well-being. 144) B Of the choices, online dating sites are the firms that are most likely to attempt to attract customers by making an appeal to social needs. 145) C Version 1

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Consumers select varying ways to meet their needs sometimes because of differences in perception—how people gather and interpret information from the world around them. Perception includes the filtering processes of selective exposure, selective perception, and selective retention. 146) A Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. 147) A Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. Culture is not a psychological variable; it is a social influence. 148) B Motivation, perception, learning, attitude, trust, and lifestyle are some of the psychological variables that affect consumer buying. Social class is not a psychological variable; it is a social influence. 149) C Wants are "needs" that are learned during a person's life. 150) E Needs are the basic forces that motivate a person to do something. 151) D Wants are "needs" that are learned during a person's life. 152) B Needs are more basic than wants. Wants are "needs" that are learned during a person's life. Marci Bello learned to buy well-known labeled items.

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153) C A drive is a strong stimulus that encourages action to reduce a need. 154) C In marketing, a product purchase results from a drive to satisfy some need. 155) B Drives are internal to the individual—that is, they are the reasons behind certain behavior patterns. Marketing managers cannot create internal drives in consumers. 156) C Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 157) A Psychological needs are concerned with nurturing, curiosity, independence, and love. 158) B A four-level PSSP hierarchy of needs model includes physiological needs, safety needs, social needs, and personal needs. 159) B The lowest-level needs are physiological. After these come safety, social, and personal needs. 160) C A four-level hierarchy of needs shows that the lowest-level needs (physiological) come first, and then come safety, social, and personal needs. 161) D Version 1

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Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 162) E Social needs are concerned with love, friendship, status, and esteem— those things that involve a person's interaction with others. 163) D Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation. 164) B Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. Examples include accomplishment, fun, freedom, and relaxation. 165) D Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. L'Oreal is aiming at personal satisfaction. 166) B Personal needs are concerned with an individual's need for personal satisfaction and are unrelated to what others think or do. A desire to make the world a better place is an example. 167) A Social needs are concerned with love, friendship, status, and esteem— things that involve a person's interaction with others. 168) C Social needs are concerned with love, friendship, status, and esteem— things that involve a person's interaction with others. Version 1

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169) D Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 170) B Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 171) D Safety needs are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise). 172) D Safety needs are concerned with protection and physical well-being, such as financial security. 173) A Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 174) C Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 175) A Physiological needs are concerned with biological needs like food, liquid, rest, and sex. 176) D A four-level hierarchy of needs model suggests that most products must fill more than one need at the same time. The lowest-level needs are physiological; then come safety, social, and personal needs. But higherlevel needs may develop before lower-level needs are completely satisfied. Version 1

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177) D Needs are the basic forces that motivate a person to do something. Wants are "needs" that are learned during a person's life. A good marketing manager studies what consumer drives, needs, and wants already exist and how they can be satisfied better. Marketers should try to develop marketing mixes that address multiple needs. 178) B Perception refers to how we gather and interpret information from the world around us. 179) D Selective exposure, selective perception, and selective retention are included in the selective processes. Selective attention is not. 180) B Selective exposure, selective perception, and selective retention are included in the selective processes. Selective distribution is not. 181) B Selective exposure is when our eyes and minds seek out and notice only information that interests us. 182) E Selective perception is the way we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 183) B Selective perception is when we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 184) B Version 1

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Selective retention is a process of remembering only what we want to remember. 185) B Selective exposure is when our eyes and minds seek out and notice only information that interests us. 186) A Selective exposure is when our eyes and minds seek out and notice only information that interests us. 187) A Selective exposure is when our eyes and minds seek out and notice only information that interests us. 188) D Selective exposure is when our eyes and minds seek out and notice only information that interests us. 189) A Selective perception is when we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs. 190) A Selective retention is a process where we remember only what we want to remember. 191) D Learning is a change in a person's thought processes caused by prior experience. 192) A The learning process involves drive, cues, response, and reinforcement. Version 1

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193) A The learning process involves drive, cues, response, and reinforcement. 194) D Reinforcement strengthens the relationship between the cue and the response, and it may lead to a similar response the next time the drive occurs. 195) D Reinforcement strengthens the relationship between the cue and the response. 196) C Reinforcement of the learning process occurs when the response is followed by satisfaction—that is, reduction in the drive. 197) A Learning is often based on direct experience. 198) D Consumer learning may result from things that marketers do. Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response to satisfy a drive. 199) E Cues can be in the form of products, signs, ads, and other stimuli in the environment. 200) E Cues can be in the form of products, signs, ads, and other stimuli in the environment. Hence, all the given choices are examples of cues. 201) E

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Depending on the cues (products, signs, ads, and other stimuli in the environment) an individual chooses some specific response to satisfy a drive. 202) D Cues can be in the form of products, signs, ads, and other stimuli in the environment. 203) D Sometimes marketers use cues or images that have positive associations from some other situation and relate them to their marketing mix. 204) B An attitude is a person's point of view toward something. 205) A An attitude is a person's point of view toward something. The "something" may be a product, an advertisement, a salesperson, a firm, or an idea. 206) E An attitude is a person's point of view toward something. Because attitudes are associated with liking or disliking, they have some action implications. Consumer attitudes tend to be enduring. 207) D Attitudes affect the selective processes, learning, and the buying decisions. Beliefs are not as action-oriented as attitudes. Forecasts for sales would be easier if attitudes were good predictors of intentions to buy, but it's not that simple. 208) A

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In an attempt to relate attitude more closely to purchase behavior, some marketers stretch the attitude concept to include consumer "preferences" or "intention to buy." 209) E An attitude is a person's point of view toward a product, an advertisement, a salesperson, a firm, or an idea. Consumers' attitudes can be learned from attitudes of others, promotion directed toward them, and previous experiences. 210) D Beliefs are not as action-oriented as attitudes. 211) C An attitude is a person's point of view toward something. Attitudes are usually thought of as involving liking or disliking. 212) A A belief is a person's opinion about something, but it does not necessarily involve any liking or disliking. 213) E Plans and intentions are usually interchangeable and mean the same thing. 214) B Changing negative attitudes is probably the most difficult job marketers face. 215) B Because consumer attitudes tend to be enduring, it's usually more economical for marketers to work with them than try to change them. 216) D Version 1

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An expectation is an outcome or event that a person anticipates or looks forward to. 217) D An expectation is an outcome or event that a person anticipates or looks forward to. 218) E Trust is the confidence a person has in the promises or actions of another person, brand, or company. 219) C Psychographics are also called lifestyle analysis. 220) D Psychographics is the analysis of a person's day-to-day pattern of living as expressed in that person's activities, interests, and opinions, sometimes referred to as AIOs. 221) E AIO dimensions (activities, interests, and opinions), along with some demographics, can be used to add detail to the lifestyle profile of a target market. 222) C Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions. 223) E

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Psychographics, or lifestyle analysis, is the analysis of a person's day-today pattern of living as expressed in that person's activities, interests, and opinions. Recreation is an example of interests. The other choices are demographic dimensions, not psychographic dimensions. See Exhibit 5–6. 224) A Examples of activities include work, vacation, hobbies, entertainment, shopping, social events, club membership, and sports. Age is a demographic dimension. 225) E The consumer decision process is influenced by psychological variables like needs (physiological, safety, social, and personal) and social influences—such as consumer's family, social class, reference groups, opinion leaders, culture, and ethnic groups. 226) B A reference group is the people to whom an individual looks when forming attitudes about a particular topic. Teen purchases are heavily influenced by reference groups. 227) E People whose children are grown are able to spend their money in other ways. This empty nester period tends to be a high-income time in which adults spend more on travel and other things they couldn't afford earlier in life. 228) D More marketers pay attention to ethnic groups now because the number of ethnic consumers is growing at a much faster rate than the overall society. Much of this growth results from higher birthrates among ethnic minorities. Version 1

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229) E An opinion leader is a person who influences others. Some marketing mixes aim especially at opinion leaders, since their opinions affect others and they have many product-related discussions with "followers." The Internet has helped some opinion leaders get more followers and therefore more influence. 230) B Social influences like the consumer's family, social class, and reference groups influence the consumer decision process. 231) E Marital status, age, and the age of any children in the family have an especially important effect on how families spend their income. 232) C Stages in the traditional flow of the family life cycle are young single, young married without children, young married with children, middleaged married with children, middle-aged married without dependent children, older married, and older unmarried. SeeExhibit 5–7. 233) A Stages in the traditional flow of the family life cycle are young single, young married without children, young married with children, middleaged married with children, middle-aged married without dependent children, older married, and older unmarried. See Exhibit 5–7. 234) C Empty nesters are people whose children are grown and who are now able to spend their money in other ways. 235) E

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Singles and young couples seem to be more willing to try new products and brands. 236) A Singles and young couples seem to be more willing to try new products and brands. 237) A Singles and young couples seem to be more willing to try new products and brands and are careful, price-conscious shoppers. 238) B The younger families, especially those with no children, are still accumulating durable goods, such as automobiles and home furnishings. 239) B Younger families, especially those with no children, are still accumulating durable goods, such as automobiles, and home furnishings, and therefore spend more (not less) on discretionary items. 240) C Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs. They are a target for many firms. 241) C Teenagers eat more, want to wear expensive clothes, like music, and develop recreation and education needs that are hard on the family budget. American teens currently spend almost $200 billion a year. 242) C American teens currently spend almost $200 billion a year. 243) C Version 1

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Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period. 244) D Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period, especially for white-collar workers. 245) D Empty nesters are people whose children are grown and who are now able to spend their money in other ways. This tends to be a high-income period, especially for white-collar workers. Hence, all of the explanations could be relevant. 246) D Buying responsibility and influence vary greatly depending on the product and the family. 247) D Although often only one family member goes to the store for a specific purchase, other family members may influence the decision or really decide what to buy. This is an example of a social influence. 248) B In most countries—including the United States—there is some general relationship between income level and social class. But people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 249) B

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In most countries—including the United States—there is some general relationship between income level and social class. But people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 250) B In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 251) C In the United States, simple approaches for measuring social class groupings are based on a person's occupation, education, and type and location of housing. 252) C In the United States, people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 253) A In the United States, people with the same income level may be in different social classes; so income by itself is usually not a good measure of social class. 254) B In the United States, people with the same income level may be in different social classes. 255) E A reference group isthe people to whom an individual looks when forming attitudes about a particular topic. 256) D Version 1

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A dissociative reference group is one that includes people that an individual does not want to be like. 257) A People normally have several reference groups for different topics. Three different types of reference groups might influence purchase decisions: associative reference groups; aspirational reference groups; and dissociative reference groups. 258) B People normally have several reference groups for different topics. 259) D Reference groups most often influence purchases that others can observe. 260) D Reference groups most often influence purchases that others can observe. 261) E A reference group is the people to whom an individual looks when forming attitudes about a particular topic. 262) D Reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. 263) C Reference group refers to the people to whom an individual looks when forming attitudes about a particular topic. Reference group influence is stronger for products that others can observe. 264) A Version 1

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An aspirational reference group includes people an individual desires to be like, like performers or athletes. For this reason, many brands use famous personalities to endorse their products. 265) A An associative reference group includes people who more realistically reflect an individual—perhaps friends, family members, or coworkers. Teens, for example, often check out what friends wear when deciding what clothes to purchase. 266) A A dissociative reference group includes people that an individual does not want to be like. 267) C An opinion leader is a person who influences others. 268) B Opinion leaders on one subject aren't necessarily opinion leaders on another. 269) C Social media amplifies the voices of opinion leaders. Marketing managers are still trying to figure out how to manage this type of influence. 270) C Social media amplifies the voices of opinion leaders. Think about the impact of a traveler posting a long, detailed, positive review at Hotels.com, or of a movie fan telling Facebook friends how much they disliked a new movie. 271) D

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Some firms make opinion leaders the target market. For example, some moms have had great success writing blogs that attract tens of thousands of readers. They often blog about products they like—and don't like. 272) A Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 273) D Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 274) B Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. 275) D Culture is the whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people. It is useful to think of subcultures within cultures, as they influence consumer behavior and therefore require different marketing mixes. 276) C People from different ethnic groups may be influenced by very different cultural variables. 277) C Planning strategies that consider cultural differences in international markets are complex to develop and even harder to implement. It makes more sense to treat each foreign market as a separate market with its own submarkets. Ignoring cultural differences—or assuming that they are not important—almost guarantees failure in international markets. 278) C Version 1

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It is an ineffective practice to apply the same marketing mix to the Asian market as to the U.S. market. Each foreign market may need to be treated as a separate market with its own submarkets. 279) E The buying power of ethnic submarkets is increasing rapidly. Estimates indicate that the buying power of Hispanics, African Americans, and Asian Americans each exceeded 1 trillion dollars in 2019. 280) E Ethnic groups buy differently and have different needs. Many firms make the mistake of treating all consumers in an ethnic group as homogeneous. The number of ethnic consumers is growing at a faster rate than the overall society. The buying power of ethnic submarkets is increasing rapidly. Hence, all the statements are true. 281) C More marketers pay attention to ethnic groups now because the number of ethnic consumers is growing at a much faster rate than the rest of the United States. 282) E Many firms make the mistake of treating all consumers in a particular ethnic group as a single group. 283) E Hispanic Americans are the largest and fastest-growing ethnic group in the United States. 284) B

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The Hispanic market is large and growing. In 2017, Hispanics comprised 18 percent of the U.S. population, and Hispanics were the largest ethnic group in the nation. More than half of all U.S. Hispanics live in three states—California, Texas, and Florida. 285) A As compared to the other major ethnic groups, African American consumers are more likely to purchase products tied to cultural traditions and family gatherings. 286) A While there are only 19 million Asian Americans (6 percent of the population), Asian Americans have the highest average household income ($81,331) of the major ethnic groups. One-third of Asian Americans live in California and, compared to other groups, they disproportionately purchase more fresh produce, organic foods, and electronic goods. 287) C Consumer behavior varies in different situations. The urgency of the need is a time-related factor that influences buying behavior. This is an example of purchase situation. 288) D Why and how a consumer selects certain products may vary greatly depending on the purchase situation. Different purchase situations may even require different marketing mixes—even when the same target market is involved. 289) C Black Friday (the day after U.S. Thanksgiving) is a unique once-a-year shopping event in which retailer discounts and mass selling displays stimulate frenzied buying. Version 1

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290) C Shopping for tires is much more urgent when one has a flat, as compared to when one notices that the tread is just starting to wear thin. Consumer behavior varies in different situations. The urgency of the need is a timerelated factor that influences their buying behavior. Therefore, this is an example of a purchase situation. 291) B Time influences a purchase situation. When consumers seek to make a purchase, the time they have available for shopping will influence their behavior. The urgency of the need generally shortens the amount of time spent comparing products. 292) A When the need is urgent, customers will be less inclined to evaluate a range of options—and place more emphasis on speed and convenience. Time influences a purchase situation. 293) D Shopping for tires is much more urgent when one has a flat tire as compared to when one notices that the tread is just starting to wear thin. When the need is urgent, customers will be less inclined to evaluate a range of options—and place more emphasis on speed and convenience. 294) C Surroundings can affect buying behavior. The excitement at an on-site auction may stimulate impulse buying. Checking out an auction online might lead to a different response. 295) B The consumer decision process begins when a consumer becomes aware of an unmet need.

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296) D The consumer decision process begins when a consumer becomes aware of an unmet need. In the case of buying a home furnace, most consumers recognize they have a need when the present furnace begins to malfunction. 297) B Many hardware and home-improvement purchases are utility-oriented and based in necessity. As a result, such items are influenced least by social influences like culture, reference groups, or social class. 298) C Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need—as is likely for a completely new purchase or to satisfy a need for the right equipment to place in a home entertainment theater. 299) E Problem solving involves the following steps: information search, identifying alternatives, setting criteria, and evaluating alternatives. 300) B Problem-solving involves the following steps: information search, identifying alternatives, setting criteria, and evaluating alternatives. 301) A Alejandro is in the information search step of consumer problem solving. He is seeking information about specific brands and looking for information from other customers, experts, and company promotions. 302) A

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There are three levels of problem solving that relate to the amount of effort the buyer puts into the decision: extensive problem solving, limited problem solving, and routinized response behavior. 303) A Extensive problem solving is when the consumer puts much effort into deciding how to satisfy a need. 304) A Extensive problem solving is when a consumer puts much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 305) E Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 306) B Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 307) C Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 308) A Consumers use extensive problem solving when they put much effort into deciding how to satisfy a need, as is likely for a completely new purchase or to satisfy an important need. 309) C Version 1

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Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. 310) A Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 311) B Limited problem solving is used by consumers when some effort is required in deciding the best way to satisfy a need. This is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 312) E Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information—for example, purchase of a fast-food restaurant meal. 313) E Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. Empty nesters would likely apply limited problem solving to all of the purchases given here. 314) C Limited problem solving is typical when the consumer has some previous experience with a product but isn't quite sure which choice to make at the moment. 315) E

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Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 316) C Routinized response is typical when a consumer has considerable experience in how to meet a specific need and requires no new information. 317) D Routinized response also may occur when a buyer trusts a company, brand, or a friend's recommendation. Because trust lowers the risk of making the wrong choice, less effort is required from the buyer. 318) E Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 319) B A consumer uses routinized response behavior when he or she regularly selects a particular way of satisfying a need when it occurs. Purchasing a new pair of shoes is not an example of routinized response behavior. 320) E Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. Soap, canned fruit, salt, and milk are low-involvement purchases. 321) A

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Routinized response behavior is typical for low-involvement purchases—that is, purchases that have little importance or relevance for the customer. 322) A Dissonance is a feeling of uncertainty about whether the correct decision was made. 323) D Dissonance is a feeling of uncertainty about whether the correct decision was made. Dissonance does not generally occur for frequently purchased items, as they are low-involvement purchases. 324) B After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 325) D After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance. 326) E Dissonance is a feeling of uncertainty about whether the correct decision was made. This may lead a customer to seek additional information to confirm the wisdom of the purchase. 327) C After making a purchase, buyers often have second thoughts and wonder if they made the right choice. The resulting tension is called dissonance—a feeling of uncertainty about whether the correct decision was made. All the other choices given take place prior to a purchase. 328) C

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When a post-purchase experience fails to live up to expectations, a customer will be disappointed. 329) E At times, a marketer's career might call for countering negative publicity—damage control—to save a product's image. Many consumers talk about their purchases and share opinions about their good and bad experiences. 330) B At times, a marketer's career might call for countering negative publicity—damage control—to save a product's image. Many consumers talk about their purchases and share opinions about their good and bad experiences. Recommendations from friends can have a big influence on whether we try a new restaurant, buy a hybrid car, or choose a veterinarian. 331) A Predictive analytics is a process that firms used to analyze data to make predictions about unknown future events. 332) A Predictive analytics can be used to identify alternatives to customers. A recommendation by a music streaming service based on a listener's past listening behavior is an example of the use of predictive analytics. 333) A Based on data about a customer and their behavior, predictive analysis is used to make predictions about unknown future events. 334) A Adoption process refers to the steps individuals go through on the way to accepting or rejecting a new idea. Version 1

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335) C When consumers face a truly new concept, their previous experience may not be relevant. These situations involve the adoption process—the steps individuals go through on the way to accepting or rejecting a new idea. Although the adoption process is similar to the decision making process, learning plays a clearer role, and promotion's contribution to a marketing mix is more visible. 336) A In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 337) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 338) A In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 339) D In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 340) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation.

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341) B In the adoption process, an individual moves through some fairly definite steps: awareness, interest, evaluation, trial, decision, and confirmation. 342) C Adoption process refers to the steps that individuals go through on the way to accepting or rejecting a new idea. Sampling (or trial) is one of these steps. 343) E In the evaluation step of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 344) A In the evaluation step of the adoption process, a consumer begins to give the product a mental trial, applying it to his or her personal situation. 345) D In the trial step of the adoption process, the consumer may buy the product to experiment with it in use. 346) E In the trial step of the adoption process, the consumer may buy the product to experiment with it in use. In this case, the customer took the car for a test drive. 347) D In the confirmation step of the adoption process, the adopter continues to rethink the decision and searches for support for the decision—that is, further reinforcement. 348) A

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Marketing managers can use marketing analytics to monitor how a new idea is being adopted by the market. Marketing metrics at each step can be used in the evaluation.

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CHAPTER 6 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) There are more final consumers than business and organizational customers, so more is purchased by final consumers. ⊚ ⊚

Manufacturers and developers are often categorized as intermediaries. ⊚ ⊚

true false

Organizational buyers are also referred to as industrial or intermediate buyers. ⊚ ⊚

true false

Organizational buyers are often referred to as the B2B market. ⊚ ⊚

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The process of organizational buying is entirely different from consumer buying. ⊚ ⊚

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6) For many firms, marketing strategy planning is about meeting the needs of organizational customers, not final consumers. ⊚ ⊚

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Buyers always take into account three areas of need—company, individual, and society.

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Organizations always focus on economic factors when they make purchase decisions. ⊚ ⊚

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9) Dependability of supply is usually much less important than price for most business customers. ⊚ ⊚

10)

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Purchasing managers seldom use purchasing specifications to buy on the Internet. ⊚ ⊚

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11) Purchasing managers are buying specialists for organizations and may have a lot of power. ⊚ ⊚

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12) "Multiple buying influence" means that several people in an organization share in making a purchase decision, but top management is never involved. ⊚ ⊚

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13) "Multiple buying influence" means that the buyer shares the purchasing decision with several people. ⊚ ⊚

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14) "Multiple buying influence" means that several people rather than top management share in making a purchase decision. ⊚ ⊚

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15) A buying center is generally thought of as all the people who participate in or influence a purchase. ⊚ ⊚

true false

16) In a large company, the "buying center" refers to all the purchasing managers who work for the firm. ⊚ ⊚

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17) A seller's marketing mix should satisfy both the needs of the customer company and the needs of individuals in the buying center. ⊚ ⊚

18)

A requisition is a request to buy something. ⊚ ⊚

19)

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A person who needs to purchase something usually completes a requisition. ⊚ ⊚

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20) Like final consumers, organizations make purchases to satisfy specific needs, but their basic need is for goods and services that will help them satisfy their own customers or clients. ⊚ ⊚

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21) Business and organizational customers are selective buyers who buy for the sole purpose of resale. ⊚ ⊚

22)

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Organizational buyers often buy on the basis of a set of purchasing specifications. ⊚ ⊚

true false

23) A description of what a firm wants to buy is called its purchasing specifications, whether that description is written or electronic. ⊚ ⊚

true false

24) Purchasing specifications should be used only with products where quality is highly standardized. ⊚ ⊚

true false

25) Purchase specifications for services are usually very simple because services tend to be very standardized. ⊚ ⊚

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26) Purchasing specifications may be very simple (with only a brand name or part number) or very detailed (as with services). ⊚ ⊚

27)

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A straight rebuy is a routine repurchase that may have been made many times before. ⊚ ⊚

true false

28) New-task buying is an in-between process in which some review of the buying situation is done. ⊚ ⊚

true false

29) Straight-rebuy buying takes longer than modified-rebuy or new-task buying and offers more opportunity for promotion impact by the seller. ⊚ ⊚

true false

30) Few purchasing managers have been able to turn over any of their order placing to computers because so few organizational purchases are routine. ⊚ ⊚

31)

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Straight rebuys can automatically be handled by e-commerce systems. ⊚ ⊚

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32) When a variety of information sources are readily available in new-task buying, a buyer is much less likely to use a trusted source.

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33) Since Millennials are increasingly responsible for organizational buying, marketing managers should focus on approaches that appeal to them like e-mail newsletters and printed brochures. ⊚ ⊚

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34) Most purchasing managers use search engines as their first step to satisfy new or unfamiliar questions. ⊚ ⊚

35)

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Specialized search engines can help a business buyer search for products by description. ⊚ ⊚

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36) Specialized search engines can help a business buyer search for products using purchase specifications. ⊚ ⊚

true false

37) A business buyer who uses general purpose and/or specialized search engines may reduce the need to arrange for custom-produced items. ⊚ ⊚

true false

38) White papers, case studies, blogs, and video content are all ways for a seller to make its website more useful.

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39) Online communities are one way for buyers to connect with others who have already dealt with a similar need. ⊚ ⊚

true false

40) As B2B buyers rely more on social networks, it's more likely that communications from sellers will have even more influence. ⊚ ⊚

true false

41) A competitive bid is the terms of sale offered by a supplier in response to the purchase specifications posted by a buyer. ⊚ ⊚

true false

42) The Internet makes it faster and easier for organizational buyers to use competitive bidding procedures. ⊚ ⊚

true false

43) Procurement sites operate for the benefit of buyers by directing suppliers to them at one convenient site. ⊚ ⊚

44)

true false

At a procurement site, competition among sellers is likely to increase.

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true false

45) B2B e-commerce has had little effect on the way organizations make purchase decisions and deal with suppliers. ⊚ ⊚

true false

46) The goal of vendor analysis is to maximize the total costs associated with purchases in order to ensure maximum product quality. ⊚ ⊚

true false

47) The best vendor is one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. ⊚ ⊚

true false

48) Internet tools used in the B2B market that focus primarily on lowering price do not always lower total purchasing costs. ⊚ ⊚

true false

49) In business markets, suppliers usually want close relationships with customers; however, there's little benefit to the customer of having closer relationships with suppliers. ⊚ ⊚

50)

true false

A close buyer-seller relationship in a business market may reduce a firm's flexibility.

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⊚ ⊚

51)

true false

A long-term commitment by an organization to a partner may reduce flexibility. ⊚ ⊚

true false

52) In business markets, a seller would always prefer to have a closer relationship with a customer. ⊚ ⊚

true false

53) In business markets, buyer-seller relationships tend to be an "all or nothing" arrangement—either very close or not at all close. ⊚ ⊚

true false

54) Although we talk about close relationships between firms in business markets, in practice it is just the relationship between the salesperson and purchasing manager that becomes close. ⊚ ⊚

true false

55) In cooperative relationships in a business market, the buyer and seller work together to jointly achieve both mutual and individual objectives. ⊚ ⊚

true false

56) Just-in-time delivery reliably helps to get products and store them long before the customer needs them.

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⊚ ⊚

true false

57) Just-in-time relationships between buyers and sellers usually require operational linkages and information sharing. ⊚ ⊚

true false

58) Negotiated contract buying means agreeing to contracts that allow for changes in the purchase arrangements. ⊚ ⊚

true false

59) Negotiated contract buying would be used when the buyer knows precisely what he or she wants and the requirements of the job aren't likely to change as the job is done. ⊚ ⊚

true false

60) Relationship-specific adaptations involve changes in a firm's product or procedures that are unique to the needs or capabilities of a relationship partner. ⊚ ⊚

true false

61) Specific adaptations are usually made when the buying organization chooses to outsource. ⊚ ⊚

true false

62) Relationship-specific adaptations are usually not required when the buying organization uses outsourcing.

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⊚ ⊚

true false

63) To protect themselves from unpredictable events, most purchasing managers seek several dependable sources of supply. ⊚ ⊚

64)

Most manufacturers have more than 500 employees. ⊚ ⊚

65)

true false

Compared to final consumers, manufacturers tend to be more spread out geographically. ⊚ ⊚

66)

true false

In the United States, many factories are concentrated in rural areas. ⊚ ⊚

true false

67) It is very common for manufacturers to concentrate in certain geographic areas and by type of industry. ⊚ ⊚

68)

true false

The U.S. government collects and publishes data by the NAICS codes. ⊚ ⊚

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true false

69)

NAICS stands for New Auto Industry Classification Survey. ⊚ ⊚

true false

70) The U.S. government reports data on the number of firms, sales volume, and number of employees by NAICS code. ⊚ ⊚

true false

71) Firms that are described by NAICS code 3152 are more similar than firms described by NAICS code 31. ⊚ ⊚

true false

72) In a market composed of service producers, most firms are small and geographically dispersed. ⊚ ⊚

true false

73) There are about 17 times as many service firms as manufacturing firms in the United States. ⊚ ⊚

true false

74) Purchasing managers are even more likely to be involved in buying by small service firms than in buying by large producers. ⊚ ⊚

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true false

75) Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. ⊚ ⊚

true false

76) Most retail and wholesale buyers see themselves as purchasing agents for their target customers. ⊚ ⊚

true false

77) Sales reps calling on large food retailers must often make their sales presentations to a buyer who doesn't have the final decision responsibility. ⊚ ⊚

true false

78) Most wholesalers and retailers pay very close attention to each item they handle, treating most products as new-task purchases. ⊚ ⊚

79)

true false

The government is the largest customer group in all countries. ⊚ ⊚

true false

80) Government is one of the smallest groups (in sales volume) of customers in the United States. ⊚ ⊚

81)

true false

When selling to government customers, competitive bids are common.

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⊚ ⊚

true false

82) To share in the government market, it is advantageous to be on the list of approved suppliers. ⊚ ⊚

true false

83) To compete in the government market, it is very important that marketing mixes be well matched with different bid procedures. ⊚ ⊚

84)

true false

The Internet is not very useful for firms that want to target government markets. ⊚ ⊚

true false

85) Although outright influence peddling is common in some international markets, it is not allowed under the Foreign Corrupt Practices Act. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 86) Which of the following statements about U.S. business and organizational customers is true?

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A) More goods and services are purchased by business and organizational customers than by final consumers. B) There are more business and organizational customers than final consumers. C) There are more manufacturers than all other types of business and organizational customers combined. D) More goods and services are purchased by government buyers than by all other business and organizational customers. E) None of the answers is correct.

87)

In marketing, business and organizational customers are distinct from A) intermediaries. B) government units. C) final consumers. D) manufacturing and service firms. E) nonprofit organizations.

88)

The "business-to-business" market (B2B market) is comprised of A) nonprofit organizations only. B) wholesalers and retailers only. C) manufacturers only. D) all businesses, governments, and nonprofits. E) government units only.

89)

Which of the following are "business and organizational customers"? A) wholesalers B) manufacturers C) financial institutions D) government units E) All of the answers are correct.

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90)

Which of the following is an organizational buyer? A) the Red Cross buying office supplies B) a sporting goods retailer buying skis C) a law office buying a background music service D) a country club buying tennis balls for a tournament E) All of the answers are correct.

91)

Which of the following is not an example of an organizational buyer? A) a government buyer purchasing a new desk for the mayor's office B) a woman buying cookware to sell to her friends and neighbors C) a sales rep buying a new necktie to make a good impression D) a wholesaler buying a delivery truck

92) Which of the following is a business or organizational customer, as opposed to an individual final consumer? A) a wholesaler purchasing merchandise for resale B) a business executive purchasing a new suit C) a teacher filling her car with gasoline D) a homeowner buying flowers at a garden center E) None of the answers is correct.

93) The college or university that you attend is considered which type of organizational customer?

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A) producer B) intermediary C) government D) broker E) charitable

94)

John Deere is considered which type of organizational customer? A) producer B) intermediary C) government D) nonprofit E) charitable

95)

Bank of Omaha is an example of which type of organizational customer? A) government B) nonprofit C) producer D) intermediary E) resident buyer

96)

Macy's is considered which type of organizational customer? A) producer B) intermediary C) government D) charitable E) nonprofit

97)

Best Buy is an example of which type of organizational customer?

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A) retailer B) producer C) government D) nonprofit E) wholesaler

98)

The St. Louis Symphony is an example of which type of organizational customer? A) government B) wholesaler C) intermediary D) resident buyer E) nonprofit

99) Which of the following statements accurately compares marketing to final consumers with marketing to organizational customers? A) Marketing to organizations is just like marketing to final consumers. B) Business-to-business marketing includes marketing to final consumers. C) As compared to those made by consumers, purchasing decisions by organizational buyers are usually more economic. D) Firms may choose to serve either organizational buyers or final consumers, but not both. E) As compared to B2B buyers, consumers are more likely to utilize purchasing specifications.

100)

Which of the following identifies a concern of organizational buyers?

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A) original cost and ongoing costs of purchase B) impact of purchase on productivity C) product quality D) seller's ability to provide speedy maintenance and repair E) All of the answers are correct.

101)

Which of the following is true of the buying behavior of organizational customers?

A) Organizational buyers are solely influenced by economic factors. B) Purchasing managers and others involved in organizational buying decisions do not expect friendly relationships with suppliers. C) In organizational buying, the needs of individuals who influence the purchase are not important. D) Product reliability is a more important concern for final consumers than for organizational customers. E) Behavioral dimensions like security, status, and a sense of accomplishment affect organizational buying.

102)

On what do organizations most focus when making purchase decisions? A) social factors B) cultural factors C) political factors D) emotional factors E) economic factors

103)

Which of the following is not true regarding organizational buyers?

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A) Buyers for all kinds of organizations (governments, nonprofit groups, intermediaries) tend to buy in much the same way as do manufacturers. B) A seller’s marketing mix may need to consider both the needs of the company and individuals within the company. C) Marketing strategies aimed at them are often tailored to each individual customer. D) Their purchases are made to help their organizations meet the demands for their products. E) Their needs are usually harder to define than for final consumers.

104)

Organizational customers

A) purchase goods in order to satisfy their customers, but the services they purchase are for themselves. B) are more emotional in their buying than final consumers. C) try to consider the total cost of selecting a supplier, not just the initial cost of the product. D) typically focus on behavioral needs instead of economic factors in making purchases. E) select their suppliers randomly in order to avoid bias.

105)

What should the seller's marketing mix focus on? A) satisfying the needs of the buying company and its purchasing manager B) satisfying the needs of the individuals buying the product and other prospective

buyers C) satisfying the needs of the buying consumer and the middlemen D) satisfying the needs of the company and the individuals who influence the purchase E) satisfying the needs of the company to make more profit and generate monetary rewards for the purchasing manager

106) A buying firm may take into account three areas of need. Which of the following best describes an individual need within a customer organization?

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A) comfort B) profit C) growth D) survival E) innovation

107) Which of the following best describes overlapping needs of the customer organization and individual influencers within the organization? A) As Schmidt Industries implements plans for growth, it plans to promote some current employees, and increase wages for all employees. B) Jordan Parks is a purchasing manager at Schmidt Industries with three children at home, she is mostly concerned with job security and career advancement. C) Schmidt Industries is focused on providing customer satisfaction while implementing a plan for rapid growth. D) Schmidt Industries has partnered with the community to implement new voluntary environmental standards at its manufacturing plant.

108)

If a firm targets business and organizational markets,

A) the geographic location of the customer is likely to be less important than in segmenting consumer markets. B) NAICS codes may help in segmenting manufacturers but not producers of services. C) each customer may need to be treated as a different segment. D) All of the answers are correct.

109)

Buying specialists for organizations are commonly called

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A) supply agents. B) vendor agents. C) value analysts. D) purchasing managers. E) consumer buyers.

110) For marketers who seek to sell to organizational customers, initial contact with the customer is likely to be with a customer's A) most senior salesperson. B) clerk who process paperwork. C) purchasing manager. D) accounting department. E) chief executive officer (CEO).

111) As part of its promotional efforts, Blue Ink Projectors Inc. offered pens and other merchandise to teachers in private schools—their primary target market. However, teachers in most private schools were hesitant to accept the promotional material, as their organizational policy was against accepting gifts from suppliers. As a result, the company's promotional efforts failed. What lesson did the marketers of Blue Ink Projectors learn? A) Their marketing efforts must avoid conflicts of interest between the customer company and its employees who influence the purchase. B) The buying centers in private schools are ineffective. C) Their promotional efforts have been targeted toward the wrong organizational customer. D) The needs of the customer company and the needs of its employees are complementary to each other. E) The company should secretly deliver pens to its customers' homes.

112) Of the many people involved in making an organizational purchase, the one with the most power is usually the

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A) user. B) influencer. C) gatekeeper. D) decider. E) salesperson.

113)

Which of the following is not a smart tip for selling to business customers?

A) Emphasize various benefits that meet the differing needs and interests of each member of the buying center. B) Offer fresh insight and ideas in e-mails and other correspondence. C) Develop a marketing mix to satisfy the needs of the organization as well as the needs of individual purchasing managers. D) Show appreciation by offering desirable gifts to purchasing managers. E) Explain how products and services will reduce the firm's risk.

114) A specialist within a company who is responsible for all of the company's major purchases may be called all of the following except A) supply manager. B) procurement officer. C) buyer. D) salesperson. E) purchasing agent.

115)

A purchasing manager

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A) is basically a clerk who fills out paperwork to place orders. B) is the only person a business-to-business salesperson ever needs to see in order to make a sale to a buying organization. C) may specialize by product area if he or she works for a large organization. D) is only interested in finding the lowest possible price for a product. E) All of the answers are correct.

116) Purchasing managers in business markets (compared to buyers in consumer markets) are generally A) fewer in number. B) more technically qualified. C) less emotional in their buying motives. D) more insistent on dependability and quality. E) All of the answers are correct.

117)

________ are responsible for working with suppliers and arranging the terms of sale. A) Gatekeepers B) Deciders C) Influencers D) Users E) Buyers

118)

Which of the following is an individual need that can conflict with company's needs? A) product innovation B) financial turnover C) customer satisfaction D) share value maintenance E) career advancement

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119) During the purchase of janitorial services for a new building, Teresa has responsibility for working with suppliers and arranging the terms of the sale. In this role, Teresa appears to be acting as a(n) A) gatekeeper. B) decider. C) buyer. D) user. E) influencer.

120)

In a buying center, which of the following are likely to be influencers? A) purchasing managers who arrange the terms of the sale B) people who supply information for evaluating alternatives C) people who have the power to select or approve suppliers D) people who control the flow of information E) purchasing managers who shield users or other deciders

121) In the purchase of a new computer monitor, which of the following is an example of a user? A) a purchasing manager who arranges the terms of the sale B) an IT manager who supplies information for evaluating alternatives C) a secretary whose computer monitor is being replaced D) a receptionist who controls the flow of information E) a supply manager who helps write specifications

122) During the purchase of new tooling at Acme Tool and Die, which of the following is an example of a gatekeeper?

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A) Sara, a purchasing manager arranging the terms of the sale B) Ross, from research and development, supplying information for evaluating alternatives C) Charlotte, in manufacturing, who has the power to select or approve suppliers D) Andre, a research assistant gathering and distributing information about alternatives E) Rita, from the manufacturing floor, who will use the new tooling

123) Regarding organizational buying, the people who have the power to select or approve the supplier—especially for larger purchases—are called A) influencers. B) deciders. C) buyers. D) gatekeepers. E) users.

124) ABC Technologies manufactures computer accessories, such as modems and network cards. Even though the company has several purchasing managers, the company president has final authority on all purchases over $500, including the selection of the supplier. In the typical buying center in this company, the company president would have the primary role of A) user. B) buyer. C) influencer. D) decider. E) gatekeeper.

125) Natalie Simopoulos, director of procurement at Grecian Glass Company, must approve every purchase order. Anthony Markatos, purchasing manager, must authorize any sales rep who wants to talk to a Grecian Glass employee. Natalie and Anthony are acting as ________ and ________, respectively.

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A) decider; gatekeeper B) influencer; user C) gatekeeper; influencer D) buyer; decider E) user; gatekeeper

126) A furniture producer has decided to buy its upholstery cloth from new suppliers. The president has given the purchasing manager responsibility to make the final selections and negotiate the terms. The purchasing manager looks through books with samples and specifications and then calls salespeople to make presentations to the production manager, who is concerned about how easy the cloth will be to cut and sew. In this case, the purchasing manager is a(n) A) influencer. B) buyer. C) decider. D) gatekeeper. E) All of the answers are correct.

127)

If many individuals are involved in a buying decision, it is a case of a A) multiple input situation. B) selective rebuy. C) modified rebuy. D) multiple buying influence situation. E) straight rebuy.

128)

Multiple buying influence is most likely to occur in which of the following purchases?

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A) note pads B) new computer network C) replacement for a broken chair D) gasoline E) paper clips

129)

A ________ consists of all the people who participate in or influence a purchase. A) procurement department B) bidding group C) set of gatekeepers D) sales analysis group E) buying center

130)

A buying center A) may vary from purchase to purchase. B) consists of all the purchasing agents in a large firm. C) is usually identified on a firm's organization chart. D) is usually controlled by the purchasing manager. E) is usually located in major wholesale markets.

131)

When a salesperson calls on a new business prospect, A) the salesperson may have trouble identifying all of the buying center members. B) the salesperson usually must see the purchasing manager first. C) the probability of encountering a gatekeeper is high. D) All of the answers are correct.

132)

Which of the following statements about organizational buying is true?

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A) A "national accounts" sales force often makes sense when firms with many facilities buy from a central location. B) Purchasing managers are more likely to be found in large organizations. C) A geographically bound salesperson can be at a real disadvantage. D) All of the statements are true.

133)

A typical purchasing manager A) buys strictly on economic needs. B) tries to satisfy both individual needs and company needs. C) seeks the lowest possible cost. D) has the final decision on all purchases. E) All of the answers are correct.

134)

Purchasing managers

A) are, in general, not very well educated. B) always buy from the lowest-price supplier. C) may be willing to pay more to reduce personal risk. D) are usually the last individual a salesperson sees after the order has been approved by the gatekeepers. E) None of the answers is correct.

135)

Organizational buyers A) are producers' agents. B) are problem solvers. C) base purchasing decisions entirely on company needs. D) are not affected by emotional needs. E) All of the answers are correct.

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136)

A requisition A) is only used for nonroutine purchases. B) is the same as a purchase order. C) sets the terms under a negotiated contract. D) is a formal contract between a buyer and a seller. E) None of the answers is correct.

137) An office manager needs office supplies, so he fills out a form indicating what he needs and sends it to the purchasing department to be ordered. This form is usually called a(n) A) purchase order. B) requisition. C) vendor analysis. D) buying center request. E) adoption process.

138)

A person who needs to purchase something usually completes a A) requisition. B) supply form. C) contract. D) certificate of purchase. E) vendor analysis.

139)

Which of the following statements about requisitions is false?

A) A requisition is a request to buy something. B) A requisition is sometimes handled online through a special website. C) Requisition processing usually takes a few hours for both simple and complex purchases. D) The requisition process is a form of centralized control.

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140)

Which of the following statements about consumer and business markets is true? A) Promotion to consumer markets usually relies more heavily on the use of personal

selling. B) It is often easier to define customer needs in business markets. C) A marketing mix directed at an organizational customer is usually less precisely adjusted to the needs of the specific customer. D) None of the statements is true.

141) Organizational buying based on a written (or electronic) description of a product is called buying by A) purchasing specifications. B) requisition. C) inspection. D) deliberation. E) negotiated contract.

142)

A(n) ________ is a written or electronic description of what the firm wants to buy. A) estimate B) negotiated contract C) new market order D) purchase order E) set of purchasing specifications

143) buy.

A set of ________ contains a written or electronic description of what a firm wants to

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A) requirements B) purchasing specifications C) blueprints D) quality certifications E) request forms

144)

Purchasing specifications may include A) the product grade. B) the brand name. C) the part number. D) All of the answers are correct.

145)

Purchasing specifications

A) often simply includes a brand name or part number when purchasing requirements are especially complicated. B) tend to be detailed for services, as compared to goods, because services are usually performed before they're purchased. C) tend to be detailed for services, as compared to goods, because services are more standardized than goods. D) are often simple for manufactured items with highly standardized quality. E) None of the answers is correct.

146) Which of the following buying methods would a supermarket buyer be most likely to use in the purchase of grade A large eggs? A) purchasing specifications B) competitive bidding C) negotiated contract D) complex buying

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147)

Which of the following products would be bought using purchasing specifications? A) 100 gallons of Du Pont brand muriatic acid B) 1,000 700-MB CD-Rs C) 50 pounds of number 10 USX nails D) All of the products would be bought using purchasing specifications.

148)

For new-task buying, a good salesperson will try to contact the potential customer's A) deciders. B) gatekeepers. C) influencers. D) buyers (purchasing managers). E) All of the answers are correct.

149)

Most purchasing managers

A) reject "vendor analysis" as too subjective. B) want to be "sold" by persuasive salespeople. C) spend most of their time on new-task buying. D) stress dependability as well as lower cost and higher quality. E) dislike the higher risk that is involved in buying from a supplier that meets the ISO 9000 standard.

150)

Organizational buyers

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A) rely on many sources of information, in addition to salespeople, when making purchase decisions. B) may use vendor analysis to make certain that all relevant areas of a purchase decision have been considered. C) will likely search for little additional information if the purchase is unimportant. D) are motivated to seek more specific information in new-task buying. E) All of the answers are correct.

151) Which of the following is not one of the organizational buying processes discussed in the text? A) multiple task buying B) modified rebuy buying C) new-task buying D) straight rebuy buying

152) Once a supplier relationship has been established, purchases of the straight rebuy variety will most likely be transacted by A) a meeting with all buying center members. B) a meeting with top executives only. C) personal e-mails to the purchasing manager. D) e-commerce computer systems. E) phone.

153) Which of the following impersonal sources enable purchasing managers to easily search for potential new suppliers?

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A) trade shows B) supplier websites C) consultants and outside experts D) salespeople E) special publicity features written by local news reporters

154) The situation that provides the greatest opportunity for suppliers that don't currently serve a customer to develop inroads with a customer is A) the straight rebuy. B) the modified rebuy. C) new-task buying. D) the virtual trade show. E) the competitive bid process.

155) In the three-step approach to organizational buying, the second step—the decisionmaking process—involves A) identifying the problem. B) specifying the product. C) describing the need. D) soliciting proposals/bids from suppliers. E) monitoring supplier performance.

156) A potential supplier sending a brochure or product catalog and a salesperson contacting the buyer over the phone are means of submitting a(n) ________ in organizational buying. A) proposal B) portfolio C) equity sheet D) treaty E) voucher

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157) Which of the following is not one of the organizational buying processes discussed in the text? A) straight rebuy B) modified rebuy C) important task buying D) new-task buying

158)

New-task buying

A) is a routine repurchase that may have been made many times before. B) occurs when an organization has a new need and the customer wants a great deal of information. C) is an in-between process in which some review of the buying situation is done. D) occurs when an organization has a routine need and the customer wants only minimal information. E) involves no review of suppliers.

159) A buyer who has not purchased from a vendor in the past is most likely to buy from that vendor when there is ________ involved. A) a straight rebuy B) selective buying C) new-task buying D) selective task buying E) a modified rebuy

160) Which of the following buying situations gives a seller the greatest opportunity for promotion impact?

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A) selective task buying B) a modified rebuy C) new-task buying D) a straight rebuy E) All of the situations provide equal opportunity for promotion impact.

161) For which of the following would an organization most likely engage in new-task buying? A) a small portable welding machine for use in making repairs B) a new desktop copying machine C) dishwashing detergent for use in a restaurant D) a new desk chair to replace one that had broken E) a 10,000-square-foot prefabricated steel building for use as a warehouse

162) When a company is trying to decide which type of smartphone to purchase for its sales staff and has never had to make that specific type of purchase before, the buying situation is called a(n) A) straight rebuy. B) new-task buy. C) JIT buy. D) modified rebuy. E) ISO 9000 buy.

163) Sweets Galore, the manufacturer of Rainbow brand lollipops, decided to expand into manufacturing liqueur-filled chocolate truffles. Its buying process for the chocolates, liqueurs, and molds was extensive, and it required seeking out a great deal of information. This is an example of a

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A) straight buy. B) modified rebuy. C) straight rebuy. D) new-task buy. E) simplified rebuy.

164) Definitely Scrumptious Co., a cookie manufacturer, decides to expand into cake manufacturing. It begins the buying process for cake molds, toppings, and icing equipment by seeking a wide variety of information. This is an example of a A) simplified buy. B) straight rebuy. C) modified rebuy. D) straight buy. E) new-task buy.

165)

Which of the following statements about straight rebuys is true?

A) Straight rebuy decisions, as contrasted with modified rebuys, are more likely to involve multiple buying influence. B) Straight rebuy vendor selections are likely to be made by a purchasing manager without consulting anyone else. C) Straight rebuy decisions are infrequent, but they typically take longer to make than new-task buying decisions. D) Straight rebuy decisions usually involve getting negotiated bids from suppliers. E) Straight rebuy decisions cannot be influenced by advertising.

166)

A straight rebuy is most likely to occur for

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A) a new computer network. B) a pension plan that meets new government regulations. C) paper supplies for copy equipment. D) electronic components for a new product. E) executive chairs for a new office building.

167) A vendor is most likely to make a sale if the buyer has bought from the vendor before and is doing A) a straight rebuy. B) selective buying. C) multiple task buying. D) a modified rebuy. E) new-task buying.

168) Gerry Jones is looking to buy windows for use in several new apartment buildings that his company is building. He begins his search with an impersonal, nonmarketing source. Which of the following sources did he most likely use? A) an online search B) a website white paper C) trade show information D) information from a consultant E) All of the answers are correct.

169) Sally Smith, a facilities manager, has been tasked with finding a solution to the pooling of water that is happening outside of a campus building. She comes back from a trade show with a sample of a permeable paver that may solve the problem. Which of the following best characterizes the source of her information?

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A) personal marketing source B) impersonal marketing source C) personal nonmarketing source D) impersonal nonmarketing source

170) Which of the following is least likely to be utilized by an organizational buyer from the Millennial generation who is researching a potential supplier? A) a brochure sent by mail B) video content posted online C) Internet searches D) social media sites like LinkedIn E) online reviews

171)

A formal rating of suppliers in all relevant areas of performance is best referred to as A) vendor analysis. B) portfolio analysis. C) intermediary survey. D) value chain analysis. E) situational survey.

172)

Which of the following statements about vendor analysis is true?

A) Its goals include increasing the total costs associated with purchases. B) It is also known as portfolio analysis. C) Its sole purpose is to get the lowest price from a supplier on a given product or service. D) It is an informal rating of the retailers and wholesalers in an industry. E) It helps in selecting suppliers by evaluating them in all relevant areas of performance.

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173) A vendor is least likely to make a sale if the buyer has not bought from the vendor before and is doing A) a straight rebuy. B) selective buying. C) new-task buying. D) selective task buying. E) a modified rebuy.

174)

A straight rebuy

A) involves setting product specifications and evaluating sources of supply. B) occurs when an organization has a new need and the customer wants a great deal of information. C) is an in-between process in which some review of the buying situation is done. D) occurs when an organization has a new need, but the customer wants only minimal information. E) is a routine repurchase that may have been made many times before.

175)

Organizational buyers

A) tend to rely almost totally on salespeople as their source of information. B) prefer formal procedures for rating vendors over informal approaches like vendor analysis. C) are likely to search for little additional information if the purchase is unimportant. D) tend to be more emotional than final consumers, because their jobs are at risk if a problem arises. E) None of the answers is correct.

176) Percy Malik, purchasing agent for Black Mountain Chemical Industries, routinely signs purchase orders for office supplies without further consideration. At Black Mountain, purchases of office supplies are

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A) modified rebuys. B) a necessity. C) somewhat insignificant commodity (SIC) items. D) selective rebuys. E) straight rebuys.

177) A sales representative calls on a prospective business customer only to find that the customer has an established relationship with another supplier that seems to be working well. The customer is not interested in considering other suppliers. The customer is currently in a ________ situation. A) straight rebuy B) modified rebuy C) new-task buying D) extensive problem solving E) limited problem solving

178) Home Sweet Home Co. manufactures and sells handmade wooden furniture. Its manager routinely orders 50 cartons of Supreme Furniture Polish and 10 bottles of Ultra Sheen Varnish from the same vendor. This is an example of a A) straight buy. B) modified rebuy. C) new-task buy. D) straight rebuy. E) simplified buy.

179) Circle Z Tires is a retailer of car tires. Unless the store manager requests something different, every month there is an automatic order of 10 XZ Performance Tires and 12 J-1 wheels from Box Tire Supply. This is an example of a

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A) new-task buy. B) modified rebuy. C) straight rebuy. D) modified buy. E) simplified buy.

180) Rosalinda's Steak House purchases 70 T-bone steaks every Friday—including last Friday. Last Friday's order was an example of a A) straight buy. B) modified rebuy. C) new-task buy. D) straight rebuy. E) simplified buy.

181) A purchase having some multiple influence and requiring some information would fit the description of a A) new-task buy. B) modified buy. C) straight rebuy. D) modified rebuy. E) simplified buy.

182)

A modified rebuy would be most likely when A) a railroad plans to change from steel to aluminum rail cars in order to cut weight. B) a car producer is developing a sportier car which will require wider tires. C) a bread producer is placing its weekly order for flour. D) a computer producer is buying new assembly line equipment. E) a shoe factory needs more glue to attach heels to its shoes.

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183)

A modified rebuy is most likely to occur for A) file folders. B) brooms. C) paper clips. D) a desk. E) copier paper.

184) Whitewater Corp. is looking for a new vendor for basic plastics because the present vendor has been inconsistent about meeting delivery schedules. Which of the following buying processes is the firm's purchasing agent most likely to use? A) selective buying B) modified rebuy C) intensive buying D) new-task buying E) straight rebuy

185) In his last order, the bakery manager at Bread of the Earth Bakery purchased a different brand of whole wheat flour from his regular supplier, Best Bakery Supplies. This is an example of a A) modified rebuy. B) straight buy. C) straight rebuy. D) new-task buy. E) simplified buy.

186)

Purchasing managers rely on Internet ________ to quickly identify new suppliers.

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A) procurement engines B) online communities C) purchasing sites D) search engines E) commercial ads

187) Which of the following impersonal sources enable purchasing managers to easily search for potential new suppliers? A) trade shows B) supplier websites C) consultants and outside experts D) salespeople E) special publicity features written by local news reporters

188) A report on a seller's website that describes how an organizational buyer can make a better decision on a particular topic is called a(n) A) mission statement. B) white paper. C) executive summary. D) online community. E) outsource.

189) A report on a seller's website that describes how one of its customers solved a specific problem by using the seller's products is called a(n) A) white paper. B) outsource. C) executive summary. D) case study. E) mission statement.

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190) ________ are the terms of sale offered by different suppliers in response to the purchase specifications posted by the buyer. A) Competitive bids B) Purchasing rebuys C) Legal bonds D) Requisitions E) Auctions

191) Charles Wood, purchasing manager for a company that makes golf carts, posted the purchase specifications for the seats on a new golf cart model his firm is building. Four suppliers submitted ________ that included the terms of sale each had to offer. A) operational linkages B) an auction C) negotiated contracts D) competitive bids E) defined sales procedures

192)

193)

Which of the following statements is true of vendor analysis?

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194) After conducting a vendor analysis on potential suppliers, purchasing managers are likely to choose the vendor that A) enables the firm to operate more efficiently with the least risk. B) offers the lowest priced goods and services. C) offers the widest assortment of business products. D) received the best rating from gatekeepers. E) was the friendliest.

195)

Vendor analysis is a(n) A) analytical thinking processing of requests to buy something from a vendor. B) formal rating of suppliers on all relevant areas of performance. C) analytical thinking processing of requests to sell something to a vendor. D) request to buy something. E) written description of what the firm wants to buy.

196)

Vendor analysis A) ensures objectivity by disregarding whether a supplier has been used in the past. B) emphasizes the emotional factors in a purchase decision. C) is used less now that multiple buying influence is more common. D) None of the answers is correct.

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197)

Vendor analysis

A) has the sole objective of getting the lowest possible price on a particular product or service from the supplier. B) does not take into account the behavioral needs of purchasing managers and others involved in the buying decision. C) is a formal rating of suppliers on all relevant areas of performance. D) None of the answers is correct.

198) A company creates a rating form for its suppliers and rates their on-time delivery, product quality, service advice, and so forth in order to determine which suppliers to put on an approved list of suppliers for specific products. This process is called a(n) A) JIT rating. B) resident buyer analysis. C) vendor analysis. D) ISO 9000 certification. E) buying center analysis.

199)

Vendor analysis

A) emphasizes the emotional factors in a purchase decision. B) is a formal procedure used by a vendor's salespeople to be certain that all members of a buying center have been contacted. C) is used less now that multiple buying influence is more common. D) is likely to favor a vendor that offers the customer the lowest total cost associated with the purchase. E) None of the answers is correct.

200)

The goal of vendor analysis is

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A) just getting a low price from the supplier on a given part or service. B) just satisfying the needs of the customer company. C) lowering the total costs associated with purchases. D) satisfying the needs of the individuals who influence the purchase. E) focusing buyers and sellers on just the economic factors needed to reduce costs.

201) Which of the following statements about close buyer-seller relationships in business markets is false? A) In close relationships, buyers and suppliers can share tasks at a lower total cost of doing business. B) The buyer can gain a more dependable source of supply. C) Buyers and suppliers can engage in joint problem solving. D) Long-term commitments on larger order quantities often cause the supplier to raise its selling price.

202) Which dimension of buyer-seller relationships most significantly increases the risk that proprietary knowledge or trade secrets may leak to competitors or to the public? A) cooperation B) information sharing C) operational linkages D) legal bonds E) relationship-specific adaptations

203) The method by which suppliers provide deliveries to organizations precisely when the buyer needs them ("just in time") involves which dimension of buyer-seller relationships?

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A) cooperation B) information sharing C) operational linkages D) legal bonds E) relationship-specific adaptations

204)

In business markets, close buyer-seller relationships

A) may improve the profits of both the buyer and the seller. B) are almost always desirable from the seller's point of view, but not from the buyer's point of view. C) may have benefits, but they usually increase a firm's uncertainty and risk. D) None of the answers is correct.

205)

Close buyer-seller relationships may not make sense because

A) flexibility may be reduced for the firms involved. B) not all purchases are important enough to the buyer to justify a close relationship with a supplier. C) some suppliers do not want to deal with buyers who place small orders. D) there are situations in which the buyer could get reduced prices by letting suppliers compete for the buyer's business. E) All of the answers are correct.

206)

With respect to buyer-seller relationships in business markets,

A) relationships benefit sellers, but not customers. B) some customers simply are not interested in a close relationship with a supplier. C) customer firms are better off selecting suppliers with competitive bids rather than establishing a relationship with a single vendor. D) None of the answers is correct.

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207)

All of the following are key dimensions of relationships in business markets except A) cooperation. B) information sharing. C) operational linkages. D) non-specific adaptations. E) legal bonds.

208) Which of the following is not a key dimension of buyer-seller relationships in business markets? A) legal bonds B) new-task sharing C) cooperation D) operational linkages E) information sharing

209) Which of the following is a key dimension of buyer-seller relationships in business markets? A) information sharing B) legal bonds C) cooperation D) operational linkages E) All of the answers are correct.

210) Which of the following is not a key dimension of buyer-seller relationships in business markets?

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A) legal bonds B) relationship-specific adaptations C) joint inspection D) operational linkages E) information sharing

211) Which of the following is not a key dimension of buyer-seller relationships in business markets? A) legal bonds B) relationship-specific adaptations C) cooperation D) operational linkages E) bid rigging

212) Which of the following is not a key dimension of buyer-seller relationships in business markets? A) legal bonds B) relationship-specific recycling C) cooperation D) operational linkages E) information sharing

213) Which of the following is not a key dimension of buyer-seller relationships in business markets? A) competition B) information sharing C) relationship-specific adaptations D) operational linkages E) legal bonds

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214)

Suppliers to business markets often

A) provide information about industry trends. B) must manage inventory and delivery carefully, to provide customers with just-in-time delivery. C) serve as technical consultants to their customers. D) have to agree to contracts that allow for changes in the purchase arrangements. E) All of the answers are correct.

215)

A close buyer-seller relationship in a business market A) may require relationship-specific adaptations by the seller, the customer, or both. B) may result in the seller accepting a lower price. C) may be close in some ways and not in others. D) may not involve a contract that spells out each party's responsibilities. E) All of the answers are correct.

216)

Operational linkages are A) direct ties between the internal operations of buyer and seller firms. B) changes in a firm's product or procedures that are unique to its relationship partner. C) connections that outline contractual obligations. D) services that link a buyer's production and purchasing departments. E) means to elaborately increase inventory costs.

217)

Which of the following statements about operational linkages is false?

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A) Just-in-time delivery is an example of an operational linkage. B) Operational linkages are direct ties between the internal operations of the buyer and seller firms. C) Operational linkages involve only occasional coordination of activities between buying and selling firms. D) Operational linkages often help lower costs and increase efficiency.

218) ________ refers to reliably getting products there exactly before the customer needs them. A) Total quality shipping B) Effective gatekeeping C) Just-in-time delivery D) On-time vendor management E) Assured outsourcing

219) When a purchasing manager knows roughly what is needed but can't describe it exactly, or when the purchasing arrangement may change as the job progresses, then buying is likely to be by A) negotiated contract. B) description. C) shared information. D) operational linkages. E) inspection.

220) Today, when a buyer can't specify all of the details of what it will need in the future, the relationship with a supplier is most likely to involve

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A) an auction. B) a procurement hub. C) negotiated contracts. D) competitive bids. E) All of these are likely to be involved.

221) Creative Electronics has an idea for a new smartphone accessory. Now it is looking for a supplier to design and manufacture the product. It will most likely use ________ buying. A) description B) negotiated contract C) inspection D) just-in-time

222) When a large aircraft manufacturer like Boeing obtains a contract to build a new type of jet airliner, the transaction is most likely a(n) A) negotiated contract buy. B) straight rebuy. C) modified rebuy. D) ISO 9000 buy. E) JIT buy.

223) Rico Paving Contractors enters into a contract with Valley Supply for the purchase of 100 bags of cement per week for the next 16 weeks, at a price of $15 per bag. The contract also includes a condition that allows prices to be revised if costs go up more than $1 per bag. This purchase involves

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A) an indefinite delivery contract. B) negotiated contract buying. C) a good faith purchase. D) cost reimbursement contracting. E) price allocation purchasing.

224) A catalog merchant wants to build a new distribution center that will improve inventory management, storage of products, shipping, and returns. The company develops a close relationship with UPS, its main supplier of shipping services. UPS helps the catalog merchant design its new distribution center so that it coordinates well with the shipping processes at UPS. This arrangement reduces shipping costs and improves service to the catalog merchant's customers. This situation is an example of A) information sharing. B) negotiated contract buying. C) legal bonds. D) competition. E) relationship-specific adaptations.

225) Chu's Coating Services, a painting company, designs a set of four paint colors that will only be used by custom motorcycle maker Walker County Choppers. This decision is an example of A) competitive bidding. B) just-in-time delivery. C) insourcing. D) operational linkages. E) a relationship-specific adaptation.

226) Specific adaptations are usually required when a buyer chooses ________, which is a contract with an external firm to produce goods or services rather than the buyer producing them internally.

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A) gatekeeping B) resident buying C) competitive bidding D) outsourcing E) auctioning

227)

Organizational buyers purchase the same product from more than one source A) if no supplier has a superior marketing mix. B) to help ensure continuing supplies. C) because a single vendor usually doesn't want all of the business. D) if vendor analysis results in a "tie score" for the different suppliers. E) None of the answers is correct.

228)

Which of the following statements about manufacturers is false?

A) The majority of U.S. manufacturers are small, with three-quarters having fewer than 20 employees. B) Most U.S. factories operate in large metropolitan areas. C) The greatest growth in manufacturing has occurred in countries where labor is cheapest. D) NAICS codes help marketers classify different types of manufacturing businesses. E) Manufacturing output in the United States is shrinking.

229) Which of the following is not a key variable that marketers need to consider when developing marketing mixes for manufacturers? A) size of manufacturers B) CEOs of manufacturers C) geographic location of manufacturers D) buying procedures of manufacturers E) classifications of manufacturers

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230)

When referencing NAICS codes, marketers should know that A) two-digit industries are subindustries of the three-digit industries. B) two-digit codes offer the broadest categorization of industries. C) categories become less detailed as you move to codes with more digits. D) the international version of the NAICS system is the most accurate and reliable. E) NAICS codes provide detailed information about the apparel industry only.

231)

Which of the following statements about manufacturers is true?

A) Industrial customers are concentrated in countries that are at the more advanced stages of economic development. B) Manufacturing output in the United States is shrinking. C) Countries with cheap labor have a slow rate of growth. D) Many factories are concentrated in rural areas of the United States. E) Currently, U.S. manufacturing output is at its lowest point since 1980.

232)

NAICS stands for A) North American Initiative for Competitive Structure. B) North American Industry Classification System. C) New Auto Industry Classification System. D) National Automakers Industry Classification System. E) National Apparel Industry Classification System.

233) Which of the following tips would help marketers find new B2B clients that are similar to clients they already serve?

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A) Ask a current customer to help identify new leads. B) Look up firms that use automated systems for straight rebuying. C) Conduct a vendor analysis. D) Identify current customers' NAICS codes and then look at NAICS-coded lists for related firms. E) Research ISO 9000 certified companies.

234) Which of the following is true of the market composed of manufacturers in the United States? A) Most manufacturers are quite large. B) Manufacturers tend to be concentrated in specific areas. C) There are a large number of manufacturers compared to the number of final consumers. D) Small manufacturers account for most of the "value added" by manufacturing. E) All of the answers are correct.

235)

U.S. business manufacturing markets tend to be concentrated A) by industry. B) with a relatively few large manufacturing plants. C) by geographical location. D) All of the answers are correct.

236)

U.S. manufacturers A) all employ many workers. B) are evenly spread throughout the country. C) tend to concentrate by industry. D) do not locate close to competitors. E) None of the answers is correct.

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237) The U.S. government collects and publishes data by ________ codes—groups of firms in similar lines of business. A) JIT B) MFG LIST C) PRIZM USA D) NAPCS E) NAICS

238)

239)

Which of the following statements about NAICS codes is true?

A) The fewer numbers in the code, the more general the industry classification is. B) The more numbers in the code, the more general the industry classification is. C) The fewer numbers in the code, the more specific the industry classification is. D) The United States is the only country to collect data that groups firms in similar lines of business. E) None of the answers is correct.

240) You have just been asked by your manager to compile data on firms in California that have a specific 4-digit NAICS code. You should know

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A) that there are no 4-digit NAICS codes. B) that there is only one firm to find, since each firm has its own 4-digit NAICS code. C) that it is possible that no data will be available, even if there is one large firm in California in that 4-digit industry. D) that your manager is talking about the New Auto Industry Classification Survey. E) None of the answers is correct.

241)

The U.S. government would not publish NAICS data that gives A) the total sales volume of the four steel manufacturers in a geographic area. B) the number of employees for similar two-digit industry groups. C) the total sales volume of the only textile equipment manufacturer in a state. D) the sales volumes of similar two-digit industry groups. E) the number of establishments for various industry groups.

242) Which of the following NAICS codes would be used by a marketing manager who wanted data on the most general breakdown of a particular industry? A) 31 B) 31522 C) 315 D) 3152 E) There is no way to tell from the information provided.

243) Which of the following NAICS codes would be used by a marketing manager who wanted data that was the most specific to a particular type of firm within an industry? A) 31 B) 31522 C) 315 D) 3152 E) There is no way to tell from the information provided.

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244) After identifying its key customers in terms of profitability, a firm can look to see what similar characteristics those current customers have. Then, it can try to find prospective new customers with characteristics similar to its current customers. What type of research analysis is most likely to prove fruitful in identifying these new prospects? A) ISO 9000 B) resident buyer codes C) NAICS codes D) intermediary codes E) JIT codes

245)

Which of the following statements about purchasing by small service firms is false?

A) Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. B) Purchases by small service firms can add up, and these smaller firms thereby become an important target market. C) Purchases by small service firms are usually handled by a person with full-time responsibility for purchasing. D) Small service firms may need much more help in buying than large corporations. E) Small service companies often rely on e-commerce for purchases.

246)

Which of these statements regarding manufacturing and service firms is true?

A) Manufacturers are more spread out around the country than service firms. B) The United States has many more manufacturing firms than service firms. C) B2B e-commerce purchasing is common for both manufacturing and service firms. D) Unlike manufacturing firms, service firms rely on engineering and R&D people to help make purchase decisions. E) Unlike service firms, manufacturers tend to locate where they can be closest to their customers.

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247) Tango with Nature Inc., a company that manufactures and sells body oils, aroma oils, essential oils, and organic personal care products to spas around the globe, has decided to launch a website with an online store for its organizational customers. How will this decision most likely affect the company? A) The decision will not affect the company in any manner, as service customers avoid Internet buying. B) The company's customer service efforts will reduce. C) The company will lose its value in the market. D) The company will limit its interactions with its organizational customers. E) The purchases by small service customers can add up, creating a new market for Tango.

248) Buyers with ________ see their role as being "purchasing agents for their target customers." A) manufacturers B) government agencies C) service firms D) nonprofits E) retailers and wholesalers

249)

Which of the following is true regarding retail buying?

A) Most retail buyers see themselves as purchasing agents for their suppliers. B) Buying committees, instead of individual retail buyers, may make the decisions. C) Retail buyers make most purchases as modified rebuys. D) Persuasive salespeople, not buying committees, are the key influencers in the buying process. E) None of the answers is correct.

250)

Which of the following statements about buying by intermediaries is true?

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A) Computer-controlled inventory systems make buyers more dependent on sales reps. B) Buying committees are a way for retail chains to handle the flood of new products. C) Buyers are seldom influenced by their salespeople. D) Wholesalers and retailers typically only carry products that they have judged "socially desirable." E) None of the answers is correct.

251)

When a large wholesaler or retailer uses a buying committee,

A) the buyer still makes the final purchase decision. B) the sales rep may not be able to make a sales presentation to the committee. C) the impact of persuasive salespeople is increased. D) the intermediary is more likely to take a chance on a really new product that hasn't yet proved itself. E) None of the answers is correct.

252)

Committee buying in large retail chains A) makes the buyers work as a group, and thus lowers costs. B) allows a sales rep to avoid a difficult buyer. C) makes it difficult for the seller to see a buyer personally. D) reduces the impact of a persuasive sales rep. E) All of the answers are correct.

253)

Because more intermediaries are using computer systems to control inventory levels, A) they can assess the profitability of each product. B) new-task buying is increasing. C) they are carrying larger inventories. D) negotiated contract buying is increasing. E) All of the answers are correct.

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254)

Large wholesale and retail buyers typically A) pay close attention to each of the products they buy. B) mistrust automatic inventory control methods. C) see themselves as selling agents for manufacturers. D) buy most of their products as straight rebuys. E) None of the answers is correct.

255)

In large retail firms,

A) committee buying favors sellers with persuasive salespeople. B) buying committees are the way all buying decisions are now made. C) buyers have computers systems that let them know the profitability of different competing products. D) purchasing agents make decisions based on what products they would buy themselves. E) None of the answers is correct.

256)

Which of the following statements about government buying is true?

A) One of the primary concerns of government buyers is finding the lowest price. B) A government buyer may be forced to accept the lowest bid whether they wants the goods or not. C) A government buyer can accept a higher bid when lower bids don't meet the required specifications. D) Purchases by government buyers in the United States are usually subject to a great deal of public review. E) All of the answers are correct.

257)

Which of the following statements about government markets is false?

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A) The government is the largest customer group in all countries. B) Most government customers buy by specification, using a mandatory bidding procedure. C) The government buyer must often accept the lowest bid that meets the specifications. D) By law, a government unit might have to accept the lowest bid even for an unwanted product. E) Government purchases are usually subject to a great deal of public review.

258)

The government market

A) is one of the smallest customer groups in the United States. B) often has a buying process that includes purchase specifications and competitive bidding procedures. C) purchases a fairly narrow range of products dealing with public safety. D) None of the answers is correct.

259)

The government market

A) often relies on an "approved supplier list" for routine items that are bought frequently. B) is the largest customer group in the United States, accounting for about 30 percent of the gross domestic product. C) usually buys from the lowest-price supplier that can meet the written specifications. D) normally uses a mandatory bidding procedure. E) All of the answers are correct.

260)

Government buyers in the United States usually buy by

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A) specification, using a mandatory bidding procedure. B) inspection. C) haggling. D) influence peddling. E) None of the answers are correct.

261)

Which of the following statement about the government market is true?

A) Sales reps generally do not (and should not) write the specifications for government business. B) Government is the largest customer group in the United States—spending about 30 percent of GDP. C) Governments buy a lot, but only certain products, and they can be safely ignored by most producers. D) Competitive bids are uncommon because of mandatory bidding procedures. E) All of the statements are true.

262)

Which of the following is true of U.S. government market buying?

A) A buyer may order from a supplier on the "approved list" at a previously set price without asking for new bids. B) Most buyers write specs so that only one brand or supplier qualifies. C) It is illegal for a salesperson to try to influence the writing of product specifications. D) Most buyers buy by inspection, since they are expected to spend money wisely. E) None of the answers is correct.

263)

USA.gov is a

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A) central source that provides marketers key information related to business with government agencies. B) platform exclusively designed to compare the revenue system of the United States with other countries. C) portal providing information on the prices of luxury goods in the U.S. market. D) website maintained exclusively to provide organizational buyers a forum to voice their concerns about suppliers. E) platform that provides information on the prices of essential goods in the U.S. market.

264)

FedBizOpps.gov is a forum that

A) provides resources to find business opportunities with the government to fit a firm's strategy. B) allows organizational buyers to voice their concerns about suppliers. C) allows organizational buyers to conduct an online vendor analysis approved by the government. D) provides information on the prices of essential goods in the U.S. market. E) provides information on the prices of luxury goods in the U.S. market.

265)

In selling to government units, a supplier should

A) learn the bidding methods of government units it is targeting. B) match marketing mixes to bid procedures. C) read about potential government target markets from various government publications. D) get permission from the government in a particular country to sell to that country. E) All of the answers are correct.

266) In the context of business opportunities in the government market, the General Services Administration handles

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A) vendor analysis for the core industries. B) vendor contracts for off-the-shelf goods and services. C) administrative tasks for small service customers. D) complaints filed against suppliers by organizational buyers. E) information on the prices of luxury goods in the U.S. market.

267) Which legislative act, passed by the U.S. Congress in 1977, prohibits U.S. firms from paying bribes to foreign officials? A) Corporate Responsibility for the New Millennium Act B) Racketeer Influenced and Corrupt Organization Act C) Ethics in Business Act D) Anti-Bribery Act E) Foreign Corrupt Practices Act

268)

The Foreign Corrupt Practices Act

A) allows small grease money payments if they are customary in the foreign country in which a firm is operating. B) applies to foreign firms or individuals who accept payments while in the United States. C) prohibits U.S. firms from paying bribes to foreign officials. D) All of the answers are correct.

269) The ________ makes individual executives responsible for their company's financial disclosures. A) Sarbanes-Oxley Act B) Walsh Healey Act C) States Commemorative Coin Program Act D) Bank Secrecy Act E) National Capital Act

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Answer Key Test name: Chap 06_17e 1) FALSE More purchases are made by businesses and other organizations than by final consumers. 2) FALSE Manufacturers and developers are producers of goods and services. 3) TRUE Marketing managers often refer to organizational customers collectively as the "business-to-business" market, or simply the B2B market. 4) TRUE Organizational customers are sometimes loosely referred to as business buyers, intermediate buyers, or industrial buyers. 5) FALSE Organizational buying is not entirely different from consumer buying. It tends to be different from buying by final consumers only in a few specific ways. 6) TRUE For many firms, marketing strategy planning is about meeting the needs of organizational customers, not final consumers. A firm can target both final consumers and organizations, but different marketing mixes may be needed. 7) FALSE

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A buying firm may take into account three areas of need—company, individual, and society. “Society’s needs” may not be relevant for all buying firms or all buying situations. 8) FALSE Organizations typically focus on economic factors when they make purchase decisions but are also influenced by noneconomic factors. 9) FALSE An organization may not be able to function if purchases don't arrive when they're expected, so dependability is often the most important thing. 10) FALSE Purchasing managers often buy on the basis of a set of purchasing specifications, whether written or electronic. 11) TRUE Many organizations rely on specialists or purchasing managers to ensure that purchases are handled sensibly. 12) FALSE Multiple buying influence means that several people—perhaps even top management—play a part in making a purchase decision. 13) TRUE Multiple buying influence means that the buyer shares the purchasing decision with users, influencers, deciders, and gatekeepers. 14) FALSE Multiple buying influence means that the buyer shares the purchasing decision with several people including users, influencers, deciders, gatekeepers. In many cases, top management plays a part in making a purchase decision. Version 1

15) TRUE Different people may make up a buying center from one decision to the next. Hence, a buying center includes all the people who participate in or influence a purchase. 16) FALSE A buying center is made up of all the people who participate in or influence a purchase—users, buyers, influencers, deciders, gatekeepers. 17) TRUE Sellers need to find an overlapping area where both the needs of the customer company and the needs of individuals who influence the purchase are satisfied. 18) TRUE A person who needs to purchase something usually completes a requisition—a request to buy something. 19) TRUE A person who needs to purchase something usually completes a requisition—a request to buy something. 20) TRUE Most organizations make purchases with the basic intent to satisfy their own customers and clients. 21) FALSE Business and organizational customers make purchases to satisfy their own customers and clients. Wholesalers or retailers buy products so they can profitably resell to their customers. 22) TRUE

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Organizational buyers often buy on the basis of a set of purchasing specifications—a written (or electronic) description of what the firm wants to buy. 23) TRUE Organizational buyers often buy on the basis of a set of purchasing specifications—a written or electronic description of what the firm wants to buy. 24) FALSE When purchase requirements are complicated and when services are involved, purchase specifications are even more necessary. 25) FALSE Purchase specifications for services tend to be detailed because services are less standardized and usually are not performed until after they're purchased. 26) TRUE When quality is highly standardized the specification may simply consist of a brand name or part number; however, when purchase requirements are more complicated, the specifications may set out detailed information about the performance standards the product must meet. 27) TRUE A straight rebuy is a routine repurchase that may have been made many times before. Buyers probably don't bother looking for new information or new sources of supply. 28) FALSE New-task buying occurs when a customer organization has a new need and wants a great deal of information. It is not an in-between process. 29) FALSE Version 1

Most of a company's small or recurring purchases are straight rebuys and take only a small part of an organized buyer's time. 30) FALSE Generally, buyers program decision rules that tell a computer how to order and leave the details of following through to the computer. If conditions change, buyers modify the computer instructions. 31) TRUE E-commerce computer systems automatically handle a large portion of straight rebuys. Buyers program decision rules that tell a computer how to order and leave the details of following through to the computer. 32) FALSE Even though a wide variety of information sources are available, business buyers will use the sources they trust. 33) FALSE Younger buyers get their information differently. The Millennial generation are increasingly responsible for organizational buying—and they bring new attitudes and approaches. They are more likely to jump online when researching a potential supplier and are also more comfortable turning to social media sites—and they love video content. 34) TRUE Most purchasing managers start with an Internet search when they need to identify new suppliers, better ways to meet needs, or information to improve decisions. 35) TRUE Buyers often rely on highly specialized search engines for technically specific information. 36) TRUE Version 1

Buyers often rely on highly specialized search engines for technically specific information. 37) TRUE A search across the whole web can often locate off-the-shelf products, eliminating the need to buy expensive, custom-made items. 38) TRUE White papers often advocate a seller's solution, and case studies help in learning about how other companies have addressed similar needs. Video content and blogs also make a seller's website more useful. 39) TRUE Buyers especially value recommendations from others that have already dealt with a similar need. Online social networks are making it easier to connect with other buyers. 40) FALSE As buyers rely more on social networks, communications from marketers may have less influence on buyers' attitudes and choices. 41) TRUE When buyers in B2B markets have identified potential suppliers, they sometimes ask them to submit a competitive bid—the terms of sale offered by the supplier in response to the purchase specifications posted by a buyer. 42) TRUE Rather than search for suppliers, buyers sometimes post their requirements and invite qualified suppliers to submit a bid. Some firms set up or participate in a procurement website that directs suppliers to companies (or divisions of a company) that need to make purchases. 43) TRUE Version 1

Some firms set up or participate in a procurement website that directs suppliers to companies (or divisions of a company) that need to make purchases. 44) TRUE Procurement websites increase the number of suppliers competing for the business, which can drive down prices or provide more beneficial terms of sale. 45) FALSE B2B e-commerce has had tremendous effect on the way organizations make purchase decisions and deal with suppliers. Search engines help in gathering information; and websites with useful content, procurement websites, and online communities help buyers make purchase decisions. 46) FALSE The goal of vendor analysis is not just to get a low price from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases. 47) TRUE The best vendor is one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. The goal of vendor analysis is not just to get a low price from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases. 48) TRUE Internet tools used in the B2B market helps increase the number of suppliers competing for the business, which can in turn drive down prices or provide more beneficial terms of sale. But sometimes dealing with one supplier with which a firm already has a good relationship is more important and lowers total cost. Version 1

49) FALSE There are often significant benefits of a close working relationship between a supplier and a customer firm. Such relationships are becoming common. 50) TRUE Although close relationships can produce benefits, they are not always best. A long-term commitment to a partner may reduce flexibility. 51) TRUE Although close relationships can produce benefits, they are not always best. A long-term commitment to a partner may reduce flexibility. 52) FALSE It may at first appear that a seller would always prefer to have a closer relationship with a customer, but that is not the case. Some customers place orders that are too small or require too much attention to be profitable. 53) FALSE Buyer-seller relationships are not "all or nothing" arrangements. Many firms may have a close relationship in some ways and not in others. 54) FALSE Purchasing managers for the buying firm and salespeople for the supplier usually coordinate the different dimensions of a relationship. However, close relationships often involve direct contacts between a number of people from different areas in both firms—R&D, Quality, Accounting, Marketing, Production, Engineering, Finance. 55) TRUE

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In cooperative relationships, the buyer and seller work together to achieve both mutual and individual objectives. The buyer and seller firms treat problems that arise as a joint responsibility. 56) FALSE Just-in-time delivery involves reliably getting products there, just before the customer needs them. 57) TRUE Closer relationships between buyers and sellers involve operational linkages and information sharing that lower costs and increase efficiency. 58) TRUE Sometimes the buyer and seller know roughly what is needed but can't fix all the details in advance. Then the relationship may involve negotiated contract buying, which means agreeing to contracts that allow for changes in the purchase arrangements. 59) FALSE Sometimes the buyer and seller know roughly what is needed but can't fix all the details in advance. Then the relationship may involve negotiated contract buying, which means agreeing to contracts that allow for changes in the purchase arrangements. 60) TRUE Managing relationship-specific adaptations involve changes in a firm's product or procedures that are unique to the needs or capabilities of a relationship partner. Industrial suppliers often custom design a new product for just one customer. This may require investments in R&D or new manufacturing technologies. 61) TRUE Version 1

Specific adaptations are usually made when the buying organization chooses to outsource. 62) FALSE Specific adaptations are usually made when the buying organization chooses to outsource. 63) TRUE Buyers often look for several dependable sources of supply to protect themselves from unpredictable events such as strikes, fires, or floods in one of their suppliers' plants. 64) FALSE One of the most striking facts about manufacturers is that they are few in number when compared to number of final consumers. Less than 2 percent of U.S. manufacturers have more than 500 employees. 65) FALSE Manufacturing industries are concentrated in certain geographic areas. 66) FALSE In the United States, many factories are concentrated in big metropolitan areas—especially in New York, Pennsylvania, Ohio, Illinois, Texas, and California. 67) TRUE Industrial markets are concentrated in certain geographic areas. There is also concentration by industry. In Germany, for example, the steel industry is concentrated in the Ruhr Valley. Similarly, most U.S. automobile manufacturing occurs in Michigan, Indiana, and Ohio. 68) TRUE

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The U.S. government collects and publishes data by the North American Industry Classification System (NAICS) codes—groups of firms in similar lines of business. 69) FALSE NAICS stands for North American Industry Classification System. 70) TRUE The U.S. government publishes data about number of establishments, sales volumes, and number of employees—broken down by geographic areas as per the NAICS code. 71) TRUE The NAICS code breakdowns start with broad industry categories such as construction (23) that have 2 digits. These further break down to 3 digits and then 4, 5, and 6 digits. The more digits, the more detailed the data, so that NAICS codes with 4 digits describe firms that are more similar than codes with just 2 digits. 72) TRUE Given the fact that there are a large number of service firms in the United States, most of them are small in size. They're also more spread out around the country than manufacturing concerns. 73) TRUE The United States has almost 6 million service firms—more than 17 times as many as it has manufacturers. 74) FALSE Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. This may be a doctor, lawyer, owner of a local insurance agency, hotel manager, or their secretary or office manager. Version 1

75) TRUE Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. This may be a doctor, lawyer, owner of a local insurance agency, hotel manager, or office manager. 76) TRUE Most retail and wholesale buyers see themselves as purchasing agents for their target customers. Typically, retailers do not see themselves as sales agents for particular manufacturers. They buy what they think they can profitably sell. 77) TRUE Decisions to add or drop product lines or change buying policies may be handled by a buying committee of retail chains. The seller still calls on and gives a pitch to a buyer—but the buyer does not have final responsibility. 78) FALSE Retailers and wholesalers usually carry a large number of products. A drug wholesaler, for example, may carry up to 125,000 products. Because they deal with so many products, most intermediaries buy their products on a routine, automatic reorder basis—straight rebuys. They don't have time to pay attention to each item. 79) FALSE Government is the largest customer group in many countries—including the United States. About 30 percent of the U.S. gross domestic product is spent by various government units. 80) FALSE Government units are the largest customer group in the United States. They account for about 30 percent of the U.S. gross domestic product.

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81) TRUE Government buyers in the United States are expected to spend money wisely—in the public interest. Most government customers buy by specification using a competitive bidding procedure. 82) TRUE To share in the government market, a supplier must be on the list of approved suppliers and agree on a price that will stay the same for a specific period—perhaps a year. 83) TRUE Potential suppliers should focus on the government units or prime contractors they want to cater to and learn the bidding methods of those units. Target marketing can make a big contribution here—making sure the marketing mixes are well matched with the different bid procedures. 84) FALSE To promote competition for their business, government agencies provide a lot of information to the marketers both in print form and online. The online resources, including USA.gov, FedBizOpps.gov (www.fbo.gov), and www.gsa.gov, carry information for vendors, prime contractors, and other marketers. 85) TRUE Outright influence peddling—where government officials or their friends request bribe money to sway a purchase decision—is common in some markets. However, the Foreign Corrupt Practices Act, passed by the U.S. Congress in 1977, prohibits U.S. firms from paying bribes to foreign officials. 86) A

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Most people think about an individual final consumer when they hear the term customer. But many marketing managers aim at customers who are not final consumers. In fact, more purchases are made by businesses and other organizations than by final consumers. 87) C Final consumers are individual shoppers. In contrast, business and organizational buyers are made up of government units, intermediaries, producers of goods and services, and nonprofit organizations. Business and organizational customers are any buyers who buy for resale or to produce other goods and services. 88) D Marketing managers refer to any and all organizational customers collectively as the "business-to-business" market, or simply the B2B market. This includes businesses, governments, and nonprofit organizations. 89) E There are many different types of organizational customers, including producers of goods and services; intermediaries; government units; and nonprofit organizations. 90) E There are many different types of organizational customers, including producers of goods and services; intermediaries; government units; and nonprofit organizations. 91) C A sales rep buying a new necktie to make a good impression is an example of an individual final consumer, not an organizational buyer. 92) A Version 1

A wholesaler purchasing merchandise for resale represents a business or organizational customer, while the other examples are of final consumers. 93) A Producers of goods and services are organizational customers. A college/university is a producer. 94) A Producers of goods and services are organizational customers. John Deere is a manufacturer of agricultural, construction, and grounds-care equipment. 95) C Producers of goods and services are organizational customers. Bank of Omaha is an example of a service-oriented organization. 96) B Intermediaries (wholesalers and retailers) are organizational customers. Macy's, a department store chain, is an intermediary. 97) A Intermediaries (wholesalers and retailers) are organizational customers. Best Buy is a retail store for electronics and other goods. 98) E The St. Louis Symphony is an American symphony orchestra and a nonprofit organization. 99) C Organizations typically focus on economic factors when they make purchase decisions, although individual buyers are also influenced by noneconomic factors.

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100) E Organizational buyers are concerned with meeting a range of economic needs, from the cost and quality of products to the seller's ability to provide maintenance and repair. In business markets, organizational buyers do not bid for suppliers; instead, suppliers offer bids to provide goods and services to organizational buyers. 101) E While economic needs are primary, B2B sellers know that organizational buyers are also influenced by noneconomic factors. Many of the behavioral dimensions, like security, status, and a sense of accomplishment, are relevant. 102) E It is often easier to understand an organization's needs because most organizations make purchases for the same basic reason. They buy goods and services that will help them meet the demand for the goods and services that they in turn supply to their markets. 103) E It is often easier to understand an organization's needs because most organizations make purchases for the same basic reason. They buy goods and services that will help them meet the demand for the goods and services that they in turn supply to their markets. 104) C Buyers or organizational customers try to consider the total cost of selecting a supplier and its particular marketing mix, not just the initial price of one product. 105) D

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A seller's marketing mix should satisfy both the needs of the customer company and the needs of individuals who influence the purchase. Sellers therefore need to find an overlapping area where both can be satisfied. 106) A Individual needs within a customer organization include comfort, risk, job security, career advancement, and money/rewards. Profit, growth, survival, and innovation best describe needs of the company. See Exhibit 6–3. 107) A Overlapping of needs are seen in Schmidt Industries plan for growth (company’s needs), which allows it to promote some current employees (individual’s needs) and increase wages for all employees (society’s needs). 108) C Small differences in buying behavior may be important because success often hinges on fine-tuning the marketing mix. Hence, each customer may need to be treated as a different segment. 109) D Many organizations rely on specialists to ensure that purchases are handled sensibly. They are commonly called purchasing managers— buying specialists for their employers. 110) C In large organizations, purchasing managers are the buying specialists that marketers must contact in order to present products and services. Purchasing managers typically work within a firm's procurement department and have a great deal of clout.

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111) A This scenario illustrates that buyers for an organization must avoid conflict between their self-interests and the policies of their employer. Marketers need to take concerns about conflict of interest very seriously. Part of the promotion job is to persuade the individuals who may influence an organization's purchase; yet the whole marketing effort may be tainted if it even appears that a marketer has encouraged a person who influences a decision to put personal gain ahead of company interest. 112) D Deciders are the people in the organization who have the power to select or approve the supplier—often a purchasing manager but sometimes top management for larger purchases. 113) D Marketers must be very careful to abide by strict ethics, especially as it relates to gifts. Purchasing managers seek to avoid a conflict between their own self-interest and company outcomes, and many firms have policies against employees accepting any gift from a supplier. 114) D Many organizations rely on specialists to ensure that purchases are handled sensibly. These specialists have different titles in different firms, such as procurement officer, supply manager, purchasing agent, or buyer. 115) C Purchasing managers or buying specialists in large organizations usually specialize by product area and are real experts. 116) E

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Purchasing managers in business markets are fewer in number compared to buyers in consumer markets; they usually specialize by product area; they are less emotional in their buying motives; and they are more insistent on dependability and quality. 117) E Buyers are responsible for working with suppliers and arranging the terms of sale. 118) E Career advancement is an individual need. While consumers have ethical issues to consider when making purchases, organizational buyers must be careful to avoid a conflict between their own self-interest and company outcomes. 119) C Buyers are responsible for working with suppliers and arranging the terms of sale. In this example, Teresa appears to be acting as a buyer. 120) B Influencers can be engineering or R&D people who help write specifications or supply information for evaluating alternatives. 121) C Users are the people who will use the product being purchased. 122) D Gatekeepers are people who control the flow of information within the organization. Andre, a research assistant who gathers and distributes information about alternatives, is an example of a gatekeeper. 123) B

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Deciders are the people in the organization who have the power to select or approve the supplier—often a purchasing manager but sometimes top management for larger purchases. 124) D Deciders are the people in the organization who have the power to select or approve the supplier—often a purchasing manager but sometimes top management for larger purchases. In this case, the president would be the decider. 125) A Deciders are the people in the organization who have the power to select or approve the supplier, and gatekeepers are people who control the flow of information within the organization. Natalie and Anthony are acting as decider and gatekeeper, respectively. 126) E The purchasing manager is playing the role of an influencer (looking through books with samples and preparing specifications), the role of a buyer (making the final selections and negotiating the terms), the role of a decider (selecting the supplier), and the role of a gatekeeper (calling the salespeople to make presentations to the production manager). 127) D Multiple buying influence involves users, influencers, buyers, deciders, gatekeepers in a buying decision. 128) B Installing a new computer network involves a multiple buying influence. Note pads, a chair, gasoline, and paper clips are standard products and can be bought by directly placing an order with simple specifications. 129) E Version 1

A buying center includes all the people who participate in or influence a purchase. Different people may make up a buying center from one decision to the next. 130) A A "buying center" may vary from purchase to purchase, as different people make up a buying center from one decision to the next. 131) D When a salesperson calls on a new business prospect, he or she has to move through a proper channel, normally meeting each member of the buying center at different stages. 132) D With centralized buying in large organizations, a sales rep may be able to sell to facilities all over a country. Many large organizations rely on purchasing managers. And a geographically bound salesperson can be at a real disadvantage, as specific business customs vary from one country to another. 133) B A typical purchasing manager tries to satisfy both individual needs and company needs. A seller's marketing mix should therefore satisfy both the needs of the customer company and the needs of individuals who influence the purchase. 134) C For many purchases, buyers know that choosing a supplier that delivers poor quality or late deliveries can be very costly. Buyers always look toward avoiding personal risk. 135) B

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Organizational buyers are problem solvers; they make purchases to solve problems, and the decision-making process depends on the nature of the purchase. 136) E A requisition is a request to buy something. 137) B A person who needs to purchase something usually completes a requisition—a request to buy something. 138) A A person who needs to purchase something usually completes a requisition—a request to buy something. 139) C Buying organizations often establish formal procedures governing how purchases are made. A person who needs to purchase something may have to complete a requisition—a request to buy something. 140) B Like final consumers, organizations make purchases to satisfy needs. But it's often easier to understand an organization's needs because most organizations make purchases for the same basic reason. 141) A Organizational buyers often buy on the basis of a set of purchasing specifications—a written (or electronic) description of what the firm wants to buy. 142) E Organizational buyers often buy on the basis of a set of purchasing specifications—a written (or electronic) description of what the firm wants to buy. Version 1

143) B Organizational buyers often buy on the basis of a set of purchasing specifications—a written (or electronic) description of what the firm wants to buy. 144) D When quality is highly standardized, as is often the case with manufactured items, the specification may simply consist of a brand name or part number. 145) D When quality is highly standardized, as is often the case with manufactured items, the specification may simply consist of a brand name or part number. 146) A The supermarket buyer is specific about purchasing grade A large eggs, so they are most likely to buy through purchasing specifications. 147) D All of these are highly standardized products and can be bought using simple purchase specifications. 148) E New-task buying can involve setting product specifications, evaluating sources of supply, and establishing an order routine that can be followed in the future if results are satisfactory. Multiple buying influence (involving users, influencers, buyers, deciders, gatekeepers) is most often found in new-task buying. 149) D

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Most purchasing managers make purchases from suppliers who deliver on time and with high quality and keep the total costs associated with purchases low. 150) E Organizational buyers rely on many sources of information, perform vendor analysis, and are motivated by new-task buying to seek more specific information. 151) A Multiple task buying is not discussed in the text. 152) D E-commerce computer systems automatically handle a large portion of straight rebuys. Buyers program the decision rules that tell the computer how to order and leave the details of following through to the computer. 153) B Most purchasing managers start with an Internet search when they need to identify new suppliers, better ways to meet needs, or information to improve decisions. Buyers often rely on highly specialized search engines, which is also why many marketing managers will pay search engines for a sponsored link (an ad) that appears when certain keywords are included in a search. 154) C New-task buying situations provide a good opportunity for a new supplier to make inroads with a customer. 155) D Buyers gather information, solicit proposals and/or bids from suppliers, and finally choose a supplier in the decision-making process stage. 156) A Version 1

When buyers in B2B markets identify potential suppliers, they contact one or more suppliers for proposals. A supplier may simply send a brochure or product catalog, or it may have a salesperson contact the buyer over the phone. In more complex buying situations, there may be formal presentations from different suppliers that also submit detailed proposals. 157) C Important task buying is not discussed in the text. 158) B New-task buying occurs when a customer organization has a new need and wants a great deal of information. 159) C New-task buying situations provide a good opportunity for a new supplier to make inroads with a customer. 160) C New-task buying situations provide a good opportunity for a new supplier to make inroads with a customer. With a buyer actively searching for information, the seller's promotion has a much greater chance of being noticed and having an impact. 161) E The organization would most likely engage in new task buying of a 10,000-square-foot prefabricated steel building for use as a warehouse. 162) B New-task buying occurs when a customer organization has a new need and wants a great deal of information. 163) D

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New-task buying occurs when a customer organization has a new need and wants a great deal of information. 164) E New-task buying occurs when a customer organization has a new need and wants a great deal of information. 165) B A straight rebuy is a routine repurchase that may have been made many times before. Buyers probably don't bother looking for new information or new sources of supply. 166) C A straight rebuy is most likely to occur for paper supplies for the company's copy equipment, as this is a routine repurchase. 167) A A vendor is most likely to sell to a buyer who has bought from the vendor before and is doing a straight rebuy, as this would be a routine repurchase. 168) A Impersonal, nonmarketing sources used by organizational buyers include online searches, rating services, trade associations, news publications, product directories, online review sites, and social media. 169) A Personal marketing sources used by organizational buyers include salespeople, others from supplier firms, and trade shows. 170) A

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Members of the Millennial generation who are responsible for organizational buying are more likely to jump online when researching a potential supplier. They are also more comfortable turning to social media sites—and they love video content. 171) A A formal rating of suppliers in all relevant areas of performance is best referred to as vendor analysis. 172) E Vendor analysis is a formal rating of suppliers in all relevant areas of performance. Analysis might show that the best vendor is the one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. 173) A A vendor is least likely to sell to the buyer who has not bought from the vendor before and is doing a straight rebuy, as this is a routine repurchase and there is no reason for the buyer to seek new information or new sources of supply. 174) E A straight rebuy is a routine repurchase that may have been made many times before. 175) C How much information a customer collects depends on the importance of the purchase and the level of uncertainty about what choice might be best. The time and expense of searching for information may not be justified for a minor purchase. 176) E

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Percy Malik routinely signs purchase orders for office supplies, so these are straight rebuys. A straight rebuy is a routine repurchase that may have been made many times before. 177) A The customer is currently in a straight rebuy situation. As the customer already has an established relationship with another supplier, the customer is not looking for new information or new sources of supply. 178) D This is an example of a straight rebuy, as the manager makes routine repurchases. A straight rebuy is a routine repurchase that may have been made many times before. 179) C This is an example of a straight rebuy, as there is a routine order made. A straight rebuy is a routine repurchase that may have been made many times before. 180) D Last Friday's order was an example of a straight rebuy, as there is a routine order made on the following Friday as well. 181) D Modified rebuy is the in-between process where some review of the buying situation is done, though not as much as in new-task buying. 182) B A modified rebuy would be most likely when a car producer is developing a sportier car that will require wider tires. In this case, the purchase specifications would require some review and modifications. 183) D

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A modified rebuy is most likely to occur for the purchase of a desk. The purchase specifications may require some review and modification. 184) B Whitewater Corp. already has the purchase specifications and only needs to look for a new supplier of basic plastics. The firm's purchasing agent is most likely to use modified rebuying. 185) A The bakery manager bought a different brand of wheat flour but from the regular supplier, so this is an example of a modified rebuy. Modified rebuy is the in-between process in which some review of the buying situation is done, though not as much as in new-task buying. 186) D Most purchasing managers start with an Internet search when they need to identify new suppliers. 187) B Most purchasing managers start with an Internet search when they need to identify new suppliers, better ways to meet needs, or information to improve decisions. Buyers often rely on highly specialized search engines, which is also why many marketing managers will pay search engines for a sponsored link (an ad) that appears when certain keywords are included in a search. 188) B White papers are reports designed to help buyers make decisions about a particular topic. 189) D

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Buyers like to read case studies—reports on a seller's website that describe how other companies solved a specific problem by using the seller's products. 190) A Competitive bids are the terms of sale offered by different suppliers in response to the purchase specifications posted by the buyer. 191) D Four suppliers submitted competitive bids that included the terms of sale each had to offer. Competitive bids are the terms of sale offered by different suppliers in response to the purchase specifications posted by the buyer. 192) A A formal rating of suppliers in all relevant areas of performance is best referred to as vendor analysis. 193) E Vendor analysis is a formal rating of suppliers in all relevant areas of performance. Analysis might show that the best vendor is the one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. 194) A The purpose of vendor analysis isn't just to get a low price from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases as may be achieved through greater efficiencies. For example, analysis might show that the best vendor is the one that helps the customer reduce costs of excess inventory, retooling of equipment, or defective parts. 195) B Version 1

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Vendor analysis is a formal rating of suppliers on all relevant areas of performance. 196) D In trying to deal with complexities arising while making purchase decisions many firms use vendor analysis—a formal rating of suppliers on all relevant areas of performance. The purpose isn't just to get a low price from the supplier but also to lower the total costs associated with purchases. 197) C In trying to deal with complexities arising while making purchase decisions many firms use vendor analysis—a formal rating of suppliers on all relevant areas of performance. 198) C A formal rating of suppliers on all relevant areas of performance like ontime delivery, product quality, service advice, and so forth is called vendor analysis. 199) D The purpose of vendor analysis isn't just to get a low price from the supplier on a given part or service. Rather, the goal is to lower the total costs associated with purchases. 200) C The goal of vendor analysis is to lower the total costs associated with purchases. 201) D Long-term commitments on larger order quantities would likely cause the supplier to lower its selling price, not raise it. 202) B Version 1

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Some relationships involve open sharing of information, whether by discussions between personnel or through information systems connected via the Internet—a key facet of B2B e-commerce. However, firms resist sharing information if there's a risk that a partner might misuse it. 203) C By establishing operational linkages with suppliers, organizations can receive material precisely on time. This technique can reduce total inventory costs, maintain adequate inventory levels, and keep production lines moving. 204) A Closely tied firms often share tasks at a lower total cost than would be possible working at arm's length. Lower total costs lead to greater profits. 205) E Although close buyer-seller relationships can produce benefits, they are not always best. All the described drawbacks substantiate this statement. 206) B Some customers simply are not interested in a close relationship with a supplier because it may not be worth the customer's investment to build a relationship for purchases that are not particularly important or made that frequently. 207) D The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 208) B Version 1

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The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 209) E The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 210) C The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 211) E The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 212) B The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 213) A The five key dimensions that help characterize most buyer-seller relationships are cooperation, information sharing, operational linkages, legal bonds, and relationship-specific adaptations. 214) E Suppliers to business markets often share information on industry trends with the customer, provide just-in-time delivery, serve as technical consultants to their customers, and agree to negotiated contract buying. Version 1

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215) E A close buyer-seller relationship in a business market may be close in some ways and not in others. Many require relationship-specific adaptations by both parties, obligatory price reductions by the supplier, and negotiated contract buying. 216) A Operational linkages are direct ties between the internal operations of the buyer and seller firms. 217) C Operational linkages usually involve ongoing coordination of activities between the firms. 218) C Just-in-time delivery means reliably getting products there just before the customer needs them. 219) A Negotiated contract buying means agreeing to contracts that allow for changes in the purchase arrangements. In such cases, the general project and basic price is described but with provision for changes and price adjustments as the job progresses. 220) C When a buyer can't specify all of the details of what it will need in the future, the relationship with a supplier is most likely to involve negotiated contracts. 221) B

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Creative Electronics only has an idea for a new smartphone accessory and not a detailed description of it, so it is most likely to use negotiated contract buying. Negotiated contract buying means agreeing to contracts that allow for changes in the purchase arrangements. 222) A The transaction is a negotiated contract buy, as the contract is likely to contain only the general project and basic price details, with provision for changes as the job progresses. 223) B This purchase involves negotiated contract buying, as the contract includes a provision for price changes over a specific period of time. Negotiated contract buying means agreeing to contracts that allow for changes in the purchase arrangements. 224) E As the two companies work in close cooperation with each other, this situation is an example of relationship-specific adaptations. Relationship-specific adaptations involve changes in a firm's product or procedures that are unique to the needs or capabilities of a relationship partner. 225) E Chu's Coating Services is providing customized services to Walker County Choppers, which is a relationship-specific adaptation. Relationship-specific adaptations involve changes in a firm's product or procedures that are unique to the needs or capabilities of a relationship partner. 226) D

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Specific adaptations are usually made when the buying organization chooses to outsource—that is, contract with an outside firm to produce goods or services rather than to produce them internally. 227) B Buyers often look for several dependable sources of supply to ensure continued supplies and also to protect themselves from unpredictable events. 228) E While it is true that the number of people employed in manufacturing has been shrinking, U.S. manufacturing output is higher than at any other time in the nation's history. The rate of growth, however, is fastest in countries where labor is cheapest. 229) B To help develop effective marketing mixes, marketers should pay close attention to the size, geographic locations, buying procedures, and types of manufacturers. 230) B NAICS codes help categorize all types of businesses and begin by listing general industry categories, which are marked by two-digit codes. Subcategories of those top-level groupings then receive codes of three or more digits, signifying greater detail about the products and services offered by firms. 231) A Internationally, industrial customers are concentrated in countries that are at the more advanced stages of economic development. 232) B NAICS stands for North American Industry Classification System. Version 1

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233) D Marketers can find firms that are similar to current B2B-market clients by looking up current customers' NAICS codes and then studying NAICS-coded lists for related firms. 234) B Within a country, there is often concentration of manufacturing in specific areas. In the United States, many factories are concentrated in big metropolitan areas—especially in New York, Pennsylvania, Ohio, Illinois, Texas, and California. 235) D U.S. business manufacturing markets tend to be concentrated by industry type, industry size, and geographical location. 236) C U.S. manufacturers tend to concentrate by industry. For example, most U.S. automobile manufacturing occurs in Michigan, Indiana, and Ohio. 237) E The U.S. government collects and publishes data by the North American Industry Classification System (NAICS) codes—groups of firms in similar lines of business. 238) B NAICS stands for North American Industry Classification System. 239) A The NAICS code breakdowns start with broad industry categories with two-digit codes. Within each two-digit industry breakdown, much more detailed data may be available for three-digit industries. Exhibit 6–9 illustrates how breakdowns are more detailed as you move to codes with more digits. Version 1

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240) C The NAICS code breakdowns become more detailed as the number of digits in the code increase. Detailed data (say, broken down at the fourdigit level) isn't available for all industries in every geographic area. 241) C The government does not provide detail when only one or two plants are located in an area. The textile equipment manufacturer, being the only plant in a state, would not find a place in the NAICS codes. 242) A A marketing manager looking for data on the most general breakdown of a particular industry should follow the NAICS codes with the least number of digits. The NAICS code breakdowns become more detailed as the number of digits in the code increase. 243) B The NAICS code breakdowns become more detailed and specific as the number of digits in the code increase. 244) C Many firms find their current customers' NAICS codes and then look at NAICS coded lists for similar companies that may need the same goods and services to identify prospective customers. 245) C Purchases by small service firms are often handled by whoever is in charge or their administrative assistant. This may be a doctor, lawyer, owner of a local insurance agency, hotel manager, or office manager. 246) C Manufacturing and service firms alike use e-commerce for purchasing. 247) E Version 1

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Small service companies that don't attract much personal attention from salespeople often rely on e-commerce for many of their purchases. A well-designed website can be efficient for both customers and suppliers. Customers can get information, place orders, or follow up with a call or e-mail for personal attention from a salesperson or customer service rep when it's needed. 248) E Most retail and wholesale buyers see themselves as purchasing agents for their target customers. They do not typically see themselves as sales agents for particular manufacturers. 249) B Decisions to add or drop lines or change buying policies may be handled by a buying committee. 250) B Space in retail stores is limited, and buyers for retail chains simply are not interested in carrying every product that some salesperson wants them to sell. Decisions to add or drop lines or change buying policies may be handled by a buying committee. 251) B When a large wholesaler or retailer uses a buying committee, the seller may not get to present his or her story to the buying committee in person. 252) D When large retail chains use a buying committee, the seller may not get to present his or her story to the buying committee in person. This approach certainly reduces the impact of a persuasive salesperson. 253) A Version 1

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Most large firms and even small retailers and wholesalers are using computer systems to control inventory levels. These automated control systems create daily reports, showing sales of every product, that can be used to assess the profitability of each product. 254) D Retailers and wholesalers usually carry a large number of products. Most intermediaries buy their products on a routine, automatic reorder basis— that is, as straight rebuys. 255) C Most large firms use computer systems to control inventory levels. These automated control systems create daily reports, showing sales of every product, that can be used to assess the profitability of each product. 256) E Often the government buyer must accept the lowest bid that meets the specifications. A contract can be landed without the lowest bid when lower bids don't meet minimum or requested specifications. Government buyers in the United States are expected to spend money wisely, so their purchases are usually subject to a great deal of public review. 257) A Government is the largest customer group in many but not all countries. 258) B Most government customers buy by specification using a mandatory bidding procedure. 259) E

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A supplier must be on the list of approved suppliers. Government accounts for about 30 percent of the U.S. gross domestic product. The government buyer accepts the lowest bid that meets the specifications. Most government customers buy by specification using a mandatory bidding procedure. 260) A Most government customers buy by specification, using a mandatory bidding procedure. 261) B Government is the largest customer group in many countries, including the United States. About 30 percent of the U.S. gross domestic product is spent by various government units. 262) A The government unit simply places an order at a previously approved price. To share in this business, a supplier must be on the list of approved suppliers and agree on a price that will stay the same for a specific period—perhaps a year. 263) A Because government agencies want to promote competition for their business, marketers are provided with a lot of information—in print form and online. The U.S. government has a central source, and USA.gov is a great place to start. 264) A There are resources at FedBizOpps.gov, including videos, publications, and a search tool, for finding opportunities to fit a firm's strategy. 265) E

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Potential suppliers should focus on targeted government units. They should monitor websites where government contracts are advertised; make sure their marketing mixes are well matched with the different bid procedures; and get permission from the government in its own country when they want to sell to a foreign government. 266) B The General Services Administration handles vendor contracts for offthe-shelf goods and services; information for vendors is available at www.gsa.gov. 267) E The Foreign Corrupt Practices Act, passed by the U.S. Congress in 1977, prohibits U.S. firms from paying bribes to foreign officials. 268) D The Foreign Corrupt Practices Act, passed by the U.S. Congress in 1977, prohibits U.S. firms from paying bribes to foreign officials. The law was amended in 1988 to allow small grease money payments if they are customary in a local culture. Since 1998, the law applies to foreign firms or foreign individuals who accept payments while in the United States. 269) A The Sarbanes-Oxley Act of 2002 makes individual executives responsible for their company's financial disclosures; and a bribe mischaracterized as a legitimate expense may violate the law.

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CHAPTER 7 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The function of marketing research is to develop and analyze new information to help marketing managers make better decisions. ⊚ ⊚

true false

2) Marketing research focuses on changing information needs, while an MIS focuses on recurring information needs. ⊚ ⊚

true false

3) A marketing information system (MIS) is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. ⊚ ⊚

true false

The marketing department is solely responsible for the creation of an MIS. ⊚ ⊚

true false

5) Big data involves data sets too large and complex to work with typical database management tools. ⊚ ⊚

true false

6) For the best results, marketing managers should always follow the numbers from big data and ignore any intuition they may have. ⊚ ⊚

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true false

7) A data warehouse is filled with file cabinets and binders where past market research is stored. ⊚ ⊚

true false

8) The benefit of using data from a firm's MIS for making marketing strategy decisions is that marketing managers trust the data and are assured of its veracity. ⊚ ⊚

true false

Marketing managers find data in raw form very useful. ⊚ ⊚

true false

10) Sales data become wisdom when they provide answers to questions of "who," "what," "where," "how much," and "when." ⊚ ⊚

true false

11) Marketing managers turn information into knowledge when they use their experience to answer "how" and "why" questions. ⊚ ⊚

true false

12) A decision support system (DSS) is a computer program that makes it easy for marketing managers to get and use information as they are making decisions. ⊚ ⊚

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true false

13) Decision support systems that include marketing models help managers by showing the relationships among marketing variables. ⊚ ⊚

true false

14) A marketing manager can use a marketing model to look at the sales (and costs) expected with different types of promotion and select the marketing mix that is best for a particular target market. ⊚ ⊚

true false

15) A marketing dashboard displays up-to-the-minute marketing data in an easy-to-read format. ⊚ ⊚

16)

true false

A marketing model displays up-to-the-minute marketing data in an easy-to-read format. ⊚ ⊚

true false

17) Executed marketing strategies and their results should be fed back into a company's data warehouse so that they can be used for problem solving in the future. ⊚ ⊚

true false

18) Information that can be used by itself or in combination with other information to identify someone is referred to as personal data. ⊚ ⊚

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true false

19) The General Data Protection Regulation is a set of laws on data protection and privacy for all individuals within the United States. ⊚ ⊚

true false

20) Use of the scientific method in marketing research helps managers make the best decisions possible. ⊚ ⊚

true false

21) A marketing researcher using the scientific method develops and tests hypotheses about the relationships between things or about what will happen in the future. ⊚ ⊚

true false

22) Use of the scientific method in marketing research forces researchers to use an inflexible process. ⊚ ⊚

true false

23) Use of the scientific method in marketing research forces researchers to use an orderly process. ⊚ ⊚

true false

24) Hypotheses are educated guesses about the relationships between things or about what will happen in the future. ⊚ ⊚

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true false

25) The scientific method is a research process consisting of five stages: observation, developing hypotheses, predicting the future, collecting data, and using statistical methods of analysis. ⊚ ⊚

true false

26) It isn't necessary for marketing managers to be involved with marketing research specialists, since research requires statistical skills that managers usually don't have. ⊚ ⊚

true false

27) Marketing managers should be able to explain the kinds of problems they are facing and the kinds of marketing research information that will help them make decisions. ⊚ ⊚

true false

28) Since marketing managers have to be able to evaluate research results, they should be involved in the design of research projects, even though they may not be research specialists. ⊚ ⊚

true false

29) Defining the problem is the first step in the marketing research process—and is usually the easiest job for the researcher. ⊚ ⊚

30)

true false

Defining the problem is always the easiest step in the marketing research process. ⊚ ⊚

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true false

31)

Defining the problem is often the most difficult step in the marketing research process. ⊚ ⊚

true false

32) To avoid wasting time working on the wrong problem, marketing researchers can use a logical strategy planning framework to guide their efforts. ⊚ ⊚

true false

33) Unless the problem is precisely defined, research efforts may be wasted on the wrong problem and may lead to costly mistakes. ⊚ ⊚

true false

34) A situation analysis is a formal study of what information is already available in the problem area. ⊚ ⊚

true false

35) During the situation analysis, marketing researchers may talk to informed people within the company, study internal records, search libraries for available information, or browse the Internet with a search engine. ⊚ ⊚

36)

true false

Secondary data is information that is already published or collected. ⊚ ⊚

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true false

37)

Secondary data involves information that has been collected or published already. ⊚ ⊚

true false

38) During the situation analysis, a marketing researcher will evaluate primary data rather than secondary data. ⊚ ⊚

39)

true false

The Internet is an excellent source for primary data but not secondary data. ⊚ ⊚

true false

40) One way to monitor what people are saying about a brand or its products is to conduct a sentiment analysis. ⊚ ⊚

41)

true false

Internet, library, and government databases are all major sources of primary data. ⊚ ⊚

true false

42) The Statistical Abstract of the United States is a useful summary of secondary data published by the federal government. ⊚ ⊚

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true false

43) Syndicated research is an economical approach for collecting specific research needed by one firm for a specific problem. ⊚ ⊚

44)

true false

Only about 25 percent of marketing research spending is for syndicated research. ⊚ ⊚

true false

45) J.D. Power’s surveys of customer satisfaction are a popular example of syndicated research. ⊚ ⊚

true false

46) A consumer panel is a group of consumers who provide information on a continuing basis. ⊚ ⊚

47)

true false

Retail scanners can feed data directly into a firm’s MIS. ⊚ ⊚

true false

48) A good situation analysis is usually expensive and takes more time, compared with more formal research efforts such as a large-scale survey. ⊚ ⊚

49)

true false

A research proposal involves interviewing 6 to 10 people in an informal group setting.

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⊚ ⊚

true false

50) In general, a marketing researcher should get some problem-specific data before planning a formal research project. ⊚ ⊚

51)

A formal marketing research project usually involves gathering primary data. ⊚ ⊚

52)

true false

Qualitative research seeks in-depth, open-ended responses, not yes or no answers. ⊚ ⊚

53)

true false

Qualitative research seeks clear yes or no answers. ⊚ ⊚

true false

54) A customer journey map can identify ways that a company can improve the entire purchase experience. ⊚ ⊚

55)

true false

Focus group interviews are a form of quantitative research. ⊚ ⊚

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true false

56) A focus group interview involves interviewing 6 to 10 people in an informal group setting. ⊚ ⊚

true false

57) Online focus groups can offset some of the limitations of traditional focus groups, because in traditional focus groups, one aggressive member may dominate the group. ⊚ ⊚

58)

true false

Focus groups are a way to gather primary data quickly but at a relatively high cost. ⊚ ⊚

true false

59) Qualitative research seeks structured responses that can be summarized in numbers, like percentages, averages, or other statistics. ⊚ ⊚

true false

60) Open-ended questions are less likely to be asked in quantitative research than in qualitative research. ⊚ ⊚

true false

61) A common quantitative research approach is to use survey questionnaires with multiplechoice questions. ⊚ ⊚

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true false

62) One reason for the popularity of mail surveys is that the response rates are usually very high. ⊚ ⊚

true false

63) The response rate is the percentage of people contacted who complete a given questionnaire. ⊚ ⊚

true false

64) One weakness of telephone interviews is that they do not allow an interviewer to probe and really learn what the respondent is thinking. ⊚ ⊚

65)

true false

Observing, as a method of collecting data, should focus on a well-defined problem. ⊚ ⊚

true false

66) With the observation method, the researcher skillfully engages the subject in conversation. ⊚ ⊚

67)

true false

Telephone surveys are effective for getting quick answers to simple questions. ⊚ ⊚

true false

68) With roots in biology, ethnographic research studies different cultures by examining their physiology.

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⊚ ⊚

69)

true false

Observing—as a method of collecting data—should focus on a well-defined problem. ⊚ ⊚

true false

70) In the observation method, researchers try to see or record what the subject does naturally. ⊚ ⊚

true false

71) With the observation method, the researcher skillfully engages the subject in conversation. ⊚ ⊚

true false

72) Applying the experimental method in marketing research usually means comparing the responses of two or more groups. ⊚ ⊚

true false

73) In the experimental method, researchers compare the responses of two or more groups that are similar even on the characteristic being tested. ⊚ ⊚

true false

74) A good marketing manager knows that the value of additional information lies in the ability to design more effective marketing strategies.

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⊚ ⊚

true false

75) A marketing manager should seek help from research only for problems where the risk of a decision can be greatly reduced at a reasonable cost. ⊚ ⊚

76)

true false

Statistical packages are easy-to-use computer programs that analyze data. ⊚ ⊚

true false

77) A statistical package is likely to be used with quantitative research, but not with qualitative research. ⊚ ⊚

true false

78) In a quantitative marketing research study, the total group of people a marketing manager is interested in learning something about is known as the sample. ⊚ ⊚

79)

true false

In marketing research, a population is a part of the relevant sample. ⊚ ⊚

true false

80) The extent to which marketing research data measure what they are intended to measure is known as the confidence level. ⊚ ⊚

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true false

81)

Validity concerns the extent to which data measure what they are intended to measure. ⊚ ⊚

true false

82) All marketing research projects are worthwhile because they gather new information even if the research doesn't have action implications. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 83) Marketing managers look to marketing research to answer four types of questions. Which of the following is not one of those questions? A) How will the marketing mix increase employee salaries? B) What value can a marketing mix deliver? C) To whom can a marketing mix deliver value? D) Which marketing strategies are working? E) What if one of the variables changed?

84) Procedures that develop and analyze new information to help marketing managers make decisions are called A) strategy planning. B) operational planning. C) analytical research. D) marketing research. E) statistical techniques.

85)

What is true about one-at-a-time marketing research procedures?

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A) They are beneficial, as they provide quick results. B) They are more effective than marketing information system. C) They cannot be combined with marketing information system. D) They are costly and take more time. E) They focus more on objective methods than subjective methods.

86) Procedures that develop and analyze new information to help marketing managers make decisions are called A) marketing research. B) statistical techniques. C) operational planning. D) strategy planning. E) sample building units (SBUs).

87) Isaac, a marketing manager, performs Internet searches and customer surveys to develop and analyze new information about a market his company is planning to enter. What procedure is Isaac following in order to get the desired information? A) marketing research B) marketing information system C) frequency monitoring program D) marketing plan E) management information system

88) An organized way of continually gathering, accessing, and analyzing data to get information to help marketing managers make ongoing decisions is called a

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A) marketing information system. B) marketing model. C) marketing research project. D) marketing research department. E) marketing logistics system.

89)

Which of the following is true of marketing information systems (MIS)?

A) They develop and analyze new information about a market. B) They are generally too costly and provide less information than a market research procedure. C) They help marketing managers improve the marketing strategy planning process. D) They cannot be combined with marketing research. E) They generally take too long to get the desired information.

90)

Which of the following statements about marketing research is accurate? A) It is an organized way of gathering and analyzing information marketing managers

need. B) It involves a wide range of techniques, including Internet searches, customer surveys, and more. C) It is a department in most small companies. D) It is only needed by producers who have long channels of distribution. E) It is not considered an alternative to a marketing information system.

91)

How do large companies engage in marketing research activities?

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A) They often rely on outside specialists and consultants for marketing research projects. B) They use the results of smaller companies, after modifications. C) They depend on nonprofit organizations for marketing research. D) They rely on their salespeople or managers for marketing research. E) They do not involve marketing managers in their design of marketing research.

92) Why is setting up a marketing information system considered valuable to marketing managers? A) It helps in providing a continual flow of information whenever needed. B) It focuses more on primary data than secondary data. C) It provides generalized information and not problem-specific data. D) It concentrates only on numerical data and supports fast analysis. E) It serves as a source of information for small companies that can't afford marketing research.

93) A ________ is an organized way of continually gathering and analyzing data to get information to help marketing managers make ongoing decisions. A) marketing information system B) marketing model C) marketing research project D) marketing research department E) marketing logistics system

94) ________ refers to an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions.

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A) Active marketing B) Manufacturing information system C) Marketing research D) Marketing information system E) Target marketing

95)

Which of the following statements about marketing information systems (MIS) is true?

A) The input of marketing managers is not needed in developing an MIS; marketers should leave everything to information technology specialists. B) They can be used to improve implementation and control. C) A good MIS converts information into raw data. D) An MIS provides an alternative to big data. E) All these statements are true.

96)

Marketing information systems rely heavily on A) information gathered by salespeople. B) customer surveys. C) teamwork between IT experts and marketing managers. D) direct observation of customers. E) marketing research departments.

97) A ________ is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. A) big data repository B) data warehouse C) marketing information system D) research specialist network E) marketing model

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98)

A marketing information system includes which of the following? A) data storage and access B) marketing analysis C) marketing strategy planning process D) information sources E) All of the answers are correct.

99)

A marketing information system should A) provide a good overall view on many types of problems. B) store data from inside and outside of the company. C) provide results in the form of marketing metrics. D) help make marketing strategy planning process and strategy decisions. E) All of the answers are correct.

100) When an organization collects data from social media websites such as Facebook and LinkedIn, the data is considered to belong to ________ sources. A) regulated B) internal C) unidentified D) external E) identified

101)

Which of the following is an example of internal data that would be included in an MIS?

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A) customer information from a customer relationship management (CRM) system B) industry growth trends and regulatory information C) information about competitors' new products D) relevant past studies and surveys regarding specific areas of interest E) All of the answers are correct.

102)

How often should external data for an MIS be collected? A) It should be routinely collected. B) It is already collected and available to marketing managers. C) It should be collected yearly. D) It should be collected when a marketing manager identifies an issue. E) External data does not need to be collected for an MIS.

103) Which of the following sources of data from a company's MIS would be considered market research? A) a previous study that gauged customer reaction to a potential change in product packaging B) an article that appeared in an industry trade paper about the growth of a customer C) a catalog of all pertinent regulations and laws that apply to the company and its product D) data on sales of the company's products in different geographic regions E) all information relating to competitors, their products, and their pricing

104)

What does the phrase "big data" refer to?

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A) It refers to the information collected by the top five firms in the marketing research industry. B) It refers to the data sets too large and complex to work with typical database management tools. C) It refers to the information received from market research studies but not internal sources. D) It refers to the marketing research data taken from Internet sources. E) It refers to the market information taken from the U.S. Census.

105)

Which of the following trends creates difficult challenges for marketing managers? A) Market data can now be gathered from social media websites. B) Market data may be gathered from internal sources and external sources. C) IT managers have become an important part of the marketing research process. D) Data warehouses have become a central part of most marketing information systems. E) Today's businesses process 1,000 times as much data as they did in the year 2000.

106)

All of the following make up the Four Vs of big data except A) volatility. B) volume. C) variety. D) velocity. E) veracity.

107)

In order to utilize big data, marketing managers must A) decide what information can be stored. B) understand how quickly information can be analyzed. C) figure out how information can be used in marketing strategy planning. D) grasp the Four Vs of big data. E) All of the answers are correct.

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108)

Which of the following would refer to the variety aspect of the Four Vs? A) the use of technology to collect a wide range of data B) the speed at which data are generated C) the amount of data in a company's MIS D) the way data are stored and accessed E) how data are used to create a marketing strategy

109)

The rate at which big data are generated and processed is referred to as A) velocity. B) tempo. C) volume. D) predictive analytics. E) variety.

110) A customer has been on a carpet company's website several times, viewing different carpets. Although the company has access to this data, by the time it analyzes the data and makes the customer a relevant offer in the form of a discount code, the customer has already purchased a carpet from another website. With regard to big data, this is a matter of A) velocity. B) veracity. C) volume. D) variety. E) value.

111)

Data security is particularly important to marketing managers because

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A) a data breach can severely damage a firm’s reputation. B) they are the protectors of customers’ personal data within a firm. C) big data and its protection are primarily marketing functions. D) it may compromise the information in an MIS. E) None of the answers are correct.

112)

For raw data to become useful to marketers, they must be A) stored in a data warehouse. B) transformed into information and knowledge. C) gathered from internal company sources. D) gathered from external sources. E) communicated to executives through a formal report.

113)

When getting information for marketing decisions, the marketing manager A) may use both internal and external sources of information. B) may need to make some decisions based on incomplete information. C) may need to rely on his or her own instincts to make some decisions. D) should have access to ongoing information about business performance. E) All of the answers are correct.

114) Marketing manager Carl Hammer looked through his marketing information system, where he learned who was buying his product and where. He was looking at A) raw data. B) information. C) a marketing model. D) big insights. E) a knowledge network.

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115) Marketing manager Ricki Stephens reviewed her marketing information system to learn who was buying her company's products and at what stores they were buying. She found this internal and external data in her company's A) data warehouse. B) big data set. C) market research network. D) annual report. E) focus group.

116) Which of the following statements about marketing research and marketing information systems is true? A) Marketing information systems gather, access, and analyze data from intra-company sources, while marketing research handles all external sources. B) Both tend to focus on nonrecurring information needs. C) Marketing information systems tend to increase the quantity of information available for decision making, but with some decrease in quality. D) Neither involves the use of big data. E) None of the answers are correct.

117) Setting up a marketing information system can be valuable to marketing managers because A) most companies have a great deal of useful information, but it often isn't available or accessible when the manager needs it. B) most market-oriented companies only need a certain type of information once or twice. C) marketing research data is rarely as accurate as data from a marketing information system. D) market-oriented managers can always use more data. E) a company that can't afford marketing research should at least have a marketing information system.

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118) Which of the following observations about the use of a marketing information system (MIS) is FALSE? A) Not every firm has a complete MIS. B) An MIS tends to focus on recurring information needs. C) For most firms it pays to wait to until you have important questions you can't answer. D) It is the job of the MIS specialist to ask for the right information in the right form. E) An MIS shouldn't be the only source of information for managers while making decisions.

119) Which of the following represents the results component of a marketing information system? A) market research studies B) internal data sources C) marketing metrics D) marketing models E) external data sources

120) Managers at Wayzata Communications, an Internet service provider, want access to a continual flow of information about their market that is available whenever they need it. Wayzata managers need A) a marketing information system. B) an intranet. C) a data warehouse. D) a customer relationship management system. E) big data.

121)

Which of the following best characterizes wisdom?

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A) knowledge + experience B) information + How? Why? C) information + knowledge D) knowledge - information E) experience - data

122) Jane, a marketing manager for the Grocery SuperStore retail chain, fired up a computer program that gave her ready access to information about product availability and customer buying. The program helped her immediately set prices for bananas and cherries. This type of computer program is called A) a decision support system. B) data warehouse management. C) an Internet. D) market analysis software. E) a raw data manager.

123)

Which of the following is true about a decision support system (DSS)?

A) It is a system that focuses only on numerical data. B) It is a computer program that allows a marketing manager to obtain and use information. C) It organizes incoming information into a data warehouse. D) It is a place where databases are stored so that they are available when needed. E) It is a system for linking computers within a company.

124) Juan Quito is a marketing manager at Branded Food Co. When he wants to have an interface with a data warehouse and DSS, Juan has to review his ________, the up-to-the-minute marketing data on his computer screen, which is organized in an easy-to-read format and customized to his area of responsibility.

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A) intranet B) marketing dashboard C) internal data sources D) data warehouse E) internal search engine

125) At Verizon Communications, a marketing manager can view up-to-date marketing data that has been customized to fit his area of responsibility by using a A) data warehouse. B) search engine. C) situation analysis. D) marketing dashboard. E) validity study.

126)

What is a marketing model?

A) It is a procedure that develops and analyzes new information about a market. B) It identifies a detailed breakdown of a company's sales records. C) It is a plan that specifies what information will be obtained and how. D) It is a statement of relationships among marketing variables. E) It supports a software application that organizes incoming information into a data warehouse.

127) A large gym’s software program figures out that, for those who have visited its website, sending promotional offers one week after Thanksgiving is most effective at gaining new “resolution” customers for January 1. This is an example of

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A) machine learning. B) a customer journey map. C) statistical packages. D) sentiment analysis. E) big data.

128) Which of the following statements about marketing planning, implementation, and control is accurate? A) Marketing managers can often provide insights that are superior to various models and predictive analytics. B) Without the use of marketing technology, most marketing programs fail. C) Antiquated spreadsheet software is totally ineffectual in today’s marketing environment. D) The concepts driving marketing strategy differ depending on whether marketing technology is being utilized. E) Thanks to marketing technology, managers do not need to engage in marketing strategy planning decisions.

129) Anything that limits others’ access to personal data that people consider sensitive or confidential is referred to as A) informational privacy. B) a data breach. C) confidence interval. D) a situation analysis. E) a decision support system.

130) As part of its network management, a firm’s IT department has details of how users used its online services, their IP addresses, the browser they used, and information gathered by the cookies on their website. Protecting this information is a matter of

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A) informational privacy. B) consumer validity. C) sentiment analysis. D) data warehousing. E) the customer journey.

131)

The General Data Protection Regulation (GDPR) A) is a set of laws on data protection and privacy for all individuals within the European

Union. B) is comprised of the laws in the United States that protect personal data and require informational privacy. C) is a uniform set of consumer privacy laws that govern privacy in all countries. D) only applies to companies that do business within the European Union nations. E) only applies to companies that house their servers in the United States.

132) A decision-making approach that focuses on being objective and orderly in testing ideas before accepting them is called the ________ method. A) MIS B) scientific C) statistical D) DSS E) marketing model

133) The ________ is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them.

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A) decision support system B) situation analysis C) idea generation process D) marketing information system E) scientific method

134)

The scientific method

A) rejects the idea that marketing managers can make "educated guesses" about marketing relationships. B) shows that every marketing research project should have five steps. C) is an orderly and objective approach to judging how good an idea really is. D) recognizes that statistical analysis provides the only basis for rejecting a hypothesis. E) None of the answers are correct.

135)

The scientific method in marketing research A) forces an orderly research process. B) is an informal approach to defining problems. C) is not a valid decision-making approach. D) is based on hunches rather than evidence. E) makes guesses about what will happen in the future.

136)

The scientific method

A) rejects the idea that marketing managers can make "educated guesses" about marketing relationships. B) is an orderly way of presenting your point of view. C) assumes that statistical analysis provides the only basis for rejecting a hypothesis. D) is a hit-or-miss approach. E) None of the answers are correct.

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137) Educated guesses about the relationships between things or about what will happen in the future are called A) theories. B) laws. C) facts. D) hypotheses. E) data.

138) Educated guesses about the relationships between things or about what will happen in the future are A) hypotheses. B) laws. C) proposals. D) theories. E) predictions.

139) ________ are educated guesses about the relationships between things or about what will happen in the future. A) Data insights B) Observations C) Situation analyses D) Hypotheses E) Marketing models

140)

What is the purpose of the five-step marketing research process?

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A) to define and solve a problem B) to design, implement, and control marketing plans and activities C) to narrow down a broad generic market into useful target markets D) to identify the main steps in the consumer decision process E) to help marketers choose between consumer markets and B2B markets

141)

What is the fourth step of the five-step marketing research process? A) defining the problem B) analyzing the situation C) getting problem-specific data D) interpreting the data E) focusing on additional problems

142) Which of the following statements accurately describes the collaboration between marketing managers and market researchers? A) Marketers explain real marketing problems and request information from researchers; researchers conduct tests that provide information to marketers. B) Marketers conduct tests; researchers turn data into useful information. C) Marketers submit bids; researchers evaluate bids. D) Marketers gather data from secondary sources; researchers input data into data warehouses for computer processing. E) Marketers conduct tests; researchers identify marketing problems.

143) Which of the following represents the third step of the five-step approach of marketing research?

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A) defining the problem B) analyzing the solution C) looking for alternatives D) interpreting the data E) getting problem-specific data

144)

Which of the following provides the correct sequence in the marketing research process?

A) analyzing the situation, getting problem-specific data, interpreting the data, defining the problem, solving the problem B) analyzing the situation, defining the problem, getting problem-specific data, interpreting the data, solving the problem C) defining the problem, analyzing the situation, getting problem-specific data, interpreting the data, solving the problem D) getting problem-specific data, interpreting the data, analyzing the situation, defining the problem, solving the problem E) getting problem-specific data, interpreting the data, defining the problem, solving the problem, analyzing the situation

145) Which of the following is the correct sequence of steps in the marketing research process? A) getting problem-specific data, interpreting data, defining the problem, analyzing the situation, solving the problem B) analyzing the situation, getting problem-specific data, interpreting data, defining the problem, solving the problem C) defining the problem, getting problem-specific data, interpreting data, analyzing the situation, solving the problem D) defining the problem, analyzing the situation, getting problem-specific data, interpreting the data, solving the problem E) None of the answers are correct.

146)

Which of the following is not part of the five-step marketing research process?

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A) writing the proposal B) analyzing the situation C) solving the problem D) interpreting the data E) defining the problem

147)

All of the following are part of the five-step marketing research process except A) interpreting the data. B) developing the marketing information system (MIS). C) analyzing the situation. D) defining the problem. E) solving the problem.

148) Which of the following is most consistent with the scientific method approach to marketing research? A) "We continually survey our customers because the results give us good ideas for hypotheses." B) "Once we interpret the data, we can define our problem." C) "Our research is as precise as possible, because we want to be 100 percent accurate." D) "Sometimes the answers from the early stages of the research process are good enough, so we stop the research and make our decisions." E) None of the answers are correct.

149)

Which of the following is true of a good marketing research practice?

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A) Marketing managers may only be consumers of research. B) Marketing managers need not explain what they want from the research. C) Marketing managers do not have to use the language of marketing research specialists. D) Marketing managers need not know the basic research process. E) Marketing managers should not be informed of the limitations of the findings.

150) Which of the following statements best reflects the point of view of the text with respect to marketing research? A) "We don't use computers, surveys, and the like because marketing's information needs are usually not that precise anyway." B) "When we work with outside marketing research specialists, we expect them to take the time to really understand the problem we are trying to solve." C) "As marketing manager, I feel that the marketing researchers should be left alone to do their research—since they often come up with interesting suggestions." D) "As marketing research director, I should know the marketing manager's position in advance, so we can prove it is correct if possible." E) "Our company is very small, but we should have our own marketing research department anyway—to get the information we need to make good decisions."

151) Why is defining the problem considered the most difficult step of the marketing research process? A) It is the first step of the process. B) It involves qualitative research. C) Failure to correctly define the problem will make all subsequent steps wasted effort. D) It avoids situation analysis study in most cases. E) It is easy to confuse problems with symptoms at this stage.

152)

What is the first step in the marketing research process?

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A) analyzing the situation B) interpreting the data C) defining the problem D) getting problem-specific data E) solving the problem

153)

Often the most difficult step in the marketing research process is A) analyzing the situation. B) defining the problem. C) getting problem-specific data. D) interpreting the data. E) None of the answers are correct.

154)

The most difficult and important step in the scientific approach to marketing research is A) defining the problem. B) interpreting the data. C) solving the problem. D) analyzing the situation. E) getting problem-specific data.

155)

Which of the following statements about the marketing research process is false?

A) Defining the problem is important because this decision will remain unchanged throughout the process. B) The situation analysis step helps educate a researcher. C) Researchers and marketing managers need to work together. D) The situation analysis includes looking at secondary data. E) Marketing managers often have to explain problems to researchers.

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156) To conduct marketing research, the first thing a marketing manager should do if one of their firm's products drops in sales volume is to A) conduct a survey to see what is wrong. B) define the problem. C) set research priorities. D) do a situation analysis. E) interview representative customers.

157)

In the marketing research process, defining the problem

A) is often confused with identifying the symptoms of the problem. B) can be guided by the marketing strategy planning framework. C) may have to wait until after a situation analysis has been completed, if it is to be precise. D) All of the answers are correct.

158)

Which of the following statements is true of marketing research?

A) It usually requires complex statistical techniques, so research specialists should leave planning of the research to the marketing managers. B) It is likely to be more effective when guided by the strategy planning framework. C) It should gather much less information, to avoid confusion. D) It ends with analyzing the situation. E) It keeps researchers as informed consumers.

159)

In the marketing research process, defining the problem A) means identifying the symptoms. B) usually requires that problem-specific data be collected and interpreted. C) may have to wait until after a situation analysis has been completed. D) All of the answers are correct.

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160)

An informal study of what information is already available in the problem area is called A) qualitative research. B) a situation analysis. C) a focus group interview. D) quantitative research. E) the marketing model.

161)

What is the likely goal of a situation analysis?

A) It usually involves formal talks with informed people. B) It helps define the problem. C) It is an approach that focuses on being objective and orderly in testing ideas before accepting them. D) It helps marketing managers in dealing with familiar areas. E) It provides a controlled test of a hypothesis.

162)

During a situation analysis, a marketing researcher should A) collect primary data. B) talk with competitors facing similar problems. C) begin to talk informally to as many customers as possible. D) study what information is already available. E) All of the answers are correct.

163)

Which of the following statements about doing a situation analysis is correct?

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A) Libraries have good data on specific topics, but they are expensive to find. B) It doesn't make sense to start a situation analysis until the problem has begun to surface. C) Good data are available from the government but obtaining them is expensive. D) A good situation analysis is usually more expensive than collecting primary data. E) It is effective if the researcher has good knowledge about the management decisions to be made.

164) A marketing manager searches the Internet to find information about a research problem. This is an example of A) an intranet. B) an experiment. C) hypothesis testing. D) a situation analysis. E) a data warehouse.

165) A marketing manager wants to know why her sales are down. She talks with several sales reps and finds that a competitor has introduced a successful new product. This "research" is likely to be part of A) the situation analysis. B) the problem solution stage. C) obtaining problem-specific data. D) the data interpretation stage. E) the problem definition stage of the research process.

166) A marketing manager scans a firm's MIS to try to obtain information about why the firm's product sales are down. This is an example of

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A) an intranet. B) hypothesis testing. C) an experiment. D) a data warehouse. E) a situation analysis.

167) A marketing manager has phone conversations with key wholesalers of his firm's products to try to obtain information about why the firm's product sales are down. This is an example of A) hypothesis testing. B) a situation analysis. C) a data warehouse. D) an intranet. E) an experiment.

168)

Which of the following statements about a situation analysis is false?

A) A situation analysis is mainly a study of new information that is not already available. B) A situation analysis may involve informal discussions with knowledgeable people. C) A situation analysis may help educate a researcher who is dealing with an unfamiliar subject. D) A situation analysis should include finding relevant secondary data.

169) Which of the following is not among the reasons a situation analysis can be highly beneficial to marketers?

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A) It is very informative. B) It requires little time. C) It is inexpensive compared to formal research efforts. D) It typically requires only a phone or Internet access. E) It yields relevant primary data.

170) Which of the following identifies secondary data easily accessible to marketers and generated inside their own firms? A) focus group surveys B) library research C) marketing information system D) U.S. government-published data E) Internet research

171) A company that sells equipment through independent wholesalers wants to find out why sales are down in one region. An analyst is asked to interview the wholesaler in that region. This seems to be A) part of a situation analysis. B) the beginning of a focus group interview. C) a case of gathering information that will be analyzed by a statistical package. D) a bad practice, since the problem has not yet been defined. E) None of the answers are correct.

172)

Information that has already been collected or published is called ________ data. A) useful B) secondary C) primary D) free E) collective

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173)

Data that have been collected or published already are A) primary data. B) free. C) franchised data. D) secondary data. E) None of these answers are correct.

174)

Which of the following statements concerning secondary data is correct? A) Secondary data usually take longer to obtain than primary data. B) Secondary data are only available within the firm. C) Secondary data were originally collected for some other purpose. D) Secondary data may provide some background but never provide the answer. E) None of the answers are correct.

175)

Secondary data A) may provide some background but never provide the answer. B) consist of information that has been collected already. C) are rarely available and are expensive. D) are specifically collected to solve a current problem. E) can be in the form of online surveys or observations.

176) Data that have already been collected in a previous study are called ________ data, while data that are generated by a phone survey this month of key customers are called ________ data.

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A) primary; secondary B) primary; intranet C) secondary; primary D) secondary; experimental E) intranet; sample

177)

Secondary data are often available at little or no cost through A) tracking consumer clicks on a website. B) conducting focus group interviews. C) the use of online customer surveys. D) conducting in-depth interviews. E) a review of company files.

178)

All of the following are examples of secondary data sources except A) previously published marketing studies. B) a phone survey this month of past customers. C) library sources. D) company cost data. E) government databases.

179) Gift Mart sent out promotional coupons to customers based on data gathered from a loyalty card program. Information from Gift Mart's loyalty card program is considered A) primary data. B) secondary data. C) sentiment analysis. D) qualitative analysis. E) a customer journey map.

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180) The marketing manager at Massimino and McCarthy, a chain of retail stores that sells men's clothing, is reviewing marketing research data to try to determine if changes in marketing strategy are needed. Which of the following describes a secondary data source? A) looking through the company's marketing information system to see past sales trends B) reviewing videotapes of a recent focus group C) making phone calls to some of the best customers to learn their interest in a new line of clothing D) spending time in stores observing customers' behavior E) looking through the results of an online customer satisfaction survey

181)

Which of the following is/are not a secondary data source? A) company sales information B) previous marketing research studies C) libraries D) subscription data services E) consumer panels

182) Which of the following statements about using the Internet to gather secondary data is false? A) Internet searches often identify too many irrelevant sources. B) Information on the Internet is readily available and very reliable. C) The Internet is one of the first places a researcher should look for secondary data. D) The key to the Internet is finding what's needed. E) Powerful Internet search engines provide lists of links to websites that include words specified by the researcher.

183)

Which of the following would be a marketing manager's best source of secondary data?

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A) a firm's MIS B) focus group interviews C) loyalty card data D) online surveys E) customer observation

184) Searching the Internet, reviewing secondary data, and monitoring "chatter" on the web are inexpensive and informal ways for marketers to A) use a decision support system. B) perform a situation analysis. C) perform a focus group interview. D) join a market research online community (MROC). E) interpret data.

185) Which of the following refers to an automated process of analyzing and categorizing social media to determine what type of comments are being made about a brand online? A) sentiment analysis B) data warehousing C) situation analysis D) response rate E) consumer panel

186)

A firm conducting sentiment analysis would A) monitor online comments on social media. B) undertake qualitative research to determine how customers feel about its brand. C) compare groups of customers that are similar except on the characteristic being

tested. D) engage a consumer panel to provide ongoing information. E) interview 6 to 10 people in an informal group setting.

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187)

When interpreting a sentiment analysis, note that it A) may not represent the whole target market. B) can be very costly. C) takes a long time to generate a little information. D) is one of the best ways to understand the sentiment of a broad set of customers. E) All of the answers are correct.

188)

Secondary data from federal government sources A) are readily available, but there is usually not much information at state and local

levels. B) focus mostly on agriculture. C) are often very helpful for estimating the size of a market. D) are only available from the Commerce Department in Washington. E) None of the answers are correct.

189) Which of the following would be a good place for a marketing analyst to start looking for published statistical data of the social, political, and economic organization of the United States? A) Encyclopedia of Associations B) Congressional Record C) The Wall Street Journal D) Statistical Abstract of the United States E) research files of the New York Times

190) A group of consumers who help in collecting problem-specific data by providing information on a continuing basis is called a

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A) contributor group. B) consumer panel. C) responder group. D) consumer experiment. E) statistical package.

191) Joy Rinaldo has agreed to participate in marketing research in which she will provide information about her purchases on an ongoing basis. She is probably part of a A) confidence interval. B) statistical package. C) contributor group. D) consumer panel. E) focus group.

192) Whenever John shops for groceries, he gives an ID card to the clerk, who scans the number. Then the scanner records every purchase—including brands, sizes, prices, and any coupons used. John is most probably a A) licensed purchaser. B) consumer panel member. C) market researcher. D) focus group leader. E) opinion leader.

193)

About ________ percent of marketing research spending is for syndicated research. A) 10 B) 25 C) 40 D) 60 E) 75

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194)

________ research accounts for about 40 percent of marketing research spending. A) Experimental method B) Observation method C) Syndicated D) Cross-tabulation E) Online survey

195)

About what percentage of marketing research spending is for syndicated research data? A) 20 percent B) 30 percent C) 40 percent D) 50 percent E) 60 percent

196)

Which of the following is likely to be part of a situation analysis? A) A marketing analyst reviews company files for data. B) A marketing researcher asks a trade association for one of its reports. C) A marketing manager searches USA.gov. D) All of the answers are correct.

197) Which of the following statements is true about the use of a situation analysis in research? A) It can never eliminate the need for further research. B) It specifically avoids determining the exact nature of the situation and the problem. C) It is expensive compared with more formal research efforts. D) It can be very informative but takes little time. E) It must be quantitative to be useful.

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198)

Which of the following is most consistent with the marketing research process?

A) "We know that time is always short, so as soon as we define the problem we get on with our data collection." B) "We pay a lot for marketing research experts, so our managers don't waste time trying to figure out how projects should be conducted." C) "We always use mail surveys, so that we won't have to worry about nonresponse problems." D) "Often all we need to solve our problems is secondary data." E) None of the answers are correct.

199) A fast-food chain is redesigning its restaurants. One of the main questions faced by the chain's management is, "Should the new restaurant design include a salad bar?" A researcher in the company finds that salad bars are costly to maintain and are not a major attraction for consumers. Based on this information, management decides that it will not have a salad bar as part of the new restaurant design. Which of the following points is illustrated by this situation? A) Situation analysis sometimes eliminates the need for conducting further research in a problem area. B) Situation analysis is very costly in terms of both time and money. C) Secondary data from sources outside the company are always better than secondary data from sources inside the company. D) Secondary data from private sources are always better than secondary data from government sources. E) Collecting primary data is always necessary in order to make good decisions.

200)

Which of the following is probably not a part of a situation analysis?

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A) A marketing manager asks a radio station for a copy of an audience study. B) A marketing analyst determines from a Census publication how many manufacturers are in the Portland area. C) A marketing analyst looks in the Index of Business Periodicals for articles about a large retail chain. D) A computer company asks ten lawyers to participate in a focus group on how they use the Internet.

201)

What is the significance of a research proposal in the marketing research process? A) It develops and analyzes new information about a market. B) It specifies what information will be obtained and how. C) It is an informal study of what information is already available in the problem area. D) It seeks in-depth, open-ended responses, not yes or no answers. E) It provides results in a typical database format for standard website search engines to

use.

202)

The research proposal may include information about all of the following except A) what the costs will be. B) who will analyze the data. C) what data will be collected. D) how long the process will take. E) what the possible solutions are.

203)

Which of the following is not likely to be included in a research proposal? A) how long the research will take B) preliminary recommendations on how to solve the problem C) information about what the research will cost D) a description of what data will be collected E) a description of how data will be collected

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204)

One example of a primary data source is A) cost data. B) an intranet. C) company files. D) observation. E) the library.

205)

Which of the following would be a source of primary data? A) U.S. Census Bureau reports B) company records on sales, costs, and advertising C) a customer journey map D) a Google search E) None of the answers are correct.

206)

Which of the following would not be a source of primary data? A) The Wall Street Journal B) journey maps C) focus groups D) observation methods E) surveys

207)

What are the two basic methods for obtaining primary information about customers? A) defining and analyzing B) questioning and observing C) intranet and data from private research organizations D) marketing information systems and cost data E) Internet search and library search

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208)

For marketers, the purpose of gathering primary data is usually to A) learn what customers think or how they behave in certain situations. B) specify what information needs to be obtained and how. C) monitor what others are saying online about the company or its products. D) define the problem that needs to be solved. E) help develop a hypothesis.

209) What is the role of a researcher when seeking problem-specific data through qualitative research? A) The researcher attempts to get yes or no answers from subjects. B) The researcher creates strict guidelines to direct responses to questions. C) The researcher tries to prevent the subject from giving open-ended responses. D) The researcher seeks for subjects to share their honest thoughts on a topic without interference. E) The researcher aims to obtain broad generalities from subjects.

210) Which of the following statements explains why marketers use focus groups to conduct research? A) People may not feel free to express their honest thoughts in groups. B) Some individuals may dominate group discussion. C) With focus groups marketers can stimulate thinking and get immediate reactions. D) The results cannot be measured objectively. E) Conclusions reached from a session usually vary depending on the viewpoint of the researcher.

211)

To get problem-specific data, a marketing researcher would use

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A) the experimental method. B) a questioning method. C) an observing method. D) focus groups. E) Any or all of these could be used.

212)

Which of the following is a feature of qualitative research in primary data collection? A) It asks closed-ended questions. B) It asks yes or no type questions. C) It provides more representative samples of consumers. D) It relies on open-ended questioning. E) It uses statistics to analyze data.

213)

Qualitative research involves A) talks with the firm's own managers. B) questioning to obtain in-depth, open-ended responses. C) "yes/no" questionnaires. D) studying secondary data. E) None of the answers are correct.

214)

The big advantage of qualitative research in marketing is A) ease of interpretation. B) that it provides a good basis for statistical analysis. C) the in-depth responses it provides. D) the fact that the analysis can be handled on a personal computer. E) None of the answers are correct.

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215) A graphic diagram that tells the story of a customer's experience in the buying process, from need awareness through to the post-purchase relationship, is called A) a journey map. B) quantitate research. C) a focus group. D) a survey. E) ethnographic research.

216) Which of the following best describes the research that should be performed to create a customer journey map? A) a qualitative, in-depth interview to get at the thoughts, emotions, and behaviors of individual customers B) qualitative questioning in which an interviewer seeks group interaction to stimulate thinking and get immediate reactions C) quantitative surveys using structured responses that can be summarized in numbers D) computer-aided telephone interviewing in which answers regarding customers' experiences are immediately recorded E) fixed responses that will simplify analysis and make creation of the map easier

217)

________ are one widely used form of qualitative questioning in marketing research. A) Focus group interviews B) Situation analyses C) Telephone surveys D) Direct observations of customers E) Experimental research studies

218)

An interview with 6 to 10 people in an informal group setting is called a(an)

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A) secondary interview. B) focus group interview. C) observation interview. D) quantitative research interview. E) informal investigation.

219) true?

Which of the following statements about the role of focus groups in marketing research is

A) They stimulate discussion among participants. B) They involve interviewing people in a formal setting. C) They use close-ended, yes or no questions. D) They are the same as opinion leaders. E) They are the same as reference groups.

220)

With focus group interviews,

A) consumers talk as a group for about 10 minutes and then meet individually with an interviewer. B) it is typical for the researcher to develop quantitative summaries of the results. C) marketing managers can estimate the size of the market for a new product. D) the objective is to get the group to interact, so that many ideas are generated. E) researchers try to select a large sample so that they can extend the results to the whole population.

221) A consumer products manufacturer wants consumer reaction to its existing products. Because the firm considers interaction important to stimulate thinking, it should use

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A) the observation method. B) a focus group interview. C) the GSR (galvanic skin response) method. D) a quantitative interview. E) a telephone interview.

222)

Focus groups A) are usually composed of 15–25 people. B) yield results that are largely dependent on the viewpoint of the researcher. C) always do a good job of representing the broader target market. D) are expensive compared to other marketing research methods. E) are conducted in a formal group setting.

223)

What is the likely advantage of using online focus groups in marketing research? A) People may not feel free to express their honest thoughts in groups. B) The results of the research can be measured objectively. C) Domination of the group by an aggressive individual is less likely to happen. D) The participants are always the representative of the broader target market. E) The conclusions reached through a session do not vary depending on who watches it.

224)

When focus group interviews are used in marketing,

A) each person in the group answers the same questionnaire, to focus the discussion. B) the typical group size is 15 to 20 typical consumers, whether online or offline. C) it is primarily as a follow-up to more quantitative research. D) the research conclusions will vary depending on who watches the interview and whether the interviews are online or in person. E) the consumer in the group who knows the most about the topic is asked to lead the discussion.

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225)

Which of the following is considered a limitation of the focus group interview approach? A) Ideas generated by the group can't be tested later with other research. B) It is difficult to measure the results objectively. C) It is difficult to get in-depth information about the research topic. D) Focus groups can be conducted at relatively high cost. E) The results do not reflect the viewpoint of the researcher.

226) Marketing research that seeks structured responses that can be summarized is called ________ research. A) focus group B) quantitative C) qualitative D) situation analysis E) open-ended

227) Which of the following is a disadvantage of quantitative research (compared to qualitative research)? A) It is harder to get in-depth answers. B) The conclusions are likely to vary more from analyst to analyst. C) The results are harder to summarize. D) It is not as fast for respondents. E) None of these is a disadvantage of quantitative research.

228) Wizard Toy Company's marketing researcher conducted a survey to find out the percentage of customers who, after receiving a promotional mailing about a new toy, actually went out and purchased the product. This is an example of

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A) a response rate. B) cross-tabulation. C) personal interviews. D) quantitative research. E) an experimental method.

229)

Quantitative research

A) involves structured responses that can be summarized. B) is not a good method for measuring consumer attitudes and opinions. C) mainly uses small samples of respondents. D) is only possible by using a mail survey. E) relies on open-ended responses to survey questions, instead of multiple-choice responses.

230) The percentage of people contacted in a survey who complete a questionnaire is called the ________ rate. A) qualitative B) sample C) population D) response E) expectancy

231)

Quantitative marketing research

A) usually makes it easier and faster for respondents to answer the questions (compared to qualitative research). B) can use a large, representative sample. C) can involve data collection by mail, email, online, telephone, or personal interviews. D) makes it easier for the research analyst to summarize answers. E) All of the answers are correct.

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232)

Mail and online surveys

A) may be more successful than personal interviews for getting personal information. B) are often limited by low response rates. C) must be simple and easy to follow since there is no interviewer there to help the respondent. D) All of the answers are correct.

233) A marketing researcher wants to get sensitive information about family spending patterns as part of a survey. He is most likely to get the needed information A) with a mail, email, or online survey. B) with a focus group. C) with personal interviews. D) with telephone interviews. E) All of these choices are about equally effective for getting sensitive information.

234) Which of the following is not an advantage of mail, email, and online surveys as a method of quantitative research? A) ability to do extensive questioning B) ability of the respondent to complete the survey at his/her convenience C) greater willingness of the respondent to provide personal information D) high response rates

235) A marketing researcher wants to do a survey to probe in-depth consumer attitudes about their experiences with the company's products. He is least likely to get what he wants if he uses

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A) personal interviews. B) online focus groups. C) telephone interviews. D) a mail survey.

236)

The percent of people contacted in a survey who complete a questionnaire is the A) qualitative rate. B) sample rate. C) population rate. D) response rate. E) None of the answers are correct.

237)

The percentage of people contacted who complete a survey questionnaire is the A) response rate. B) sample base unit (SBU) rate. C) population rate. D) sample rate. E) hit rate.

238)

Which of the following is a disadvantage of telephone surveys? A) They are not effective for getting quick answers. B) Fast data analysis is not possible. C) Response rates are low. D) They cannot be used in markets where illiteracy is a problem. E) They are very expensive.

239) Which method of quantitative research would probably produce the best results when the questions are simple and require only quick "yes" or "no" answers? Version 1

A) telephone interviews B) focus group interviews C) mail questionnaires D) personal interviews E) observation

240) Which method of data collection is typically best when you want respondents to quickly answer a small number of fairly simple questions? A) telephone interview B) mail interview C) observation method D) experiment method E) secondary grouping

241) Which of the following is usually the most expensive way to collect data from consumers? A) telephone surveys B) email surveys C) online surveys D) mail surveys E) personal interviews

242) Business market researchers commonly use ________ because it's easier to get and keep the respondent's attention when the interviewer is right there. A) mail questionnaires B) focus group interviews C) personal interviews D) telephone interviews E) None of the answers are correct.

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243)

What is the significance of the observing method in marketing research? A) It uses personal interviews only. B) It requires customers to change their normal shopping behavior. C) It is used to gather data without influencing the subject's behavior in the process. D) It is not suitable for obtaining primary data. E) It has no focus on any well-defined problems.

244) What would be the best way for the marketing manager of a supermarket to find out how consumers move through the store? A) have an interviewer go through the store with each customer B) observe customers with hidden cameras C) give customers a questionnaire after they have finished shopping D) install checkout counters at the end of each aisle E) None of these methods would be very good.

245) Which of the following is not a good example of the observation method of marketing research? A) The manager of a supermarket occasionally walks through the store to see what customers are doing. B) A drugstore installs optical scanners at its checkout counters. C) The owner of a shopping center puts a counting device at the entrance to count how many cars come in. D) A store manager studies videotapes of consumers shopping in the store.

246) An information gathering process in which the responses of two or more groups that are similar except on the characteristic being tested are compared is called the ________ method.

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A) focus group B) random C) observing D) experimental E) qualitative questioning

247) When using ________, researchers compare the responses of two or more groups that are similar except on the characteristic being tested. A) response rates B) consumer panels C) the experimental method D) personal interview surveys E) opinion leader analysis

248) Two similar groups of consumers are shown different magazines that include the same ad; and then each consumer is asked questions about the advertised product. This seems to be a description of A) the experimental method. B) a set of focus group interviews. C) a consumer panel research project. D) a set of personal interviews. E) None of the answers are correct.

249) A marketing manager wants to know if a "2 for 1" coupon will attract new customers. He will get the most persuasive results if he uses

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A) a focus group to ask consumers if they like the idea. B) an experimental method in which only some consumers get the coupon and the purchases of the two groups (with and without coupons) are compared. C) personal interviewers to ask consumers how they will react. D) a mail survey to ask consumers if they use coupons and why. E) None of these would allow the manager to determine if the coupon will help get new customers.

250)

Which of the following statements about the cost and value of information is false?

A) Dependable information can be expensive. B) Managers rarely get all the information they would like to have. C) Money may be wasted if a manager ignores the facts revealed in a marketing research study and bases his or her decisions on guesswork. D) The cost of gathering additional information is always justified by its value.

251)

What are statistical packages? A) They are easy-to-use computer programs that analyze data. B) They are syndicated research services that do qualitative research. C) They are procedures used to be sure that a sample is representative. D) They are product packages that make it possible to collect data at checkout counters. E) They are research plans that specify what information will be obtained and how.

252) In a sample development by random selection, the range on either side of an estimate that is likely to contain the true value for the whole population is referred to as the A) empirical cluster. B) prediction interval. C) regression coefficient. D) confidence interval. E) frequency coefficient.

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253)

Which of the following statements about interpreting data is the most accurate?

A) The confidence interval refers to the range located on the left side of an estimate. B) The confidence interval is likely to contain the true value for the whole population. C) The confidence interval is always very narrow. D) The smaller the sample, the greater the accuracy of estimates from a random sample. E) With a larger sample, a few unusual responses are more likely to make a big difference.

254) Which of the following is a frequently used approach for analyzing and interpreting marketing research data that shows the relationship of answers to two different questions? A) observation B) focus group interviews C) online response rates analysis D) experimental approach E) cross-tabulation

255)

The total group a survey researcher is interested in is called the A) population. B) sample. C) study group. D) representative group. E) None of the answers are correct.

256) Since marketers can't collect information from everyone, they collect information from a small number of people taken from the larger group they are analyzing—a sample. This technique is effective when the sample group

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A) is representative of the larger population. B) is different from the larger population. C) provides identical responses. D) is questioned using online surveys. E) is questioned using personal interviews.

257)

The part of the relevant population that is surveyed by a researcher is called the A) representative group. B) focal group. C) target population. D) sample. E) research group.

258)

The response rate to a survey affects A) who is in the population for a marketing research study. B) whether a statistical package can be used to analyze the data. C) how representative the sample is. D) All of the answers are correct.

259) Regarding an estimate from a survey, the range on either side of the survey result that is likely to contain the "true" value of the relevant population is called the A) sample range. B) accuracy range. C) confidence interval. D) validity interval. E) population estimate.

260)

By computing confidence intervals, a researcher can

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A) have just as much confidence in an estimate from a small sample. B) offset some of the problems of having a nonrepresentative sample. C) estimate how precise his or her research results are likely to be. D) None of the answers are correct.

261)

The extent to which data measure what they are intended to measure is called A) cross-tabulation. B) validity. C) regularity. D) dependability. E) confidence.

262)

________ concerns the extent to which data measure what they are intended to measure. A) Conformance B) Reliability C) Depth D) Validity E) Penetration

263)

Which of the following describes an ethical problem in marketing research?

A) A researcher does not disclose problems that occurred during consumer interviews. B) A company calls consumers under the guise of doing research when the phone calls are really sales pitches for the company's products. C) A manager informs a researcher that the only acceptable results are those that confirm the manager's existing viewpoints. D) A researcher deliberately withholds details about how a research study was conducted. E) All of the answers are correct.

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264)

In the context of marketing research, the most common ethical issues concern A) distrusting data and analytics due to differences in judgment. B) blowing minor findings out of proportion. C) making decisions to withhold certain information about the research. D) sharing the results of marketing research with everyone. E) collecting responses only from individuals who reply without "guessing."

265) Which of the following statements is true regarding the last step—solving the problem— in the marketing research process? A) In this step, managers use the research results to make decisions. B) Research needs to have action implications to have value. C) Managers should be able to apply the research findings to marketing strategy planning. D) Research that does not provide information that is useful for decision making is a waste of time and money. E) All of the answers are correct.

266) In which of the following cases does research have little value, suggesting poor planning by a manager? A) The research does not ultimately have implications that allow a manager to take action. B) The research is qualitative in nature. C) The research has tidbits of information rather than knowledge of the whole situation. D) The research does not anticipate the next research step.

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Answer Key Test name: Chap 07_17e 1) TRUE Marketing research refers to procedures to develop and analyze new information about a market. Marketing managers utilize marketing research for making better decisions. 2) TRUE Marketing research develops and analyzes new information about a market, while MIS is an organized way of continually gathering, accessing, and analyzing information. 3) TRUE A marketing information system (MIS) is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. 4) FALSE When it comes to setting up an MIS, a company usually turns to information technology (IT) experts. 5) TRUE Big data refers to data sets too large and complex to work with typical database management tools. 6) FALSE When it comes to big data, marketing managers must remember the importance of their own intuition and wisdom—and that at least some of the data that they collected may not be important. They must sort through the data and determine what matters most.

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7) FALSE An MIS organizes all the incoming data and information into a data warehouse, a place where databases are stored so that they are available when needed.A data warehouse can be thought of as an electronic library where all of the information can be searched with some sort of search engine. 8) FALSE Many managers question the veracity and quality of the data. One-third of business leaders don't trust making decisions with this information. 9) FALSE All that data in its raw form is not useful to a marketing manager, so an MIS includes software programs that convert the data to information that is useful to managers. 10) FALSE Sales data become information when they provide answers to questions of "who," "what," "where," "how much," and "when." 11) FALSE Information becomes knowledge when it helps a marketing manager answer "how" and "why" questions. 12) TRUE A decision support system (DSS) is a computer program that makes it easy for marketing managers to get and use information as they are making decisions. 13) TRUE A marketing model is a statement of relationships among marketing variables. 14) TRUE Version 1

A marketing model is a statement of relationships among marketing variables. It enables a manager to look at the sales (and costs) expected with different types of promotion and select the marketing mix that is best for a particular target market. 15) TRUE A marketing dashboard displays up-to-the-minute marketing data in an easy-to-read format. 16) FALSE A marketing model is a statement of relationships among marketing variables. This question provides the definition of a marketing dashboard. 17) TRUE After implementing a marketing strategy, marketing managers should make sure the strategy and the results are fed back into the data warehouse to allow future marketing managers who face a similar problem to learn from the company's previous experience. 18) TRUE Personal data is information that can be used by itself or in combination with other information to identify someone. 19) TRUE The General Data Protection Regulation is a set of laws on data protection and privacy for all individuals within the European Union. 20) TRUE The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them.With the scientific method, managers don’t just assume that their intuition is correct. Version 1

21) TRUE With the scientific method, managers use their intuition and observations to develop hypotheses—educated guesses about the relationships between things or about what will happen in the future. 22) FALSE The scientific method in marketing research forces an orderly process. 23) TRUE The scientific method focuses on being objective and orderly in testing ideas before accepting them. 24) TRUE Hypotheses are educated guesses about the relationships between things or about what will happen in the future. 25) FALSE The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them. 26) FALSE Good marketing research requires cooperation between researchers and marketing managers. Marketing managers must be able to explain their problems and the information they need to the specialists. 27) TRUE Marketing managers must be able to explain to the specialists what their problems are and what kinds of information they need. 28) TRUE

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Marketing managers must be able to explain their problems and the kinds of information they need. They should be able to explain exactly what they want from the research and know about some of the basic decisions made during the research so that they know the limitations of the findings. 29) FALSE Defining the problem, which is the first step in the marketing research process, is often the most difficult. 30) FALSE Defining the problem is often the most difficult step in the marketing research process. 31) TRUE Defining the problem is often the most difficult step in the marketing research process. 32) TRUE A strategy planning framework is useful for guiding the problem definition step. It can help the researcher identify the real problem area and what information is needed. 33) TRUE Defining the problem is often the most difficult step in the marketing research process, but it's important for the objectives of the research to be clearly defined. The best research job on the wrong problem is wasted effort. 34) FALSE A situation analysis is an informal study of what information is already available in the problem area. 35) TRUE Version 1

The situation analysis aims to find relevant secondary data. The source of secondary data may include company sales and cost data, previous marketing research studies, the Internet, the library, government databases, and researchers at universities and private research organizations. 36) TRUE Secondary data refers to information that has been collected or published already. 37) TRUE Secondary data refers to information that has been collected or published already. 38) FALSE During the situation analysis, a researcher evaluates secondary data. 39) FALSE Secondary data refers to information that has been collected or published already. One of the first places a researcher should look for secondary data is on the Internet. 40) TRUE A sentiment analysis can help a firm monitor and review what others are saying about a company or its products. Sentiment analysis is an automated process of analyzing and categorizing social media to determine the amount of positive, negative, and neutral online comments a brand receives. 41) FALSE See Exhibit 7–6. Sources of secondary data include Internet, library, and government databases, as well as subscription data services and syndicated research. Version 1

42) TRUE Federal and state governments publish secondary data on many subjects. For the U.S. market, a useful summary reference is the Statistical Abstract of the United States. 43) FALSE Syndicated research is an economical approach when marketing managers from many different firms need the same type of data. 44) FALSE About 40 percent of marketing research spending is for syndicated research. 45) TRUE Many different auto producers use J. D. Power's surveys of customer satisfaction as the basis for advertising claims. This serves as an example of syndicated research. 46) TRUE A consumer panel is a group of consumers who provide information on a continuing basis. 47) TRUE Retail checkout scanners help researchers collect very specific, and useful, information. Often this type of data feeds directly into a firm’s MIS. 48) FALSE A good situation analysis is very informative, takes little time, and is inexpensive compared with more formal research efforts like a largescale survey. The virtue of a good situation analysis is that it can be very informative and takes little time. 49) FALSE Version 1

A research proposal is a plan that specifies what information will be obtained and how. The focus group interview involves interviewing 6 to 10 people in an informal group setting. 50) FALSE Collecting problem-specific data is the third step in a marketing research project. It comes after a research proposal is in place. 51) TRUE Collecting primary data or problem-specific data is the third step in a marketing research project. 52) TRUE Qualitative research seeks in-depth, open-ended responses, not yes or no answers. 53) FALSE Qualitative research seeks in-depth, open-ended responses, not yes or no answers. 54) TRUE A journey map is the story and graphic diagram of a customer's experience in the buying process, from need awareness through the purchase process and post-purchase relationship. It can identify opportunities to improve the entire purchase experience. 55) FALSE One widely used form of qualitative questioning in marketing research is the focus group interview. 56) TRUE A focus group interview involves interviewing 6 to 10 people in an informal group setting.

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57) TRUE Online focus groups can offset some of the limitations of traditional focus groups. Participants who meet online express their honest thoughts—and an aggressive individual is less likely to dominate the group. 58) FALSE The focus group, which is one of the methods for collecting primary data, can be conducted quickly and at relatively low cost, an average of about $4,000 each. 59) FALSE Quantitative research seeks structured responses that can be summarized in numbers, like percentages, averages, or other statistics. Qualitative research seeks in-depth, open-ended responses, not yes or no answers. 60) TRUE Qualitative research seeks in-depth, open-ended responses, not yes or no answers; quantitative research seeks structured responses. 61) TRUE Most survey research is quantitative research. Survey questionnaires usually provide fixed responses to questions. A multiple-choice approach makes it easier and faster for respondents. 62) FALSE The advantages of mail surveys are convenience for the respondents, willingness to provide personal information etc.; while the disadvantage is a poor response rate. 63) TRUE The response rate is the percentage of people contacted who complete a given questionnaire. Version 1

64) FALSE Telephone interviews allow the interviewer to probe and really learn what the respondent is thinking. Such interviews are also popular and effective for getting quick answers to simple questions. 65) TRUE Observing, which is a method of collecting data, focuses on a welldefined problem. With the observation method, researchers try to see or record what the subject does naturally. 66) FALSE With the observation method, researchers try to see or record what the subject does naturally. They don't want the observing to influence the subject's behavior. 67) TRUE Telephone interviews can be effective for getting quick answers to simple questions or when there is a need to probe and really learn what the respondent is thinking. 68) FALSE Ethnographic research has its roots in anthropology, which studies different cultures by observing participants in their natural habitat. 69) TRUE Observing, which is a method of collecting data, focuses on a welldefined problem. With the observation method, researchers try to see or record what the subject does naturally. 70) TRUE Observing, which is a method of collecting data, focuses on a welldefined problem. With the observation method, researchers try to see or record what the subject does naturally. Version 1

71) FALSE With the observation method, researchers try to see or record what the subject does naturally. They don't want the observing to influence the subject's behavior. 72) TRUE With the experimental method, marketing researchers compare the responses of two (or more) groups that are similar except on the characteristic being tested. 73) FALSE With the experimental method, marketing researchers compare the responses of two (or more) groups that are similar except on the characteristic being tested. 74) TRUE A good marketing manager knows that the value of additional information lies in the ability to design more effective marketing strategies. 75) TRUE Marketing research takes time and money. A good marketing manager knows that the value of additional information lies in the ability to design more effective marketing strategies. 76) TRUE Statistical packages are easy-to-use computer programs that analyze data easily so that managers can interpret data themselves. 77) TRUE In quantitative research, data interpretation usually involves statistics. Statistical packages are easy-to-use computer programs that analyze data easily. Version 1

78) FALSE The population is the total group the marketing manager is interested in, while the sample is a part of the relevant population. 79) FALSE The population is the total group the marketing manager is interested in, while the sample is a part of the relevant population. 80) FALSE Validity concerns the extent to which data measure what they are intended to measure. Validity problems are important in marketing research. 81) TRUE Validity concerns the extent to which data measure what they are intended to measure. Validity problems are important in marketing research. 82) FALSE Though the information that comes from the research process is fascinating, if the marketing research doesn't have action implications, it has little value and suggests poor planning. 83) A Marketing managers look to marketing research to help answer at least four types of questions. They want to know what value a marketing mix can deliver and to whom. They need to know which measures matter and what works. They also need to consider the “ what ifs,” like what could happen if prices are raised (or lowered), if a new store opened, or if a new product line is launched. 84) D

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Marketing research refers to procedures that develop and analyze new information about a market. It is a key source that marketing managers turn to for information to make better decisions. 85) D Marketing managers often find that one-at-a-time marketing research projects can be too costly or take too long to get the desired information. 86) A Marketing research refers to procedures that develop and analyze new information about a market. It is the key source that marketing managers turn to for information to make better decisions. 87) A Marketing research refers to procedures that develop and analyze new information about a market. It involves a wide range of techniques, including Internet searches, customer surveys, experiments, direct observation of customers, and many more. 88) A A marketing information system (MIS) is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. 89) C Marketing managers need marketing research during any step in the marketing strategy planning process to make good marketing decisions or to improve implementation and control. 90) B Marketing research involves a wide range of techniques including Internet searches, customer surveys, experiments, direct observation of customers, and many more. Version 1

91) A Most large companies have a separate marketing research department to plan and manage research projects. People in these departments usually rely on outside specialists to carry out the work on particular projects. 92) A A marketing information system can provide a continual flow of information that is available and quickly accessible when it's needed. 93) A A marketing information system (MIS) is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. 94) D A marketing information system (MIS) is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. 95) B Marketing managers may need marketing research, an MIS, or a combination of both to get the information they need to make decisions during any step in the marketing strategy planning process—or to improve implementation and control. 96) C It is very important that marketing managers be closely involved in the design of an MIS. Specialists in research and IT can make sure that the technical aspects are handled correctly, but marketing managers need to make sure they can access information to guide marketing strategy planning or implementation and control. 97) C Version 1

A marketing information system is an organized way of continually gathering, accessing, and analyzing information that marketing managers need to make ongoing decisions. 98) E See Exhibit 7–2. 99) E See Exhibit 7–2. A good MIS stores data collected from inside and outside the company and from various marketing research studies. The data can be analyzed to guide the marketing strategy planning process. 100) D Organizations collect and store information from internal sources (data on sales, cost information, customer information), external sources (information from the marketplace)), and market research studies (for example, results from surveys and experiments). 101) A Information from a customer relationship management (CRM) system would contain customer information that would be considered internal data that should be accessible to marketing managers in an MIS. Industry growth trends, regulatory information, and competitor information is external data. Past studies and surveys are marketing research. 102) A An MIS should collect external information from the marketplace. Marketing managers should have a system in place to routinely scan the external market environment, customers, and competitors to ensure that important information is available when needed for marketing strategy planning.

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103) A Market research includes past studies that a company can use to help guide a strategy decision. 104) B Big data are data sets too large and complex to work with typical database management tools. 105) E It has been estimated that organizations today process 1,000 times as much data as they did in the year 2000. The explosion of data collection has created data sets too large and complex to work with typical database management tools. 106) A The Four Vs of big data include volume, variety, velocity, and veracity. 107) E The Four Vs help marketing managers under the opportunities and complexity of big data, which includes decisions about what information should be stored, an understanding of how quickly information can be analyzed, and how big data can be used in marketing strategy planning. 108) A These days data are more than just sales numbers; marketing managers can collect a wide variety of data from many sources, including social media sites like Facebook, Twitter, and Instagram, or wearable technology like the Fitbit or Apple Watch. 109) A Velocity refers to the speed at which big data are generated and can be processed. Velocity is important for marketing managers who seek to do predictive analytics. Version 1

110) A Big data velocity refers to the speed at which data are generated and can be processed. Velocity is important to help marketing managers anticipate what a customer might be interested in purchasing by using real-time data. In this case, the ability of the company to make an offer when a customer is actually shopping depends on velocity. 111) A While many of the technical aspects of protecting data fall on the information technology staff, marketing managers need to recognize the harm that may come from data breeches. A firm’s reputation can be severely damaged if a hacker accesses its customers’ personal data. 112) B Data in raw form are not useful to a marketing manager, so an MIS includes software programs that convert the data to information that is useful to managers. Data become information when they provide answers to questions of "who," "what," "where," "how much," and "when." That information then becomes knowledge when it helps a marketing manager answer "how" and "why" questions. 113) E Marketing managers for some companies make decisions based on their own judgment with very little hard data, but when it's time to make a decision, they wish they had more information. A continual flow of information is available and quickly accessible from an MIS. 114) B

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All that data in raw form is not useful to a marketing manager, so an MIS includes software programs that convert the data to information that is useful to managers. Sales data becomes information when they provide answers to questions of "who," "what," "where," "how much," and "when." Information becomes knowledge when it helps a marketing manager answer "how" and "why" questions. 115) A A data warehouse is a place where databases are stored so that they are available when needed. An MIS includes software programs that convert the data to information that is useful to managers. Sales data become information when they provide answers to questions of "who," "what," "where," "how much," and "when." Information becomes knowledge when it helps a marketing manager answer "how" and "why" questions. 116) E Marketing research develops and analyzes new information about a market. An MIS is an organized way of continually gathering, accessing, and analyzing information managers need to make ongoing decisions. 117) A A marketing information system can provide a continual flow of information that is available and quickly accessible when it's needed. 118) C Many firms realize that it doesn't pay to wait until you have important questions you can't answer. They anticipate the information they will need. They work to develop a continual flow of information that is available and quickly accessible from an MIS when it's needed. 119) C See Exhibit 7–2. The results include marketing metrics such as profits, market share, customer lifetime value, etc. Version 1

120) A A marketing information system can provide a continual flow of information that is available and quickly accessible when it's needed. 121) A See Exhibit 7–4. Wisdom is the result of a combination of knowledge and experience. As marketing managers gain experience and understanding of why things happened in the past, they can put that together to build wisdom and better predict changes in a marketing strategy to turn things around. 122) A A decision support system (DSS) is a computer program that makes it easy for a marketing manager to get and use information as he or she is making decisions. 123) B A decision support system (DSS) is a computer program that makes it easy for a marketing manager to get and use information. 124) B Marketing dashboards display up-to-the-minute marketing data in an easy-to-read format. They are usually customized to a manager's areas of responsibility. 125) D Marketing dashboards display up-to-the-minute marketing data in an easy-to-read format. They are usually customized to a manager's areas of responsibility. 126) D

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A marketing model is a statement of relationships among marketing variables. It enables a manager to look at the sales and costs expected with different types of promotion and select the marketing mix that is best for a particular target market. 127) A Software can “learn” when sending a promotional offer is most effective. The software does know why the time frame works—no knowledge is generated—but it does know what works best and creates a marketing strategy based on that. 128) A The use of marketing technology should not be overstated. While these practices are becoming more common, most marketing managers do not have this luxury. These marketing managers analyze data and information using spreadsheet software. The concepts driving marketing strategy planning do not change and, in many situations, marketing managers can provide insights superior to various model and predictive analytics. 129) A Informational privacy is anything that limits others’ access to personal data that people consider sensitive or confidential. 130) A As firms gather personal data, they must consider the legal and ethical issues around informational privacy. 131) A

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The General Data Protection Regulation is a set of laws on data protection and privacy for all individuals within the European Union. Because this law also protects EU citizens who may visit a website in countries outside the EU, the law has implications for many firms located outside the EU. 132) B The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them. It guides marketing research. 133) E The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them. It guides marketing research. 134) C The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them. With the scientific method, managers don't just assume that their intuition is correct. Instead, they use their intuition and observations to develop hypotheses—educated guesses about the relationships between things or about what will happen in the future. The hypotheses are tested by marketing managers before making final decisions. 135) A Marketing research is guided by the scientific method, a decisionmaking approach that focuses on being objective and orderly in testing ideas before accepting them. With the scientific method, managers don't just assume that their intuition is correct. Instead, they use their intuition and observations to develop hypotheses—educated guesses about the relationships between things or about what will happen in the future. Version 1

136) E The scientific method is a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them. It is not a hit-or-miss approach. With this method, managers don't just assume that their intuition is correct. 137) D Hypotheses are educated guesses about the relationships between things or about what will happen in the future. They are tested by marketing managers before they make final decisions. 138) A Hypotheses are educated guesses about the relationships between things or about what will happen in the future. They are tested by marketing managers before they make final decisions. 139) D Hypotheses are educated guesses about the relationships between things or about what will happen in the future. They are tested by the marketing manager before making final decisions. 140) A According to Exhibit 7–5, the general purpose of the five-step marketing research process is to help marketers define and gather information to solve a problem. 141) D The marketing research process is a five-step application of the scientific method that includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 142) A Version 1

Good marketing research requires cooperation between researchers and marketing managers. Marketing managers must be able to explain what their problems are and what kinds of information they need. Researchers must be sure their research focuses on real problems. 143) E The marketing research process is a five-step application of the scientific method that includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 144) C The marketing research process is a five-step application of the scientific method. It includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 145) D The marketing research process is a five-step application of the scientific method. It includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 146) A The marketing research process is a five-step application of the scientific method. It includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 147) B

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The marketing research process is a five-step application of the scientific method. It includes (1) defining the problem; (2) analyzing the situation; (3) getting problem-specific data; (4) interpreting the data; and (5) solving the problem. 148) D The marketing research process is a five-step application of the scientific method; but the marketing research process may lead to a solution before all the steps are completed. 149) A Marketing managers must be able to explain what their problems are and what kinds of information they need. They should be able to communicate with specialists in the specialists' language. Marketing managers may only be "consumers" of research. But they should be informed consumers—able to explain exactly what they want from the research. They should also know about some of the basic decisions made during the research process so they know the limitations of the findings. 150) B Good marketing research requires cooperation between researchers and marketing managers. Researchers must be sure their research focuses on real problems. Marketing managers must explain their problems and kinds of information they need to the researchers. 151) C Defining the problem is often the most difficult step in the marketing research process; but it's important for the objectives of the research to be clearly defined. The best research job conducted on the wrong problem is wasted effort. 152) C

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Defining the problem is the first step in the marketing research process. It is also often the most difficult. 153) B Defining the problem, which is the first step in the marketing research process, is often also the most difficult. 154) A Defining the problem, which is the first step in the marketing research process, is often also the most difficult. 155) A Defining the problem sounds simple, but it's easy to confuse problems with symptoms. The problem may need to be redefined several times. 156) B Defining the problem is the first step in the marketing research process. 157) D Defining the problem is often confused with symptoms. The strategy planning framework is useful for guiding the problem definition step. Situation analysis is carried out before narrowing down to final research objectives. 158) B The strategy planning framework is useful for guiding the problem definition step of marketing research. It helps the researcher identify the real problem area and the information needed. 159) C A list of research questions that includes all the possible problem areas can be developed. Then, a situation analysis is carried out before narrowing down to final research objectives.

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160) B A situation analysis is an informal study of what information is already available in the problem area. It can help define the problem. 161) B A situation analysis is an informal study of what information is already available in the problem area. It can help define the problem and specify what additional information, if any, is needed. 162) D A situation analysis is an informal study of what information is already available in the problem area. 163) B When a marketing manager thinks the real problem has begun to surface, a situation analysis is useful. A situation analysis is an informal study of what information is already available in the problem area. 164) D The situation analysis may begin with quick research—perhaps an Internet search, utilizing an MIS, and phone calls or informal talks with people familiar with the industry, problem, or situation. 165) A The situation analysis may begin with quick research—perhaps an Internet search, utilizing an MIS, and phone calls or informal talks with people familiar with the industry, problem, or situation. 166) E The situation analysis may begin with quick research—perhaps an Internet search, utilizing an MIS, and phone calls or informal talks with people familiar with the industry, problem, or situation. 167) B Version 1

The situation analysis may begin with quick research—perhaps an Internet search, utilizing MIS, and phone calls or informal talks with people familiar with the industry, problem, or situation. 168) A A situation analysis is an informal study of what information is already available in the problem area. It can help define the problem. 169) E A situation analysis is a method of gathering secondary data, not primary data. Secondary data is information that has been collected or published already. 170) C A marketing information system (MIS) is an excellent source of secondary data generated from inside the firm. 171) A The situation analysis may begin with quick research—perhaps an Internet search, utilizing an MIS, and phone calls or informal talks with people familiar with the industry, problem, or situation. 172) B Secondary data refers to information that has been collected or published already. 173) D Secondary data refers to information that has been collected or published already. 174) C Data that have already been collected in a previous study are called secondary data.

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175) B Secondary data refers to information that has been collected or published already. 176) C Primary data are information specifically collected to solve a current problem. Secondary data refers to information that has been collected or published already. 177) E Refer to Exhibit 7–6. Secondary data are available inside the company, from sales and cost data and previously published marketing research studies. Secondary data from outside the company include searches of the Internet, library, and private research organizations. 178) B Secondary data are available from libraries, the Internet, company files, government databases, and private research organizations. A phone survey represents primary data. 179) A Primary data represents information that is specifically collected to solve a current problem. Loyalty card data from retailers is considered primary data. 180) A Secondary data refers to information that has been collected or published already. Ideally, much secondary data are readily available from the firm's MIS. 181) E See Exhibit 7–6. 182) B Version 1

It is known that a treasure trove of useful information is found on the Internet; but not all the available information is reliable. Anyone can post anything on the Internet. 183) A Secondary data are often readily available from a firm's MIS. The other choices describe primary data. 184) B A situation analysis is an informal study of what information is already available in the problem area. It can help define the problem and specify what additional information is needed. The situation analysis may begin with quick research—perhaps an Internet search—and should also include a review of relevant secondary data or even "web chatter." 185) A One way to monitor and review what others are saying about a company or its products is to conduct a sentiment analysis, which is an automated process of analyzing and categorizing social media to determine the amount of positive, negative, and neutral online comments a brand receives. 186) A A firm undertaking a sentiment analysis would monitor the type and amount of online comments about it or its brand on social media. Sentiment analysis is an automated process of analyzing and categorizing social media to determine the amount of positive, negative, and neutral online comments a brand receives. 187) A

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Marketing managers should be cautious when interpreting a sentiment analysis. Although tools that measure sentiment analysis can generate a lot of information, much of which is free, the measures may not accurately represent the sentiment of the whole target market. 188) C Federal and state governments publish data on many subjects. These secondary data are often useful in estimating the size of markets. 189) D The Statistical Abstract of the United States provides a summary of statistics on the social, political, and economic organization of the United States. It must be purchased or accessed through a library. 190) B A consumer panel is a group of consumers who provide information on a continuing basis. 191) D A consumer panel is a group of consumers who provide information on a continuing basis. 192) B A consumer panel is a group of consumers who provide information on a continuing basis. 193) C About 40 percent of marketing research spending is for syndicated research. This is economical when different firms need the same type of data. 194) C

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About 40 percent of marketing research spending is for syndicated research. This is economical when different firms need the same type of data. 195) C About 40 percent of marketing research spending is for syndicated research. This is economical when different firms need the same type of data. 196) D The situation analysis should find relevant secondary data. These data are available from libraries, trade associations, company files, government agencies, and private research organizations. 197) D The virtue of a good situation analysis is that it can be very informative but takes little time or money. 198) D In many instances a situation analysis, which finds relevant secondary data, can help focus further research or even eliminate the need for it entirely. 199) A In many instances a situation analysis, which finds relevant secondary data, can help focus further research or even eliminate the need for it entirely. 200) D A situation analysis is an informal study dealing with the collection of secondary data, while the focus group is a method for collecting primary data. 201) B Version 1

A research proposal is a plan that specifies what information will be obtained and how. It may include information about costs, data collection, data analysis, and processing time. 202) E A research proposal is a plan that specifies what information will be obtained and how. It may include information about costs, data collection, data analysis, and processing time. It does not include possible solutions. 203) B A research proposal is a plan that specifies what information will be obtained and how. It includes information about costs, data collection, data analysis, and processing time. It does not include possible solutions. 204) D In primary data collection, there are two basic methods for obtaining information about customers: questioning and observing. 205) C In primary data collection, there are two basic methods for obtaining information about customers: questioning and observing. Primary data collection includes customer journey maps, focus group interviews, surveys, and observation methods. 206) A In primary data collection, there are two basic methods for obtaining information about customers: questioning and observing. Primary data collection includes customer journey maps, focus group interviews, surveys, and observation methods. 207) B

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There are two basic methods for obtaining information about customers: questioning and observing. Questioning can range from qualitative to quantitative research. There are many kinds of observing. 208) A In most primary data collection, the researcher tries to learn what customers think about some topic or how they behave under some conditions. The two basic methods for obtaining information about customers are questioning and observing. 209) D Qualitative research seeks in-depth, open-ended responses, not yes or no answers. The researcher tries to get people to share their thoughts on a topic, without giving them many directions or guidelines about what to say. 210) C Unlike an interview, which produces answers from one interviewee, focus groups generate answers from up to ten participants in an informal group setting. In a focus group, an interviewer seeks group interaction— to stimulate thinking and get immediate reactions. 211) E There are different methods for collecting problem-specific data. These include the questioning method, the observing method, the experimental method, and use of focus groups. 212) D Qualitative research seeks in-depth, open-ended responses, not yes or no answers; quantitative research seeks structured responses. 213) B

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Qualitative research seeks in-depth, open-ended responses, not yes or no answers. 214) C Qualitative research seeks in-depth, open-ended responses, not yes or no answers. The real advantage of this approach is depth. 215) A A journey map is the story and graphic diagram of a customer's experience in the buying process, from need awareness through the purchase process and post-purchase relationship. 216) A To learn about a buyer's entire purchase process, a researcher would likely use a qualitative, in-depth interview using open-ended questions to lead to a customer journey map—the story and graphic diagram of a customer's experience in the buying process from need awareness through the purchase process and post-purchase relationship. 217) A One widely used form of qualitative questioning in marketing research is the focus group interview, which involves simultaneously interviewing 6 to 10 people in an informal group setting. 218) B A focus group interview involves simultaneously interviewing 6 to 10 people in an informal group setting. It is a form of qualitative questioning in marketing research. 219) A A focus group interview, a form of qualitative questioning, uses openended questions; an interviewer seeks group interaction to stimulate thinking and get immediate reactions. Version 1

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220) D The focus group interview, a form of qualitative questioning, uses openended questions; group interaction is preferred, to stimulate thinking and get immediate reactions. 221) B A focus group interview, a form of qualitative questioning, uses openended questions; group interaction is preferred, to stimulate thinking and get immediate reactions. 222) B A typical problem with focus groups is that the results seem to depend largely on the viewpoint of the researcher. This is considered a serious limitation of focus groups. 223) C Participants who meet online usually feel freer to express their honest thoughts and an aggressive individual is less likely to dominate the group. Conclusions reached from a session usually vary depending on who watches it, and it's hard to measure the results objectively. Participants of a focus group may not be representative of the broader target market. 224) D Regardless of how a focus group is conducted, conclusions reached from a session usually vary depending on who watches it. It's hard to measure the results objectively. 225) B In qualitative research, a typical problem with focus groups is that it's hard to measure the results objectively. It is considered a serious limitation of focus groups.

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226) B Quantitative research is survey research. It seeks structured responses that can be summarized in numbers, like percentages, averages, or other statistics. 227) A Qualitative research seeks in-depth, open-ended responses, not yes or no answers; quantitative research seeks structured responses. 228) D Quantitative research seeks structured responses that can be summarized in numbers, like percentages, averages, or other statistics. 229) A Quantitative research seeks structured responses that can be summarized in numbers, like percentages, averages, or other statistics. 230) D The response rate is the percentage of people contacted who complete the questionnaire in a survey. 231) E The advantages of quantitative marketing research are convenience of the respondents; larger and more representative samples; different methods of contacts like by mail, email, online, phone, or in person; and use of various statistics to draw conclusions. 232) D The advantages of mail and online surveys are convenience and respondents’ increased willingness to provide personal information; but the response rate is low and the survey must be simple because there is no interviewer there to help. 233) A Version 1

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The respondents may be more willing to provide personal information when a questionnaire can be completed anonymously in a mail, email, or online survey. 234) D Mail, email, and online surveys have poor response rates. 235) D In mail surveys, the respondents cannot expand on particular points to give in-depth answers; the questions must be simple and easy to follow, since no interviewer is there to help. 236) D The response rate is the percentage of people contacted who complete the questionnaire in a survey. 237) A The response rate is the percentage of people contacted who complete the questionnaire in a survey. 238) C Telephone interviews are effective for getting quick answers. With computer-aided telephone interviewing, answers are immediately recorded on a computer, resulting in fast data analysis. Many respondents, however, simply don't answer the phone when they don't recognize the number—or refuse to participate in a phone survey. 239) A Telephone interviews are popular and are effective for getting quick answers to simple questions. 240) A Telephone interviews are popular and are effective for getting quick answers to simple questions. Version 1

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241) E Though personal interviews are commonly used for research on business customers, they are usually much more expensive per interview than email, online, mail, or telephone surveys. 242) C Personal interviews are commonly used by business market researchers for research on business customers, as it's easier to get and keep the respondent's attention when the interviewer is right there. The interviewer can also help explain complicated directions and perhaps get better responses. 243) C Observing, as a method of collecting data, focuses on a well-defined problem. With this method, researchers try to see or record what the subject does naturally. They don't want the observing to influence the subject's behavior. 244) B With the observation method, researchers try to see or record what the subject does naturally. Observing does not influence the subject's behavior. Consumers are recorded on video. This may be in a store, at home, or out with friends. 245) A In the observation method, researchers try to see or record what the subject does naturally. They don't want the observing to influence the subject's behavior. Walking through the store occasionally is not a good example. 246) D

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With the experimental method, researchers compare the responses of two or more groups that are similar except on the characteristic being tested. This is one method of collecting problem-specific data. 247) C In the experimental method, researchers compare the responses of two or more groups that are similar except on the characteristic being tested. This is one method of collecting problem-specific data. 248) A In the experimental method, researchers compare the responses of two or more groups that are similar except on the characteristic being tested. 249) B This refers to the experimental method, where the researcher can compare the responses of two or more groups that are similar except on the characteristic being tested. Consumers with and without coupons can be compared. 250) D The value of additional information lies in its ability to help design more effective marketing strategies. Similarly, different research methods provide different insights and come at different costs. 251) A Statistical packages are easy-to-use computer programs that analyze data and facilitate data interpretation. 252) D

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If random selection is used to develop a sample, researchers can use statistical methods to help determine the likely accuracy of the sample value. This is done in terms of confidence intervals—the range on either side of an estimate that is likely to contain the true value for the whole population. 253) B If random selection is used to develop a sample, researchers can use statistical methods to help determine the likely accuracy of the sample value. This is done in terms of confidence intervals—the range on either side of an estimate that is likely to contain the true value for the whole population. Some managers are surprised to learn how wide that range can be. 254) E Cross-tabulation is one of the most frequently used approaches for analyzing and interpreting marketing research data. It shows the relationship of answers to two different questions. 255) A The term population refers to the total group the researcher is evaluating. 256) A Marketing researchers typically study only a sample, a part of the relevant population. How well a sample represents the total population affects the results. Results from a sample that is not representative may not give a true picture. 257) D The term sample refers to a part of the relevant population that is surveyed by a researcher. How well a sample represents the total population affects the results. Version 1

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258) C How well a sample represents the total population affects the results. Results from a sample that is not representative may not give a true picture. 259) C The confidence interval is the range on either side of an estimate that is likely to contain the true value for the whole population. Some managers are surprised to learn how wide that range can be. 260) C Researchers can employ confidence intervals to help determine the likely accuracy of the sample value. 261) B Validity concerns the extent to which data measure what they are intended to measure. Validity problems are important in marketing research. 262) D Validity concerns the extent to which data measure what they are intended to measure. Validity problems are important in marketing research. 263) E Ethical problems can include failing to disclose problems in the interview process; misrepresentation of research goals; selective sharing of research results; withholding details of how research was conducted; and many others. 264) C

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The most common ethical issues concern decisions to withhold certain information about the research. For example, a manager might selectively share only those results that support his or her viewpoint. Others involved in a decision might never know that they are getting only partial truths. 265) E Managers use the research results for decision making. They should apply the findings in marketing strategy planning. If research doesn't have action implications, it has less value; and if it doesn't provide information for decision making, it is a waste of time and money. 266) A If research doesn't have action implications, it has little value and suggests poor planning by the researcher and the manager. When the research process is finished, the marketing manager should be able to apply the findings in marketing strategy planning—the choice of a target market or the mix of the Four Ps. If the research doesn't provide information to help guide these decisions, the company has wasted research time and money.

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CHAPTER 8 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The "Product" area is concerned with what goods and services are produced, not with decisions about installation, instructions on use, packaging, a brand name, a warranty, or aftersale service. ⊚ ⊚

A "Product" should be thought of as potential customer satisfaction or benefits. ⊚ ⊚

true false

Product means the need-satisfying offering of a firm. ⊚ ⊚

true false

The definition of quality focuses on the producer. ⊚ ⊚

true false

5) When comparing two similar products, the product with the most features is the higherquality product. ⊚ ⊚

true false

A warranty explains what the seller promises about its product. ⊚ ⊚

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7) A product assortment is the set of all product lines and individual products that a firm sells. ⊚ ⊚

A product line is a set of individual products that are closely related. ⊚ ⊚

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An individual product is a particular product within a product line. ⊚ ⊚

true false

10) Product line length refers to the amount of the different products that come under the same family brand. ⊚ ⊚

11)

A product might involve a physical good, a service, or a combination of the two. ⊚ ⊚

12)

true false

A service is not a product, because services do not include any physical good. ⊚ ⊚

13)

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Satellite radio is an example of 100 percent product emphasis. ⊚ ⊚

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14)

Goods are intangible and services are tangible. ⊚ ⊚

true false

15) Goods are typically mass-produced in a factory far away from customers, while services are produced in their presence. ⊚ ⊚

16)

It is usually more difficult to provide consistent quality for goods than for services. ⊚ ⊚

17)

true false

Software applications can offer value-adding services to supplement a core product. ⊚ ⊚

true false

18) Augmented reality refers to having machines operate like humans with respect to learning and decision making. ⊚ ⊚

true false

19) A mirror that takes an image of a customer and shows them how makeup will look on their face or how clothes will look on their body is an example of the use of augmented reality. ⊚ ⊚

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20) Companies use artificial intelligence and intelligent agents to forecast what a customer wants even before the customer knows that he or she wants it. ⊚ ⊚

true false

21) Although a lot of data is produced when technology is integrated into products, firms have yet to harness it for use. ⊚ ⊚

22)

Branding includes the use of trademarks and brand names to identify a product. ⊚ ⊚

23)

true false

A service logo is a type of trademark used for a service offering. ⊚ ⊚

25)

true false

A trademark can be a word but cannot be a symbol. ⊚ ⊚

24)

true false

A service mark is the same as a trademark, except that it refers to a service offering. ⊚ ⊚

true false

26) Branding is more likely to be successful if the product is the best value for the price, and quality can be consistently maintained. ⊚ ⊚ Version 1

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27) Branding would be more likely to be successful if dependable and widespread availability of a product is possible. ⊚ ⊚

28)

Customers will pay a premium if a brand consistently delivers on a promise. ⊚ ⊚

29)

true false

Brand familiarity means how well customers recognize and accept a company's brand. ⊚ ⊚

true false

30) Brand preference means customers usually choose the brand over other brands, perhaps out of habit or past experience. ⊚ ⊚

true false

31) Brand insistence means that target customers usually choose one brand over other brands, perhaps because of habit or favorable past experience. ⊚ ⊚

true false

32) Brand names that convey a positive image in one language may be meaningless in another. ⊚ ⊚

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33)

Brand equity is the value of the brand's overall strength in the market. ⊚ ⊚

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34) Brand equity is likely to be lower if customers insist on buying a product and retailers are eager to stock it. ⊚ ⊚

true false

35) Despite the different levels of brand familiarity, brands generally have only one set of target customers. ⊚ ⊚

true false

36) The Lanham Act spells out the exact method for protecting registered trademarks, but it does not force firms to register their trademarks. ⊚ ⊚

37) Act.

true false

If a trademark is to be used in foreign markets, it is wise to register it under the Lanham ⊚ ⊚

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38) A marketing manager should make sure the firm's brand names do not become so familiar that they become common descriptive terms for certain kinds of products. ⊚ ⊚

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39) A firm can lose all rights to a brand name if the name becomes a common descriptive term for that kind of product. ⊚ ⊚

40)

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The acceptance of counterfeiting is often a matter of culture. ⊚ ⊚

true false

41) Branding decisions should be based on two questions: "Where will the brand be used?" and "How much should be spent on branding?" ⊚ ⊚

true false

42) Family brands may cut promotion costs because the goodwill attached to one or two products may help the others. ⊚ ⊚

43)

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A licensed brand can be used by only one company. ⊚ ⊚

true false

44) There is no real reason for a firm to use individual brands rather than a family brand— except to avoid confusion. ⊚ ⊚

true false

45) It is usually necessary for a firm to use a family brand rather than individual brands if it plans to offer products at different quality and price levels to different target markets.

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46) A product that has no brand other than the identification of the contents is a generic product. ⊚ ⊚

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47) Generic products are popular in the United States and other developed nations, but not in less-developed nations. ⊚ ⊚

48)

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Dealer brands are brands created by producers. ⊚ ⊚

true false

49) Manufacturer brands are always advertised and distributed more widely than dealer brands. ⊚ ⊚

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50) The "battle of the brands" is the competition between dealer brands and manufacturer brands. ⊚ ⊚

51)

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The "battle of the brands" hurts consumers by driving up prices. ⊚ ⊚

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52) A major advantage of dealer brands is that the intermediary usually earns a better margin than the intermediary would earn with manufacturer brands. ⊚ ⊚

true false

53) Packaging can add value to a market offering by promoting, protecting, or enhancing the product. ⊚ ⊚

true false

54) Spending money to improve protective packaging may be necessary, but it usually results in higher total distribution costs for a firm's product. ⊚ ⊚

true false

55) A growing number of consumers are moving toward plastics packaging because it is clean, light, and durable. ⊚ ⊚

true false

56) Examples of packaging's role of protecting include its link to promotion and its role in conveying product information. ⊚ ⊚

true false

57) Coke's logo greeting a consumer when they open the refrigerator and see the can is an example of enhancing the product. ⊚ ⊚

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58)

It is illegal for a firm to use a package that cannot be recycled. ⊚ ⊚

true false

59) Consumers in the United States generate more trash per person than anywhere else on the planet, and packaging is a major contributor to this dilemma. ⊚ ⊚

true false

60) The Federal Fair Packaging and Labeling Act requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. ⊚ ⊚

true false

61) The Federal Fair Packaging and Labeling Act of 1966 requires that consumer products be clearly labeled in understandable terms. ⊚ ⊚

true false

62) The Federal Fair Packaging and Labeling Act of 1966 requires that firms in a productmarket reduce the number of package sizes to three or fewer for any product. ⊚ ⊚

true false

63) There are two broad groups of product classes based on the type of customer that will use the product. ⊚ ⊚

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64) Business product classes are based on how buyers think about products and how the products will be used. ⊚ ⊚

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65) Business product classes are based on the way that buyers shop for and buy products, because there is much more shopping for business products compared to consumer products. ⊚ ⊚

true false

66) The four groups of consumer products are convenience products, shopping products, specialty products, and unsought products. ⊚ ⊚

true false

67) Products a consumer needs but isn't willing to spend much time shopping for are convenience products. ⊚ ⊚

68)

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Convenience products include staples, impulse products, and emergency products. ⊚ ⊚

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69) Consumer products that are bought often, routinely, and without much thought are staples. ⊚ ⊚

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70)

The consumer product classes are based on where consumers use products. ⊚ ⊚

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71) Staples are consumer products that are sold in places like gourmet shops and health food stores, because convenience is not important to the customer. ⊚ ⊚

true false

72) Consumer products that a customer buys on sight as unplanned purchases, may have bought the same way before, and wants "right now" are impulse products. ⊚ ⊚

73)

true false

Customers usually plan and shop for impulse products. ⊚ ⊚

true false

74) Emergency products are purchased only when the need is great and urgent, and therefore price is usually not very important. ⊚ ⊚

true false

75) Consumer products that a customer feels are worth the time and effort to compare with competing products are shopping products. ⊚ ⊚

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76)

Shopping products are products that are purchased immediately when the need is great. ⊚ ⊚

true false

77) Shopping products that a customer sees as basically the same and wants at the lowest price are homogeneous shopping products. ⊚ ⊚

true false

78) Quality, features, and style matter more than price for items that the customer sees as different and wants to inspect. ⊚ ⊚

true false

79) Shopping products that a customer sees as different and wants to inspect for quality and suitability are heterogeneous shopping products. ⊚ ⊚

true false

80) Shopping products that a customer sees as basically the same and wants at the lowest price are heterogeneous shopping products. ⊚ ⊚

true false

81) Consumer products that a customer really wants and is willing to make a special effort to shop for and compare different possibilities are specialty products. ⊚ ⊚

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82) Shopping for a specialty product involves comparing the special features of different brands. ⊚ ⊚

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83) Specialty products are usually only purchased once-in-a-lifetime, so the customer must search extensively before buying. ⊚ ⊚

true false

84) Firms should try to show the value of unsought products through promotion because people do not want them or know that they are available. ⊚ ⊚

85)

true false

Without promotion, unsought products will probably stay unsold. ⊚ ⊚

true false

86) Consumer products that offer truly new ideas that potential customers don't know about yet are new unsought products. ⊚ ⊚

true false

87) Personal selling is important for new unsought products, but it tends not to be important for regularly unsought products. ⊚ ⊚

88)

true false

Product class does not vary by country.

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89) For different people, the same product might be a convenience product, a shopping product, or a specialty product. ⊚ ⊚

90)

true false

The demand for business products derives from the demand for final consumer products. ⊚ ⊚

true false

91) Although the total industry demand for business products may be inelastic, the demand facing individual sellers may be extremely elastic. ⊚ ⊚

true false

92) Expense items are depreciated over many years, while capital items are charged off, as they are used usually in the year of purchase. ⊚ ⊚

true false

93) Installations are long-lasting capital items such as buildings and land rights, custom-made equipment, and standard equipment. ⊚ ⊚

true false

94) Installations are not bought very often, but the number of potential buyers at any particular time is usually quite large.

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95) The main difference between installations and accessory equipment is that accessories are capital items, while installations are expense items. ⊚ ⊚

true false

96) Capital items that are more expensive and longer-lived than installations are called accessory equipment. ⊚ ⊚

97)

Raw materials are unprocessed expense items such as farm products and natural products. ⊚ ⊚

98)

true false

Raw materials are short-lived capital items. ⊚ ⊚

true false

99) One of the important differences between raw materials and other business products is that raw materials usually have to be graded. ⊚ ⊚

true false

100) An important difference between raw materials and other business products is the need for grading. ⊚ ⊚

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101) Expense items that have had more processing than raw materials and become part of a finished product are component parts and materials. ⊚ ⊚

true false

102) Operating people and purchasing agents make decisions regarding the purchase of accessories. ⊚ ⊚

103)

Component parts usually require much processing to get them ready for assembly. ⊚ ⊚

104)

true false

Supplies (business products) are expense items that do not become part of a final product. ⊚ ⊚

true false

105) The cost of handling a purchase order for operating supplies may be more than the cost of the purchase. ⊚ ⊚

106)

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Professional services are usually expense items that support the operation of a firm. ⊚ ⊚

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107) For professional services that are needed only occasionally and require special skills, it is usually better for a firm to have its own employees provide them than to use outsiders. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 108) Which of the following relates to a product decision that should be made during marketing strategy planning? A) branding B) packaging C) product idea D) product class E) All of the answers are correct.

109)

According to the text, "product" A) means a physical good. B) includes all the elements of a marketing mix. C) means the need-satisfying offering of a firm. D) refers to goods but not services. E) All of the answers are correct.

110)

The ________ ultimately determines a product's quality and value. A) product designer B) marketing manager C) quality inspection team D) retail manager E) customer

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111)

Which of the following is not a product? A) an automobile B) a movie C) a visit to the dentist D) an iPad E) Microsoft

112)

For dieters, the highest quality potato chips are probably A) chips made from all natural ingredients. B) the chips with the best flavor. C) Gourmet Cape Cod Kettle Chips. D) chips that are low in fat and calories. E) Lay's brand potato chips.

113)

To assess products through the eyes of the consumer, managers should focus on A) tangible product components. B) production quality. C) pricing. D) total satisfaction and benefits for users. E) eye-catching packaging.

114)

"Product" means A) all the services needed with a physical good. B) a physical good with all its related services. C) the need-satisfying offering of a firm. D) all of a firm's producing and distribution activities. E) a well-packaged item with a well-advertised brand name.

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115)

A product is best described as A) a purely physical entity. B) an image in the mind of the consumer. C) a need-satisfying offering of a firm. D) an intangible service. E) the attractiveness of a package.

116)

The need-satisfying offering of a firm is its A) promotion. B) warranty. C) brand. D) product. E) relative quality.

117)

According to the text, product quality means that A) products are designed to meet demanding specifications. B) a product satisfies a customer's requirements or needs. C) there are no errors in the production process. D) the product won't ever break. E) None of the answers are correct.

118)

________ means a product's ability to satisfy a customer's needs or requirements. A) Quality B) Service C) Trademark D) Brand E) Assortment

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119)

From a marketing perspective, product quality primarily depends on A) the price of a product. B) a product working as it is supposed to work. C) quality-control procedures used during manufacturing. D) the customer's specific requirements and needs. E) the features of products offered by competitors.

120)

From a marketing perspective, a high-quality copy machine is one that A) does a good job satisfying a customer's requirements or needs. B) offers the most features. C) is produced with the best materials. D) has the longest warranty. E) is designed and manufactured to last the longest.

121) Saxon Shoes is a large independent shoe store. In the men’s department, the store offers three different brands of slip-on tassel loafers for men: Bass, priced at $75; Rockport, priced at $125; and Allen-Edmonds, priced at $250. In terms of product quality, which of the following is an accurate statement? A) The Bass shoes have the lowest quality. B) The Allen-Edmonds shoes have the highest quality. C) The Rockport shoes have mid-level quality. D) The quality of the three brands depends on the degree to which they meet the needs of the consumers in the target market. E) The Allen-Edmonds shoes are first movers in the market.

122)

"Product" means

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A) a physical good or service that offers potential customer satisfaction. B) a physical good with all its related features. C) the entire physical output of a firm. D) all the elements in a firm's marketing mix. E) something that has been produced, packaged, branded, and given a warranty.

123)

A product might include A) a brand name, a package, and a warranty. B) instructions. C) a service that does not include a physical good at all. D) some physical item and its related features. E) All of the answers are correct.

124)

Which of the following is a product? A) a used car B) a bus ride C) a haircut D) a dental exam E) All of the answers are correct.

125)

Based on the text, which of the following is a product? A) space in Playboy Magazine sold to an advertiser B) a Sony PlayStation III C) a Broadway musical play D) the San Diego Zoo E) All of the answers are correct.

126)

A ________ explains what the seller promises about its product.

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A) copyright B) trademark C) brand D) service mark E) warranty

127)

Which of the following is characteristic of a product warranty? A) It must be offered on all physical goods sold. B) It can have a positive effect on perceptions of product quality. C) It is usually offered by low-end retailers. D) It is the same as a service guarantee. E) It must be for a minimum period of five years.

128) Vision Co. manufactures and sells tea, coffee, desserts, shoes, and sporting goods. All of these products are its A) product line. B) equity products. C) complementary goods. D) product assortment. E) brand family.

129)

A product assortment is A) something offered by manufacturers but not by retailers. B) a particular product within a product line. C) a set of products that are closely related. D) the set of all product lines and individual products that a firm sells. E) None of the answers are correct.

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130)

A company with a large product assortment might A) have many product lines with little selection in each. B) have a single product line. C) have many individual products. D) All of the answers are correct.

131)

Product line length indicates the A) number of individual offerings in a product line. B) number of product lines that the company has to offer its customers. C) number of intermediaries involved in the distribution of all the offerings in a product

line. D) total customer lifetime value associated with the offerings in a product line. E) total number of products that the company has to offer its customers.

132) A large U.S. firm produces potato chips, shortening, dishwasher detergent, laundry detergent, shampoo, disposable diapers, and facial tissues. These are the firm's A) product classes. B) product assortment. C) individual products. D) marketing mix. E) product line.

133) A product line is a set of individual products that are closely related in which of the following ways?

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A) They are sold to the same target market. B) They are produced and/or operate in a similar manner. C) They are priced at about the same level. D) They are sold through the same type of outlets. E) All of the answers are correct.

134)

Which of the following could be an example of a firm's product line? A) coffees B) disposable diapers C) snow skis D) ski boots E) All of these could be examples of a firm's product line.

135)

The set of laptop computers sold by Dell is called a(n) A) product line. B) emergency product. C) impulse product. D) product assortment. E) unsought product.

136) Nike, Inc. markets several types of athletic shoes, along with clothing and fitness equipment. In other words, Nike has A) product components. B) a battle of the brands. C) no product assortment. D) many product classes. E) several product lines.

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137)

Individual products A) are part of product lines but not product assortments. B) may require their own marketing mixes. C) are usually distinguished by brand only. D) are part of product assortments but not product lines. E) None of the answers are correct.

138)

Which of the following is the best example of an individual product? A) 32-ounce boxes of Gain and Tide B) three types of pears C) six brands of cookies D) 12-oz. size of Pert Plus E) two brands of mountain bikes

139)

Which of the following statements about a product is not true? A) A product must be a tangible good. B) Product quality is determined by how customers view a product. C) Product lines require several strategy decisions. D) When it comes to products, customers buy satisfaction. E) Product quality and satisfaction depend on the total product offering.

140)

________ are an example of 100 percent physical goods. A) Restaurant meals B) Paper towels C) Satellite radio subscriptions D) Postal services

141)

Services

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A) are intangible. B) often have to be produced in the presence of the customer. C) are not easy to store. D) are perishable. E) All of the answers are correct.

142)

Which of the following statements does not describe a characteristic of a good?

A) Goods are tangible items that can be touched. B) Goods can be produced and then stored to sell at some future time. C) Goods are typically manufactured at the location where the customer makes the purchase. D) Goods can be owned by the customer. E) Goods are typically mass-produced.

143)

Which of the following is not true when comparing goods and services?

A) Customers rely more heavily on recommendations when purchasing goods as compared to services. B) Services are intangible while goods are tangible. C) Goods are easily stored while services cannot be stored. D) It is easier to produce consistent quality goods as compared to services. E) Services are usually produced in front of customers, whereas goods are not.

144) To take advantage of increased customer demand, a hair salon may use all the following strategies except A) keeping the salon open for longer hours. B) hiring more specialists. C) creating a larger store with more capacity. D) opening additional stores. E) storing inventories of salon services in warehouses.

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145)

Services A) are tangible. B) often have to be produced in the presence of the customer. C) are easy to store. D) are usually produced before they are sold. E) All of the answers are correct.

146)

Services, as opposed to physical products, A) may be stored for later use. B) are usually sold first, and then produced. C) are usually produced and consumed in different time frames. D) never require the presence of the consumer in order to be performed. E) None of the answers are correct.

147) LG recently added a computer touchscreen to the door of some models of its refrigerators. Which of the following describes this move by LG? A) It creates differentiation between LG refrigerators and its competitors. B) It seeks to add value and improve customer satisfaction. C) It offers LG a competitive advantage in the refrigerator market. D) It has integrated technology with the hope of improving the customer experience. E) All of the answers are correct.

148) Bank of America checking account customers can take a picture of a check with their phone and it will be virtually deposited, which eliminates the need for the customer to physically go to the bank. This is an example of

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A) a software application adding value to a core product. B) augmented reality. C) the use of artificial intelligence to add to the customer experience. D) an intelligent agent anticipating customer needs. E) the creation of a new "tech" product.

149)

Which of the following defines augmented reality?

A) an overlay of a computer-generated image, sound, text, or video onto a user's view of the physical world B) having machines operate like humans with respect to learning and decision making C) the ability of a machine to observe the environment and act to achieve a goal D) easy-to-use computer programs that analyze data E) an automated process that analyzes and categorizes social media comments in real time

150)

Which of the following is the best example of augmented reality? A) an app that allows shoppers to virtually place furniture in their home to see how it

looks B) a self-driving car that parallel parks on its own C) an online banking system D) the use of digital personal assistants like Apple's Siri to find the nearest gas station E) the ability of large retail chains to anticipate people's shopping needs

151) The shoe company Converse has an app that enables its customers to virtually see how any of their shoes would look on a customer's foot. The customer simply points their phone at their leg to see how a selected shoe would look on their foot. This is an example of

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A) augmented reality. B) the use of predictive analytics. C) artificial intelligence. D) virtual reality. E) an intelligent agent at work.

152)

AI and intelligent agents use ________ to help anticipate customer needs. A) analytics B) augmented reality C) primary data D) big data E) decision support systems

153)

Who benefits from the integration of technology into core products? A) customers B) data collection firms C) sellers D) advertisers E) All of the answers are correct.

154)

A ________ is a word, letter, or group of words or letters. A) UPC B) FTC C) trademark D) SIC E) brand name

155)

The primary purpose of branding is to

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A) prevent competitors from stealing product ideas. B) identify a product. C) enhance package design. D) increase quality. E) boost customer satisfaction.

156)

By definition, a brand name may not include A) the company name. B) the product name. C) words. D) groups of words. E) symbols and pictures.

157)

Which of the following is a benefit of branding from the perspective of the manufacturer?

A) Brands improve a company's image. B) Brands speed acceptance of new products. C) Brands reduce selling time and effort, especially for new products marketed under the same name. D) All of the answers are correct.

158)

Which of the following statements is true?

A) "Service mark" refers to all means of product identification. B) A "trademark" must be attached to a product to be legally protected. C) "Branding" refers to the use of symbols to identify a product—but does not include brand names. D) "Brand name" is a word, letter, or group of words or letters. E) All of the answers are correct.

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159) Words, symbols, or logos that are legally registered for use by a single company are called A) trademarks. B) brand names. C) brand marks. D) service marks. E) watermarks.

160)

A trademark

A) has no legal meaning. B) includes those words, symbols, or marks that are legally registered for use by a single company. C) is any word, letter, or a group of words or letters. D) is the value of a brand to its current owner or to a firm that wants to buy it. E) is protected by the Magnuson-Moss Act.

161)

Which of the following statements is true? A) A "service mark" is to a service what a "trademark" is to a physical good. B) "Trademark" refers to all means of product identification. C) A "trademark" must be attached to a product to be legally protected. D) "Trademarks" and "service marks" must be words. E) None of these statements is true.

162)

Branding is good for some consumers because it

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A) makes shopping easier. B) provides dependable guides to product quality. C) helps assure regular satisfaction. D) connects the product with the benefits the consumer expects. E) All of the answers are correct.

163)

Branding can help branders because it A) may lower promotion costs. B) can improve the company's image. C) encourages repeat buying. D) may develop customer loyalty. E) All of the answers are correct.

164) When customers have consistently positive experiences with a brand, or they hear good things from the firm's promotion or other customers, we can expect that customers will ________ that brand name. A) mistrust B) demand C) trust D) tolerate E) dislike

165) If a brand consistently delivers on a promise that purchasers consider important, those purchasers are likely to develop a ________ for the brand. A) disliking B) trust C) demand D) mistrust E) tolerance

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166)

Which of the following is a condition favorable to successful branding? A) The product quality is difficult to maintain. B) The product is difficult to label and identify by brand. C) Favorable shelf locations or display spaces are available in stores. D) There is limited availability of the product in the market. E) No economies of scale exist for the product.

167)

Branding

A) is especially helpful with a low-quality product. B) is handled by manufacturers but not intermediaries. C) helps consumers, but it is bad for the firm because it increases expenses. D) is more likely to be successful if demand for the general product class is strong enough to allow a profitable price. E) None of the answers are correct.

168)

Which of the following is not favorable to successful branding? A) Consistent quality can be maintained. B) Access to favorable shelf locations is very limited. C) Economies of scale should be possible. D) The product is easy to identify by brand or trademark. E) Dependable and widespread availability should be possible.

169)

Which of the following would not be favorable for successful branding?

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A) The product is hard to identify by brand or trademark. B) The product has widespread availability in the market. C) The product has economies of scale in production and distribution. D) The product offers the best value for the price. E) Product quality is easy to maintain.

170)

Which of the following would not be favorable to successful branding? A) The product offers superior customer value. B) Product quality fluctuates due to variations in raw materials. C) Availability is dependable and widespread. D) There are economies of scale in production. E) Favorable shelf locations are available.

171)

Which of the following is true of branding in different countries? A) Branding is more successful in developed countries. B) Branding is key to product success in emerging markets. C) Branding is more common in developing economies. D) Branding is an inefficient method of getting customers to pay a premium worldwide. E) All of the answers are correct.

172)

Why is brand rejection a big concern for service-oriented businesses? A) Customers don't buy a brand unless its image is changed. B) Target customers usually choose one brand over others. C) It is hard to control the quality of service. D) Copy-cats in the market can make the product obsolete. E) Customers want a personal touch.

173)

Brand recognition, brand preference, and brand insistence are various levels of

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A) brand rejection. B) branding. C) brand familiarity. D) brand equity. E) brand marks.

174)

Identify the correct sequence of the levels involved in building brand familiarity.

A) brand activation, brand rejection, brand recognition, brand preference, brand insistence B) brand insistence, brand equity, brand evaluation, brand insistence, brand rejection C) brand rejection, brand nonrecognition, brand recognition, brand preference, brand insistence D) brand evaluation, brand preference, brand recognition, brand rejection, brand activation E) brand rejection, brand nonrecognition, brand recognition, brand activation, brand equity

175) ________ can help create brand recognition, but only ________ can create brand insistence. A) Design; price B) Advertising; satisfying experiences C) Quality; distribution D) Brand names; endorsements E) Publicity; product trials

176) Wilbur Donald has had good experience using Crest toothpaste, and he is in the habit of buying it. His level of brand familiarity for Crest is

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A) brand insistence. B) brand preference C) brand desire. D) brand recognition. E) brand identity.

177)

Which of the following is not a level of brand familiarity? A) brand nonexistence B) brand rejection C) brand nonrecognition D) brand preference E) brand insistence

178) ________ means potential customers won't buy a brand unless its current image is changed. A) Brand preference B) Brand rejection C) Brand insistence D) Brand recognition E) Brand nonrecognition

179) Ross Wrigley refuses to buy the Billy Goat brand of beer. His attitude toward this brand is called A) brand rejection. B) brand familiarity. C) brand nonrecognition. D) brand recognition. E) brand positioning.

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180) Roberto Vasquez has never owned a Samsung TV, but his parents owned one and were not at all satisfied. As a result, Roberto won't even consider buying a Samsung. As far as Roberto is concerned, Samsung has achieved brand A) preference. B) recognition. C) nonrecognition. D) rejection. E) insistence.

181) Anita Seagroves visits the local Healthy Glow spa, but she dislikes the dirty dressing area and refuses to go back. This is an example of A) homogeneous shopping. B) trademarking. C) brand rejection. D) heterogeneous shopping. E) brand nonrecognition.

182)

________ means a brand is not recognized by final customers at all. A) Brand nonrecognition B) Brand rejection C) Brand insistence D) Brand recognition E) Brand preference

183)

When a consumer has no idea what an RAV4 is, it is a example of

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A) brand recognition. B) brand nonrecognition. C) brand insistence. D) brand preference. E) brand familiarity.

184)

Nonrecognition of the brand name of a firm's product is likely to be least important for A) coal. B) photographic film. C) lubricating oils for machinery. D) cold tablets. E) replacement auto repair parts.

185)

________ means potential customers remember a particular brand. A) Brand preference B) Brand nonrecognition C) Brand insistence D) Brand recognition E) Brand rejection

186) If members of the target market for an Apple iPad do not initially recognize the brand name, but compelling advertising results in more members remembering the brand, the Apple iPad has achieved A) brand rejection. B) brand preference. C) brand nonrecognition. D) brand insistence. E) brand recognition.

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187) Target customers choosing a particular brand over other brands because of habit or favorable past experience have a brand familiarity level of A) brand preference. B) brand knowledge. C) brand insistence. D) brand recognition. E) brand positioning.

188) ________ means target customers will generally choose a particular brand over other brands—perhaps out of habit or past experience. A) Brand nonrecognition B) Brand preference C) Brand insistence D) Brand rejection E) Brand recognition

189) Beth Sahadi usually buys Sassoon shampoo because she likes its smell. But this morning her local drugstore was out of Sassoon, so she decided to buy another highly advertised brand that was on sale because, she really needed to wash her hair that night. For Beth, Sassoon has probably achieved brand A) preference. B) insistence. C) nonrecognition. D) rejection. E) extinction.

190) Carlotta Issa is shopping for a new pair of jeans. She has had good experiences with Jordache jeans in the past and is looking for Jordache now. She probably will buy Jordache if she finds some that are at least as good-looking as competitive jeans. This is a good example of

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A) brand rejection. B) brand recognition. C) brand remembrance. D) brand preference. E) brand insistence.

191) ________ means potential customers insist on a firm's branded product and are willing to search for it. A) Brand insistence B) Brand preference C) Brand nonrecognition D) Brand rejection E) Brand recognition

192) Wu Chen frequently travels to Caracas, Venezuela, where the only hotel he will stay at is the Crown Prince Hotel. His level of brand familiarity toward the Crown Prince Hotel is A) brand awareness. B) brand familiarity. C) brand rejection. D) brand recognition. E) brand insistence.

193) Darrell Everwine read a review about a new computer program that appealed to him very much. He decided to try to find the program. However, the new program was in short supply, although other brands with similar features were available. Darrell had to try seven shops before he finally found the program in stock. For Darrell, this program achieved brand

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A) preference. B) insistence. C) rejection. D) nonrecognition. E) recognition.

194) Applying the text's list of characteristics of a good brand name, which of the following would be the poorest example of a good brand name? A) Pizza Hut B) King Kong Chewing Gum C) DieHard flashlights D) General Electric TVs E) L'eggs hosiery

195) Which of the characteristics of a good brand name is missing in the proposed name of "Gnucheo" candy? A) simple B) short C) not offensive D) always timely E) easy to pronounce

196)

Which of the following is not among the characteristics of a good brand name? A) easy to spell and pronounce B) trendy and fashionable C) suggestive of productbenefits D) legally available for use by the firm E) adaptable to the brand's packaging

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197)

The value of a brand to its current owner or to a firm that wants to buy it is called A) brand preference. B) brand equity. C) brand identity. D) brand positioning. E) brand reference.

198)

Which of the following statements is true? A) Consumer demand for a specific brand at a profitable price helps build brand equity. B) Brand equity is likely to be higher if retailers are eager to stock the brand. C) The value of a brand to its current owner is called brand equity. D) It is usually difficult and expensive to build brand recognition. E) All these statements are true.

199) A customer goes into a hardware store and buys a screwdriver set but is not aware of the brand. This is known as brand A) nonrecognition. B) insistence. C) equity. D) rejection. E) unfamiliarity.

200) In order to measure the brand recognition of a firm's product, marketing managers measure

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A) brand awareness. B) optimization. C) brand equity. D) supplier scorecards. E) cluster analyses.

201)

The highest level of brand familiarity is brand A) insistence. B) preference. C) recognition. D) nonrecognition. E) equity.

202)

The law that focuses on the protection of trademarks and brand names is the A) Lanham Act. B) Magnuson-Moss Act. C) Uniform Product Code Act. D) Federal Fair Packaging and Labeling Act. E) Federal Mass Product Act.

203) The ________ spells out what kinds of marks including brand names can be protected and the exact method of protecting them. A) Magnuson-Moss Act B) Federal Fair Packaging and Labeling Act C) Lanham Act D) Wagner Act E) Licenses Act

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204)

Which of the following statements about trademarks is true?

A) Trademarks must always be registered in their home country only. B) In the U.S., common law does not protect the rights of owners of brand names and trademarks. C) The Lanham Act requires that all trademarks be registered. D) Registering under the Lanham Act is often a first step to protecting a trademark to be used in foreign markets. E) None of these statements is true.

205)

Trademarks

A) can be legally protected in the U.S. under the Lanham Act. B) cannot be registered with a government agency in the U.S. C) are legally protected in the United States, but not in any other countries. D) are, along with trademark infringement, aggressively policed by a special agency of the U.S. government. E) None of the answers are correct.

206)

Which of the following statements about the Lanham Act is true?

A) It spells out what kinds of brand names can be protected. B) Registration under the Lanham Act only applies to licensed brands. C) It makes registration of a brand name mandatory. D) Registering under the Lanham Act does not help protect a trademark to be used in foreign markets. E) All these statements are true.

207)

The Lanham Act

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A) provides legal guidelines for product warranties. B) forces all companies to register their brands. C) describes the kinds of marks that can be protected and the methods for doing so. D) deals with deceptive product claims and advertisements. E) protects consumers against unsafe products.

208)

A trademark or brand name can become public property if A) the owner doesn't renew the registration each year. B) it becomes a common descriptive word for the product. C) the owner doesn't register it under the Lanham Act. D) it is sold in international markets. E) the buyer claims it under the Moss Act.

209) A producer that is selling all its products under one brand name is using a(n) ________ brand. A) family B) generic C) licensed D) national E) individual

210)

When a company decides to use the same brand name for several products, it is a(n) A) individual brand. B) family brand. C) dealer brand. D) private brand. E) select brand.

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211) Vision Co. manufactures and sells tea, coffee, desserts, shoes, and sporting goods—all under the Vision brand name. These products are A) the firm's product line. B) dealer brands. C) sold with a family brand. D) specialty products. E) generic products.

212) A producer of high-quality stereo component equipment has developed a new line of very inexpensive, low-quality “rack systems” to sell through discount stores. It probably should not use its current ________ brand for the new line. A) dealer B) licensed C) national D) family E) generic

213)

Use of family brands A) may involve several firms if one licenses its brand. B) is common among both producers and intermediaries. C) can provide customers with cues about the quality of new products. D) can be efficient, since the brand name will carry over in the firm's advertising. E) All of the answers are correct.

214) Boatwright College gives manufacturers of clothing and gift items permission to place the college's name and emblem on a wide variety of merchandise. In return, Boatwright is paid a fee for granting this permission. In this case, the Boatwright name and logo are a(n) ________ brand.

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A) manufacturer B) individual C) dealer D) licensed E) private

215) Sellers pay a fee to use the Sunkist brand on more than 400 products in 30 countries. Sunkist is a(n) ________ brand. A) manufacturer's B) individual C) dealer D) licensed E) specialty

216) Which of the following is most likely to use individual brands rather than a family brand for its products? A) manufacturer of knives and scissors for the "top quality" market B) manufacturer of canned pet foods and sandwich spreads for final consumers C) manufacturer of sweeping compounds, brooms, and mops for business firms D) manufacturer of flour for the "mass market" E) manufacturer of packaged potato chips and crackers

217) Sears uses a(n) ________ brand when it uses the same brand name for several products. In contrast, General Motors, by using different brands for each car line, uses ________ brands. A) individual; generic B) generic; family C) manufacturer; dealer D) national; local E) family; individual

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218) Fresher Foods Co. manufactures and sells a variety of dairy products under the Fresh Farm brand name. It then decides to introduce a new line of organic jams and preserves under the Tru Flavor Preserves brand name. For its new line, Fresher Foods is using a(n) A) family brand. B) individual brand. C) dealer brand. D) private brand. E) select brand.

219)

Products that have no brand other than the identification of their contents are called A) generic products. B) local brands. C) regional brands. D) licensed products. E) dealer brands.

220)

Manufacturer brands are also called A) dealer brands. B) global brands. C) national brands. D) private brands. E) store brands.

221)

A dealer brand is sometimes called a ________ brand.

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A) national B) local C) manufacturer D) private E) regional

222)

Another term for a dealer brand is a(n) A) family brand. B) individual brand. C) franchise brand. D) private label brand. E) generic brand.

223)

All of the following are examples of dealer brands except A) Craftsman Tools. B) Up & Up. C) Sam's Choice. D) McDonald's. E) Kenmore.

224) Ukrop's Supermarkets places the Ukrop's brand on a wide variety of products that are only available in Ukrop's stores. The Ukrop's brand is referred to as a(n) A) global brand. B) manufacturer brand. C) national brand. D) private brand. E) producer brand.

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225) Sears' Kenmore brand of appliances sold in all Sears stores illustrates which two kinds of brands? A) dealer and family brands B) local and national brands C) generic and family brands D) licensed and dealer brands E) manufacturer and family brands

226) Food Lion (a large supermarket chain that emphasizes low prices) sells a dealer brand of frozen green beans. Here, A) the producer of the green beans probably does a lot of advertising. B) a trademark cannot be used. C) a similar manufacturer brand is likely to be given less shelf space. D) the price for the consumer will probably be higher than with competing manufacturer brands. E) None of the answers are correct.

227)

Compared to manufacturer brands, dealer brands usually offer wholesalers and retailers A) less risk. B) higher gross margins. C) faster turnover at reduced selling costs. D) products that are presold to target customers. E) more prestige.

228)

The "battle of the brands" refers to competition between

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A) manufacturers and intermediaries. B) retailers and wholesalers. C) retailers and other retailers. D) wholesalers and other wholesalers. E) manufacturers and other manufacturers.

229)

Dealer brands make up almost ________ percent of the products in U.S. grocery stores. A) 10 B) 20 C) 30 D) 40 E) 50

230)

Packaging A) can serve as a useful enhancement tool. B) can increase costs for the consumer. C) can serve as a useful promotional tool. D) is concerned with protecting the product in shipping and on the shelf. E) All of the answers are correct.

231) Which of the following qualities of packaging would not likely turn a casual customer into a loyal buyer? A) making the product easier or safer to use B) making a product convenient to store C) preventing spoiling or damage D) making products easier to identify E) promoting the brand at the point of purchase

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232)

The Federal Fair Packaging and Labeling Act

A) says that producers must provide a clearly written warranty if they choose to offer a warranty. B) requires that consumer goods be clearly labeled to give consumers more information. C) spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them. D) requires food manufacturers to use a labeling format that allows consumers to compare the nutritional value of different products. E) ensures that all labels list the "green benefits" of using the product.

233)

Good packaging A) can make a product easier or safer to use. B) can be an important promotional tool. C) can lower distribution costs. D) can make products easier to handle and display. E) All of the answers are correct.

234)

Which of the following statements about packaging is true?

A) Packaging objectives should focus primarily on promoting the product at the point of purchase. B) Packaging is important to manufacturers but not to retailers. C) Packaging decisions should be based on which package will result in the lowest possible cost to the consumer. D) Packaging almost always increases costs. E) None of these statements is true.

235)

Which of the following statements about packaging is true?

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A) Better packaging almost always increases total distribution cost. B) A package should satisfy not only the needs of final consumers but also those of intermediaries. C) A package doesn't have much promotion impact at retail stores. D) A good package can aid in the promotion effort, but it's not as effective as advertising. E) All these statements are true.

236)

Which of the following statements about packaging is true?

A) The number of package sizes for similar products from different manufacturers is increasing dramatically because most firms realize that this makes direct comparisons among brands more difficult. B) There is very little government regulation of packaging, except for drug products. C) Packaging choices that are environmentally friendly can create value for both buyers and sellers. D) Better packaging almost always raises total distribution costs. E) None of these statements is true.

237)

A carefully designed package may A) raise or lower total distribution cost. B) make a product more convenient to use. C) enhance the product by making it easier or safer to use. D) offer product information that helps consumers buy. E) All of the answers are correct.

238)

The Federal Fair Packaging and Labeling Act

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A) was created in response to consumer criticism of packaging and labeling. B) calls on government agencies and industry to try to reduce the number of packaging sizes. C) requires that consumer goods be clearly labeled in understandable terms. D) All of the answers are correct.

239)

The Federal Fair Packaging and Labeling Act requires

A) consumer goods to be clearly labeled in understandable terms to give consumers more information. B) informative labeling of food products regarding nutrients, taste, and texture. C) informative labeling of food products regarding fat content. D) protective packaging. E) All of the answers are correct.

240) Which of the following is called for by the Nutrition Labeling and Education Act of 1990? A) Consumer goods should be clearly labeled in easy-to-understand terms. B) Industry should try to reduce the number of package sizes. C) Food manufacturers should use a uniform format that allows consumers to compare the nutritional value of different products. D) Industry should make labels more useful.

241)

The Nutrition Labeling and Education Act of 1990 requires food manufacturers to A) list the nutritional value of the food product. B) use a uniform format in the Nutrition Facts panel. C) list the fat content of the food product. D) list ingredients that trigger common food allergies. E) All of these are requirements of the Nutrition Labeling and Education Act.

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242)

Products that are meant for use in producing other products are ________ products. A) convenience B) shopping C) specialty D) unsought E) business

243)

Which of the following is true regarding product classes?

A) Business product classes are based on how buyers think about products and how the products will be used. B) Consumer product classes are based on how consumers think about and shop for products. C) The same product may be a consumer product and a business product. D) Products are classified by what type of customer will use them. E) All of the answers are correct.

244)

Product class is based on the type of A) customer. B) manufacturing process. C) marketing mix. D) marketing strategy. E) shopping strategy.

245) Consumer product classes are based on ________, while business product classes are based on ________.

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A) how the product is to be used; the price for the product B) how consumers shop for the product; how the product is to be used C) the price of the product; the quality of the product D) how the product is produced; how the product is sold E) how the product is sold; how the product is produced

246)

Which of the following is not a consumer product class? A) specialty B) unsought C) derived D) shopping E) convenience

247)

Which of the following is not one of the consumer product classes discussed in the text? A) unsought products B) innovative products C) shopping products D) convenience products E) specialty products

248)

Which of the following is not one of the consumer product classes discussed in the text? A) unsought products B) imitation products C) shopping products D) convenience products E) specialty products

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249) ________ are products a consumer needs but isn't willing to spend much time and effort shopping for. A) Convenience products B) Unsought products C) Homogeneous shopping products D) Utility products E) Heterogeneous shopping products

250) ________ are products a consumer needs but isn't willing to spend much time and effort shopping for. A) Convenience products B) Unsought products C) Homogeneous shopping products D) Specialty products E) Heterogeneous shopping products

251)

Convenience products are products A) a consumer needs but is not willing to spend much time or effort shopping for. B) consumers are aware of but are not interested in. C) meant for use in producing other products. D) toward which consumer attitudes may be negative. E) that consumers want because they are easy to use or consume.

252)

Which of the following is not a convenience product? A) a staple B) an impulse product C) a business product D) an emergency product

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253)

Convenience products include A) impulse products. B) staple products. C) emergency products. D) All of the answers are correct.

254)

Which of the following would be a convenience product for most consumers? A) gold jewelry B) butter C) smartphone D) dress shoes E) bicycle

255) Which of the following is LEAST likely to be a convenience product for most consumers? A) peanut butter B) laundry detergent C) candy bar D) pair of jeans E) package of paper towels

256) If a consumer product is used regularly and usually bought frequently and routinely with little thought (although branding may be important), the product is a

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A) routine product. B) specialty product. C) homogeneous shopping product. D) staple product. E) casual product.

257)

________ are bought often, routinely, and without much thought. A) New unsought products B) Staples C) Specialty products D) Business products E) Shopping products

258)

Staple products A) need maximum exposure and widespread distribution at low cost. B) need adequate representation in major shopping areas. C) need widespread distribution but with assurance of preferred display. D) need widespread distribution near probable points of use. E) can have limited availability as long as display is good.

259)

Which of the following accurately defines impulse products? A) products that potential customers do not want yet or know they can buy B) products that are bought quickly as unplanned purchases because of a strongly felt

need C) any products that consumers search for because of a strongly felt craving D) any convenience products that are bought often and routinely E) any products bought for an immediate need or requirement

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260)

Impulse products A) are likely to gain or lose sales depending on where they're sold. B) require a great deal of advertising. C) are a specific type of specialty product. D) are usually high in price. E) All of the answers are correct.

261) Which of the following products in a supermarket is most likely to be an impulse product? A) oranges B) bread C) frozen peas D) child's toy E) shampoo

262) Which of the following products in a supermarket is LEAST likely to be an impulse product? A) bread B) local newspaper C) holiday decoration D) ice cream cone E) flashlight battery

263) While shopping in a local supermarket, Jolene Partin came upon an aisle display of cookies and had to have some—immediately. By the time she got to the checkout counter with the rest of her selections, all the cookies were gone. In this case, the cookies were

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A) an impulse product. B) a staple product. C) an unsought product. D) very nutritious. E) a consumption product.

264)

Impulse products A) can have limited availability as long as display is good. B) need widespread distribution with display at point of purchase. C) need enough exposure to facilitate price comparisons. D) need adequate representation in major shopping areas. E) need widespread distribution at low cost.

265) Compared to other consumer products, the major distinguishing characteristic of emergency products is the customer's A) desire to negotiate for a "deal." B) urgency to get the need satisfied. C) willingness to shop around for a lower price. D) interest in the brand name. E) willingness to shop and compare.

266) During a heavy rainstorm, Louie Hirasawa stepped into a drugstore and bought an umbrella—just like the one he had at home—for $15.00 plus tax. In this case, the umbrella is a(n) A) specialty product. B) shopping product. C) unsought product. D) emergency product. E) impulse product.

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267) You have several umbrellas in your closet at home, but when it's raining hard and you're stranded on Market Street in San Francisco you need a new umbrella fast. What type of consumer product is your new umbrella? A) emergency product B) new unsought product C) staple D) specialty product E) shopping product

268) When selling ________ products, a marketing manager should recognize that consumers have low price sensitivity and the product should have widespread distribution near the probable point of need. A) homogeneous B) specialty C) emergency D) impulse E) regularly unsought

269)

Emergency products A) need adequate representation in major shopping areas. B) need widespread distribution but with assurance of preferred display. C) can have limited availability as long as display is good. D) need widespread distribution near probable points of use. E) need widespread distribution at low cost.

270) as

Regarding consumer product classes, a convenience product is to an emergency product

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A) a staple is to an emergency product. B) a shopping product is to a heterogeneous shopping product. C) an unsought product is to a specialty product. D) a new unsought product is to a regularly unsought product. E) a specialty product is to a homogeneous shopping product.

271) Regarding the organization of the product classes, an impulse product is to an emergency product as A) a new unsought product is to a regularly unsought product. B) an installation is to a homogeneous shopping product. C) an impulse product is to a convenience product. D) a consumer product is to a business product. E) a shopping product is to a specialty product.

272) Consumer products that customers see as basically the same and want to buy at the lowest price are called A) heterogeneous shopping products. B) homogeneous shopping products. C) comparison products. D) unsought products. E) convenience products.

273) ________ shopping products are products that the customer sees as basically the same and wants at the lowest price. A) Regularly unsought B) New unsought C) Specialty D) Unsought E) Homogeneous

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274) When some customers see all competitors' offerings as basically the same and are willing to spend much time and effort to buy the item at the lowest price, the item is a(n) A) analysis product. B) specialty product. C) staple product. D) heterogeneous shopping product. E) homogeneous shopping product.

275) Luke Flaherty wants to buy an electric drill for some jobs around his home. Deciding that all such drills are similar, he reads all the advertisements in his Sunday paper in search of the best price. For Luke, these drills are a(n) A) heterogeneous shopping product. B) staple product. C) specialty product. D) homogeneous shopping product. E) emergency product.

276)

Having a competitive price is likely to

A) be more important for a homogeneous shopping product than for a specialty product. B) be more important for a heterogeneous shopping product than for a homogeneous shopping product. C) be more important for an emergency product than for a staple. D) keep a product from falling into the "unsought" product class. E) decrease the demand for the product among customers.

277)

Homogeneous shopping products need

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A) widespread distribution near probable points of sale. B) enough exposure to facilitate price comparison. C) widespread distribution with assurance of preferred display. D) widespread distribution at low cost. E) None of the answers are correct.

278)

For a homogeneous shopping product, a marketing manager should A) provide enough exposure to facilitate price comparison. B) understand that price sensitivity is likely to be low. C) recognize that consumers see a lot of differences across alternatives. D) realize that consumers usually pay little attention to price. E) know that consumer purchases are typically unplanned and done quickly.

279) When final consumers are willing to spend much time and effort comparing quality and style, with brand and price being less important, the product is a(n) A) inspection product. B) heterogeneous shopping product. C) homogeneous shopping product. D) specialty product. E) emergency product.

280) Customers see ________ products as different and want to inspect them for quality and suitability. A) heterogeneous B) specialty C) new unsought D) impulse E) convenience

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281) a(n)

A consumer is most likely to want and expect help from a salesperson when shopping for

A) regularly unsought product. B) impulse product. C) staple. D) heterogeneous shopping product. E) homogeneous shopping product.

282) Gavan and Rebekah want to buy a TV. They look at several brands in several different stores before finally deciding on a Sharp. The TV set was the most expensive model they saw, but they felt it had better colors and would be more reliable. In this case, the TV is a(n) A) impulse product. B) heterogeneous shopping product. C) emergency product. D) specialty product. E) homogeneous shopping product.

283)

Which of the following is true regarding shopping products?

A) Price is less important in the purchase of heterogeneous shopping products than homogeneous shopping products. B) Compared to heterogeneous shopping products, homogeneous shopping products are usually more standardized. C) Buyers usually expect more sales help or service with heterogeneous shopping products. D) The Internet is a fast way to comparison shop for homogeneous shopping products. E) All of the answers are correct.

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284) Lisa Campos was interested in buying a coffee pot to use at college and also a digital assistant as a birthday present for her sister. At the local store, Lisa compared prices on coffee pots and chose the cheapest. She then read product information on each digital assistant and finally chose one from Amazon because it had the most features. For Lisa, A) the coffee pot was a convenience product, but the digital assistant was a specialty product. B) the coffee pot was a heterogeneous shopping product, but the digital assistant was a staple. C) the coffee pot was an impulse product, but the digital assistant was a convenience product. D) the coffee pot was a specialty product, but the digital assistant was a heterogeneous shopping product. E) the coffee pot was a homogeneous shopping product, but the digital assistant was a heterogeneous shopping product.

285)

Heterogeneous shopping products need A) adequate representation in major shopping areas near similar products. B) widespread distribution near probable points of sale. C) enough exposure to aid price comparison. D) widespread distribution at low cost. E) widespread distribution but with assurance of preferred display or counter position.

286) A consumer product that a customer really wants—and is willing to make a special shopping effort to find—is a(n) A) staple product. B) convenience product. C) heterogeneous shopping product. D) specialty product. E) emergency product.

287)

Specialty products

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A) have a number of close substitutes. B) are brands customers request by name. C) are generally high in price. D) cannot be found using the Internet. E) None of the answers are correct.

288)

A specialty product

A) may not require much searching to find, but the customer would be willing to search if necessary. B) may carry a well-recognized brand. C) may be frequently purchased. D) need not be an expensive item. E) All of the answers are correct.

289)

Specialty products are consumer products that A) have elastic demand. B) very few customers want or can afford to buy. C) are relatively expensive and purchased only rarely. D) consumers are willing to search for because they really want them. E) All of the answers are correct.

290)

Regarding specialty products, which of the following is true? A) Branding does not play an important role in purchasing specialty products. B) It is a customer's willingness to search for it that makes it a specialty product. C) Shopping for a specialty product involves much comparing of products. D) It is the extent of searching the customer must do that makes it a specialty product. E) All of the answers are correct.

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291) Emil Flores won't buy any coffee except "Blue Mountain"—a relatively expensive type that few stores sell. He used to have to drive about 10 miles out of his way to buy it at a small shop, but now he has persuaded his local supermarket manager to handle this coffee. For him, this coffee is a(n) A) emergency product. B) specialty product. C) staple product. D) unsought product. E) heterogeneous shopping product.

292) Until recently, Emil Flores wouldn't buy any coffee except "Blue Mountain"—a relatively expensive type that few stores sell. He used to have to drive about 10 miles out of his way to buy it at a small shop. Then he was at a friend's home and tried an inexpensive brand of coffee sold by the local supermarket chain. Now he won't buy anything except that brand. For him, the supermarket coffee is a(n) A) emergency product. B) specialty product. C) staple product. D) unsought product. E) heterogeneous shopping product.

293) Denise Hunter had Thomasville brand living room furniture and wanted to buy a particular chair of the same brand. She made a few calls to find a store that had the chair in stock. When she found one, she went there and purchased the chair. For Denise, the chair was a(n) A) homogeneous shopping product. B) specialty product. C) impulse product. D) heterogeneous shopping product. E) emergency product.

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294) Mrs. Moreau was planning to have several guests at her home for a traditional Thanksgiving dinner. She had cooked Shady Brook Farms fresh turkeys in the past and had enjoyed them very much. When she went to her usual grocery store, she discovered that the store no longer carried the Shady Brook Farms brand. She called several other grocery stores and was finally able to locate Shady Brook Farms fresh turkeys at a small grocery store approximately 10 miles away. She drove to the store and bought a 20-pound Shady Brook Farms turkey, even though the price per pound was higher than what she normally paid at her usual grocery store. For Mrs. Moreau, the Shady Brook Farms turkey was a(n) A) homogeneous shopping product. B) specialty product. C) heterogeneous shopping product. D) convenience product. E) unsought product.

295) Rosalita has a special place in her heart for Fina Pasta. She will make a special effort to find the pasta—even going to another store if she cannot find it at her usual store. For Rosalita, Fina Pasta is a(n) ________ product. A) homogeneous B) specialty C) unsought D) new unsought E) impulse

296)

Specialty products A) need widespread distribution at low cost. B) need enough exposure to facilitate price comparison. C) need adequate representation near similar products. D) need widespread distribution near probable points of sale. E) can have limited availability.

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297) Consumer products that consumers do not yet want or know they can buy—and probably would not buy without special promotion even if they saw them—are called A) new brands of well-accepted staples. B) unsought products. C) heterogeneous shopping products. D) emergency products. E) homogeneous shopping products.

298)

Unsought products A) require wide distribution but little promotion. B) are generally unprofitable. C) should not be marketed. D) are products consumers want but can't find. E) None of the answers are correct.

299)

Which of the following describes an unsought product? A) gravestones aimed at senior citizens B) a new type of "health food" produced by a new, small company C) life insurance aimed at college students D) encyclopedias aimed at new parents E) All of the answers are correct.

300)

Personal selling is extremely important for sellers of A) specialty products. B) regularly unsought products. C) heterogeneous shopping products. D) new unsought products. E) homogeneous shopping products.

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301)

Customers view regularly unsought products as A) basically the same. B) really new ideas that potential customers do not know about yet. C) undesirable but not unsold forever. D) different, and they want to inspect them for quality and suitability. E) worth the time and effort to compare with competing products.

302)

Regarding consumer products, which of the following is true? A) All unsought products remain unsought forever. B) Convenience products are products that customers want to buy at the lowest possible

price. C) Price is not important at all for heterogeneous shopping products. D) Supermarkets may carry homogeneous shopping products. E) Specialty products must be searched for.

303) Which of the following lists is in the correct order, based on the amount of effort consumers are willing to spend in searching for the "right" product, from little effort to much effort? A) heterogeneous shopping products, specialty products, unsought products B) convenience products, homogeneous shopping products, specialty products C) unsought products, homogeneous shopping products, convenience products D) staples, heterogeneous shopping products, unsought products E) homogeneous shopping products, heterogeneous shopping products, staples

304)

If a consumer purchases a new watch, the watch is a

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A) specialty product. B) heterogeneous shopping product. C) homogeneous shopping product. D) convenience product. E) The watch could be any of these choices.

305)

A $50 consumer product that is purchased infrequently is a(n) A) unsought product. B) convenience product. C) specialty product. D) shopping product. E) It might be any of these choices.

306)

Which of the following consumer products is most likely to be classified as "unsought"? A) tablet computer B) tires C) life insurance D) band aids E) house paint

307)

According to the text, consumer product classes A) are based on how consumers shop for products. B) are interesting, but not helpful for planning marketing strategy. C) are based on how the products will be used. D) are based on the product features involved. E) can be broken down into goods, services, and ideas.

308)

Consumer product classes

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A) are based on how the product will be used. B) are based primarily on how much effort is actually involved in making a purchase. C) suggest the type of marketing mix that should be used, while business product classes have little to do with the marketing mix that should be used. D) are based on how consumers think about and shop for products. E) None of the answers are correct.

309)

The text's consumer product classes are based on A) each product's price level. B) the way consumers think about and shop for products. C) the channel(s) of distribution used for each product. D) the nature of the product and how it will be used. E) how the product is produced.

310)

The text's consumer product classes are based on A) the demand elasticity of the products. B) the way people think about and shop for products. C) the type of stores that sell the products. D) the quantity in which products will be purchased or used. E) how the sellers view the products.

311)

Consumer product classes are based on A) the level of derived demand. B) how consumers think about products. C) what types of business products were used to produce them. D) how consumers will use the products. E) how new and innovative the products are.

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312)

Which of the following are meant for use in producing other products? A) consumer products B) staples C) business products D) convenience products E) shopping products

313)

Which of the following is a business product? A) a roll of sheet metal B) a metal shelf system for storing inventory C) a custom-built robot for welding metal D) a pad of paper E) Any of these could be a business product.

314) When the economy is sluggish, final consumers have less money to buy their favorite computer gadgets; and this leads to touchscreen manufacturers selling less product to computer makers like Apple. This illustrates the concept of A) "Product" as potential customer satisfaction. B) derived demand. C) brand nonrecognition. D) brand rejection. E) unsought products.

315) The big difference between the consumer products market and the business products market is

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A) demand. B) derived demand. C) supply. D) availability. E) price sensitivity.

316) The fact that the demand for business products depends a lot on the demand for final consumer products is called A) primary demand. B) derived demand. C) diminishing demand. D) elastic demand. E) secured demand.

317)

Derived demand is best illustrated by the demand for A) tea as a substitute for coffee. B) brick because of increasing demand for new homes. C) fresh raspberries during the winter months. D) magazines sold at point-of-purchase locations in the supermarket. E) All of these are good illustrations of derived demand.

318)

Regarding business products, which of the following is true?

A) The demand for consumer products is derived from the demand for business products. B) Total industry demand is fairly elastic. C) Demand facing individual sellers is always inelastic. D) Tax treatments of business products have no importance to business customers. E) The demand for business products is derived from the demand for consumer products.

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319)

Regarding the demand for business products, which of the following is true?

A) Demand for business products is derived from the demand for final consumer products. B) The demand facing most individual firms is fairly inelastic. C) Industry demand is generally highly elastic. D) All of the answers are correct.

320)

Which of the following is usually not true about business products? A) The demand curve for a particular industry is usually inelastic. B) Demand for consumer products is derived from business products. C) The demand curve for individual sellers may be extremely elastic. D) Each business product may be only a small part of the cost of a final product.

321) Why might the demand for business products be inelastic, while the demand facing individual sellers of those products is extremely elastic? A) because total demand for business products often exceeds supply B) because most business producers use haggling in their buying C) because the demand for business products is derived, and some industries have many sellers of essentially homogeneous products D) because the industry demand is rising E) None of the answers are correct.

322) VoiceSys, Inc. produces voice mail switchboard systems used in large office buildings, hotels, and other facilities. VoiceSys's products are selling so well that the company has decided to buy new equipment that will increase its production capacity. This example best illustrates

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A) why the demand for a particular seller's equipment is inelastic. B) derived demand. C) why the industry demand for this kind of equipment is quite elastic. D) that the market for installations is a “boom-or-bust” business. E) All of the answers are correct.

323) Short-lived goods and services that are charged off as they are used rather than depreciated over several years are called A) nontaxable items. B) expense items. C) derived items. D) durables. E) capital items.

324) Which of the following would be treated as an expense item for a children's clothing manufacturer? A) cloth B) sewing needles C) buttons D) zippers E) All of the answers are correct.

325) Which of the following would probably be treated as a capital item by a large clothing manufacturer? A) computer-controlled fabric cutting machines B) zippers C) cloth D) buttons E) None of the answers are correct.

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326) VoiceSys, Inc. produces voice mail switchboard systems used in large office buildings, hotels, and other facilities. VoiceSys is short of cash, but its products are so profitable and are selling so well that it has decided to buy more production equipment from one of the many suppliers that serve its industry. This example illustrates A) how installations are a boom-or-bust industry. B) why installations may have to be leased or rented. C) derived demand. D) All of the answers are correct.

327)

When making business buying decisions, it is important to remember that A) capital item purchases can't be fully charged off to the current year's expenses. B) expense items are depreciated over several years. C) large purchases must be expensed in one year. D) capital items are expensed in one year, making them less risky to buy. E) expense items are very risky, since they cannot be depreciated.

328)

Which of the following is not a business product class? A) raw materials B) component parts and materials C) specialty products D) professional services E) installations

329)

Which of the following is not a business product classification?

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A) installations B) accessories C) professional services D) specialty items E) supplies

330)

Installations A) are important long-lived capital items. B) seldom involve multiple buying influence. C) are very large expense items for buyers as soon as they buy. D) are purchased often. E) are always custom-made.

331)

________ are a boom-or-bust business. A) Accessories B) Professional services C) Installations D) Specialty items E) Supplies

332)

Multiple buying influence would be most likely for A) repair items. B) accessories. C) professional services. D) installations. E) convenience purposes.

333)

Installation products

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A) are hardly ever leased because of the tax disadvantages. B) do not include buildings and land rights. C) justify multiple buying influence for custom-made equipment but not for standard equipment. D) such as custom-made equipment generally require special negotiations for each sale. E) All of the answers are correct.

334)

Regarding installations, which of the following is not true? A) The number of potential customers at any one time is quite large. B) Leasing installations may be attractive to buyers. C) It is common for sellers to offer specialized services. D) The buying needs of potential customers are basically economic. E) Multiple buying influence is common.

335) A local copying service is buying a new kind of high speed color copier. Which of the following is true of this situation? A) There will probably be more buying influences for the paper for the copier than for the copier itself. B) The copier is likely to be purchased with a new-task buying process. C) The copier will be depreciated as an expense item. D) The copier is a new unsought product. E) None of the answers are correct.

336) Trane Corp. manufactures long-lived, custom-made equipment, which its customers treat as capital items. Trane's sales force faces much multiple buying influence. Trane's products, which do not become part of the customer's final product, are

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A) accessory equipment. B) installations. C) MRO items. D) component parts. E) operating supplies.

337) Which of the following consist(s) of capital items that cost less and are shorter-lived than installations? A) supplies B) staples C) component parts D) component materials E) accessory equipment

338)

________ are short-lived capital items. A) Accessories B) Installations C) Raw materials D) Components E) Professional services

339)

Compared to installations, accessory equipment A) is usually less standardized. B) involves more multiple buying influence. C) is an expense item instead of a capital item. D) is sold to more target markets. E) becomes part of the buyer's final product.

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340)

Regarding business products, which of the following is true?

A) Derived demand has little effect on the market for accessory equipment. B) Sellers of accessory equipment usually must face more competitors than sellers of installations. C) At any one time there are usually fewer target customers for accessories than for installations. D) Accessory equipment is not treated as a capital item. E) Special services and advice are more important with accessories than with installations.

341)

Regarding accessory equipment, which of the following is not true?

A) Multiple buying influence is less important in the purchase of an installation than with accessory equipment. B) There are more customers for accessory equipment than for installations. C) Specialized services are more important in the purchase of installations than accessories. D) There are more sellers of accessory equipment than of installations.

342) A Hewlett-Packard "all-in-one" printer that serves as a computer printer, fax machine, copier, and scanner would fall into which of the following business product classes? A) accessories B) components C) installations D) raw materials E) supplies

343) A Xerox photocopy machine in the university chancellor's office is an example of which type of business product?

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A) installation B) MRO product C) accessory D) component part E) component material

344) Sumitomo Bank, a large bank in southern California, has just purchased 120 computers (costing about $1,300 each) to standardize the computer equipment in each of its offices. The purchase was made by the purchasing manager, who expects the machines to last about three years. In this case, the computers are A) accessory equipment. B) MRO items. C) installations. D) component parts. E) professional services.

345)

Accessory equipment needs

A) fair to widespread distribution for prompt delivery. B) fairly widespread and numerous contacts by experienced and sometimes technically trained personnel. C) very widespread distribution for prompt delivery. D) technical contacts to determine the specifications required; but widespread contacts are not usually necessary. E) fairly widespread contacts with users.

346)

Which of the following business products are usually treated as expense items?

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A) component parts and materials B) raw materials C) professional services D) supplies E) All of the answers are correct.

347)

Raw materials A) are treated as expense items. B) are unprocessed but eventually become part of a final physical good. C) include both farm products and natural products. D) move to the next production process with little handling. E) All of the answers are correct.

348)

Raw materials are different from other business products, in that A) buyers of raw materials do not seek sources of supply. B) raw materials require grading. C) raw materials require a lot of handling before moving to the next production process. D) raw materials never involve contract production arrangements. E) pricing decisions for farm products are more complicated.

349) A marketing manager developing a marketing mix to sell ________ probably needs to be concerned with grading, transportation, and storing because of seasonal production and/or perishable products. A) component parts B) accessories C) impulse items D) supplies E) raw materials

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350) Procter & Gamble buys unprocessed logs, which are handled as little as needed to move them to its plant. Eventually, they become part of P&G's disposable diapers and are considered an expense item on P&G's income statement. For P&G, logs are A) farm products. B) supplies. C) component parts. D) component materials. E) raw materials.

351)

Logs, fish, cotton, and strawberries can all be A) supplies. B) raw materials. C) component parts. D) capital items. E) accessories.

352)

Which of the following is/are a business raw material? A) logs B) coal C) wheat D) cattle E) All of the answers are correct.

353)

Which of the following is/are not a business raw material?

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A) coal B) grease C) sugar cane D) iron ore E) logs

354) A product that becomes part of a buyer's final product and still requires more processing is called a(n) A) supply. B) component material. C) component part. D) raw material. E) installation.

355)

Which of the following is not a component material? A) paper B) copper wire C) copper ore D) copper screen

356) A product that becomes part of a buyer's final product and comes finished and ready for assembly is called A) a raw material. B) a component material. C) a component part. D) accessory equipment. E) an installation.

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357) Bonafide Electric produces electric motors that power refrigerators, air condition units, washing machines, and many other electric appliances produced by various manufacturers. Bonafide Electric is selling A) raw materials. B) component parts. C) MRO items. D) accessory equipment. E) installations.

358) A firm that makes stereo radios for car manufacturers who install them directly in their new cars is selling A) component parts. B) supplies. C) component materials. D) installations. E) accessory equipment.

359) A firm that makes special batteries that boat and motorcycle manufacturers buy and install directly into their new boats and motorcycles is selling A) supplies. B) component parts. C) component materials. D) installations. E) accessory equipment.

360)

Regarding component parts, which of the following is true?

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A) The original equipment market and the aftermarket for component parts are typically separate target markets. B) A product originally sold as a component part may become a consumer product when sold in the "aftermarket." C) Component buyers want dependable suppliers. D) They are finished items that must meet specifications. E) All of the answers are correct.

361) Michelin manufactures tires, which truck producers buy and install on their trucks. Based on this description, which of the following is true? A) Michelin sells installations for which multiple buying influence is likely to be quite important. B) Michelin is likely to have few opportunities in the aftermarket. C) Michelin is selling to the OEM. D) For Michelin, product quality is important but delivery reliability is not. E) All of the answers are correct.

362) The market into which a company introduces components or parts that may be bought and configured into the final product and sold by the reseller is called the A) original equipment market. B) operational essentials market. C) aftermarket. D) optimal brand market. E) general market.

363) Absinth Co. specializes in manufacturing serial ATA cables and optical drives. These component parts are purchased by Belcom Inc., a hardware manufacturing company, and are assembled, along with other parts, in the manufacturing of personal computers. Edward already owns a personal computer, but he wants to upgrade his system. He only purchases the components he needs to revamp his system from a local dealer. Which of the following statements is true of this scenario?

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A) The market Absinth first introduced its products into is called the aftermarket. B) The market Edward purchased his component parts from is called the original equipment market. C) The components Edward purchased were being sold as consumer goods in the aftermarket. D) The products Belcom purchased from Absinth were being sold as components in the aftermarket.

364) Business products that are necessary expense items and are continually used up but which do not become part of the buyer's final product are A) component materials. B) supplies. C) component parts. D) raw materials. E) accessory equipment.

365)

Supplies can be divided into which of the following three types? A) staples, impulse, and emergency B) accessory equipment, raw materials, and component parts C) homogeneous, heterogeneous, and specialty D) products, installations, and services E) maintenance, repair, and operating

366) Nebula Co., a pharmaceutical manufacturing company in the United States, enters into a contractual agreement with a firm in India to conduct clinical trials there after discovering that it is more cost effective. In this example, Nebula Co. is

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A) outsourcing. B) insourcing. C) restructuring. D) downsizing. E) crowdsourcing.

367)

Which one of the following statements is true of outsourcing?

A) Outsourcing tends to increase operational and recruitment costs. B) Outsourcing has no effect on a company's efficiency. C) In outsourcing, in-house professionals are hired to perform tasks. D) Outsourcing involves the free exchange of services and resources between organizations in the same country. E) Outsourcing involves buying professional services outside the firm.

368)

MRO items are A) supplies. B) natural products. C) modified rebuy orders. D) accessory equipment. E) component parts and materials.

369)

Which of the following is not one of the types of supplies? A) maintenance supplies B) repair supplies C) operating supplies D) professional supplies

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370) Allan Clapp is a purchasing agent for Deep River Mfg. Co. He regularly buys items such as nails, light bulbs, brooms, and sweeping compounds. In other words, he buys A) components. B) supplies. C) installations. D) professional services. E) accessory equipment.

371) When business buyers purchase items such as grease, electricity, typing paper, and paper clips, they are buying A) accessory equipment. B) operating supplies. C) components. D) repair supplies. E) maintenance supplies.

372)

Regarding business supplies, which of the following is not true?

A) Maintenance items are to business buyers as convenience products are to final consumers. B) Supplies do not become part of a final product, but they are expense items. C) Buyers of important operating supplies are likely to be particularly concerned about dependability. D) Operating supplies are frequently called "accessories." E) A seller of repair supplies is likely to face fewer competitors than a seller of operating supplies.

373)

Which of the following is true of supplies?

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A) New-task buying is typical with most purchases. B) Only one supplier is generally available. C) Branding is not important for maintenance and small operating supplies. D) Breadth of assortment is important, but dependability is not. E) None of the answers are correct.

374)

Operating supplies typically need

A) technical and experienced personal contacts, usually at the top management level. B) widespread distribution or prompt delivery. C) technical contacts to determine specifications required; but widespread contacts are not usually necessary. D) skillful personal selling by a producer. E) None of the answers are correct.

375)

Business professional services A) may not be purchased outside the firm if they are needed regularly. B) support a firm's operations. C) are offered by a growing number of specialists. D) are generally treated as expense items. E) All of the answers are correct.

376) Drue Valentine is a management consultant who helps manufacturers improve their quality-control procedures for new products. Drue is selling A) supplies. B) components. C) accessories. D) MROs. E) professional services.

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377) The Garland Advertising Agency provides promotional assistance to small and mediumsized firms that cannot afford to pay the fees charged by large national advertising agencies. Garland would fall into which of the following business product classes? A) components B) installations C) professional services D) raw materials E) supplies

378) What type of business product is General Motors purchasing when it asks a law firm for bankruptcy advice? A) emergency product B) professional service C) component D) accessory E) installation

379)

Regarding business products, which of the following is true?

A) Availability may be more important than low price to a buyer of repair items. B) Quality of service may be more important than low price to a buyer of professional services. C) A broad product assortment may be more important than low price to a buyer of supply items. D) Meeting specifications may be more important than low price to a buyer of component parts. E) All of the answers are correct.

380)

The text's business product classes are based on

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A) how buyers think about products and how they will be used. B) how consumers think about and shop for products. C) a buyer's price sensitivity. D) a buyer's willingness to search. E) None of the answers are correct.

381)

Business product classes are based on A) where buyers shop for products. B) how products will be used. C) the buying situation—whether the decision is new task, straight rebuy, or modified

rebuy. D) whether the price is easy to compare. E) None of the answers are correct.

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382) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which product class best describes how regulars view SDF cereals? A) staples B) impulse product C) heterogeneous product D) specialty product

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383) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which product class best describes how loyalists view SDF cereals? A) impulse product B) shopping product C) specialty product D) regularly unsought product

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384) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which product class best describes how deal prone customers view SDF cereals? A) staples B) homogeneous shopping product C) heterogeneous shopping product D) regularly unsought product

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385) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. For which market segment would in-store demonstrations of SDF cereals be most effective? A) loyalists B) regulars C) deal prone D) politicos E) SDF who?

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386) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. For which market segment would widespread distribution not be as important? A) politicos B) SDF who? C) loyalists D) deal prone E) regulars

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387) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; andthe package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. For which market segment would coupons be most effective? A) loyalists B) regulars C) deal prone D) politicos E) SDF who?

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388) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. What best describes the level of brand familiarity that customers in "the loyalists" segment have with SDF? A) brand rejection B) nonrecognition C) brand recognition D) brand preference E) brand insistence

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389) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. What best describes the level of brand familiarity that customers in "the deal prone" segment have with SDF? A) brand nonrecognition B) brand recognition C) brand rejection D) brand preference E) brand insistence

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390) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. What best describes the level of brand familiarity that customers in "the regulars" segment have with SDF? A) brand rejection B) brand insistence C) brand preference D) brand nonrecognition E) brand recognition

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391) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. What best describes the level of brand familiarity that customers in "the politicos" segment have with SDF? A) brand insistence B) brand rejection C) brand preference D) brand nonrecognition E) brand recognition

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392) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal What best describes the level of brand familiarity that customers in "SDF who?" segment have with SDF? A) brand insistence B) brand rejection C) brand nonrecognition D) brand recognition E) brand preference

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393) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which of the following terms best describes the "Sunny Day Foods" brand? A) individual brand B) licensed brand C) dealer brand D) family brand E) private brand

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394) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which of the following terms best describes the Nature's Foodsbrand? A) private brand B) generic product C) individual brand D) licensed brand E) manufacturer brand

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395) Use this information for questions that refer to the Sunny Day Foods (SDF) case. For six months, Kim Wu has been working for Sunny Day Foods (SDF), a fast-growing manufacturer of organic foods. After graduating college, she worked for four years as a sales rep for a nationally known food company; butshe jumped at the chance when SDF contacted her about becoming marketing manager for its breakfast foods division, which sells dry cereals and a pancake mix. Kim spent the first few months on the job trying to better understand SDF, its product line, and its marketing strategy. She reviewed the company's past marketing research, commissioned new research, and talked to both consumers and retailers. Now, the CEO of the company wants her thoughts on what the company's marketing strategy should be for the next few years. Her research indicates that among cereal customers, there are at least five segments of customers who use SDF products. a) One segment, the loyalists, has a strong preference for one or two of the SDF cereals. These customers often go out of their way to visit a store with their favorite SDF cereal and buy only that product at the store. b) Another segment, the regulars, buys SDF cereals without much thought. For them it is just part of their routine and, if you ask them why they pick the cereal, they'd say it's just a habit. c) A third segment, the deal prone, sees SDF cereals as just another organic cereal. They view all organic cereals as pretty much the same and buy whichever brand seems to offer the best deal that week. d) A fourth segment, the politicos, consists of former buyers of SDF cereals. A few years ago, the company took a strong stand in a presidential race and these customers resented it. Now, they boycott all SDF foods because of that incident. e) A fifth segment, SDF who?, is made up of consumers who buy organic cereals but who don't have much awareness of particular organic brand names. In reviewing how SDF currently brands its products, Kim sees that it is using several different approaches. The Sunny Day Foods brand is used on most products the company sells. But a few years ago the company brought out an instant organic oatmeal with the Hot 'n Healthy name. SDF also makes cereal sold by a health food chain; and the package for that chain uses the store's own name, Nature's Foods, as the brand name for the cereal. Which of the following terms best describes the Hot 'n Healthybrand? A) manufacturer brand B) individual brand C) family brand D) generic product E) private brand

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Answer Key Test name: Chap 08_17e 1) FALSE Most customers think about a total product in terms of the total satisfaction it provides, which is a combination of a physical good with the right features, useful instructions, a convenient package, a trustworthy warranty, excellent service, and a recognizable brand name. 2) TRUE Product means the need-satisfying offering of a firm. The idea of Product should be thought of as potential customer satisfaction or benefits. 3) TRUE Product means the need-satisfying offering of a firm. The idea of Product should be thought of as potential customer satisfaction or benefits. 4) FALSE Product quality should also be determined by how customers view the product. Quality means a product's ability to satisfy a customer's needs or requirements. 5) FALSE A product with more features or better features is not a higher-quality product if the features aren't what the target market wants. 6) TRUE A warranty explains what the seller promises about its product. considered.

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7) TRUE A product assortment is the set of all product lines and individual products that a firm sells. 8) TRUE A product line is a set of individual products that are closely related. They may be similar in terms of production or operation, target market, intermediaries, or price. 9) TRUE An individual product is a particular product within a product line. It is usually differentiated by brand, level of service offered, price, or some other characteristic. 10) FALSE Product line length is the number of individual products in a product line. Firms can add more colors, flavors, styles, and sizes to appeal to a wider range of customers. 11) TRUE A product may be a physical good, a service, or a blend of both. 12) FALSE A product may be a physical good, a service, or a blend of both. 13) FALSE Services are intangible offerings involving a deed, performance, or effort. These include satellite radio, hair styling, and the postal service. 14) FALSE Because a good is a physical thing, it can be seen and touched. In contrast, services are not physical. Instead, they are intangible. When you provide a customer with a service, the customer can't keep it; they can only experience, use, or consume it. Version 1

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15) TRUE Goods are typically mass-produced in a factory far away from the customer. A service is usually produced in person—where the customer is located—after the customer has committed to buy. It is often difficult to achieve economies of scale with personal services. One reason is that service suppliers often need duplicate equipment and staff at places where the service is actually provided. 16) FALSE Service quality often isn't that consistent. One reason is that it's hard to separate the service experience from the person who provides it. 17) TRUE Software applications can offer value-adding services to a core product. 18) FALSE Artificial intelligence refers to having machines operate like humans with respect to learning and decision making. Augmented reality overlays a computer-generated image, sound, text, or video on a user's view of the physical world. 19) TRUE Augmented reality overlays a computer-generated image, sound, text, or video on a user's view of the physical world. 20) TRUE Analytics are used to help AI and intelligent agents anticipate customer needs. Today many products try to forecast what a customer will want next, perhaps even before the customer knows it. 21) FALSE

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The integration of technology into products offers value to firms that collect and analyze data. By tracking customers' everyday behavior through apps, companies can deliver more targeted promotions and come up with new product features based on customer needs. 22) TRUE Branding means the use of a name, term, symbol, or design or a combination of these to identify a product. 23) FALSE Trademark is a legal term. A trademark includes only those words, symbols, or marks that are legally registered for use by a single company. 24) FALSE A service mark, not a service logo, is a trademark used for a service offering. 25) TRUE A service mark is a trademark used for a service offering. 26) TRUE Maintaining product quality and providing best value for the price are some of the factors that will make branding more successful. 27) TRUE Dependable and widespread availability makes branding more successful. When customers start using a brand, they want to be able to continue using it. 28) TRUE If a brand consistently delivers on a promise that target customers consider important, those customers will pay a premium price for the certainty that comes with that brand name. Version 1

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29) TRUE Brand familiarity means how well customers recognize and accept a company's brand. The degree of brand familiarity affects the planning for the rest of the marketing mix. 30) TRUE Brand preference means that target customers usually choose the brand over other brands, perhaps because of habit or favorable past experience. 31) FALSE Brand preference means that target customers usually choose the brand over other brands, perhaps because of habit or favorable past experience. Brand insistence means customers insist on a firm's branded product and are willing to search for it. 32) TRUE A name that conveys a positive image in one language may be meaningless in another—or worse, it may have unintended meanings. 33) TRUE Brand equity refers to the value of a brand's overall strength in the market. 34) FALSE Brand equity is likely to be higher if many satisfied customers insist on buying the brand and if retailers are eager to stock it. 35) FALSE A brand is likely to have target customers at each level of brand familiarity. Ideally, customers move to higher levels of brand familiarity over time. 36) TRUE

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The Lanham Act of 1946 spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them. The Lanham Act is often a first step toward protecting a trademark to be used in international markets, though it does not force registration. 37) TRUE The Lanham Act of 1946 spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them. The Lanham Act is often a first step toward protecting a trademark to be used in international markets, though it does not force registration. 38) TRUE Each firm should try to see that its brand doesn't become a common descriptive term for its kind of product. This was the case with the names cellophane, aspirin, shredded wheat, and kerosene. 39) TRUE Each firm should try to see that its brand doesn't become a common descriptive term for its kind of product. When this happens, the brand name or trademark becomes public property and the owner loses all rights to it. 40) TRUE Counterfeiting is accepted in some cultures. It is especially common in developing countries where regulation is weak or cultural values differ. 41) FALSE See Exhibit 8–7. When it comes to branding, two questions should be asked: "What kind of brand to use?" and "Who should do the branding?" 42) TRUE

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The use of the same brand for many products makes sense if all are similar in type and quality. The main benefit is that the goodwill attached to one or two products may help the others. 43) FALSE A licensed brand is a well-known brand that sellers pay a fee to use. The Sunkist brand name has been used on more than 400 products. 44) FALSE A company uses individual brands when it's important for the products to each have a separate identity as when products vary in quality or type. 45) FALSE A company uses individual brands when it's important for the products to each have a separate identity as when products vary in quality or type. 46) TRUE Generic products have no brand at all other than identification of their contents and the manufacturer or intermediary. 47) FALSE Generic products are usually offered in plain packages at lower prices and are quite common in less-developed nations. 48) FALSE Dealer brands, also called private brands, are brands created by intermediaries. 49) FALSE In the United States over 30 percent of grocery store purchases are now dealer brands with percentages much higher in many European countries. Over the past 30 years, dealer brands have been slowly gaining the upper hand. In tough economic times, consumers turn to dealer brands even more. Version 1

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50) TRUE The "battle of the brands"—the competition between dealer brands and manufacturer brands—is just a question of which brands will be more popular and who will be in control. 51) FALSE Manufacturer brands typically need to build strong brand preference or brand insistence through heavy promotion and quality ingredients, both of which raise costs and lead to higher prices, leaving national brands at a distinct disadvantage. Dealer brands generally sell for less than manufacturer brands, so the "battle of the brands" tends to lower prices overall. 52) TRUE There is plenty of motivation for intermediaries to develop dealer brands. The intermediary usually earns a better margin on the sale of a dealer brand. 53) TRUE Packaging involves promoting, protecting, and enhancing the product. Good packaging makes products easier to identify and promotes the brand at the point of purchase and even in use. 54) FALSE Better protective packaging helps manufacturers and wholesalers, because they have to pay the cost of goods damaged in shipment. Retailers need protective packaging too, to help reduce storing costs by cutting breakage, spoilage, and theft. Good packages also save space and weight so they are easier to transport, handle, display, and they are better for the environment. In summary, packaging may lower distribution costs. 55) FALSE Version 1

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For years plastic seemed to be the perfect packaging material because it is clean, light, and durable; unfortunately, this means it's everywhere and lasts forever. Growing numbers of consumers are interested in making greener choices. Firms are making packaging choices that are better for the environment. 56) FALSE See Exhibit 8–8. Packaging acts to protect from tampering, from shoplifting, from spoiling, and when shipping and storing. 57) FALSE This is an example of promoting. See Exhibit 8–8. 58) FALSE Although no law imposes it, many firms now use socially responsible packaging with their products. Firms are making packaging choices that are better for the environment. 59) TRUE U.S. shoppers generate much more trash per person than anywhere else on earth. Much of what is tossed out is packaging. It overloads landfills, litters streets, and pollutes the environment. 60) TRUE The Federal Fair Packaging and Labeling Act (of 1966) requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. 61) TRUE The Federal Fair Packaging and Labeling Act of 1966 requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. 62) FALSE Version 1

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The Federal Fair Packaging and Labeling Act of 1966 requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information; but it does not require them to reduce the number of package sizes. It does call on industry to try to reduce the confusing number of package sizes and to make labels more useful. 63) TRUE All products fit into one of two broad groups based on the type of customer that will use them. Consumer products are products meant for the final consumer. Business products are products meant for use in producing other products. 64) TRUE Business product classes are based on how buyers think about products and how the products will be used. 65) FALSE Business product classes are based on how buyers think about products and how the products will be used. 66) TRUE Consumer product classes divide into four groups: (1) convenience, (2) shopping, (3) specialty, and (4) unsought. 67) TRUE Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. 68) TRUE

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Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. They include staples, impulse products, and emergency products. 69) TRUE Convenience products, like staples, are bought often, routinely, and without much thought. Examples include cereal and soup. 70) FALSE The consumer product classes are based on the way people think about and shop for products. 71) FALSE Convenience products, like staples, are bought often, routinely, and without much thought. 72) TRUE Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. True impulse products are items that the customer hadn't planned to buy, decides to buy on sight, may have bought the same way many times before, and wants right now. 73) FALSE Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. 74) TRUE Emergency products are products that are purchased immediately when the need is great. The price of such products does not matter to the consumer at that given time. 75) TRUE Shopping products are products that a customer feels are worth the time and effort to compare with competing products. Version 1

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76) FALSE Shopping products are products that a customer feels are worth the time and effort to compare with competing products. 77) TRUE Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. Some consumers view televisions, computers, and washing machines this way. 78) TRUE Heterogeneous shopping products are items the customer sees as different and wants to inspect for quality and suitability. For heterogeneous shopping products, quality, features, and style matter more than price. In fact, once the customer finds the right product, price may not matter as long as it's reasonable. 79) TRUE Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Furniture, clothing, and membership in a spa are good examples. 80) FALSE Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. 81) FALSE Specialty products are consumer products that the customer really wants and makes a special effort to find. But shopping for a specialty product doesn't mean comparing; the buyer wants that special product and is willing to search for it. 82) FALSE

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Specialty products are consumer products that the customer really wants and makes a special effort to find. Shopping for a specialty product doesn't mean comparing; the buyer wants that special product and is willing to search for it. 83) FALSE Specialty products are consumer products that the customer really wants and makes a special effort to find. It is the customer's willingness to search that makes it a specialty—not the extent of searching. 84) TRUE Unsought products are products that potential customers don't yet want or know they can buy, so they don't search for them at all. In fact, consumers probably won't buy these products if they see them unless promotion can show their value. 85) TRUE Unsought products are products that potential customers don't yet want or know they can buy, so they don't search for them at all. In fact, consumers probably won't buy these products if they see them, unless promotion can show their value. 86) TRUE New unsought products are products offering truly new ideas that potential customers don't know about yet. 87) FALSE Regularly unsought products are products like gravestones, life insurance, and nursing homes that stay unsought but not unbought forever. There may be a need, but potential customers aren't motivated to satisfy it. For this kind of product, personal selling is very important. 88) FALSE Version 1

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The same product might be seen in different ways by different target markets at the same time. 89) TRUE The same product might be seen in different ways by different target markets at the same time. 90) TRUE The demand for business products derives from the demand for final consumer products. For example, car manufacturers buy about one-fifth of all steel products. But if demand for cars drops, they'll buy less steel. 91) TRUE Total industry demand for business products is fairly inelastic. However, demand facing individual sellers may be extremely elastic if similar products are available at a lower price. 92) FALSE A capital item is a long-lasting product that can be used and depreciated for many years. It is often very expensive. Customers pay for the capital item when they buy it, but for tax purposes the cost is spread over a number of years. This may reduce the cash available for other purchases. 93) TRUE Installations such as buildings, land rights, and major equipment are important capital items. One-of-a-kind installations—like office buildings and custom-made machines—are also important capital items. 94) FALSE Installations are a boom-or-bust business. During growth periods, firms may buy installations to increase capacity; but during a downswing, sales fall off sharply. 95) FALSE Version 1

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Accessories, like tools and equipment used in production or office activities, are short-lived capital items. Installations such as buildings, land rights, and major equipment are long-lived capital items. 96) FALSE Accessories, like tools and equipment used in production or office activities, are short-lived capital items. Installations such as buildings, land rights, and major equipment are long-lived capital items. 97) TRUE Raw materials are unprocessed expense items such as logs, iron ore, and wheat that are moved to the next production process with little handling. There are two types of raw materials: farm products and natural products. 98) FALSE Raw materials are unprocessed expense items such as logs, iron ore, and wheat that are moved to the next production process with little handling. 99) TRUE The need for grading is one of the important differences between raw materials and other business products. Nature produces what it will, and someone must sort and grade raw materials to satisfy various market segments. 100) TRUE The need for grading is one of the important differences between raw materials and other business products. Nature produces what it will, and someone must sort and grade raw materials to satisfy various market segments. 101) TRUE

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Components are processed expense items that become part of a finished product. Component parts are finished or nearly finished items that are ready for assembly into the final product. Component materials have already been processed but must be processed further before becoming part of the final product. 102) TRUE Accessories are short-lived capital items—tools and equipment used in production or office activities. Because these products cost less and last a shorter time than installations, multiple buying influence is less important. Operating people and purchasing agents, rather than top managers, may make the purchase decision. 103) FALSE Components are processed expense items that become part of a finished product. Component parts are finished or nearly finished items that are ready for assembly into the final product. 104) TRUE Supplies are expense items that do not become part of a finished product. 105) TRUE Maintenance and small operating supplies are like convenience products. The item will be ordered because it is needed, but buyers won't spend much time on it. Important operating supplies, like coal and fuel oil, receive special treatment. Usually there are several sources for such commodity products and large volumes may be purchased at global exchanges on the Internet. 106) TRUE Professional services, which are usually expense items, are specialized services that support a firm's operations. Version 1

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107) FALSE Managers compare the cost of buying professional services outside the firm to the cost of having company people do them. Work that was previously done by an employee is now often purchased from an independent specialist. 108) E All of these are product decisions that should be made during marketing strategy planning. 109) C Product has been defined as the need-satisfying offering of a firm. 110) E While it's easy to think that a product's quality is determined by product designers and other managers involved in production, quality is ultimately determined by the customer. Quality is a product's ability to satisfy a customer's needs or requirements. 111) E A product may be a physical good, such as a car or iPad, or a service, such as a movie or bus ride. A product may also be a blend of both. But a brand, such as Microsoft, is not a product. 112) D Quality means a product's ability to satisfy a customer's needs or requirements. Such a definition focuses on the customer and how the customer thinks a product will fit some purpose. A product with better features is not a higher-quality product if the features aren't what the target market wants. For dieters, the potato chip that helps people lose weight is the highest quality. 113) D Version 1

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The idea of "Product" as potential customer satisfaction or benefits is very important. Many business managers get wrapped up in the technical details involved in producing a product. But most customers think about a product in terms of the total satisfaction it provides. 114) C Product has been defined as the need-satisfying offering of a firm. 115) C Product has been defined as the need-satisfying offering of a firm. 116) D Product has been defined as the need-satisfying offering of a firm. 117) B Product quality refers to a product's ability to satisfy a customer's needs or requirements. 118) A Product quality refers to a product's ability to satisfy a customer's needs or requirements. 119) D Product quality should also be determined by how customers view the product. From a marketing perspective, quality means a product's ability to satisfy a customer's needs or requirements. 120) A Product quality should also be determined by how customers view the product. From a marketing perspective, quality means a product's ability to satisfy a customer's needs or requirements. 121) D

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Product quality should also be determined by how customers view the product. From a marketing perspective, quality means a product's ability to satisfy a customer's needs or requirements. 122) A A product may be a physical good, a service, or a blend of both. The idea of "Product" as potential customer satisfaction or benefits is very important. 123) E A total product is a combination of excellent service, a physical good with the right features, instructions, a package, a warranty, and a trustworthy brand name. 124) E A product may be a physical good, a service, or a blend of both. 125) E A product may be a physical good, a service, or a blend of both. 126) E A warranty explains what the seller promises about its product. 127) B A strong warranty can send consumers a positive signal about brand quality. 128) D A product assortment is the set of all product lines and individual products that a firm sells. 129) D A product assortment is the set of all product lines and individual products that a firm sells. Version 1

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130) D A product assortment is the set of all product lines and individual products that a firm sells. A firm may have multiple product lines or a single product line within its assortment. 131) A Product line length indicates the number of individual products in a product line. Sometimes extending the length of the product line offers marketing managers new opportunities. 132) B A product assortment is the set of all product lines and individual products that a firm sells. 133) E A product line is a set of individual products that are closely related. They may be produced or operate in a similar way, sold to the same target market, sold through the same types of outlets, or priced at about the same level. 134) E A product line is a set of individual products that are closely related. They may be produced or operate in a similar way, sold to the same target market, sold through the same types of outlets, or priced at about the same level. 135) A A product line is a set of individual products that are closely related. They may be produced or operate in a similar way, sold to the same target market, sold through the same types of outlets, or priced at about the same level. 136) E Version 1

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A product line is a set of individual products that are closely related. They may be produced or operate in a similar way, sold to the same target market, sold through the same types of outlets, or priced at about the same level. 137) B An individual product is a particular product within a product line. Each individual product and target market may require a separate strategy. 138) D An individual product is a particular product within a product line. 139) A A product may be a tangible, physical good or it may be a service, which is an intangible offering involving a deed, performance, or effort. 140) B A physical good is tangible; it can be seen and touched. Physical goods are typically mass-produced in a factory. 141) E Services are not physical products; they are intangible. When you provide a customer with a service, the customer can't keep it. Rather, a service is experienced, used, or consumed. A service is usually produced in person after the customer has committed to buy. Services are perishable. They can't be produced and then stored to sell later. 142) C Goods are typically mass-produced in a factory far away from the customer. In contrast, a service is usually produced in person—where the customer is located—after the customer has committed to buy. 143) A

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Although customers seek recommendations for goods and services alike, customers rely more heavily on recommendations when purchasing services—such as a vacation cruise. This is because customers can't see, feel, or try a service before the purchase. To reduce uncertainty, service customers often seek referrals from friends or advice from online reviews. 144) E Services like salons are perishable. They can't be produced and then stored in warehouses to sell at some future time when more customers want to buy. 145) B Services are not physical products, they are intangible. They cannot be stored, but only experienced, used, or consumed. They often have to be produced in the presence of the consumer. 146) B Services are usually sold first, and then produced. This is evident in the hotel industry and the airline industry. 147) E Many products that were not previously thought of as tech products now include technology. Firms seek to add customer value to their core product offerings to improve customers' experience and satisfaction. They seek to differentiate a product and to gain a competitive advantage in a market where competing products are seen as alike. 148) A Software applications can offer value-adding service to a core product, which, here, is a checking account. 149) A Version 1

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Augmented reality overlays a computer-generated image, sound, text, or video on a user's view of the physical world. 150) A An app that allows a shopper to place a piece of furniture in their home to see how it looks is an example of the use of augmented reality (AR). AR overlays a computer-generated image, sound, text, or video on a user's view of the physical world. 151) A The Converse app described is an example of augmented reality. AR overlays a computer-generated image, sound, text, or video on a user's view of the physical world. 152) A Analytics are used to help AI and intelligent agents anticipate customer needs. Analytics help to forecast what a customer will want next, perhaps even before the customer knows it. 153) E While customers see value from the integration of technology into products, it also offers value for firms that collect and analyze the data. It can provide useful information to companies and advertisers to help deliver targeted messages and promotions. 154) E A brand name is a word, letter, or a group of words or letters. 155) B Branding means the use of a name, term, symbol, or design—or a combination of these—to identify a product. It includes the use of brand names, trademarks, and practically all other means of product identification. Version 1

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156) E While branding may involve the use of a name, term, symbol, or design, a "brand name" has a narrower meaning—it is restricted to a word, letter, or a group of words or letters. It does not extend to symbols or pictures. A trademark includes words, symbols, or marks. 157) D From the perspective of a manufacturer, a good brand reduces the marketer's selling time and effort. Good brands can also improve the company's image and speed acceptance of new products marketed under the same name. 158) D A brand name is a word, letter, or a group of words or letters. 159) A A trademark includes only those words, symbols, or marks that are legally registered for use by a single company. 160) B A trademark includes only those words, symbols, or marks that are legally registered for use by a single company. 161) A A trademark includes only those words, symbols, or marks that are legally registered for use by a single company. A service mark is the same as a trademark except that it refers to a service offering. 162) E Branding means the use of a name, term, symbol, or design or a combination of these to identify a product. Well-recognized brands make shopping easier and connect a product with the benefits a customer can expect. Version 1

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163) E Branding means the use of a name, term, symbol, or design or a combination of these to identify a product. It can also improve the company's image and speed acceptance of new products. A good brand reduces the marketer's selling time and effort. 164) C Customers trust the brand name if they consistently have a positive experience with the brand or they hear good things from the firm's promotion or other customers. 165) B Customers trust the brand name if they consistently have a positive experience with the brand or they hear good things from the firm's promotion or other customers. 166) C Favorable shelf locations or display space in stores is a factor within the control of retailers and has been listed as one of the conditions favorable to successful branding. 167) D If demand is so strong that the market price can be high enough to make the branding effort profitable, it can prove to be a condition favorable to successful branding. 168) B Favorable shelf locations or display space in stores is a factor within the control of retailers and has been listed as one of the conditions favorable to successful branding. 169) A

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Having a product that is easy to label and identify by brand or trademark is a condition favorable to successful branding. 170) B Being able to maintain product quality and price is a condition favorable to successful branding. 171) A Branding may be more or less valuable in different countries. Efforts to build brands in emerging markets often fail because they are less likely to have the conditions that make a market favorable to successful branding. 172) C Brand rejection means that potential customers won't buy a brand unless its image is changed—or if the customers have no other choice. Brand rejection is a big concern for service-oriented businesses because it's difficult to control the quality of service. 173) C Brand recognition, brand preference, and brand insistence are various levels of brand familiarity. Brand familiarity means how well customers recognize and accept a company's brand. 174) C Five levels of brand familiarity are useful for strategy planning: (1) rejection, (2) nonrecognition, (3) recognition, (4) preference, and (5) insistence. 175) B Advertising can help boost brand recognition, but only satisfying experiences can create brand insistence among customers. 176) B Version 1

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Most branders would like to win brand preference—which means that target customers usually choose the brand over other brands, perhaps because of habit or favorable past experience. 177) A Five levels of brand familiarity are useful for strategy planning: (1) rejection, (2) nonrecognition, (3) recognition, (4) preference, and (5) insistence. 178) B Brand rejection means that potential customers won't buy a brand unless its image is changed. Rejection may suggest a change in the product or perhaps only a shift to target customers who have a better image of the brand. 179) A Brand rejection means that potential customers won't buy a brand unless its image is changed. Rejection may suggest a change in the product or perhaps only a shift to target customers who have a better image of the brand. 180) D Brand rejection means that potential customers won't buy a brand unless its image is changed. Rejection may suggest a change in the product or perhaps only a shift to target customers who have a better image of the brand. 181) C Brand rejection means that potential customers won't buy a brand unless its image is changed. Rejection may suggest a change in the product or perhaps only a shift to target customers who have a better image of the brand.

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182) A Brand nonrecognition means final consumers don't recognize a brand at all, even though intermediaries may use the brand name for identification and inventory control. 183) B Brand nonrecognition means final consumers don't recognize a brand at all—even though intermediaries may use the brand name for identification and inventory control. 184) A Nonrecognition of the brand name is least important for a commodity like coal, which is relatively homogeneous. 185) D Brand recognition means the ability of customers to remember a brand. 186) E Brand recognition means the ability of customers to remember a brand. 187) A Brand preference means that target customers usually choose the brand over other brands, maybe because of habit or favorable past experience. 188) B Brand preference means that target customers usually choose the brand over other brands, maybe because of habit or favorable past experience. 189) A Brand preference means that target customers usually choose the brand over other brands, maybe because of habit or favorable past experience. 190) D

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Brand preference means that target customers usually choose the brand over other brands, perhaps because out of habit or favorable past experience. 191) A Brand insistence means customers insist on a firm's branded product and are willing to search for it. 192) E Brand insistence means customers insist on a firm's branded product and are willing to search for it. 193) B Brand insistence means customers insist on a firm's branded product and are willing to search for it. 194) B According to the characteristics of a good brand name cited in Exhibit 8–6, King Kong Chewing Gum lacks the features required for a brand name to be successful. 195) E A brand name should be easy to pronounce. See Exhibit 8–6. 196) B Being trendy and fashionable is not a pre-requisite for a good brand name. See Exhibit 8–6. 197) B The value of a brand to its current owner or to a firm that wants to buy it is called brand equity—in other words, the value of a brand's overall strength in the market. 198) E Version 1

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Some firms prefer to acquire established brands rather than try to build their own because building brand recognition is difficult. The value of a brand to its current owner or to a firm that wants to buy it is sometimes called brand equity. It is likely to be higher if many satisfied customers insist on buying the brand and if retailers are eager to stock it. 199) A Brand nonrecognition means that final consumers don't recognize a brand at all—even though intermediaries may use the brand name for identification and inventory control. 200) A To assess brand recognition, firms often use of measure of brand awareness to aid in strategy development. 201) A The highest level of brand familiarity is brand insistence, in which customers insist on a firm's branded product and are willing to search for it. A respected name builds brand equity, which is the firm's value of a brand's overall strength in the market—but brand equity is not one of the five levels of brand familiarity. 202) A The Lanham Act of 1946 spells out what kinds of marks, including brand names, can be protected and the exact method of protecting them. 203) C The Lanham Act of 1946 spells out what kinds of marks, including brand names, can be protected and the exact method of protecting them. 204) D

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The Lanham Act does not force registration; but registering under the Lanham Act is often a first step toward protecting a trademark to be used in international markets. 205) A The Lanham Act of 1946 spells out what kinds of marks including brand names can be protected and the exact method of protecting them. The law applies to goods shipped in interstate or foreign commerce. 206) A The Lanham Act of 1946 spells out what kinds of marks including brand names can be protected and the exact method of protecting them. The law applies to goods shipped in interstate or foreign commerce. 207) C The Lanham Act of 1946 spells out what kinds of marks including brand names can be protected and the exact method of protecting them. The law applies to goods shipped in interstate or foreign commerce. 208) B Each firm should try to see that its brand doesn't become a common descriptive term for its kind of product. When this happens, the brand name or trademark becomes public property and the owner loses all rights to it. 209) A When several products have the same brand name, the brand is known as a family brand. 210) B When several products have the same brand name, the brand is known as a family brand. 211) C Version 1

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When several products have the same brand name, the brand is known as a family brand. 212) D When several products have the same brand name, the brand is known as a family brand. The use of the same brand for many products makes sense if all are similar in type and quality. 213) E A licensed brand is a special kind of family brand that sellers pay a fee to use. The use of the same family brand for many products makes sense if all are similar in type and quality. The goodwill attached to one or two products may help the others. Money spent to promote the brand name benefits more than one product, which cuts promotion costs for each product. 214) D A licensed brand, a special kind of family brand, is a well-known brand that sellers pay a fee to use. 215) D A licensed brand, a special kind of family brand, is a well-known brand that sellers pay a fee to use. 216) B A company uses individual brands—separate brand names for each product—when it's important for the products to each have a separate identity, as when products vary in quality or type. 217) E

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When several products have the same brand name, the brand is known as a family brand. A company uses individual brands—separate brand names for each product—when it's important for the products to each have a separate identity, as when products vary in quality or type. 218) B A company uses individual brands—separate brand names for each product—when it's important for the products to each have a separate identity, as when products vary in quality or type. 219) A Generic products are products that have no brand at all, other than identification of their contents and the manufacturer or intermediary. 220) C Manufacturer brands are sometimes called national brands because the brand is promoted all across the country or in large regions. 221) D Dealer brands are also called private brands (or private label) and are created by intermediaries. 222) D Dealer brands are also called private brands (or private label) and are created by intermediaries. 223) D Examples of dealer brands include Primo Taglio and Priority Pet (Safeway), Up & Up (Target), and Sam's Choice and Equate (Walmart). McDonald's is a manufacturer brand. 224) D Private brands are brands created by intermediaries (i.e. channels of distribution). Version 1

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225) A The Sears' Kenmore brand operates as both a family brand and a dealer brand. 226) C In the battle between dealer and manufacturer brands, dealer brands are likely to receive special shelf positions, since the intermediary usually earns a better margin on the sale of a dealer brand. 227) B There is plenty of motivation for intermediaries to develop dealer brands, as they usually earn a better margin on the sale as compared to a manufacturer brand. 228) A The battle of the brands is the competition between dealer brands (intermediaries) and manufacturer brands. 229) C In the United States, almost 30 percent of grocery store purchases are now dealer brands, with percentages much higher in many European countries. 230) E Packaging involves promoting, protecting, and enhancing the product. It can make a product more convenient to use or store. It can prevent spoiling or damage. Good packaging makes products easier to identify and promotes the brand at the point of purchase and even in use. 231) E

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Packaging can make a key difference in a new marketing strategy when it meets customers' needs better. For example, a package that makes the product safer to use, more convenient to store, more resistant to spoilage, or easier to identify delivers important value to customers. The fact that a package may promote the brand at the point of purchase, while good promotion, would not likely enhance the customer experience in a way that fosters brand preference or brand insistence. 232) B The Federal Fair Packaging and Labeling Act (of 1966) requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. The law also calls on industry to try to reduce the confusing number of package sizes and make labels more useful. 233) E Packaging involves promoting, protecting, and enhancing the product. It can make a product more convenient to use or store. It can prevent spoiling or damage. Good packaging makes products easier to identify and promotes the brand at the point of purchase and even in use. 234) E Packaging involves promoting, protecting, and enhancing the product. Retailers need packaging to reduce storing costs by cutting breakage, spoilage, and theft. Good packages also save space and weight so they are easier to transport, handle, and display. Packaging may lower distribution costs and costs to the consumer. 235) B

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Better protective packaging is very important to manufacturers and wholesalers. They sometimes have to pay the cost of goods damaged in shipment. Retailers need protective packaging too. It can reduce storing costs by cutting breakage, spoilage, and theft. Good packages also save space and weight so they are easier to transport, handle, and display. 236) C Greener packaging can create value for both buyers and sellers. A growing number of consumers are interested in making greener choices and firms are making packaging choices that are better for the environment. 237) E Good packaging makes products easier to identify, more convenient to use, and promotes the brand at the point of purchase and even in use. It can help reduce distribution costs by reducing storing costs (cutting breakage, spoilage, and theft). It can also save space and weight making it easier to transport, handle, and display products; but it can also raise costs, depending on the benefit/cost ratio. 238) D The Federal Fair Packaging and Labeling Act required that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information, since many critics thought that labeling information was often too incomplete or misleading. The law also calls on industry to try to reduce the confusing number of package sizes and make labels more useful. 239) A The Federal Fair Packaging and Labeling Act requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more information. Version 1

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240) C The Nutrition Labeling and Education Act of 1990 requires food manufacturers to use a uniform format that allows consumers to compare the nutritional value of different products. 241) E The Nutrition Labeling and Education Act of 1990 requires food manufacturers to use a uniform format that allows consumers to compare the nutritional value of different products and clearly show the fat content of food and ingredients that trigger common food allergies. 242) E All products fit into one of two broad groups based on the type of customer that will use them. Consumer products are products meant for the final consumer, whereas business products are products meant for use in producing other products. 243) E All products fit into one of two broad groups—consumer products and business products. The same product may be a consumer and a business product. Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 244) A All products fit into one of two broad groups, consumer products or business products, based on the type of customer that will use them. 245) B Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used.

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246) C Consumer product classes are divided into four groups: (1) convenience, (2) shopping, (3) specialty, and (4) unsought. 247) B Consumer product classes are divided into four groups: (1) convenience, (2) shopping, (3) specialty, and (4) unsought. 248) B Consumer product classes are divided into four groups: (1) convenience, (2) shopping, (3) specialty, and (4) unsought. 249) A Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. 250) A Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. 251) A Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. 252) C

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Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. A convenience product may be a staple, impulse product, or emergency product. A business product is not a convenience product. 253) D Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. Staple products, impulse products, and emergency products are examples of convenience products. 254) B Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. These products are bought often, require little service, don't cost much, and may even be bought by habit. Butter is an example. 255) D Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. Jeans do not qualify as a convenience product. 256) D Staples are products that are bought often, routinely, and without much thought like breakfast cereal, canned soup, and most other packaged foods used almost every day in almost every household. 257) B Staples are products that are bought often, routinely, and without much thought like breakfast cereal, canned soup, and most other packaged foods used almost every day in almost every household. Version 1

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258) A Staples need maximum exposure and should be priced low since they are bought routinely, without much effort. 259) B Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. True impulse products are items that the customer hadn't planned to buy and decides to buy on sight. 260) A Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. If the buyer doesn't see an impulse product at the right time, the sale may be lost. 261) D Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. True impulse products are items that the customer hadn't planned to buy and decides to buy on sight. A child's toy in a supermarket is an example. 262) A Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. True impulse products are items that the customer hadn't planned to buy and decides to buy on sight. Bread is not an impulse product; it is a staple. 263) A Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. True impulse products are items that the customer hadn't planned to buy and decides to buy on sight. Here the cookies were bought quickly as an unplanned purchase.

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264) B Impulse products are products that are bought quickly as unplanned purchases because of a strongly felt need. Impulse products need widespread distribution with display at point of purchase, since they are bought on sight. 265) B Emergency products are products that are purchased immediately when the need is great. The customer does not have the time to shop during an emergency, when the urgency to satisfy a need is great. 266) D Emergency products are products that are purchased immediately when the need is great. The customer does not have the time to shop during an emergency, when the urgency to satisfy a need is great. 267) A Emergency products are products that are purchased immediately when the need is great. The customer does not have the time to shop during an emergency, when the urgency to satisfy a need is great. 268) C While purchasing emergency products, a customer does not have the time to shop and is not very sensitive to price. A marketing manager should identify these factors and ensure that the product has widespread distribution near the probable point of need. 269) D While purchasing emergency products, a customer does not have the time to shop and is not very sensitive to price. A marketing manager should identify these factors and ensure that the product has widespread distribution near the probable point of need.

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270) B Emergency products are a type of convenience product, while heterogeneous shopping products are a type of shopping product. 271) A Impulse products and emergency products are types of convenience products, while new unsought products and regularly unsought products are types of unsought products. 272) B Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. 273) E Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. 274) E Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. 275) D Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. 276) A Since homogeneous shopping products are products the customer sees as basically the same, customers usually decide on which products to buy based on price. 277) B

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Since homogeneous shopping products are products the customer sees as basically the same, customers usually decide on which products to buy based on price. This requires enough exposure to make it easy to compare prices. 278) A Since homogeneous shopping products are products the customer sees as basically the same, customers usually decide on which products to buy based on price. This requires enough exposure to make it easy to compare prices. 279) B Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Quality and style matter more than price. 280) A Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Quality and style matter more than price. 281) D Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Quality and style matter more than price. Often the consumer expects help from a knowledgeable salesperson. 282) B Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Quality and style matter more than price. 283) E Version 1

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Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. Quality and style matter more than price, and buyers usually expect more sales help or service. Homogeneous shoppers shop for the best price, and the Internet is a fast and effective way of doing that. 284) E Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. 285) A Heterogeneous shopping products are shopping products the customer sees as different and wants to inspect for quality and suitability. They need adequate representation in major shopping areas near similar products. Some retailers carry competing brands so that consumers won't go to a competitor to compare items. 286) D Specialty products are consumer products that the customer really wants and makes a special effort to find. 287) B Specialty products are consumer products that the customer really wants and makes a special effort to find. Any branded product that consumers insist on by name is a specialty product. 288) E Specialty products are consumer products that the customer really wants and makes a special effort to find, irrespective of cost or brand. The frequency of purchase depends on how badly a consumer wants a given product. Version 1

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289) D Specialty products are consumer products that the customer really wants and makes a special effort to find. 290) B The customer's willingness to search is what makes it a specialty product, not the extent of searching. 291) B Specialty products are consumer products that the customer really wants and makes a special effort to find. 292) B Specialty products are consumer products that the customer really wants and makes a special effort to find. 293) B Specialty products are consumer products that the customer really wants and makes a special effort to find. 294) B Specialty products are consumer products that the customer really wants and makes a special effort to find. 295) B Specialty products are consumer products that the customer really wants and makes a special effort to find. 296) E Specialty products can have limited availability, since consumers are usually willing to make a special effort to find them. 297) B

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Unsought products are products that potential customers don't yet want or know they can buy, so they don't search for them at all. 298) E Unsought products are products that potential customers don't yet want or know they can buy, so they don't search for them at all. Consumers probably won't buy these products when they see them unless promotion can show their value. 299) E Unsought products are products that potential customers don't yet want or know they can buy, so they don't search for them at all. Consumers probably won't buy these products when they see them unless promotion can show their value. 300) B Regularly unsought products are products like life insurance or gravestones, that stay unsought but not unbought forever. There may be a need, but potential customers aren't motivated to satisfy that need. For this kind of product, personal selling is very important. 301) C Regularly unsought products are products like gravestones, life insurance, and nursing homes that stay unsought but not unbought forever. 302) D Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. Supermarkets often stock several brands of a product to give shoppers an opportunity to choose the lowest price. 303) B Version 1

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Convenience products are products a consumer needs but isn't willing to spend much time or effort shopping for. Homogeneous shopping products are shopping products the customer sees as basically the same and is willing to search for the lowest price. Specialty products are consumer products that the customer really wants and makes a special effort to find. 304) E Any of these choices could be correct in the case of purchasing a watch. It depends on various other factors and how a consumer thinksof it. 305) E It could be any of these choices. Consumer product classes are based on how consumers think about and shop for products. 306) C Unsought products are consumer products that potential customers don't yet want or know they can buy. Examples include life insurance and gravestones. 307) A Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 308) D Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 309) B

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Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 310) B Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 311) B Consumer product classes are based on how consumers think about and shop for products. Business product classes are based on how buyers think about products and how they'll be used. 312) C Business products are products meant for use in producing other products. 313) E Business products are products meant for use in producing other products. Any of these products could be a business product, depending on its use. 314) B The touchscreen component maker is unable to sell products due to derived demand—the concept that demand for business products derives from the demand for final consumer products. Since customers are not buying as many mobile devices in a sluggish economy, mobile device brands aren't willing to buy as many components from component parts suppliers. 315) B

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The big difference between the consumer products market and the business products market is derived demand—i.e., the demand for business products derives from the demand for final consumer products. 316) B When one demand depends on another demand, it is called derived demand—i.e., the demand for business products derives from the demand for final consumer products. 317) B The demand for business products derives from the demand for final consumer products. For example, demand for bricks increases as the demand for new homes increases. 318) E The demand for business products derives from the demand for final consumer products. 319) A The demand for business products derives from the demand for final consumer products. 320) B The demand for business products derives from the demand for final consumer products. 321) C Total industry demand for business products is fairly inelastic, as firms need to buy what they need in order to produce their products. However, sharp business buyers try to buy as economically as possible, so the demand facing individual sellers may be extremely elastic if similar products are available at a lower price. 322) B Version 1

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The demand for business products derives from the demand for final consumer products. 323) B An expense item is a product whose total cost is treated as a business expense in the year it's purchased. A capital item is a long-lasting product that can be used and depreciated for many years. 324) E An expense item is a product whose total cost is treated as a business expense in the year it's purchased. 325) A A capital item is a long-lasting product that can be used and depreciated for many years—e.g., automobiles, machinery, etc. 326) D The demand for business products derives from the demand for final consumer products. Installations are a boom-or-bust business. During growth periods, firms may buy installations to increase capacity; but during a downswing, sales fall sharply. Installations are often rented or leased. 327) A A capital item is a long-lasting product that can be used and depreciated for many years. 328) C The classes of business products are (1) installations, (2) accessories, (3) raw materials, (4) components, (5) supplies, and (6) professional services. 329) D

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The classes of business products are (1) installations, (2) accessories, (3) raw materials, (4) components, (5) supplies, and (6) professional services. 330) A Installations such as buildings, land rights, and major equipment are important capital items. 331) C Installations are a boom-or-bust business. During growth periods, firms may buy installations to increase capacity; but during a downswing, sales fall off sharply. 332) D Multiple buying influence is displayed in one-of-a-kind installations like custom-made machines and generally requires special negotiations for each sale. Negotiations often involve top management and can stretch over months or even years. 333) D One-of-a-kind installations like office buildings and custom-made machines generally require special negotiations for each sale. Negotiations often involve top management and can stretch over months or even years. 334) A Installations are a boom-or-bust business. During growth periods, firms may buy installations to increase capacity; but during a downswing, sales fall off sharply. 335) B For installations, multiple buying influence and new-task buying are common. Version 1

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336) B Installations such as buildings, land rights, and major equipment are important capital items where multiple buying influence and new-task buying are common. 337) E Accessories are short-lived capital items that cost less and last a shorter time than installations. Accessories are more standardized than installations, and they're usually needed by more customers. 338) A Accessories are short-lived capital items that cost less and last a shorter time than installations. 339) D Accessories are more standardized than installations and they're usually needed by more customers. 340) B Accessories are more standardized than installations and they're usually needed by more customers. Sellers of accessories face more competitors than sellers of installations. 341) A Multiple buying influence is less important in the purchase of accessory equipment than for installations, since accessory equipment costs less and lasts a shorter time. 342) A Accessories are short-lived capital items such as tools and equipment used in production or office activities. 343) C

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Accessories are short-lived capital items such as tools and equipment used in production or office activities. 344) A Accessories are short-lived capital items such as tools and equipment used in production or office activities. 345) B Accessory equipment needs fairly widespread distribution and numerous contacts by experienced and sometimes technically trained personnel; price competition is often intense, but quality is important. 346) E An expense item is a product whose total cost is treated as a business expense in the year it's purchased. All the items mentioned here are treated as expense items. 347) E Raw materials are unprocessed expense items that are moved to the next production process with little handling. There are two types of raw materials: (1) farm products and (2) natural products. They eventually become part of a physical product. 348) B The need for grading is one of the important differences between raw materials and other business products. Nature produces what it will; but it must be sorted and graded to satisfy various market segments. 349) E Raw materials need to be graded. Nature produces what it will; but it must be sorted and graded to satisfy various market segments. Most buyers of raw materials want ample supplies in the right grades for specific uses, such as in the case of vegetables. Version 1

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350) E Raw materials are unprocessed expense items such as logs, iron ore, and wheat that are moved to the next production process with little handling. 351) B Raw materials are unprocessed expense items such as logs, iron ore, and wheat that are moved to the next production process with little handling. 352) E Raw materials are unprocessed expense items such as logs, iron ore, wheat, and cattle that are moved to the next production process with little handling. 353) B Raw materials are unprocessed expense items such as logs, iron ore, and wheat that are moved to the next production process with little handling. Grease is a maintenance and operating supply, not a raw material. 354) B Component materials are items such as wire, plastic, or textiles. They have already been processed but must be processed further before becoming part of the final product. 355) C Component materials are items such as wire, plastic, or textiles. They have already been processed but must be processed further before becoming part of the final product. Copper ore is a raw material, not a component material. 356) C Component parts are finished or nearly finished items that are ready for assembly into the final product. 357) B Version 1

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Component parts are finished or nearly finished items that are ready for assembly into the final product. 358) A Component parts are finished or nearly finished items that are ready for assembly into the final product. 359) B Component parts are finished or nearly finished items that are ready for assembly into the final product. 360) E The original equipment market and aftermarket are separate target markets. Since component parts go into finished products, a replacement market often develops. Car tires are components originally sold in the original equipment market that become consumer products in the aftermarket. Quality is important with components and requires dependable suppliers. 361) C Component parts are finished or nearly finished items that are ready for assembly into the final product. 362) A OEM stands for original equipment market. Car tires are components originally sold in the OEM that become consumer products in the aftermarket. 363) C Because component parts go into finished products, a replacement product often develops. The components Edward bought were sold in the original equipment market (OEM) but then became consumer products in the aftermarket. Version 1

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364) B Supplies are necessary expense items that do not become part of a finished product. 365) E Supplies are expense items that do not become part of a finished product. Supplies can be divided into three types: (1) maintenance, (2) repair, and (3) operating supplies—giving them their common name, MRO supplies. 366) A In this example, Nebula Co. is outsourcing. Managers compare the cost of buying professional services outside the firm (outsourcing) to the cost of having company people do them. Work that was previously done by an employee is now often purchased from an independent specialist. 367) E Buying professional services outside the firm is known as outsourcing. Work that was previously done by an employee is now often purchased from an independent specialist. 368) A Supplies can be divided into three types: (1) maintenance, (2) repair, and (3) operating supplies—giving them their common name, MRO supplies. 369) D Supplies can be divided into three types: (1) maintenance, (2) repair, and (3) operating supplies. Professional supplies are not included. 370) B Supplies are expense items that do not become part of a finished product. Version 1

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371) B Maintenance and small operating supplies are like convenience products. The items will be ordered because they are needed, but buyers won't spend much time on the purchase. 372) D Operating supplies are not called accessories. They are to business buyers what convenience products are to final consumers. 373) E For maintenance and small operating supplies, breadth of assortment, the seller's dependability, and branding are important. These products have many suppliers and are often purchased via online catalog sites. Important operating supplies may receive special treatment. But newtask buying is not typical for most small operating supplies or for maintenance and repair supplies. They are often handled as straight rebuys. 374) B Small operating supplies require widespread delivery, and repair items require fast delivery. Important operating supplies, like coal and fuel oil, require several sources. 375) E Professional services are specialized services that support a firm's operations and are usually treated as expense items. Managers compare the cost of having company people do them to the large number of professional service providers available. 376) E Professional services are specialized services that support a firm's operations. Quality-control procedures help a firm improve its operations. Version 1

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377) C Advertising agencies offer professional services. Professional services are specialized services that support a firm's operations. 378) B Bankruptcy advice is a form of professional service. Professional services are specialized services that support a firm's operations. 379) E In general, product quality, breadth of assortment, and reliability are more important to firms than price. Professional services aim at improving an organization; therefore, firms are not very price sensitive. 380) A Business product classes are based on how buyers think about products and how the products will be used. 381) B Business product classes are based on how buyers think about products and how the products will be used. 382) A Staples are products that are bought often, routinely, and without much thought—like breakfast cereal or canned soup. 383) C Specialty products are consumer products that the customer really wants and makes a special effort to find. 384) B Homogeneous shopping products are shopping products the customer sees as basically the same and wants at the lowest price. 385) E Version 1

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In-store demonstrations would be ideal to attract that segment of the market that is completely unfamiliar with the brand. 386) C Loyalists view the product as a specialty product. They are willing to go out of their way and make a special effort to find the product. 387) C Deal prone consumers view the product as a homogeneous shopping product. The customer sees them as basically the same and wants at the lowest price. 388) E Brand insistence means customers insist on a firm's branded product and are willing to search for it. 389) B Brand recognition means that customers remember the brand. This may not seem like much, but it can be a big advantage if there are many "nothing" brands on the market. 390) C Brand preference means that target customers usually choose the brand over other brands, perhaps out of habit or because of favorable past experience. 391) B Brand rejection means that potential customers won't buy a brand unless its image is changed. 392) C Brand nonrecognition means final consumers don't recognize a brand at all. The "SDF who?" target market falls under this category.

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393) D A family brand is one in which several products are known by the same brand name. 394) A Private brands (or private label), also called dealer brands, are brands that are created by intermediaries. 395) B A company uses individual brands—separate brand names for each product—when it's important for the products to each have a separate identity, as when products vary in quality or type.

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CHAPTER 9 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The product life-cycle concept is concerned with planning for product recycling to protect the environment. ⊚ ⊚

true false

2) The product life cycle describes the stages a new product idea goes through from beginning to end. ⊚ ⊚

true false

3) The product life cycle is the four stages a new product idea goes through from beginning to end. ⊚ ⊚

true false

4) Market introduction, market growth, market maturity, and sales decline are the four stages of the product life cycle. ⊚ ⊚

true false

5) During the various stages of the product life cycle, the attitudes and needs of target customers do not change. ⊚ ⊚

true false

Sales and profits generally decrease continually throughout the product life cycle. ⊚ ⊚

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true false

Sales and profits usually move together over time during the product life cycle. ⊚ ⊚

true false

8) In the market introduction stage, sales are low as a new idea is first introduced to a market. ⊚ ⊚

true false

9) The market introduction stage of the product life cycle is usually marked by losses, as money is being invested in the hope of future profits. ⊚ ⊚

true false

10) In the market growth stage of the product life cycle, firms usually earn smaller profits than they did in the market introduction stage, because new competitors enter the market. ⊚ ⊚

true false

11) During the market growth stage of the product life cycle, industry profits usually reach their peak and begin to decline. ⊚ ⊚

true false

12) The market maturity stage of the product life cycle has very low promotion expenditures, little price competition, and rising industry profits. ⊚ ⊚

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true false

13) Industry profits usually decline steadily during the market maturity stage of the product life cycle. ⊚ ⊚

true false

14) The market maturity stage of the product life cycle rarely lasts more than one or two months. ⊚ ⊚

15)

true false

During the sales decline stage of the product life cycle, no firm can earn a profit. ⊚ ⊚

true false

16) It is still possible for a firm to earn a profit if it operates in the sales decline stage of the product life cycle. ⊚ ⊚

true false

17) Product life cycles describe industry sales and profits within a particular product-market, and not the sales and profits of individual brands. ⊚ ⊚

18)

true false

The sales and profits of an individual brand always follow the life-cycle pattern. ⊚ ⊚

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true false

19) The product life cycle shows that sales of an individual firm's brand follows a general pattern—which is very useful for marketing strategy planning. ⊚ ⊚

true false

20) The sales and profits of an individual brand may or may not follow the life-cycle pattern of the product idea. ⊚ ⊚

21)

A product idea may be in a different life-cycle stage in different markets. ⊚ ⊚

22)

true false

A firm may introduce or withdraw a product during any stage of the product life cycle. ⊚ ⊚

true false

23) It is possible for a firm with a mature product in the U.S. to experience new growth with the same product in international markets. ⊚ ⊚

true false

24) It is easy for marketing managers to predict how long a product or brand will stay in each stage of the product life cycle. ⊚ ⊚

25)

true false

The length of each stage in the product life cycle is set.

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⊚ ⊚

26)

true false

The product life-cycle concept tells a manager how long each stage of the cycle will last. ⊚ ⊚

true false

27) The smaller the comparative advantage of a new product over those already on the market, the faster its sales will grow. ⊚ ⊚

true false

28) Sales growth is faster when a new product is easy to use and its advantages are easy to communicate. ⊚ ⊚

true false

29) Sales growth is usually faster when the product is incompatible with the past values and experience of the target market. ⊚ ⊚

30)

true false

In general, product life cycles appear to be getting longer in recent years. ⊚ ⊚

true false

31) Firms should try to develop marketing mixes that make the most of the market growth stage of the product life cycle—when profits are highest. ⊚ ⊚

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true false

32) The stage of the product life cycle in which competitors are most likely to introduce product improvements is the market growth stage. ⊚ ⊚

33)

Fashion-related products tend to have short life cycles. ⊚ ⊚

34)

true false

A fad cycle is shorter than a fashion cycle. ⊚ ⊚

37)

true false

Fad products are characterized by popular styles, and they appeal to the mass market. ⊚ ⊚

36)

true false

A fad is an idea that is fashionable only to certain groups who are enthusiastic about it. ⊚ ⊚

35)

true false

The probable length of the product life cycle has little effect on strategy planning. ⊚ ⊚

true false

38) Marketing strategy planning for a product depends on where the product is in its life cycle and how fast it is moving to the next stage.

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⊚ ⊚

true false

39) When introducing a really new product, the marketer should be concerned about building channels of distribution but not about promotion. ⊚ ⊚

true false

40) How quickly a new product will be accepted by customers and how quickly competitors will follow with their own version of a product are important factors when planning the best strategy for a new product. ⊚ ⊚

true false

41) When a firm's product has won loyal customers, it can be successful for a long time— even in a mature or declining market. ⊚ ⊚

42)

The strategies for all stages of the product life cycle should be growth strategies. ⊚ ⊚

43)

true false

If the prospects in a product-market are poor, a firm may need a "phase out" strategy. ⊚ ⊚

44)

true false

A product that is new in any way for the company concerned is a new product. ⊚ ⊚

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true false

45)

Variations on an existing product idea can make a product new. ⊚ ⊚

true false

46) To be called "new" according to the FTC, a product must be entirely new or changed in a functionally significant or substantial respect. ⊚ ⊚

true false

47) Both patent and copyright law are designed to protect inventors and provide an incentive for innovation. ⊚ ⊚

true false

48) Discontinuous innovations require that customers change behavior to a much greater extent, as compared to dynamically continuous innovations. ⊚ ⊚

49)

true false

A continuous innovation requires significant change in customer behavior. ⊚ ⊚

true false

50) The risks and costs of failure in new-product development are minor when one considers the likely rewards. ⊚ ⊚

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true false

51)

Experts estimate that 80 to 95 percent of all new consumer packaged-goods brands fail. ⊚ ⊚

true false

52) A new-product development process helps make sure that new ideas for products are carefully studied and that good ideas are marketed profitably. ⊚ ⊚

true false

53) In the new-product development process, the burden is on the new-product idea to prove itself or be rejected. ⊚ ⊚

54)

true false

The first step in new-product development is evaluating ideas. ⊚ ⊚

true false

55) When planning new products, managers need not be too concerned about safe design, because it is each consumer's responsibility to decide what products are safe to buy and use. ⊚ ⊚

true false

56) Even in a full-scale market test, the firm is testing only the product, not the whole marketing mix. ⊚ ⊚

true false

57) Market testing can be risky because it gives information to competitors—but not testing may be even riskier.

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⊚ ⊚

true false

58) A high percentage of new-product ideas survive to the commercialization step in the new-product development process. ⊚ ⊚

true false

59) If an individual is injured by a defective or unsafely designed product, the seller's legal obligation to pay damages is called product liability. ⊚ ⊚

true false

60) Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products. ⊚ ⊚

true false

61) Relative to most other countries, the United States has very strict product liability standards. ⊚ ⊚

true false

62) In general, top-management support is needed for successful new-product development efforts. ⊚ ⊚

true false

63) New-product development usually fits into the old routines of a firm, so it is not necessary for top management to support new-product development in any special way.

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⊚ ⊚

true false

64) Brand managers manage specific products, often taking over the jobs formerly handled by an advertising manager. ⊚ ⊚

true false

65) Product managers or brand managers are most often found in firms with only one or a few related products. ⊚ ⊚

66)

true false

Product managers are especially common in small, single-product companies. ⊚ ⊚

true false

67) When a large firm has several different kinds of products, product managers or brand managers may be put in charge of each one. ⊚ ⊚

68)

true false

Product managers can be instrumental in adapting products for international markets. ⊚ ⊚

true false

69) The total quality management approach recognizes that defects are an inevitable part of mass production, and that the cost of replacing defective goods is just a cost of doing business. ⊚ ⊚

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true false

70) The Japanese experience showed that one of the biggest costs of poor quality is lost customers. ⊚ ⊚

true false

71) Due to the success of artificial intelligence, the collection of data for the purposes of quality improvement has become obsolete. ⊚ ⊚

72)

true false

The cost of replacing defective parts is the biggest cost of poor quality. ⊚ ⊚

true false

73) With total quality management (TQM), a company's management makes the marketing department solely responsible for quality and customer service. ⊚ ⊚

74)

true false

Total quality management can be used to improve any implementation effort. ⊚ ⊚

true false

75) "Continuous improvement" means a commitment to constantly make things better—one step at a time. ⊚ ⊚

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true false

76) Simply showing customer-contact employees around the rest of the business—so that they learn how their contribution fits in the total effort—can be a key part of their training. ⊚ ⊚

true false

77) Total quality management applies when the firm's product is a physical good, but not when it is a service. ⊚ ⊚

true false

78) The two keys to improving how people implement quality service are: (1) training and (2) more inspectors. ⊚ ⊚

79)

true false

Empowerment means giving employees the authority to correct a problem on their own. ⊚ ⊚

true false

80) The money spent to improve quality should not only satisfy customers but also justify the cost through improved profit. ⊚ ⊚

true false

81) A manager shouldn't worry about making a financial return from money spent on a quality program as long as customers recognize that the quality is high. ⊚ ⊚

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true false

82) Artificial intelligence only endangers those service jobs that involve routine and repetitive tasks. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 83) Which of the following statements is true of how innovation and market changes create opportunities? A) Market changes due to product innovations lead to fewer opportunities for marketing managers. B) Products, customer behavior, and competition vary over time. C) Marketing managers should avoid seeking innovations, as they only pose challenges to a firm and are not essential to a firm's success. D) Managers should design new products to meet their own needs rather than meeting the needs of the target market.

84)

The product life cycle is divided into four major stages. These are A) market penetration, market growth, market maturity, and sales decline. B) market introduction, market growth, market maturity, and sales decline. C) concept introduction, market decline, market maturity, and sales decline. D) ideation, market growth, market maturity, and investment decline. E) market introduction, profit growth, market maturity, and profit decline.

85) As a firm's product moves along the product life cycle, marketing managers can expect all of the following to occur except

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A) potential changes in customers' attitudes and needs. B) the necessity of changes to the firm's marketing mix. C) a shift in the competitive environment toward pure competition or oligopoly. D) increasing industry profits until total product sales finally reach their decline. E) total product sales peaking at the market maturity stage.

86) The stage of the product life cycle characterized by informative promotion but little customer awareness of a product is A) market introduction. B) market growth. C) market maturity. D) sales decline. E) market extinction.

87) In the 1990s, DVDs replaced audiocassettes and floppy disks as the storage media of choice for music and computers. At which stage of the product life cycle is the DVD today? A) market introduction B) market growth C) market immaturity D) sales decline E) market extinction

88) Competition for a product or product category begins to increase rapidly during the ________ stage of the product life cycle. A) market introduction B) market growth C) market maturity D) sales decline E) market extinction

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89)

Competitors that begin to see the success of a new product or product category typically A) invest heavily in R&D to pioneer a new innovative product of their own. B) quickly enter the market with a replica of the most successful good or service. C) sue the firm for creating the product innovation. D) invest in that company's stock. E) launch negative publicity campaigns to harm the innovation's chances of success.

90)

Industry profits decline during the market maturity stage, due to A) declining sales and dipping promotion costs. B) declining competition and declining manufacturing costs. C) mismanaged budgets and price stabilization. D) increased competitive pressure to cut prices. E) the sale of shoddy varieties of the original product.

91)

Which of the following is least related to the product life-cycle pattern? A) sales and profits of a particular individual brand or product in the market B) industry sales and profits for a product idea within a particular product-market C) growth and subsequent decline of sales for a product category D) the impact of increased competition on a new product idea over time E) the need for marketers to adjust their marketing mixes for a product category

92)

The product life cycle A) describes the stages a new-product idea goes through from beginning to end. B) has five major stages. C) applies more to individual brands than to categories or types of products. D) shows that sales and profits tend to move together over time. E) All of the answers are correct.

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93)

As a product moves through its product life cycle, A) a firm should change its target market—but not its marketing mix. B) the competitive situation moves toward monopoly. C) industry profits keep increasing along with industry sales. D) customers' needs and attitudes may change. E) All of the answers are correct.

94)

As a product moves through its product life cycle, A) industry profits may decrease while industry sales increase. B) the nature of competition moves toward pure competition or oligopoly. C) entirely different target markets may be aimed at. D) customers' attitudes and needs may change. E) All of the answers are correct.

95)

Regarding product life cycles, a good marketing manager knows that

A) entirely different target markets may be involved at different stages. B) a product that doesn't get beyond the introduction stage is still likely to be very profitable. C) industry profits are increasing well after sales start to decline. D) once a market goes into sales decline, oligopoly conditions set in. E) All of the answers are correct.

96)

The total sales of a product by all competitors in the industry is

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A) highest in the introduction stage. B) lowest in the market maturity stage. C) highest in the sales decline stage. D) lowest in the market growth stage. E) lowest in the market introduction stage.

97)

In the market introduction stage of the product life cycle, A) sales are the highest. B) most companies experience losses. C) industry profits rise. D) industry sales level off. E) total industry profit is highest.

98)

During the market introduction stage of the product life cycle, A) large profits are typical until competition arrives. B) Price and Promotion are more important than Place and Product. C) all forms of expenditure on Place and Promotion are put on hold. D) much money is spent for Product, Place, and Promotion. E) most customers are looking for the new product.

99)

During the introduction stage of the product life cycle, A) "me-too" products quickly take market share away from the innovator. B) most products achieve intensive distribution. C) industry profits are at their highest. D) promotion is likely to be needed to build primary demand. E) None of the answers are correct.

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100) In the ________ stage of the product life cycle, organizations focus on building primary demand. A) market decline B) market maturity C) sales decline D) market growth E) market introduction

101) In which product life cycle stage must companies focus on educating potential customers about the advantages of a new-product concept? A) market establishment B) market introduction C) market growth D) market maturity E) sales decline

102) In which of the following situations is the new product entering the market introduction stage of the product life cycle? A) Porsche just introduced a new luxury sport utility vehicle to compete against sport utility vehicles made by others. B) Colgate-Palmolive just introduced a "new and improved" chemical formula for its "Total" toothpaste. C) Home Depot (a home improvement chain) just introduced its own dealer brand of paint. D) Apple introduced a first-of-its-kind computer operating system that is so "userfriendly" it responds to spoken commands. E) All of these situations show a new product entering the market introduction stage of the product life cycle.

103) 3-D televisions are new products in the U.S. market. They are in the ________ stage of the product life cycle. Version 1

A) market maturity B) market introduction C) market growth D) sales decline

104) Pfizer Corp. is introducing a truly new product idea. Pfizer is spending a lot of money to inform potential customers and intermediaries about the availability and advantages of the new product. Although sales are rising slowly, Pfizer doesn't expect the product to become profitable for at least another year. Pfizer's new product is in which stage of the product life cycle? A) market introduction B) sales decline C) market development D) market growth E) market maturity

105)

Industry profits are largest in which of the following product life-cycle stages? A) market introduction B) market growth C) market maturity D) sales decline

106)

Which stage of the product life cycle is the largest profit stage for companies? A) market introduction B) market maturity C) stagnation D) sales decline E) market growth

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107) Total industry profits reach their maximum during the ________ stage of the product life cycle. A) market maturity B) sales decline C) market development D) market introduction E) market growth

108) It is toward the end of the ________ stage of the product life cycle when industry profits begin to decline. A) market maturity B) market introduction C) market growth D) sales decline E) market decline

109)

At which stage of the product life cycle do industry profits start to decline? A) market maturity B) market introduction C) market growth D) stagnation E) sales decline

110)

In the market growth stage of the product life cycle,

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A) competing products appear the same to consumers. B) distribution moves from intensive to selective. C) many competitors drop out of the market. D) total industry sales increase very slowly. E) industry profits reach their peak and then decline.

111)

Regarding product life cycles, good marketing managers know that A) all competitors lose money during the sales decline stage. B) they are getting longer and profit margins are widening. C) industry sales reach their maximum during the market growth stage. D) firms earn their biggest profits during the market introduction stage. E) industry profits reach their maximum during the market growth stage.

112) Cargill, Inc. is finally earning a profit on the unique product it introduced six months ago. Cargill's advertising is both informative and persuasive. Much money is being spent on Place development. There is little price competition, although several competitors have come out with reasonable imitations. Total industry sales and profits are both rising. In which stage of the product life cycle is Cargill operating? A) market growth B) market introduction C) sales decline D) market maturity E) market development

113) Acme Corporation is currently experiencing rising sales for a new-product idea it pioneered several months ago. Profits are also increasing, so other competitors are now entering the market with similar products. The competitive situation is changing from monopoly to monopolistic competition. In which stage of the product life cycle is Acme Corporation operating?

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A) market establishment B) market introduction C) market growth D) market maturity E) sales decline

114)

Which of the following statements about the stages of the product life cycle is false? A) The market introduction stage can be seen as investing in the future. B) In the market growth stage, profits keep rising steadily with no sign of decline. C) Sales level off and profits continue to go down in the market maturity stage. D) The sales decline stage can be seen as a time of replacement. E) Industry profits go down throughout the market maturity stage.

115)

Industry sales are highest in which of the following product life-cycle stages? A) market growth B) market development C) market maturity D) sales decline E) market introduction

116) Health Care Products Company has noticed that in one of its product-markets, industry sales have leveled off and competition has been tougher than ever. This product-market appears to be in the ________ stage of the product life cycle. A) market maturity B) market introduction C) market growth D) sales decline E) market decline

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117)

Competition is toughest in which of the following product life cycle stages? A) market introduction B) market growth C) market maturity D) market development E) market hold

118)

Marketing managers should recognize that

A) product life cycles appear to be getting longer. B) every segment within a market has the same product life cycle. C) the product life cycle describes the sales and profits of individual products, not industry sales and profits. D) firms that enter mature markets have to compete with established firms for declining industry profits. E) None of the answers are correct.

119)

Regarding product life-cycle planning, good marketing managers know that A) competing firms may introduce a product during any stage of the product life cycle. B) every brand must go through the sales decline stage. C) market introduction is usually profitable for the innovator. D) any change in an existing product results in a new product life cycle. E) All of the answers are correct.

120)

Which of the following observations concerning the market maturity stage is false?

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A) Many aggressive competitors have entered the race for profits. B) There is a long-run downward pressure on prices. C) New firms cannot enter the market at this stage. D) Promotion costs rise and some competitors cut prices to attract business. E) Persuasive promotion becomes more important during this stage.

121)

During the market maturity stage of the product life cycle, A) some competitors drop out of the market, and no new firms enter. B) persuasive promotion becomes more important. C) promotion emphasizes the advantages of the basic product concept. D) total industry sales and profits reach their maximum levels. E) None of these answers are correct.

122)

Regarding product life cycles, which of the following is false?

A) Industry profits are likely to level off or decline before sales level off. B) The level of promotion usually decreases in the market maturity stage, since there is less revenue to cover the cost. C) Many close substitutes are usually competing in the market maturity stage. D) It is usually expensive for a new firm to enter in the market maturity stage. E) There is downward pressure on prices over time.

123)

Persuasive promotion is especially important in which product life-cycle stage? A) market maturity B) sales decline C) market introduction D) market growth E) market decline

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124) An industry's sales have leveled off and profits are declining in oligopolistic competition. Consumers see competing products as homogeneous. Several firms have dropped out of the industry, but a new one entered recently. Firms in the industry are trying to avoid price-cutting by spending on persuasive advertising. These firms are competing in which stage of the product life cycle? A) market growth B) market maturity C) market development D) market introduction E) sales decline

125) Over the past several years General Motors (GM), like other auto manufacturers, has introduced many new models of sport utility vehicles (SUVs) in all its major divisions. This proliferation of SUVs and an increase in gasoline prices have caused sales to level off. In response, GM offered rebates of up to $5,000 or no-interest financing on selected models of SUVs. The largest rebates went to current owners of GM vehicles, so that they would replace their current vehicles with a GM model instead of switching to another brand. The rebates have been heavily advertised on national television. Profit margins per vehicle have shrunk as a result of these costly promotions. In which stage of the product life cycle is GM currently operating? A) market establishment B) market introduction C) market growth D) market maturity E) sales decline

126)

During the sales decline stage of the product life cycle, A) good product differentiation is profitable. B) across the board, no profits are earned. C) price competition usually declines. D) brand loyalty declines rapidly. E) monopoly is a typical end result.

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127)

During the sales decline stage, A) price competition from dying products is reduced. B) profits are nonexistent. C) new products replace the old. D) profits increase and then decrease. E) None of the answers are correct.

128) Midway, Inc. has seen most of its competitors drop out of its product-market due to declining industry sales and profits. But Midway still has considerable demand for its product from a small group of loyal customers. This product-market is in which product life-cycle stage? A) market introduction B) market maturity C) market development D) market growth E) sales decline

129)

At which stage of the product life cycle are DVD players today? A) stagnation B) market introduction C) sales decline D) market maturity E) market growth

130)

Product life cycle refers to the life of a

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A) firm's individual product. B) product idea. C) firm's brand. D) fashion. E) Any of these answers could be correct.

131)

Product life cycles are concerned with sales and profits A) in generic markets, not individual product-markets. B) of a firm's individual products or brands. C) of goods but not services. D) in a product-market. E) None of the answers are correct.

132)

Which of the following observations concerning the product life cycle is false?

A) Product life cycles are industry sales and profits for a product idea within a particular product-market. B) The sales and profits of an individual brand follow the life-cycle pattern. C) A product idea may be in a different life-cycle stage in different markets. D) A given firm may introduce or drop a specific product during any stage of the product life cycle.

133)

Regarding product life cycles, which of the following is true? A) Industry sales and profits tend to reach their maximum during the market maturity

stage. B) Product life cycles are industry sales and profits within some product-market. C) Product life cycles are generally getting shorter and cannot be extended. D) Every new brand must pass through all four stages of the product life cycle. E) All of the answers are correct.

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134)

When thinking about the product life cycle, a good manager knows that

A) sales and profits for individual brands always follow the same life-cycle pattern as industry sales and profits. B) the only stage in which products are introduced is the market introduction stage. C) all products will eventually earn a profit. D) a product that is mature in one market may be in the growth stage in another international market. E) None of the answers are correct.

135)

The shape, length, and current stage of a product life cycle may vary depending on A) how the market is defined. B) the nature of the competition. C) the nature of the products involved. D) All of the answers are correct.

136)

Which of the following is true regarding product life cycles? A) Each of a producer's individual products follows the life-cycle pattern. B) In the early part of market maturity, new products begin to replace the old. C) The stages usually have varying lengths. D) In general, life cycles are getting longer. E) None of the answers are correct.

137) A new-product idea is more likely to move quickly through the early stages of the product life cycle when the product

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A) is easy to use. B) is compatible with the values and experiences of target customers. C) can be given a trial. D) has advantages that are easy to communicate. E) All of the answers are correct.

138) A new-product idea moves through the early stages of the life cycle more quickly when it has all the following characteristics except A) being easy to use. B) being available for trial on a limited basis, without a great deal of risk to the customer. C) having no competitive advantage over those already in the market. D) being compatible with the values and experiences of target customers. E) having advantages that are easy to communicate.

139)

Product life cycles are A) getting longer. B) speeding up in the later stages. C) now about the same length as they were a hundred years ago. D) getting shorter. E) slowing down in the early stages.

140)

Product life cycles A) last five years for each product idea. B) average 90 days. C) are very long for movies. D) vary in length but are generally getting shorter. E) are identical in length across all geographic regions.

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141)

Which of the following statements about the product life cycle is false?

A) How long a whole product life cycle takes, and the length of each stage, varies a lot across products. B) Although the life of different products varies, on average product life cycles are getting longer. C) The greater the comparative advantage of a new product over those already on the market, the more rapidly its sales will grow. D) If the product can be tried on a limited basis, without a lot of risk to the customer, it can usually be introduced more quickly. E) A product idea may be in a different life-cycle stage in different markets.

142) Because firms must be developing new products all the time, which of the following statements is true? A) Competitors are likely to rapidly introduce product improvements in the market growth stage. B) The developed economies experience technological advances more rapidly than the less-developed economies. C) Although the life of different products varies, product life cycles are getting shorter. D) One new invention may make possible many new products to replace old ones. E) All of the answers are correct.

143) Which of the following statements about pioneers, second-movers, and followers is false? A) A pioneer is the first to market with a new product idea. B) On average, pioneers are usually more profitable than followers. C) Second-movers typically have a strong customer focus. D) Second-movers that respond quickly build market share in the market growth stage.

144)

Fashion is the currently accepted or popular

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A) trend. B) idea. C) fad. D) assortment. E) style.

145) An idea that is fashionable only to certain groups who are enthusiastic about it is referred to as a A) fad. B) fashion. C) liability. D) brand. E) prototype.

146) A few years ago, elementary school students were so obsessed with a small device called a fidget spinner that stores sold out of them. Now, you can find them anywhere, but the kids are no longer interested. The fidget spinners can best be described as a A) fad. B) fashion. C) trend. D) movement. E) mania.

147)

A good marketing manager knows that A) a fashion is the currently accepted or popular style. B) the faster fashions change, the harder marketing strategy planning is. C) fashion-related products have short life cycles. D) a fad is even more short-lived than a fashion. E) All of the answers are correct.

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148) When a marketing manager notices that customer reaction to a new product does not meet expectations, the marketing manager must be prepared to ________, or move to a new marketing mix. A) pivot B) discontinue C) prototype D) revitalize E) roast

149) When planning for the different stages of the product life cycle, managers should remember that A) sometimes competitors can help to build customer interest in a new-product idea. B) the correct strategy depends on how quickly the new idea will be accepted by consumers. C) a firm that can change its strategy quickly may have an advantage over less-flexible competitors. D) not all new-product ideas catch on with consumers or intermediaries. E) All of the answers are correct.

150)

What is the focus of promotional activity during the market growth stage? A) persuading B) reminding C) building primary demand D) pioneering E) penetration

151) Which of the following is a strategy that a marketing manager is most likelyto use in the market growth stage?

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A) building brand familiarity B) penetration pricing to develop customer loyalty C) moving toward intensive distribution D) price slashing E) developing new ways to use the product

152) Which of the following describes a change that is less likely as a product moves through the later stages of the product life cycle? A) Place: move toward selective distribution B) Promotion: build selective demand C) Price: meet competition D) in terms of competitive situation: head toward pure competition E) Product: some drop out

153)

As a product moves into the market maturity stage of the product life cycle, A) consumers tend to view products as being more similar. B) the competitive situation moves toward monopoly. C) promotion emphasizes informing consumers more than persuading them. D) there is less consideration of competition in setting prices. E) None of the answers are correct.

154) As a product moves into the market maturity stage of its life cycle, the marketing manager should A) try to build primary demand. B) move toward exclusive distribution. C) expect the market to move toward pure competition. D) emphasize promotion that informs rather than persuades. E) None of the answers are correct.

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155) When moving into the market maturity stage of the product life cycle, a firm might be able to obtain a competitive advantage A) with lower production costs. B) by being more successful at promotion. C) by having a slightly better product than competitors. D) All of the answers are correct.

156) Which of the following is a useful plan during the market maturity stage of the product life cycle? A) Disregard changes in customer behavior. B) Slash product prices to maintain market share. C) Eliminate points of differentiation to increase market share. D) Phase out products for more market penetration. E) Disregard all forms of competitor behavior.

157)

Regarding product life cycles, good marketing managers know that A) all new brands start off in the market introduction stage. B) product life cycles can be extended through product modifications. C) a product must pass through all the product life-cycle stages. D) no strategy planning is needed during the sales decline stage. E) a firm should use penetration pricing during market introduction.

158)

Which of the following statements about the product life cycle is true?

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A) Profits and sales begin to decline in the maturity stage. B) Individual products may enter and leave the market at any stage. C) A successful introduction almost guarantees that the product will remain a success over the life cycle. D) Phasing out a dying product is not a strategy. E) None of the answers are correct.

159)

Regarding product life cycles, good marketing managers know that A) any new brand must start off in the market introduction stage. B) any product modification results in a new-product life cycle. C) product life cycles cannot be extended. D) a firm's product can be withdrawn before its related product life cycle is over. E) All of the answers are correct.

160)

The need for phasing out becomes most obvious in the ________ stage. A) market introduction B) market maturity C) market growth D) sales decline E) inventory decline

161) true?

Which statement about products in the sales decline stage of the product life cycle is

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A) Brand managers should phase out this product as quickly as possible. B) A declining product may still be profitable for some time and it might be more appropriate to phase out this product gradually. C) Customers will always abandon the declining product immediately if an alternative is available. D) Phasing out a product at this time is fairly easy, and this strategy will cut future losses. E) None of these statements is true.

162)

According to the text, a new product is one that is A) physically changed. B) unique. C) new in any way for the company concerned. D) completely new, physically and conceptually. E) None of the answers are correct.

163) If a producer does not have a new-product development process, it ultimately means that the firm A) lacks financial resources. B) does not want to be profitable. C) will survive on current products until going out of business. D) is incapable of innovation. E) can survive on old products indefinitely.

164) New products that are minor variations on existing products and which require no change to consumer behavior are called

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A) fads. B) new products. C) second-movers. D) discontinuous innovations. E) continuous innovations.

165) A ________ is a type of innovative product that requires customers adopting the innovation to significantly change their behavior. A) fad innovation B) dynamically continuous innovation C) discontinuous innovation D) continuous innovation E) behavior-change innovation

166) Which of the following scenarios illustrates how really new product ideas disrupt the old ways of doing things? A) a firm's introduction of a new digital video recorder that makes videocassette recorders for TVs obsolete B) a firm's introduction of a new range of cell phones that have better features than those offered by its competitors C) the addition of a new flavored breakfast cereal to a firm's existing line of breakfast cereals D) the removal of an existing product from a firm's line of perfumes because it isn't producing much profit E) the way in which the QWERTY keyboard on smart phones reflects the order of letters on manual typewriters

167) By law, a firm may call a new product "new" for only a stipulated period of time. Such regulations are established by the

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A) Environmental Protection Agency (EPA). B) Federal Trade Commission (FTC). C) Consumer Product Safety Commission (CPSC). D) Food and Drug Administration (FDA). E) U.S. Department of Justice (DOJ).

168)

Which of the following is an example of a new product? A) an existing product that has been modified in some way B) an existing product for which new uses have been found in other product markets C) a wholly new product idea D) an existing product being offered to new markets E) All of the answers are correct.

169)

Which of the following is true with regard to how a new product is defined?

A) A product should be considered "new" if it is new in any way for the company concerned. B) The FTC would not call an existing product new, even if it were changed in a functionally significant way. C) There is no legal limit on how long a product can be called "new." D) A new product must be totally different before it can be called a "new product." E) All of the answers are correct.

170)

According to the FTC, for a producer to call a product "new," the product must A) be no more than two months old. B) have achieved brand insistence. C) be entirely new or changed in a functionally significant or substantial respect. D) have been changed in some way during the past year. E) None of the answers are correct.

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171)

According to the Federal Trade Commission (FTC), a new product is A) only new for twelve months. B) only new for two months. C) entirely new or changed in a functionally different or substantial respect. D) something that is new in any way for the company concerned. E) None of the answers are correct.

172)

The introduction of a new flavor of Dr. Pepper is an example of a A) practical innovation. B) dynamic innovation. C) continuous innovation. D) discontinuous innovation. E) trivial innovation.

173)

Which of the following statements about new products is false?

A) In order for it to be advertised as "new," there should be a functionally significant change in the product—according to the FTC. B) A product should be considered "new" by a particular firm if it is new in any way for that company. C) The FTC considers six months the maximum amount of time that a product should be called "new." D) According to the FTC, a product may be called "new" as long as the firm has made at least some minor change in the package or product. E) A marketing manager should consider a product new if it is aimed at new markets.

174) Seeking to stop declining sales for an established mouthwash, a sales manager suggests that new coloring be added to the product and a major promotion effort be started for the "new" product. The Federal Trade Commission would

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A) be concerned about the possibility of the firm getting a monopoly. B) allow the company to call the product "new" for only six months. C) probably not approve of this at all because the product doesn't meet the FTC's definition of "new." D) allow the promotion effort if it felt that consumers would think the coloring made it "new." E) None of the answers are correct.

175) Sales of a producer's wax paper food-wrap are declining fast. The advertising manager— looking for a way to attract attention to the brand—suggests changing the package somewhat and promoting it as a "new" product. The Federal Trade Commission would A) allow the company to call the product "new" for only six months. B) probably not approve of this at all. C) allow the advertising campaign if it concluded that consumers thought the different package made it new. D) not pay any attention to this firm, as the FTC does not regulate advertising. E) None of the answers are correct.

176) Which of the following gives an inventor of a new product the ability to “exclude others from making, using, offering for sale, or selling the invention”? A) patent B) planned obsolescence C) trademark D) copyright E) service mark

177)

The objective of patent law is to

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A) incentivize inventors to share their technology by providing a short-term monopoly on its use. B) protect the creators of literary works by giving them exclusive rights to reproduce their work. C) encourage companies to release new products that it will soon replace with improved new versions. D) ensure that customers are involved in the innovation process. E) safeguard consumers from product defects.

178) _______ law protects the producer of a creative work by giving them exclusive rights to reproduce the work. A) Copyright B) Patent C) Trademark D) Media E) Trade secret

179)

Which of the following is a common cause of new-product failures?

A) The product fails to offer the customer a unique benefit. B) The company tries to follow an organized new-product development process rather than using a faster and more spontaneous "race-to-market" approach. C) The managers worry too much about the competition. D) The company delays putting the product on the market until it develops a complete marketing plan. E) All of the answers are correct.

180) Which of the following statements does not accurately characterize new-product development?

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A) New-product development is costly. B) Some companies move too fast to launch a new product. C) Some companies move too slow to launch a new product. D) New-product development has a high risk of failure. E) New-product development has a low risk of failure.

181) E-commerce jewelry retailer SparklesNow announces a contest, inviting its regular online members to submit contemporary jewelry designs. Winning designs and entries are chosen based on ratings and comments from other members. SparklesNow is using ________ to get new ideas from customers. A) crowdsourcing B) creative resourcing C) reverse engineering D) an idea rollout E) idea magnets

182) When new product ideas are chosen based on ratings and comments from customers, the process is called A) idea engineering. B) creative resourcing. C) reaction engineering. D) crowdsourcing. E) idea solicitation.

183) Analyzing customer comments and other companies to find new product concepts is carried out during which step of the new-product development process?

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A) idea generation B) screening C) idea evaluation D) development E) commercialization

184) The stage of the new-product development process in which marketers evaluate the firm's strengths, weaknesses, and objectives is A) idea generation. B) screening. C) idea evaluation. D) development. E) commercialization.

185) Which of the following gives the correct order of the steps in the new-product development process? A) screening, idea generation, idea evaluation, development, commercialization B) idea generation, screening, idea evaluation, development, commercialization C) idea generation, idea evaluation, development, screening, commercialization D) development, idea generation, screening, commercialization, idea evaluation E) commercialization, idea generation, idea evaluation, screening, development

186)

The last step in the new-product development process is A) idea generation. B) commercialization. C) idea evaluation. D) development. E) screening.

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187)

The stages in the new-product development process are idea generation, screening, A) idea evaluation, market research, and commercialization. B) market research, development, and commercialization. C) idea evaluation, development, and ROI estimation. D) idea evaluation, development, and commercialization. E) development, marketing mix, and ROI estimation.

188)

The new-product development process

A) is based on the idea that a firm should eliminate potentially unprofitable product ideas as early as possible. B) seeks to take as many ideas to market as possible, hoping to find a breakthrough opportunity. C) relies solely on test marketing to decide whether to drop an idea or take it to market. D) is especially important because it increases the number of new-product ideas that get to the commercialization stage. E) None of the answers are correct.

189) In the new-product development process, an ROI estimate is needed during which four stages? A) commercialization, development, idea generation, and screening B) idea generation, commercialization, development, and idea evaluation C) commercialization, idea generation, idea evaluation, and screening D) idea generation, development, idea evaluation, and screening E) commercialization, development, idea evaluation, and screening

190)

In the idea generation stage of the new-product development process,

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A) bad ideas should be discarded as soon as possible. B) using competitors as a source of ideas should be avoided. C) firms need a continuous flow of ideas. D) analysis of consumer complaints about current products is unlikely to generate any new ideas. E) None of the answers are correct.

191)

When looking for new-product ideas, which of the following would be good sources? A) your salespeople B) your intermediaries C) your competitors D) your production people E) All of the answers are correct.

192) If you are seeking new-product ideas for your business, your ________ are a good source. A) intermediaries B) customers C) production people D) salespeople E) All of the answers are correct.

193) Which of the following are an effective source of ideas at the idea generation stage of the new-product development process? A) customer complaints B) users of the product C) competitors' products D) products found in overseas markets E) All of the answers are correct.

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194)

Ideas about potential new products should

A) be encouraged from any and all sources, since only a few ideas will develop into successful products. B) not be eliminated from consideration until they have been tested in the commercialization stage. C) come primarily from employees of the firm, so that time won't be wasted evaluating product ideas that are inconsistent with the firm's objectives and resources. D) come from outside the firm, since studies show that really new ideas require a fresh perspective. E) None of the answers are correct.

195)

In the idea generation stage of the new-product development process, A) many new ideas in business markets come from competitors. B) customers are given new products to test. C) a S.W.O.T. analysis helps evaluate new product ideas. D) a firm decides which ideas to pursue based on ROI screening. E) final ROI estimates are done.

196) Regarding the idea generation stage of the new-product development process, which of the following is true? A) Business firms often get new product ideas from competitors. B) It is best to focus on only a few good ideas at this stage. C) Studying customers' ideas is not very helpful, since they tend to focus on minor technical changes in existing products. D) Most companies don't need a special procedure for seeking new-product ideas, because so many ideas are coming from so many different sources. E) None of the answers are correct.

197) New-product specialists at Whirlpool buy washing machines made by other firms and take them apart to look for new ideas. This is called Version 1

A) reverse engineering. B) positioning. C) S.W.O.T. analysis. D) concept testing. E) clustering.

198) In the ________ step of the new-product development process, a marketing manager evaluates how well the idea fits with the company's objectives. A) idea generation B) commercialization C) screening D) development E) rollout

199) Wujin Chu, marketing manager for Innovative Electronics Products, reviews a S.W.O.T. analysis to help him evaluate four new-product ideas his company is currently considering. Chu is operating in the ________ step of the new-product development process. A) idea evaluation B) development C) commercialization D) screening E) idea generation

200)

The Consumer Product Safety Commission can A) back up its orders with jail sentences. B) set safety standards for products. C) back up its orders with fines. D) order the return of "unsafe products." E) All of the answers are correct.

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201)

The Consumer Product Safety Commission A) has little power until a consumer accident occurs. B) must approve every new drug before it can be sold. C) provides product liability insurance. D) can order costly returns of products it considers unsafe. E) has very little influence over product design.

202)

As a result of passage of the Consumer Product Safety Act, A) some businesspeople may go to jail if they offer unsafe products. B) consumers will be more willing to pay for safer products in the future. C) product-related injuries will be eliminated in the future. D) producers are no longer liable for an injury if it is the consumer's fault. E) All of the answers are correct.

203)

It is outside the power of the Consumer Product Safety Commission to A) set safety standards for products. B) order repairs of unsafe products. C) order returns of unsafe products. D) back up its orders with fines and jail sentences. E) search for unsafe products in consumers' homes.

204)

In the idea evaluation stage, A) an actual product is developed. B) companies cannot estimate likely costs. C) concept testing is used to get customer reactions. D) parts of a product are designed and manufactured. E) the final ROI is estimated.

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205) Getting reactions from customers about how well a new-product idea fits their needs is called A) concept testing. B) target marketing. C) screening. D) brand positioning. E) product liability.

206)

Concept testing

A) takes place during the screening step of the new-product development process. B) involves usage tests by potential customers. C) seeks potential customers' reactions and attitudes toward new-product ideas before actual models are developed. D) is the last step before commercialization of a new-product idea. E) None of the answers are correct.

207) National Family Opinion (NFO) contacts several hundred members of its consumer panel and provides them with a printed description of a new chewing gum and its package. Consumers are then given a survey containing several multiple-choice questions about their attitudes toward the new product, based on what they read in the description. The final survey question asks consumers to indicate the likelihood that they would purchase the product. NFO seems to be conducting a(n) A) market test. B) concept test. C) prototype test. D) sensitivity test. E) attitude test.

208) PepsiCo is evaluating an idea for a new "clear cola" by using focus groups made up of young adults to suggest brand names for the proposed product. This is an example of Version 1

A) empowerment. B) concept testing. C) market testing. D) TQM. E) EDI.

209)

Which of the following statements about the idea evaluation step is false?

A) Companies can often estimate likely costs, revenue, and profitability at this stage. B) Product planners can compare the cost advantages and limitations of a new product with those currently being used. C) Product tests with customers are used to revise the early versions of the product. D) This step should gather enough information to help decide whether there is an opportunity.

210) The ________ step in the new-product development process could involve research and development as well as engineering to design and build the physical part of the product. A) screening B) idea evaluation C) roll out D) commercialization E) development

211)

Regarding new-product development, market tests A) are used mostly for durable products, because of their high production costs and

risks. B) seek customer reactions to ideas, not actual products. C) should test the product and specific marketing mix variables. D) are not very costly but take a long time to complete. E) None of the answers are correct.

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212)

Full-scale market tests A) are unrealistic because they do not test the whole marketing mix. B) are not expensive, even when a full market picture is sought. C) should always be skipped when consumer preferences are clear. D) may provide competitors advance information about products. E) are used mostly for products having long lead times.

213) Kelly Drake, marketing manager for Find-Ur-Way global positioning systems, is testing the marketing mix for one of her company's new products. The product was introduced in two different markets with different prices and packages. This suggests the new product is in the ________ step of the new-product development process. A) commercialization B) idea evaluation C) screening D) development E) idea generation

214) Which of the following statements about the commercialization stage of the new-product development process is false? A) A firm should always roll out the product to the entire target market at one time. B) Channels of distribution need to be filled with goods. C) Introductory promotion tends to be more costly if the firm is entering a very competitive market. D) People need to be hired and trained to provide services.

215) Gradual "rollouts" are characteristic of which step of the new-product development process?

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A) idea generation B) development C) idea screening D) idea evaluation E) commercialization

216)

A "rollout" happens in the ________ step of the new-product development process. A) idea generation B) idea evaluation C) screening D) development E) commercialization

217) When a market test for a new product is successful, the firm typically introduces the product in different regions of the United States in sequential stages. This process is called a A) rollout. B) fallout. C) TQM. D) concept test. E) JIT.

218)

Which of the following activities is typical of the screening stage? A) Goods have to be produced to fill the channels of distribution. B) People must be hired and trained to provide services. C) Manufacturing or service facilities have to be set up. D) Strengths, Weaknesses, Opportunities, and Threats are identified. E) Products are introduced region by region in a gradual "rollout."

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219)

Regarding the new-product development process, which of the following is true? A) The hypothesis tested is that the new product idea will not be profitable. B) A gradual "rollout" of the product—region by region—allows for more market

testing. C) Concept tests are done before any physical models are produced. D) Likely ROI should be estimated throughout the process, to force the new idea to prove itself. E) All of the answers are correct.

220) The legal obligation of sellers to pay damages to individuals who are injured by defective or unsafely designed products is called A) product responsibility. B) breach of warranty. C) rule of reason. D) product liability. E) design enforcement.

221) In the context of the legal obligation of sellers to pay damages to individuals, product liability settlements A) may exceed a company's insurance coverage but not its total assets. B) may exceed not only a company's insurance coverage but also its total assets. C) never exceed a company's insurance coverage or its total assets. D) never exceed three-fourths of a company's insurance coverage. E) are always too small to make a difference to the company's total assets.

222)

Which of the following is true of product liability?

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A) Product liability is a consideration, but it's not important until the development stage of the new-product development process. B) Relative to most other countries, U.S. courts enforce a very strict product liability standard. C) Sellers are usually not held responsible for injuries related to their products, especially when the items are well designed. D) None of these statements is true.

223) A court rules that a fast-food restaurant has a legal obligation to pay damages to a family whose child was injured when it swallowed an unsafe toy that came in a kids' meal box. Such a legal obligation is called A) consumer compensation. B) product liability. C) consumer protection. D) product quality assurance. E) product pleasing.

224) During the development step of new-product development, a firm could develop a(n) ________, an early sample or model built to test a concept. A) creation B) concept test C) prototype D) idea type E) embryo concept

225) Which of the following is not an accurate characterization of the idea evaluation stage of the new-product development process?

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A) The stage involves getting reactions from customers by way of concept testing. B) The stage evaluates the potential reaction of channel partners like wholesalers and retailers. C) The stage produces rough estimates of costs, sales, and profits. D) The stage introduces a prototype of the product. E) The stage involves an assessment of the assumptions managers are making about the new idea.

226)

The new-product development process should

A) have ongoing support from top management. B) avoid applying quantitative screening criteria, since applying such criteria tends to eliminate most of the "really new" ideas. C) be informal—to encourage creativity. D) start whenever the majority of current products are in the market maturity stage of the product life cycle. E) All of the answers are correct.

227) In its efforts to support new-product development ideas within its own company, Google allows its employees to spend ________ percent of their time each week thinking about newproduct ideas, even if the ideas are not related to the employees' specific jobs. A) 5 B) 10 C) 15 D) 20 E) 25

228)

Successful companies

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A) leave the new-product development process to anyone who happens to be interested in taking the initiative. B) leave the new-product development process only to someone from the sales department. C) put a person, a team, or a department in charge of the new-product development process. D) do not allow top-level management to get involved in the new-product development process. E) do not put anyone in charge of the new-product development process.

229) In the context of new-product development and the balance of market needs and company resources, marketing managers must generally A) recognize that new-product projects need to meet ROI goals. B) have various departments independently evaluate the feasibility of new ideas. C) develop marketing plans for goods that can't currently be produced profitably. D) place a product in the market quickly and not wait for a marketing plan. E) focus on satisfying customer needs, even if it means taking a loss.

230) Chris Carmine manages specific products and promotion at Bright-n-Shiny Toothbrush Company. Her job responsibility sounds like that of a A) brand manager. B) project coordinator. C) channel manager. D) sales representative. E) marketing research manager.

231)

Which of the following functions is generally outside the purview of brand managers?

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A) managing each product category, or each brand, in an organization B) performing promotion duties traditionally handled by the advertising manager C) coordinating with a sales manager, advertising agencies, and channel members D) overseeing new-product development E) conducting research and development

232)

Product managers A) are especially common in large companies. B) are sometimes responsible for a product's whole marketing effort. C) coordinate their efforts with individuals within and outside the company. D) may serve as "product champions" in planning and implementing the promotion

effort. E) All of the answers are correct.

233)

The job of product or brand manager is often created when a firm wants to A) handle many different kinds of products or brands. B) eliminate the job of the research and development department. C) eliminate the job of sales manager. D) do away with product "champions." E) None of the answers are correct.

234) At one time, most firms assumed defects were an inevitable part of mass production. ________ firms showed that this assumption was not valid. A) Chinese B) American C) European D) Japanese E) Latin American

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235)

The use of artificial intelligence for quality improvement depends on A) the collection and utilization of data. B) whether service providers have empowered employees. C) the cost to the company if a customer gets a defective product. D) the assumption that defects are an inevitable part of mass production. E) whether a company has rejected TQM or not.

236) Lisa wants to book a hotel suite at Luxury International and looks up the company website for information about the range of services offered, the prices, the hours of operation, the phone number, and the address. She makes a phone call to the hotel, which is promptly answered by the front office. A few days later the bellman opens the door and takes Lisa's luggage, and the concierge helps her make a dinner reservation. Each of these contacts with Luxury International is called a(n) A) point of contact. B) corporate interface. C) touchpoint. D) contact opportunity. E) opportunism.

237) When assessing a firm's quality from the customer's perspective, marketing managers must take account of all instances where customers have contact with the firm and its products. These instances are called A) pain points. B) touchpoints. C) sales kiosks. D) connectors. E) intersects.

238)

The big cost of poor quality is the cost of

Version 1

A) replacing defective parts. B) lost customers. C) recalling defective goods. D) rework and training. E) induction training.

239)

A marketing manager might use the total quality management approach to A) reduce defects in goods produced in factories. B) train better salespeople. C) improve customer service. D) make delivery schedules more reliable. E) All of the answers are correct.

240)

Before widespread adoption of TQM, most firms assumed that A) the advantages of mass production were insignificant. B) customers scarcely notice deficiencies in quality. C) production defects were an inevitable part of mass production. D) eliminating defects from mass production was achievable. E) the cost of replacing defective parts was unacceptable.

241)

Total quality management A) requires that everyone in the organization be concerned with improving quality. B) means more than just using statistical controls to reduce manufacturing defects. C) views the cost of lost customers as an important result of quality problems. D) applies to service producers as well as manufacturers. E) All of the answers are correct.

242)

________ refers to a commitment to constantly make things better one step at a time.

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A) Just-in-time B) Ladder approach C) Continuous improvement D) Production focus E) Sales orientation

243) At Toyota, its Lexus designers attempt to make improvements to the car's design each year, even if those changes are minor ones. This process is an example of A) continuous improvement. B) concept testing. C) product liability. D) empowerment. E) market testing.

244)

It is difficult to maintain consistent quality in services because A) services, unlike goods, are nonperishable. B) unlike products, services are tangible in nature. C) service providers often have to interpret each customer's needs. D) variability is reduced as more humans are involved in delivery. E) most of the time it requires minimal human interaction.

245)

Two keys to improving service quality are A) training and empowerment. B) JIT delivery and supply chain management. C) appraisals and rewards. D) monitoring and control. E) positive and negative reinforcement.

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246) ________ refers to giving employees the authority to correct a problem without first checking with management. A) Responsibility adjustment B) Empowerment C) Training D) Induction E) Benchmarking

247)

When building quality into services, managers should A) not focus on training, because people will learn by experience. B) watch over employees to make sure they do things right every time. C) require employees to check with managers before correcting any problem. D) empower employees by giving them the authority to satisfy customer needs. E) ensure managerial involvement at all levels of interaction with customers.

248)

Building quality into services can be A) accomplished easily by spending more. B) accomplished without top-level support because it is such a simple idea. C) considered unnecessary unless the service is guaranteed. D) accomplished easily with surprise quality inspections. E) improved by giving employees the authority to correct a problem on their own.

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249) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which stage of the product life cycle is Wire Locker?

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A) market introduction B) sales decline C) market development D) market growth E) market maturity

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250) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which stage of the product life cycle is Wire Window?

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A) market maturity B) market development C) sales decline D) market growth E) market introduction

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251) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which stage of the product life cycle is Wire Closet?

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A) market development B) sales decline C) market maturity D) market introduction E) market growth

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252) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which stage of the product life cycle is Oil Wire?

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A) market introduction B) sales decline C) market growth D) market maturity E) market development

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253) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which stage of the product life cycle is Wire Fold-Fence?

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A) sales decline B) market introduction C) market maturity D) market growth E) market development

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254) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. For which product does WPI need to build primary demand?

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A) Wire Closet B) Wire Fold-Fence C) Oil Wire D) Wire Window E) Wire Locker

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255) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. For which product is it most critical for WPI to build brand familiarity?

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A) Wire Closet B) Wire Window C) Wire Locker D) Wire Tent E) It is equally important for each of these products.

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256) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. Based on the text's recommendations for different stages in the product life cycle, for which product does WPI most need to consider developing different markets?

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A) Wire Window B) Oil Wire C) Wire Closet D) It is equally important to develop new markets for all these products.

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257) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. According to the definition in your text, which of WPI's products can be called a new product?

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A) Wire Closet B) Wire Locker C) Wire Fold-Fence D) Wire Window E) None of these products fits the definition of a new product.

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258) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which step of the new-product development process is Oil Wire?

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A) screening B) development C) idea evaluation D) commercialization E) idea generation

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259) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which step of the new-product development process is the Wire Car Top?

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A) commercialization B) idea evaluation C) idea generation D) screening E) development

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260) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. In which step of the new-product development process is the Wire Tent?

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A) screening B) development C) idea evaluation D) idea generation E) commercialization

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261) Use this information for questions that refer to the Wire Products Inc. (WPI) case. Rob Rose sat back to review the portfolio of products his company, Wire Products Inc. (WPI), has in its product line. The company specializes in making various products for consumer and industrial uses from hard laminated wire that is coated with special paints. 1) WPI's Wire Closet products have been on the market for 10 years. Consumers install the wire shelves and closet rods themselves. The market leader, Closetmaid, has been selling similar products for more than 20 years, but so far the sales volume and profits for the market have continued to grow. Recently, several new competitors have come into the market. 2) Three months ago, WPI entered the lawn and garden market with folding fences made with laminated wire and branded as Wire Fold-Fence. Previously, WPI had never made fences or been a player in the lawn and garden market—although other companies have been making products in this market for years. However, Rob Rose has discovered that recent sales of wire garden fencing have leveled off and profits are declining overall. Still, WPI thinks it has some cost advantages and can grow its own sales and profits in this market. 3) WPI has just developed Oil Wire, a new concept for the environmental cleanup market. Oil Wire is coated with a special material that cleans up oil spills. There has never been a product like this and WPI wants to quickly get the word out about its benefits. The product is now being rolled out in selective markets. 4) Another business product is Wire Locker, used for secure storage by gymnasiums or companies. This style of locker has now gone out of fashion, and most customers are finding better materials to use for lockers. Aggressive selling has helped Wire Locker's sales stay flat, but the total market for wire-style lockers is only half what it was 10 years ago. 5) WPI's Wire Window product is used as a security product to protect glass windows. It sells to homeowners and retailers looking for additional safety. WPI's sales of this product have dropped in recent years because competitors have introduced maintenance-free products. However, the overall market for this type of product continues to show good growth. 6) WPI is running concept tests of a new wire car-top carrier called Wire Car Top. There are other car-top carrier products on the market, but WPI plans to include options in its carrier that will make it easier to load bikes, skis, and suitcases. Wire Car Top is also very easy to put on and take off of the car because of its light weight and ease-of-use features. The concept tests are helping WPI analysts develop rough estimates of costs, sales, and profits. 7) Another new-product idea, tentatively called Wire Tent, is being considered. It would use laminated wires to create a portable tent frame. This product is currently being evaluated to determine its fit with the company's objectives and external market trends. Rob is thinking about the product life cycle, where each product fits, and what he should be doing as part of his marketing plan for each of these products. Is it a good idea for a company like WPI to have several product managers?

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A) No, because the company has several different product categories. B) Yes, because the company would want to eliminate the job of advertising manager. C) Yes, because the company has several different product categories. D) No, because the company would need someone to give direction to the advertising manager.

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Answer Key Test name: Chap 09_17e 1) FALSE The product life cycle describes the stages a new product idea goes through, from beginning to end. 2) TRUE The product life cycle describes the stages a new product idea goes through, from beginning to end. 3) TRUE The product life cycle describes the stages a new product idea goes through, from beginning to end. The product life cycle is divided into four major stages. 4) TRUE The product life cycle is divided into four major stages: (1) market introduction, (2) market growth, (3) market maturity, and (4) sales decline. 5) FALSE Customers' attitudes and needs may change over the product life cycle. 6) FALSE Sales and profits move from very low in the market introduction stage to high at market maturity and then back to low in the sales decline stage. 7) FALSE Sales and profits do not move together over time. Industry profits can decline while industry sales are still rising. 8) TRUE Version 1

In the market introduction stage, sales are low as a new idea is first introduced to a market. 9) TRUE Most companies experience losses during the introduction stage because they spend so much money for Product, Place, and Promotion development. They invest the money in the hope of future profits. 10) FALSE In the market growth stage, industry sales grow fast. First, industry profits rise, and they then start falling. The innovator makes big profits as more customers buy. But competitors soon enter the market. Still, firms earn larger profits than in the market introduction stage. 11) TRUE The market growth stage is the time of biggest profits for the industry, with rapid sales and growth earnings. Toward the end of this stage industry profits begin to decline, due to stiff competition and increases in consumer price sensitivity. 12) FALSE Industry profits go down throughout the market maturity stage because promotion costs rise and some competitors cut prices to attract business. 13) TRUE During the market maturity stage, sales level off and profits continue to go down. 14) FALSE The duration of the market maturity stage is not definite. This stage may last for many years, until a basically new product idea comes along. 15) FALSE

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During the sales decline stage, price competition from dying products becomes more vigorous; but firms with strong brands may make profits until the end because they have successfully differentiated their products. 16) TRUE Firms with strong brands may make profits until the end because they have successfully differentiated their products. 17) TRUE Product life cycles describe industry sales and profits for a product idea within a particular product-market. The sales and profits of an individual brand may not, and often do not, follow the life-cycle pattern. 18) FALSE The sales and profits of an individual brand may not, and often do not, follow the life-cycle pattern. 19) FALSE The sales and profits of an individual brand may or may not follow the life-cycle pattern. 20) TRUE The sales and profits of an individual brand may not and often do not follow the life-cycle pattern. They may vary up and down throughout the life cycle—sometimes moving in the opposite direction of industry sales and profits. 21) TRUE A product idea may be in a different life-cycle stage in different markets. 22) TRUE A given firm may introduce or drop a specific product during any stage of the product life cycle. Version 1

23) TRUE A firm with a mature product can sometimes find new growth in international markets. 24) FALSE The product life-cycle concept does not tell a manager precisely how long the cycle will last. However, a manager can often make a good guess, based on the life cycles for similar products. 25) FALSE The length of each stage in the product life cycle varies across products. 26) FALSE The product life-cycle concept does not tell a manager precisely how long the cycle will last. The duration of the whole product life cycle and the length of each stage vary across products. 27) FALSE The greater the comparative advantage of a new product over those already on the market, the more rapidly its sales will grow. 28) TRUE Sales growth is faster when the product is easy to use and its advantages are easy to communicate. 29) FALSE If a product is compatible with the values and experiences of target customers, they are likely to buy it more quickly. 30) FALSE Although the life cycle of different products varies, in general product life cycles are getting shorter. 31) TRUE Version 1

The product life cycle means that firms must be developing new products all the time. Further, they must try to use marketing mixes that will make the most of the market growth stage—when profits are highest. 32) TRUE During the growth stage, competitors are likely to rapidly introduce product improvements. 33) TRUE Fashion-related products tend to have short life cycles. What is currently popular can shift rapidly. A certain color or style of clothing—baggy jeans, miniskirts, or four-inch-wide ties—may be in fashion one season and outdated the next. 34) TRUE A fad is an idea that is fashionable only to certain groups who are enthusiastic about it. 35) FALSE A fad is an idea that is fashionable only to certain groups who are enthusiastic about it. 36) TRUE A fad is a fashionable idea that appeals only to certain groups of people. These groups are so fickle that a fad is even more short-lived than a regular fashion. 37) FALSE Where a product is, in its life cycle, and how fast it's moving to the next stage affect marketing strategy planning. 38) TRUE

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Where a product is in its life cycle and how fast it's moving to the next stage affects marketing strategy planning. 39) FALSE When introducing a really new product, the marketer will not only have to build channels of distribution but is also required to build the demand for the whole idea through promotion. 40) TRUE The correct marketing strategy depends on how quickly the new idea will be accepted by customers—and how quickly competitors will follow with their own versions of the product. 41) TRUE When a firm's product has won loyal customers, it can be successful for a long time even in a mature or declining market. However, continued improvements may be needed as customers' needs shift. 42) FALSE The strategies for all stages of the product life cycle need not necessarily be growth strategies. If prospects are poor in a product-market, a phaseout strategy may be needed. 43) TRUE The strategies for all stages of the product life cycle need not necessarily be growth strategies. If prospects are poor in a product market, a phaseout strategy may be needed. 44) TRUE Each year, firms introduce many products that are basically refinements of existing products. A new product is one that is new in any way for the company concerned. 45) TRUE Version 1

A product can become "new" in many ways. A fresh idea can be turned into a new product; and even variations on an existing product idea can make a product new. 46) TRUE A firm can call its product new for only a limited time. Six months is the limit. According to FTC, a product must be entirely new or changed in a "functionally significant or substantial respect" to be called "new." 47) TRUE Patent law and copyright law are designed to protect inventors and provide an incentive for innovation. 48) TRUE Dynamically continuous innovations require minor changes in customer behavior. A discontinuous innovation requires that customers adopting the innovation significantly change their behavior. 49) FALSE Continuous innovations do not require customers to learn new behaviors. 50) FALSE The costs of new-product development and the risks of failure are high. 51) TRUE Experts estimate that consumer packaged-goods companies spend more than $20 million to introduce a new brand, and 80 to 95 percent of those new brands flop. 52) TRUE

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Identifying and developing new-product ideas and effective strategies to go with them is often the key to a firm's success and survival. To move quickly and avoid expensive failures, a company needs a new-product development process. 53) TRUE Any new-product development process has to be continuously evaluated for its likely profitability and return on investment. The hypothesis tested is that the new idea will not be profitable, and this puts the burden on the idea to either prove itself or to be rejected. 54) FALSE The first step in a new-product development is idea generation. 55) FALSE Real acceptance of the marketing concept prompts managers to screen new products on the basis of how safe they are. Safety is not a casual matter. 56) FALSE Firms often use full-scale market testing to get reactions in real-market conditions or to test variations in the marketing mix. 57) TRUE Running market tests is costly, but not testing is risky. 58) FALSE Not many new-product ideas survive to the commercialization stage, because putting a product on the market is expensive. 59) TRUE Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products.

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60) TRUE Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products. 61) TRUE Relative to most other countries, U.S. courts enforce a very strict product liability standard. 62) TRUE Companies that are particularly successful at developing new goods and services seem to have one key trait in common: enthusiastic topmanagement support for new-product development. 63) FALSE New products tend to upset old routines; so someone with top-level support and the authority to get things done needs to be responsible for new-product development. 64) TRUE Product managers or brand managers manage specific products—often taking over the jobs formerly handled by an advertising manager. 65) FALSE Product managers are especially common in large companies that produce many kinds of products. Several product managers may serve under a marketing manager. 66) FALSE Product managers are especially common in large companies that produce many kinds of products. 67) TRUE

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When a large firm has several different kinds of products, product managers or brand managers are sometimes made responsible for the profitable operation of a particular product's whole marketing effort. 68) TRUE Product managers may work with managers in other countries to decide whether and how to adapt products for different markets. Some adaptations may be required and fairly simple. 69) FALSE Total quality management (TQM) first focused on reducing defects in goods produced in factories. Experience has shown that it is less expensive to do something right the first time than it is to pay to do it poorly and then pay again to fix problems. 70) TRUE Poor quality erodes goodwill and leaves customers dissatisfied, less trusting of the brand, and possibly spreading their dismay to others via word-of-mouth or the Internet. The big cost of poor quality is the cost of lost customers. 71) FALSE Artificial intelligence requires data in order to identify patterns that can help improve quality. 72) FALSE The big cost of poor quality is the cost of lost customers. 73) FALSE The perspective of total quality management (TQM) is that everyone in the organization should be concerned about quality, throughout all of the firm's activities, to best serve customer needs. 74) TRUE Version 1

Firms that adopt total quality management (TQM) always look for ways to improve implementation. 75) TRUE Continuous improvement is a commitment to constantly make things better one step at a time. 76) TRUE Good training usually includes role-playing on handling different types of customer requests and problems. Employees in contact with customers can better serve customers when they have complete information about the business and how their contribution fits in the total effort. 77) FALSE Services create particular quality management challenges. Most products involve some service component, whether it is primarily a service, primarily a physical good, or a blend of both. 78) FALSE Two keys to improving service quality are: (1) training and (2) empowerment. 79) TRUE Empowerment means giving employees the authority to correct a problem without first checking with management. 80) TRUE A manager should focus on quality efforts that really provide the customer with superior value—quality that costs no more to provide than customers will ultimately be willing to pay. 81) FALSE

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A manager should focus on quality efforts that really provide the customer with superior value—quality that costs no more to provide than customers will ultimately be willing to pay. 82) FALSE As AI capabilities improve, even service jobs requiring analytical skills may be replaced. 83) B Innovations result from products, customer behavior, and competition changing over time. These changes create opportunities for marketing managers and pose challenges as well. Developing new products and managing existing products to meet changing conditions are important to the success of every firm. 84) B The product life cycle is divided into four major stages: (1) market introduction, (2) market growth, (3) market maturity, and (4) sales decline. 85) D Over the course of the product life cycle, sales and profits do not move together in tandem. Profits from a new product or category begin to decline even while industry sales are still rising. Profits decline steadily during the market maturity stage. 86) A In the market introduction stage, sales are low as a new idea is first introduced to a market. Customers aren't looking for the product, and informative promotion is needed to tell potential customers about the advantages and uses of the new-product concept. 87) D Version 1

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As a result of streaming digital media and the cloud, sales of DVDs are in decline. Movies, music, and computer files no longer require hard disk storage for most customers. 88) B In the market growth stage, competitors see the opportunity and enter the market. 89) B During the market growth stage, many competitors identify the new growth opportunity and quickly copy the most successful product or try to improve it to compete better. 90) D Industry profits go down throughout the market maturity stage because promotion costs rise and some competitors cut prices to attract business. 91) A When discussing the product life cycle, it is important to remember that product life cycles don't relate to individual products. Product life cycles describe industry sales and profits for a product idea within a particular product-market. The sales and profits of an individual brand may not, and often do not, follow the life-cycle pattern. 92) A The product life cycle describes the stages a truly new product idea goes through from beginning to end. 93) D Customers' attitudes and needs may change over the product life cycle. 94) E

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Industry profits decline while industry sales are still rising; the nature of competition moves toward pure competition or oligopoly; the product may be aimed at entirely different target markets at different stages; and customers' attitudes and needs may change over the product life cycle. 95) A The product may be aimed at entirely different target markets at different stages of the product life cycle. 96) E The total sales of the product—by all competitors in the industry—vary in each of its four stages. They move from very low in the market introduction stage to high at market maturity and then back to low in the sales decline stage. 97) B Most companies experience losses during the introduction stage because they spend so much money for Product, Place, and Promotion development. 98) D In the market introduction stage, sales are low as a new idea is first introduced to a market. Customers aren't looking for the product. Most companies experience losses during the introduction stage because they spend so much money for Product, Place, and Promotion development. Of course, they invest the money in the hope of future profits. 99) D During the introduction stage of the product life cycle, informative promotion is needed to tell potential customers about the advantages and uses of the new-product concept. 100) E Version 1

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In the market introduction stage of the product life cycle, organizations focus on building primary demand. 101) B During the introduction stage of the product life cycle, informative promotion is needed to tell potential customers about the advantages and uses of the new-product concept. 102) D Apple's user-friendly computer operating system that responds to spoken commands is the first of its kind in the market, so it is a new product entering the market introduction stage in the product life cycle. 103) B 3-D televisions are in the market introduction stage of the product life cycle in the U.S. market. 104) A In the market introduction stage, a firm spends a lot of money on informative promotion to tell potential customers about the advantages and uses of the new-product concept. Although sales are low at this stage, Pfizer invests money in the hope of future profits. 105) B In the market growth stage, the innovator begins to make big profits as more and more customers buy. This is the time of biggest profits for the industry. 106) E In the market growth stage, the innovator begins to make big profits as more and more customers buy. This is the time of biggest profits for the industry. 107) E Version 1

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The market growth stage is the time of biggest profits for the industry. 108) C It is toward the end of the market growth stage of the product life cycle that industry profits begin to decline. 109) C Toward the end of the market growth stage, industry profits begin to decline as competition and consumer price sensitivity increase. 110) E In the market growth stage, industry sales grow fast but industry profits rise and then start falling. 111) E Market growth stage is the time of biggest profits for the industry. 112) A Rising industry sales and profits show that Cargill is operating in the market growth stage of the product life cycle. 113) C Rise in sales, increasing profits, and monopolistic competition are all features of the market growth stage. 114) B In the market growth stage, industry sales grow fast but industry profits rise and then start falling. 115) C Industry sales are highest in the market maturity stage. 116) A The market maturity stage occurs when industry sales level off and competition gets tougher. Version 1

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117) C Competition is toughest in the market maturity stage. 118) D New firms may still enter the market at the market maturity stage— increasing competition even more. The market leaders have a lot at stake, so they fight hard to defend their share. 119) A Competitors enter the market at both the market growth stage and the market maturity stage. 120) C Many aggressive competitors enter the market during the market maturity stage. 121) B Persuasive promotion becomes even more important during the market maturity stage. 122) B Persuasive promotion becomes even more important during the market maturity stage because many aggressive competitors enter the race for profits. 123) A Persuasive promotion becomes even more important during the market maturity stage. 124) B During the market maturity stage, industry sales level off and profits decline. Due to stiff competition, less efficient firms drop out of the market while new firms may still enter. Products tend to differ only slightly and firms focus on persuasive promotion. Version 1

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125) D As part of persuasive promotion, General Motors (GM) is offering attractive rebates on selected models of SUVs to keep sales from further declining. This shows GM is currently operating in the market maturity stage of the product life cycle. 126) A During the sales decline stage, firms with strong brands may make profits until the end because they have successfully differentiated their products. 127) C During the sales decline stage, new products replace the old. 128) E During the sales decline stage, firms with strong brands may make profits until the end because they have successfully differentiated their products. 129) C Streaming services and on-demand video have driven DVD players into the sales decline stage of the product life cycle. 130) B Product life cycle refers to the life of a product idea within a particular product-market. 131) D Product life cycles describe industry sales and profits for a product idea within a particular product-market. 132) B The sales and profits of an individual brand may not, and often do not, follow the life-cycle pattern. Version 1

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133) B Product life cycles are industry sales and profits for a product idea within a particular product-market. 134) D A product idea may be in a different life-cycle stage in different markets. 135) D The length of each stage of the product life cycle varies across products depending on how the market is defined, the nature of the competition, and also the nature of the products involved. 136) C How long a whole product life cycle takes and the length of each stage vary a great deal across products. 137) E A new-product idea is more likely to move quickly through the early stages of the product life cycle when the product is easy to use, is compatible with the values and experiences of target customers, can be used on a trial basis, and has advantages that are easy to communicate. 138) C The greater the comparative advantage of a new product over those already on the market, the more rapidly its sales will grow. 139) D Although the life of different products varies, in general product life cycles are getting shorter. 140) D

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How long a whole product life cycle takes—and the length of each stage—varies considerably across products. Although the life of different products varies, product life cycles are generally getting shorter. This is partly due to rapidly changing technology. 141) B Although the life of different products varies, in general product life cycles are getting shorter. 142) E Product improvements come rapidly in the market growth stage. One new invention may make possible many new products that replace old ones; and in general, product life cycles are getting shorter. Although life cycles keep moving in the developed economies, many advances bypass most consumers in less-developed economies. 143) B A pioneer is the first to market with a new product idea. If that product idea proves profitable, competitors (second-movers) move in quickly— usually with enhanced customer service. The second-movers then become more profitable than the pioneer. 144) E Fashion is the currently accepted or popular style. 145) A A fad is an idea that is fashionable only to certain groups who are enthusiastic about it. 146) A A fad is an idea that is fashionable only to certain groups who are enthusiastic about it. But these groups are so fickle that a fad is even more short-lived than a regular fashion. Version 1

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147) E Fashion-related products tend to have short life cycles, while those of fads tend to be even shorter. Marketing managers who work with fashions often have to make quick product changes. 148) A Marketing managers often need to pivot, or move to a new marketing mix, when the product fails to perform well in the market introduction stage. 149) E Two or more companies investing in promotion to build demand may help to stimulate the growth of the whole product-market. The correct strategy depends on how quickly the new idea will be accepted by customers and how quickly competitors will follow with their own versions of the product. Not all new-product ideas catch on with customers or intermediaries. Flexibility always helps. 150) A In the market growth stage, promotion often shifts from informing customers to persuading customers to buy the brand. 151) A During the market growth stage, new customers are usually aware of a product and many are looking for it. During this phase, marketing managers want to build brand familiarity. 152) A Moving toward selective distribution is less likely to happen as a product moves through the later stages of the product life cycle. The emphasis is on intensive distribution. See Exhibit 9–3. 153) A Version 1

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As a product moves into the market maturity stage of the product life cycle, consumers tend to view the product market as homogeneous. 154) C As a product moves into the market maturity stage of its life cycle, the marketing manager should be aware that the competitive situation will head towards pure competition. 155) D As they move towards the market maturity stage, firms can achieve a competitive advantage by modifying their products to make them better, with lower production costs, or by simply being more successful at promotion. 156) B In the highly competitive market maturity stage of the product life cycle, many firms slash prices to maintain market share. Creative marketers will find other ways to create value and maintain their margins. In a mature market, a firm may be fighting to keep or increase its market share; but if the firm finds a new use for the product, it may stimulate overall demand. 157) B When a firm's product has won loyal customers, it can be successful for a long time even in a mature or declining market; however, continued improvements may be needed as customers' needs shift. 158) B Individual products may enter and leave the market at any stage. 159) D

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Not all strategies are exciting growth strategies. If prospects are poor in a product market, a phase-out strategy may be needed—that is, a product can be withdrawn before its related product life cycle is over. 160) D If prospects are poor in a product-market, a phase-out strategy may be needed. The need for phasing out becomes more obvious as the sales decline stage arrives; but even in market maturity, it may be clear that a particular product is not going to be profitable enough to reach the company's objectives. 161) B Inventory moves in the channel and advertising may help to keep a declining product in demand. Old products can keep sales by appealing to their most loyal customers or those who are slow to try new ideas. Because of this, it's sometimes better to phase out the product gradually. 162) C A new product is one that is new in any way for the company concerned. 163) C It is essential for a firm to develop new products or modify its current products to meet changing customer needs and competitors' actions. Not having an active new-product development process means that consciously or subconsciously, the firm has decided to milk its current products and eventually go out of business. This is because old product ideas eventually become obsolete. 164) E Some new products are minor variations on existing products. These "continuous innovations" don't require customers to learn new behaviors. A new toothpaste flavor, a low-calorie iced tea, or a new style of earring would fit in this category. Version 1

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165) C A discontinuous innovation is a type of product innovation that requires customers adopting the innovation to significantly change their behavior. This type of innovation often results in a completely new productmarket and new product life cycle. 166) A Digital video recorders replaced videocassette recorders for TVs. Likewise, cell phones are replacing landline phones and point-and-shoot cameras. Really new product ideas disrupt the old ways of doing things—not only for marketers, but also for customers. 167) B A firm can call its product "new" for only a limited time. Six months is the limit according to the Federal Trade Commission (FTC)—the federal government agency that polices antimonopoly laws. To be called new, says the FTC, a product must be entirely new or changed in a "functionally significant or substantial respect." 168) E A new product is one that is new in any way for the company concerned. A product can become "new" in many ways. A fresh idea can be turned into a new product and start a new product life cycle. Variations on an existing product idea can also make a product new. 169) A A new product is one that is new in any way for the company concerned. A product can become "new" in many ways. A fresh idea can be turned into a new product and start a new product life cycle. Variations on an existing product idea can also make a product new. 170) C

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To be called "new," says the FTC, a product must be entirely new or changed in a "functionally significant or substantial respect." 171) C To be called "new," says the FTC, a product must be entirely new or changed in a "functionally significant or substantial respect." 172) C Continuous innovations don't require customers to learn new behaviors. 173) D A product cannot be called "new" if only minor changes are made to the packaging or the product. To be called "new," says the FTC, a product must be entirely new or changed in a "functionally significant or substantial respect." 174) C The FTC would not approve the mouthwash with new coloring because the product doesn't meet the FTC's definition of "new." 175) B The FTC would not approve the wax paper food-wrap with changed packaging because the product doesn't meet the FTC's definition of "new." 176) A A patent grants the inventor of a new product the right to “exclude others from making, using, offering for sale, or selling the invention.” 177) A

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A patent grants the inventor of a new product the right to “exclude others from making, using, offering for sale, or selling the invention.” Patent law provides an incentive for inventors to share their new technology with the world in exchange for a short-term monopoly on its use. 178) A Copyright law protects the producer of a creative work (literary, musical, dramatics, or artistic), giving them exclusive rights to reproduce the work. 179) A A new product may fail when it doesn't offer a unique benefit to the customer. 180) E When it comes to new-product development, the risks of failure are high. Experts estimate that 80 to 95 percent of new brands flop. 181) A Customers can be a great source of new ideas—and if they suggest the idea, they are more likely to buy it. When a firm actively solicits ideas from customers, it can be called crowdsourcing. In this example, the ecommerce retailer takes this approach to another level. Its community members submit jewelry designs as part of a contest. Winning designs are chosen based on ratings and comments from other members. 182) D When new product ideas are chosen based on online ratings and comments, it is referred to as crowdsourcing. 183) A

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Seeking ideas from customers, competitors, and even other markets is a step that takes place during the idea generation phase of the new-product development process. 184) B During the screening stage of the new-product development process, managers evaluate the firm's strengths, weaknesses, and objectives as they relate to the launch of a new-product idea. A "good" new idea should eventually lead to a product (and marketing mix) that will give the firm a competitive advantage. 185) B The new-product development process has five steps: (1) idea generation, (2) screening, (3) idea evaluation, (4) development, and (5) commercialization. 186) B The last step in the new-product development process is commercialization. 187) D The five steps in the new-product development process are (1) idea generation, (2) screening, (3) idea evaluation, (4) development (of product and marketing mix), and (5) commercialization. 188) A A new-product idea is evaluated for its likely profitability and return on investment. Applying this process requires considerable analysis of the idea before the company spends money to develop and market a product. Potentially unprofitable product ideas generally get eliminated at this early stage. 189) E Version 1

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As stated in Exhibit 9–4, an ROI estimate is needed during the screening, idea evaluation, development, and commercialization stages of the new-product development process. 190) C In the idea generation stage, firms need a formal procedure to generate a continuous flow of ideas. 191) E New ideas can come from a company's own sales or production staff, wholesalers or retailers, competitors, and others. 192) E New ideas can come from a company's own sales or production staff, wholesalers or retailers, competitors, consumer surveys, and others. 193) E New product ideas can be generated by analyzing new and different views of the company's markets, studying present consumer behavior, analysis of consumer complaints, paying attention to what competitors are doing, and analyzing international markets. 194) A Ideas about potential new products should be encouraged from any and all sources, since only a few ideas will develop into successful products. 195) A In the idea generation stage of the new-product development process, many new ideas in business markets come from competitors. 196) A Business firms often get new product ideas by paying attention to what competitors are doing.

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197) A New-product specialists from one firm buy products of a competitive firm and takes them apart to look for new ideas or improvements. This is called reverse engineering. 198) C In the screening step of the new-product development process, a marketing manager evaluates how well the idea fits with the company's objectives. 199) D Chu is operating in the screening step of the new-product development process. 200) E The Consumer Product Safety Commission has a great deal of power. It can set safety standards for products, order costly repairs or return of unsafe products, and also back up its orders with fines and jail sentences. 201) D The Consumer Product Safety Commission can order costly repairs or return of unsafe products. 202) A The Consumer Product Safety Commission can back up its orders with jail sentences. 203) E It is not within the power of the Consumer Product Safety Commission to conduct random searches for unsafe products in consumers' homes. 204) C In the idea evaluation stage, concept testing is used for getting reactions from customers about how well a new-product idea fits their needs. Version 1

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205) A Getting reactions from customers about how well a new-product idea fits their needs is concept testing. 206) C Concept testing seeks potential customers' reactions and attitudes toward new-product ideas before actual models are developed. 207) B Concept testing seeks potential customers' reactions and attitudes toward new-product ideas before actual models are developed. 208) B PepsiCo is conducting a concept test using focus groups. 209) C At this stage, an actual product has not yet been developed. Concept tests, not product tests, are used to get reactions from customers about how well the product idea fits their needs. 210) E The development step in the new-product development process involves research and development as well as engineering to design and build the physical part of the product. 211) C Firms often use full-scale market testing to get reactions in real-market conditions or to test variations in the marketing mix. 212) D With full-scale market tests, firms run the risk of providing competitors with advance information about their new products. 213) D Version 1

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Find-Ur-Way global positioning systems is conducting a product test with customers. This suggests the new product is in the development step of the new-product development process. 214) A In the commercialization step, some firms introduce their products city by city or region by region in a gradual "rollout." 215) E Gradual "rollouts" are characteristic of the commercialization step of the new-product development process. 216) E A "rollout" happens in the commercialization step of the new-product development process. 217) A In the commercialization step, some firms introduce their products city by city or region by region. This process is called a "rollout." 218) D Screening involves evaluating the new ideas with a type of S.W.O.T. analysis and product-market screening criteria. These criteria include the combined output of a resource (strengths and weaknesses) analysis, a long-run trends analysis, and a thorough understanding of the company's objectives. 219) E The hypothesis tested is that the new idea will not be profitable; a gradual "rollout" of the product in the commercialization step permits more market testing; before a physical product is produced, concept testing is done to analyze if a new-product idea fits customers' needs; and ROI is a crucial screening criterion throughout the whole process. Version 1

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220) D Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products. 221) B Product liability means the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products. Product liability is a serious matter. Liability settlements may exceed not only a company's insurance coverage but also its total assets. 222) B Relative to most other countries, U.S. courts enforce a very strict product liability standard. 223) B Product liability is the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products. 224) C A prototype is an early sample or model built to test a concept. 225) D The idea evaluation stage does not involve the development of a prototype of the product. Prototypes are used during the development stage—Step 4 of the new-product development process. 226) A For new goods and services to be successful, the new-product development process should have ongoing support from top management. 227) D Google allows its employees the freedom to spend 20 percent of their time working on new ideas. Version 1

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228) C Rather than leaving new-product development to someone who just happens to be interested in taking the initiative, successful companies put someone in charge. It may be a person, department, or team. Product development is not a casual thing—it's a major component in achieving success. 229) A Marketing managers must recognize that new-product projects need to meet return-on-investment goals. Team members from R&D and production should provide insights about the company's capabilities and costs to produce. It isn't sensible for a marketing manager to develop elaborate marketing plans for goods or services that the firm simply can't produce—or produce profitably. Clearly, a balancing act is involved here. 230) A Brand managers manage specific products and their promotion. 231) E In organizations, marketing is distinct from research and development (R&D). However, R&D specialists charged with managing science, technology, and new-product development require guidance from marketing managers so that they create products for market needs. 232) E

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Product managers are especially common in large companies that produce many kinds of products. They (1) can be responsible for the profitable operation of a particular product's whole marketing effort; (2) have to coordinate efforts with sales managers, advertising agencies, production and research people, and even channel members; and (3) sometimes serve mainly as "product champion," concerned with planning and getting the promotion effort implemented. 233) A When a firm has products in several different product categories, management creates the role of product or brand manager to manage and promote specific products. 234) D At one time, when most firms assumed defects were an inevitable part of mass production, Japanese firms showed that this assumption was not valid. 235) A Some firms use data and artificial intelligence to support continuous improvement efforts. Data are used to program artificial intelligence for the purpose of quality improvement. 236) C The purchase and consumption process for many products involves multiple touchpoints. These are points at which there is contact between the customer and the company. There are usually more touchpoints for services than for goods. 237) B

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Marketing managers must deliver quality throughout the entire customer experience—at all relevant touchpoints. The purchase and consumption process for many products involve multiple touchpoints, or points at which there is contact between the customer and the company. There are usually more touchpoints for services than for goods. 238) B The big cost of poor quality is the loss of customers. 239) E An efficient marketing manager uses TQM to reduce manufacturing defects; train better salespeople; make reliable delivery schedules; and improve customer service. 240) C At one time, most firms assumed defects were an inevitable part of mass production. They saw the cost of replacing defective parts or goods as just a cost of doing business—an insignificant one compared to the advantages of mass production. 241) E TQM requires that everyone be concerned about quality and serving customer needs better. TQM means more than just using statistical controls to reduce manufacturing defects. TQM views the big cost of poor quality to be lost customers. TQM applies to all firms, including service providers and manufacturers. 242) C Continuous improvement refers to a commitment to constantly make things better one step at a time. 243) A

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Continuous improvement refers to a commitment to constantly make things better one step at a time. 244) C A service provider usually deals directly with the customer, making it difficult to provide consistent service quality. Also, a provider has to successfully interpret each customer's needs. 245) A Two keys to improving service quality are training and empowerment. 246) B Empowerment refers to giving employees the authority to correct a problem without first checking with management. 247) D When building quality into services, managers should empower employees by giving them the authority to satisfy customers' needs without always checking with a supervisor. 248) E Firms that commit to quality services need to give employees the authority to correct a problem on their own. 249) B Wire lockers have become old fashioned and are getting replaced by newer and better products. Sales have stayed flat and the total product market has been reduced to half what it was 10 years ago. Hence, Wire Locker is in the sales decline stage. 250) D

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Competitors in the market have introduced products with better features than Wire Window. Consequently, sales of Wire Window have declined. However, the overall market for this type of product continues to show good growth; so Wire Window is still in the market growth stage. 251) E This product-market continues to be persistent with many players in monopolistic competition; so Wire Closet is in the market growth stage. 252) A Oil Wire is a new-product concept just introduced in the market. Informative promotion has been initiated to tell potential customers about the advantages and uses of the new-product concept. Oil Wire is in the market introduction stage. 253) C The market maturity stage occurs when industry sales level off and industry profits go down. Firms can, at times, still make profits with persuasive promotion and cost advantages. Wire Fold-Fence is in its market maturity stage. 254) C Oil Wire is a new-product concept and requires building primary demand. It is in the market introduction stage. 255) A It is essential for WPI to build brand familiarity for Wire Closet. New competitors are entering the market. 256) A Considering that Wire Window already has competitors with newer and better products, WPI needs to develop different markets for this product. Otherwise, sales are likely to fall. Version 1

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257) C A new product is one that is new in any way for the company concerned. Wire Fold-Fence is a new product. 258) D Oil Wire is ready for a rollout in the market. It is therefore in the commercialization stage of the new-product development process. 259) B WPI is running a concept test for Wire Car Top. It is therefore in the idea evaluation stage of the new-product development process. 260) A Wire Tent is a new-product concept that is under evaluation. It is therefore in the screening stage of the new-product development process. 261) C When a firm has products in several different product categories, product managers or brand managers are put in charge of managing and promoting specific product categories. This ensures that all products receive adequate attention.

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CHAPTER 10 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Place decisions make goods and services available in the right quantities and locations, when customers want them. ⊚ ⊚

true false

2) Place is concerned with the selection and use of marketing specialists—intermediaries and collaborators—and making goods and services available in the right quantities and locations when customers want them. ⊚ ⊚

true false

3) A channel of distribution is a series of firms or individuals participating in the flow of products from the producer to the consumer. ⊚ ⊚

true false

4) Specialists are often involved in how they come together to form a channel of distribution. ⊚ ⊚

true false

5) Product classes help marketing managers understand how much market exposure will be needed in each geographic area. ⊚ ⊚

true false

6) Place decisions are easier to change in the short run than Product, Price, and Promotion decisions.

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⊚ ⊚

true false

7) The Internet is making it possible for firms to reach customers that were impossible to reach before. ⊚ ⊚

true false

8) With the Internet, even very small specialized firms can draw customers from all over the world. ⊚ ⊚

true false

9) The Internet gives large firms access to repeat customers, but it does little for small firms trying to develop an initial base of customers. ⊚ ⊚

true false

10) Firms that use direct distribution can usually adjust their marketing mixes more quickly than firms that use indirect distribution. ⊚ ⊚

true false

11) Aggressive, market-oriented intermediaries are almost always available and eager to handle the distribution of innovative new products. ⊚ ⊚

true false

12) Some firms are forced to use direct distribution when they can't find intermediaries willing to carry innovative new products.

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true false

13) Selling direct-to-customer is more common with business products than consumer products. ⊚ ⊚

true false

14) Direct-to-customer channels are rarely used in business markets because they are much more expensive and less efficient than using intermediaries. ⊚ ⊚

15)

Many business products are sold direct, but hardly any services are. ⊚ ⊚

16)

true false

Firms that use direct marketing promotion may or may not use direct distribution. ⊚ ⊚

18)

true false

The terms direct marketing and direct distribution mean the same thing. ⊚ ⊚

17)

true false

Direct marketing is primarily concerned with Promotion, not Place. ⊚ ⊚

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true false

19) A producer who wants to reach certain customers may have no choice about which wholesaler to use. ⊚ ⊚

true false

20) A wholesaler might help a producer by reducing the producer's need to carry large inventory stocks. ⊚ ⊚

true false

21) A wholesaler might help a producer by reducing the producer's need for marketing research. ⊚ ⊚

true false

22) The most important reason to use indirect channels is if intermediaries can help serve customers better and at lower cost. ⊚ ⊚

true false

23) Discrepancies of quantity occur because individual producers want to produce large quantities of products, while individual consumers prefer to buy products in small quantities. ⊚ ⊚

true false

24) Discrepancies of assortment occur because individual producers tend to specialize in producing a large assortment of products, while individual consumers prefer to buy a small assortment of products. ⊚ ⊚

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true false

25) Discrepancies of quantity and assortment occur because individual producers find it economical to produce and sell small quantities of a large assortment of products, while individual customers prefer to buy large quantities of a small assortment of products. ⊚ ⊚

true false

26) Discrepancy of quantity means the difference between the lines a typical producer makes and the assortment final consumers want. ⊚ ⊚

true false

27) Regrouping activities involve adjusting the quantities or assortments of products handled at each level in a channel of distribution. ⊚ ⊚

true false

28) When a warehouse is rearranged to speed up order processing, "regrouping activities" are being performed. ⊚ ⊚

true false

29) Accumulating involves dividing larger quantities into smaller quantities as products get closer to the final market. ⊚ ⊚

true false

30) Accumulating involves collecting products from many small producers—often as a way to get lower transportation rates.

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true false

31) Bulk-breaking means separating products into grades and qualities as desired by different target markets. ⊚ ⊚

true false

32) "Sorting" means separating products into grades and qualities desired by different target markets. ⊚ ⊚

true false

33) Assorting activities involve putting together a variety of products to give a target market what it wants. ⊚ ⊚

true false

34) Assorting means separating products into grades and qualities desired by different target markets. ⊚ ⊚

true false

35) Distribution costs can be very low for digital products because there is often no physical good to distribute. ⊚ ⊚

36)

true false

Digital products cost more to distribute than physical products.

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⊚ ⊚

true false

37) In an indirect channel of distribution, both vertical conflict and horizontal conflict may arise. ⊚ ⊚

true false

38) Channel conflict often results when a manufacturer opens a new distribution channel, especially if it directly competes with its existing intermediaries. ⊚ ⊚

true false

39) A new channel is more likely to prompt conflict if it focuses on segments not already served by current channels. ⊚ ⊚

true false

40) One way for a producer to reduce conflict with channel partners is to offer different products in each different channel. ⊚ ⊚

41)

true false

A channel captain is a manager who helps direct the activities of a whole channel. ⊚ ⊚

true false

42) A channel captain helps direct the activities of a whole channel and tries to avoid or solve channel conflicts.

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⊚ ⊚

43)

true false

Most traditional channel systems don't have a channel captain. ⊚ ⊚

true false

44) According to the text, it's best for the channel captain to be a producer rather than a wholesaler or retailer. ⊚ ⊚

true false

45) Because wholesalers and retailers are closer to the final user, they are in an ideal position to assume the channel captain role. ⊚ ⊚

true false

46) Horizontal marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel. ⊚ ⊚

true false

47) In administered channel systems, vertical cooperation is achieved by acquiring firms at different levels of activity. ⊚ ⊚

true false

48) Administered and contractual channel systems are vertical marketing systems that depend on agreements between channel members to cooperate.

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49)

Any contractual channel system, by definition, is also an administered channel system. ⊚ ⊚

50)

true false

Vertical marketing systems account for a majority of U.S. retail sales. ⊚ ⊚

true false

51) Vertical marketing systems are growing in the United States but declining in the rest of the world. ⊚ ⊚

52)

true false

Traditional channel systems are growing faster than vertical marketing systems. ⊚ ⊚

true false

53) Firms that cooperate to build vertical marketing systems typically share a longer-term commitment. ⊚ ⊚

true false

54) Ideal market exposure should make a product available widely enough to satisfy target customers' needs but not exceed them. ⊚ ⊚

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true false

55) Ideal market exposure means selling a product through all intermediaries willing to stock and sell it. ⊚ ⊚

true false

56) Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. ⊚ ⊚

true false

57) Intensive distribution is selling through only those intermediaries who will give the product special attention. ⊚ ⊚

true false

58) Intensive distribution covers the broad area of market exposure between selective and exclusive distribution. ⊚ ⊚

true false

59) Selective distribution is becoming more popular than intensive distribution as firms see that they do not need 100 percent coverage of a market to support national advertising. ⊚ ⊚

true false

60) Selective distribution is growing in popularity because it provides 100 percent coverage of the market. ⊚ ⊚

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true false

61) The 80/20 rule is more likely to apply to a firm that uses intensive distribution than a firm that uses selective distribution. ⊚ ⊚

true false

62) Compared to intensive distribution, selective distribution gives a producer a greater opportunity for profit but usually makes it more difficult for intermediaries to make a profit. ⊚ ⊚

63)

true false

Exclusive distribution is selling through only one intermediary in each geographic area. ⊚ ⊚

true false

64) Horizontal agreements to limit sales by territory or customer are always illegal according to the Supreme Court. ⊚ ⊚

true false

65) Vertical agreements to limit sales by customer or territory are always illegal, while horizontal agreements may be legal sometimes. ⊚ ⊚

true false

66) Exclusive distribution is more likely to involve a more formal arrangement than is selective or intensive distribution. ⊚ ⊚

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true false

67) A manufacturer that uses several competing channels to reach the same target market is using multichannel distribution. ⊚ ⊚

true false

68) Multichannel distribution occurs when a producer uses several competing channels to reach the same target market, perhaps using several intermediaries in addition to selling directly. ⊚ ⊚

true false

69) A manufacturer may be forced to use multichannel distribution because a big retail chain wants to deal directly with it instead of wholesalers. ⊚ ⊚

true false

70) Manufacturers are sometimes forced to use multichannel distribution because their present channels are doing a poor job or are not reaching some potential customers. ⊚ ⊚

true false

71) A customer who goes to Amazon.com to look at different types of cycling jackets and then tries the jacket on at her local bike shop before finally buying it at bikes.com is a multichannel shopper. ⊚ ⊚

true false

72) Webrooming refers to gathering information for a purchase in an online store and then purchasing in a brick-and-mortar store.

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⊚ ⊚

true false

73) Omnichannel is a multichannel selling approach in which a single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. ⊚ ⊚

true false

74) A customer goes to the Ace Hardware website and finds out that there are three Philips LED light bulbs he wants to purchase in stock at his local store. He then goes to the store and finds those light bulbs in stock. Ace Hardware is practicing an omnichannel approach. ⊚ ⊚

true false

75) When a firm utilizes multichannel distribution, a sales channel report—which lists unit or dollar volume sales for each channel—can help a marketing manager monitor the performance of each channel. ⊚ ⊚

76)

true false

Reverse channels are used when multichannel distribution fails. ⊚ ⊚

true false

77) Channels used to retrieve products that customers no longer want are called collection channels. ⊚ ⊚

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true false

78) Reverse channels may provide a way to retrieve unwanted products from intermediaries, business customers, or final consumers. ⊚ ⊚

79)

Exporting is often the first step toward international marketing. ⊚ ⊚

80)

true false

Exporting is sometimes just a way for a firm to get rid of surplus products. ⊚ ⊚

true false

81) Exporters often work with specialists who can handle international problems such as customs, taxes, exchange rates, and shipping. ⊚ ⊚

true false

82) Of the five basic kinds of involvement in international marketing, exporting is the least permanent. ⊚ ⊚

true false

83) Exporting has an advantage, compared to other types of international involvement, because it is usually easier to drop or change arrangements as the firm's needs change. ⊚ ⊚

true false

84) In a licensing agreement, the licensee takes most of the risk because it must invest some capital to use the right granted by the licensor.

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⊚ ⊚

true false

85) General Motors (GM), a U.S. automotive manufacturer, has an arrangement with Isuzu Motors of Japan in which the Isuzu Ascender is produced at the same GM manufacturing plant as the Chevrolet TrailBlazer and GMC Envoy. All three vehicles use the same basic platform and engine. This is an example of licensing. ⊚ ⊚

true false

86) A firm that has a lot of management know-how but expects production problems in a foreign market might be wise to use management contracting. ⊚ ⊚

true false

87) Management contracting is a relatively low-risk way of entering foreign markets, since no commitment is made to fixed facilities. ⊚ ⊚

88)

In a joint venture, a domestic firm enters into a partnership with a foreign firm. ⊚ ⊚

89)

true false

Joint venturing gives a firm less control than if it owns a separate subsidiary. ⊚ ⊚

90) risk.

true false

Direct investment in a foreign market involves the biggest commitment and the biggest

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⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 91) Which of the following is not a Place decision? A) types of intermediaries needed B) degree of market exposure desired C) recruiting, selecting, and managing the sales force D) type of distribution channel to use E) customer service level desired

92)

Which of the following statements does not accurately characterize Place decisions?

A) Place decisions involve stocking the right quantities of products. B) Place decisions involve identifying appropriate locations for products. C) Place decisions must involve analysis of when customers will want or need products. D) Place decisions typically involve channel partners. E) Place decisions are more easily changed compared to Price, Promotion, and Product decisions.

93)

Strategy decisions concerning Place would not include A) geographic pricing policy. B) type of channel of distribution. C) type of intermediaries/collaborators. D) type of physical distribution facilities. E) degree of market exposure desired.

94)

Strategy decisions concerning Place would not include

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A) type of physical distribution facilities. B) type of channel of distribution. C) degree of market exposure desired. D) distribution customer service level. E) how to train wholesalers' salespeople.

95)

A channel of distribution

A) is any series of firms or individuals who participate in the flow of goods and services from producer to consumer or final user. B) is only needed when products must be stored. C) must include one or more intermediaries. D) is only needed when products are sold indirectly. E) None of the answers are correct.

96)

Which of the following statements about Place is false? A) Place variations are required when target markets have different needs. B) Product classes suggest Place objectives. C) Place decisions have relatively little impact on competition in a product-market. D) Place decisions have longer-run implications than Price decisions. E) Place decisions must take into consideration when customers want products.

97)

Which of the following statements about Place is false?

A) Most consumer products move from producer to intermediaries to final customer. B) A series of participants in the flow of goods and services from producer to final customer is called a channel of distribution. C) There is always one Place arrangement that is "best" for a product. D) Intermediaries develop to adjust discrepancies in quantity and assortment.

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98)

Which of the following statements about Place decisions is true? A) Product classes are not related to Place objectives. B) The product life cycle is not related to Place objectives. C) Place decisions are short-term decisions that are easy to change. D) Different market segments may require separate Place arrangements. E) Place decisions are the same for any market.

99)

Which of the following statements about Place is true?

A) Most consumer products and most business products are sold to intermediaries, who then sell them to final customers. B) Place decisions are usually harder to change than other marketing mix decisions. C) There is always one Place arrangement that is "best" for a product. D) A series of individuals who aid in the flow of goods and services from producer to final customer is called a distribution network. E) None of these statements is true.

100) Because of long-run effects, decisions about which of the Four Ps are often harder to change than decisions about the others? A) Product B) Place C) Promotion D) Price

101)

For heterogeneous shopping goods, marketers should

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A) utilize knowledgeable salespeople who can provide insights about different brands and models. B) sell through low-cost retailers. C) avoid selling through online stores. D) provide limited customer support, as customers focus mostly on low prices. E) keep the level of the salesforce in the retail stores to the lowest level possible.

102)

For homogeneous shopping goods, marketers favor low-cost retailers primarily because A) customers focus on low prices. B) customers focus on low quality. C) customers focus on broad product assortments. D) low-cost retailers provide extensive customer support. E) low-cost retailers have many outlets close to customers.

103)

Which of the following favor low-cost retailers? A) homogeneous shopping goods B) specialty shopping goods C) heterogeneous shopping goods D) physical shopping goods E) household shopping goods

104)

What do business product classes reflect? A) what intermediaries think about the products and how they should be marketed B) what customers think about the products and how they must be priced C) what distributors think about the products and how they must be distributed D) what buyers think about the products and how they are used E) what producers think about the products and how they are promoted

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105)

________ decisions often have long-run effects and are harder to change. A) Product B) Promotion C) People D) Place E) Price

106)

Place decisions A) may focus on the location of retail stores and wholesale facilities. B) may focus on the selection and use of intermediaries and collaborators. C) can be aided by knowing about the product classes. D) are harder to change than Product, Promotion, or Price decisions. E) All of the answers are correct.

107)

Why would a producer prefer direct distribution? A) because it has more business transactions B) because they can handle orders that are smaller in size C) because they want to maintain control of the marketing mix D) because customers are usually widely dispersed across geographic areas E) because business products always use direct distribution

108)

A direct-to-customer channel

A) includes a retailer but not a wholesaler. B) provides firms with data, knowledge, and information about its market. C) eliminates some of the marketing functions. D) is typical in reaching final consumer markets. E) is most suitable when a large number of transactions are required in the channel or when orders are smaller.

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109)

Business products tend to be sold direct to customers because A) business markets have more transactions. B) the orders are small in size. C) e-commerce systems can efficiently handle orders once relationships are established. D) customers are usually widely dispersed across geographic areas. E) these products always use direct distribution.

110) Producers who consider handling the entire distribution job themselves may be especially inclined to do so because A) many customers have established buying patterns that don't include buying direct from producers. B) many customers have a preference for shopping at their favorite locations and won't be likely to change. C) direct distribution usually requires a significant investment in facilities, people, and information technology. D) a channel partner (intermediary) is not available or will not cooperate. E) intermediaries often serve customer needs better than producers and at lower cost.

111) Direct ________ involves personal sales contact between a representative of the company and an individual consumer. A) marketing B) selling C) distribution D) servicing E) pricing

112)

Direct marketing is

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A) personal sales contact between a representative of the company and an individual consumer. B) primarily concerned with the degree of market exposure. C) direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. D) an effort to sell through only one intermediary. E) a strategy that works best when a producer has little working capital.

113) Throughout the world, Sony sells its televisions through retailers. Which of the following is probably a reason for using this indirect distribution strategy? A) Sony's customers prefer to buy direct from Sony. B) Sony's customers do not know which intermediaries sell its televisions. C) Sony has limited financial resources. D) Sony could more effectively serve customers by selling to them through its website. E) Sony believes that some intermediaries can serve customer needs better than Sony and at lower cost.

114) What would be the most effective way for a firm to convince an intermediary to carry a less well-known product? A) by demonstrating customer demand for the product B) by making the product the cheapest offering on the market C) by instituting a vertical marketing system D) by requesting exclusive distribution E) by engaging independent distributors to promote the product

115)

A company may be inclined to use both direct and indirect channels of distribution when

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A) serving multiple target markets. B) it wants total control over the marketing mix. C) suitable channel partners are hard to find. D) selling to business customers. E) selling to final customers.

116)

Many firms prefer to distribute directly to the final customer or consumer because they A) want to control the whole marketing job. B) believe they can serve target customers at a lower cost. C) think they can do the work more effectively than intermediaries. D) can use e-commerce systemsto make direct distribution easier. E) All of these are reasons why firms may prefer direct distribution.

117) Which of the following is a factor in the growing number of consumer products that are being sold direct to consumer? A) growth of delivery services B) increased customer comfort with online purchases C) website e-commerce systems D) lowered costs for direct distribution E) All of the answers are correct.

118) In which of the following distribution channels is the firm most likely to maintain control of the marketing mix? A) direct B) indirect C) cooperative D) layered E) horizontal

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119)

Which of the following statements about direct channel systems is false?

A) There is no reliance on independent intermediaries whose objectives may be different from the producer's objectives. B) Suitable intermediaries are always available even when they're needed at the last minute. C) The producer can generate data, information, and knowledge about its market. D) Direct channels are more typical with business products than with consumer products.

120)

One disadvantage of direct-to-customer channels is that they A) are not suitable when the number of transactions is small or when orders are large. B) are illegal in business and organizational markets. C) make it more difficult to serve buyers who want to lease rather than buy products. D) require the producer to coordinate with many retailers. E) None of the answers are correct.

121)

One disadvantage of direct-to-customer channels is that

A) most organizational buyers are used to relying on intermediaries to serve as their purchasing advisors. B) they require producers to shift many marketing functions to others. C) this approach makes it hard to achieve coordination among the required marketing activities. D) they make it more difficult to get information about changing needs of the market. E) None of the answers are correct.

122)

Which of the following statements about direct-to-customer channels is false?

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A) Most consumer products are sold via direct-to-customer channels. B) Producers must sometimes use direct-to-customer channels because suitable intermediaries are not available. C) Many business products are sold via direct-to-customer channels. D) Service firms often use direct-to-customer channels. E) Direct marketing does not mean that a firm uses direct-to-customer channels.

123) Ravi Singh is working his way through college as an independent distributor of the Rapier Knife Co. The Rapier product line includes kitchen knives, hunting knives, and other special-purpose cutlery. Ravi makes sales presentations to potential customers in their homes. If a customer wants to make a purchase, Ravi buys the knives from Rapier and sells them to the customer at a markup. For example, Rapier's most popular knife is a chef's knife that Ravi buys for $25 and resells to the consumer for $50. Ravi is A) part of a direct-to-customer channel. B) engaged in direct marketing. C) engaged in direct selling but is part of an indirect channel. D) None of the answers are correct.

124)

Direct ________ involves a salesperson talking directly to a customer. A) marketing B) selling C) distribution D) servicing E) pricing

125) Sofia Martin sells Mary Kay cosmetics. She hosts parties, provides product knowledge, and places orders for her customers with Mary Kay. Mary Kay considers Sofia to be an independent dealer of their product. Regarding this situation, which of the following statements is accurate?

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A) Sofia is not an employee, so in a strict technical sense her sales are not direct distribution. B) Sofia is an independent dealer, so the communication between her and her clients is considered direct marketing. C) Sofia is engaging in classic indirect distribution. D) Sofia is a licensee, which gives her exclusive rights to directly distribute Mary Kay products. E) None of the answers are correct.

126)

Direct marketing is

127)

Which of the following is true of direct distribution?

A) It requires a significant investment in facilities. B) It reduces a producer's need for working capital. C) Direct distribution always serves customer needs better and at a lower cost. D) Most firms selling consumer products rely on direct distribution. E) It is easy to change customer buying patterns from indirect distribution to direct distribution.

128)

Indirect channels are probably a better choice than direct channels when

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A) the firm has limited financial resources. B) the product is a consumer product instead of a business product. C) target customers already have established buying patterns for where to search for the product. D) retailers are already conveniently located where consumers shop. E) All of the answers are correct.

129) Which of the following is a function that an intermediary is likely to provide for customers? A) reducing inventory costs B) regrouping products C) providing delivery D) granting credit E) All of the answers are correct.

130) Which of the following is among the benefits an intermediary is likely to provide for producer-suppliers? A) reduced credit risk B) reduced need to store inventory C) reduced need for marketing research D) reduced need for working capital E) All of the answers are correct.

131)

Intermediaries in indirect channels of distribution

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A) often perform functions that producers cannot perform efficiently by themselves. B) do not provide additional convenience to consumers. C) increase the need for producers to make large investments in distribution facilities and personnel. D) make it necessary for producers to carry more inventory. E) None of the answers are correct.

132) to

An indirect channel is probably a better choice than a direct channel if a producer wants

A) provide special technical service. B) make it easier to do marketing research. C) be more sensitive to coming changes in customer needs and attitudes. D) obtain a very aggressive selling effort. E) adjust large discrepancies of quantity and assortment.

133)

Channel specialists provide value to producers in which of the following circumstances?

A) when producers are located far from their customers and may not know how best to reach them B) when the assortment and quantity of products customers want matches the assortment and quantity of products companies produce C) when customers are well informed about their product choices D) when producers and customers exist in the same location E) when customers prefer online purchasing

134) To help producers manage discrepancies between what gets produced and what customers need, channel specialists perform ________ activities, such as accumulating, bulkbreaking, sorting, and assorting.

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A) channel B) regrouping C) direct marketing D) promotion E) selective distribution

135) Channel specialists use the regrouping activities of sorting and assorting to resolve discrepancies of A) time. B) quantity. C) assortment. D) place. E) need.

136) When Fresh Produce Wholesaler Inc. buys fruits and vegetables from a variety of different farmers and then takes large bushels and breaks them into smaller package sizes, Fresh Produce is addressing discrepancies of A) time. B) quantity. C) assortment. D) place. E) need.

137)

Discrepancy of assortment means

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A) some producers can produce more products than others. B) some consumers buy more products than others. C) consumers want more output than producers can make. D) there are more producers than wholesalers. E) the difference between the product lines the typical producer makes and the assortment wanted by final consumers or users.

138) A publisher of photography books finds that it is cost-effective to print 10,000 or more at a time. But a bookstore orders only a few copies of each book, since its customers want to select from a wide variety. This example shows A) why discrepancies of quantity occur. B) why both discrepancies of quantity and discrepancies of assortment occur. C) neither discrepancy of assortment nor discrepancy of quantity. D) why discrepancies of assortment occur. E) multichannel distribution.

139)

Discrepancy of quantity means

A) there are more producers than consumers. B) there are more consumers than producers. C) the difference between the product lines the typical producer makes and the assortment wanted by consumers or final users. D) consumers want more products than producers can make. E) the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users.

140) The regrouping activity that involves collecting products from many small producers so that the products can be handled more economically further along in the channel is called

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A) sorting. B) wholesaling. C) accumulating. D) assorting. E) bulk-breaking.

141) Dividing large quantities into smaller quantities as products get closer to the final market is called A) accumulating. B) bulk-breaking. C) sorting. D) assorting. E) dividing.

142)

Since music, movies, books, and TV programs now exist in digital form, such products A) have the same distribution methods as physical products. B) have lower distribution costs. C) do not require intermediaries. D) do not need distribution. E) do not face discrepancies of quantity or assortment.

143)

Discrepancies of quantity occur because

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A) producers seek economies of scale. B) most intermediaries specialize in selected product lines and buy in large enough quantities to get a good price. C) adding intermediaries in a channel of distribution increases the cost of getting products to consumers. D) consumers want the convenience of buying many different types of products at one time. E) All of the answers are correct.

144)

Discrepancies of quantity means

145)

Discrepancy of quantity means

A) some consumers buy more products than others. B) there are more consumers than producers. C) some manufacturers can produce more products than others. D) the difference between the quantity of products it is economical for an individual producer to make and the quantity normally wanted by individual consumers or users. E) that demand is greater than what a company can supply.

146)

Discrepancy of quantity is

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A) the difference between the lines a typical producer makes and the assortment final consumers or users want. B) adjusting the quantities of products handled at each level in a channel of distribution. C) collecting products from many small producers. D) the difference between the quantities of products that it is economical for a producer to make and the quantity final users or consumers normally want. E) usually seen with producers who specialize by product.

147)

Which of the following best illustrates discrepancy of quantity?

A) Michelin makes tires, but most consumers also want a large selection of car-care services. B) Some stores sell large quantities of Michelin tires but only small quantities of tires made by other companies. C) There are over 310 million consumers in the United States, but only a small portion buy tires in any given year. D) Four firms make over 90 percent of all the tires sold in the United States. E) Michelin made millions of tires last year, but most customers bought only one set.

148) Sony manufactures clock radios in quantities of more than 100,000 in a given time period, but the average consumer wants only one clock radio at a time. This difference is an example of A) a regrouping activity. B) a discrepancy of assortment. C) a discrepancy of quantity. D) a sorting error. E) reassorting.

149) A manufacturer prefers to produce and ship in large quantities to take advantage of economies of scale. Final consumers often want to purchase in small quantities. This difference between the producer and consumer is a

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A) discrepancy of assortment. B) discrepancy of quantity. C) regrouping activity. D) discrepancy adjustment. E) marketing discrepancy.

150) ESPN cable television offers numerous sports programs. What type of discrepancy does this create for sports fans who want to watch only a few of the programs? A) discrepancy of assortment B) discrepancy of information C) discrepancy of quantity D) discrepancy of quality E) discrepancy of image

151) The CBS network offers consumers hundreds of hours of television viewing each month, but the typical consumer wants to watch only a few programs. What type of discrepancy does this create? A) discrepancy of assortment B) discrepancy of quality C) discrepancy of image D) discrepancy of variety E) discrepancy of quantity

152)

Discrepancy of assortment means

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153)

Discrepancy of assortment means

A) there are more producers than consumers. B) consumers want more output than producers make. C) the difference between the product lines the typical producer makes and the assortment wanted by final consumers or users. D) there are more consumers than producers. E) the difference between the quantity of products the typical producer makes and the quantity wanted by individual consumers.

154)

Which of the following best illustrates adjusting discrepancies of assortment?

A) General Motors makes Hummer for one product-market and Chevrolet for another product-market. B) A hardware store sells all the hardware items wanted by most people. C) Over 310 million U.S. consumers are served by approximately 330,000 manufacturers. D) RCA sold more than 2,000,000 TVs last year. E) Three firms produce over 60 percent of all the DVD players sold in the United States.

155) Consumers usually want to shop for milk, meat, vegetables, and fruits at one convenient location. Grocery stores that offer all these products help to alleviate this

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A) discrepancy of quantity. B) accumulation deficit. C) sorting error. D) discrepancy of assortment. E) bulk-breaking.

156) A publisher of photography books finds that it is cost-effective to print 10,000 or more at a time. But a bookstore orders only a few copies of each book, since its customers want to select from a wide variety. This example shows A) why discrepancies of quantity occur. B) why both discrepancies of quantity and discrepancies of assortment occur. C) neither discrepancies of assortment nor discrepancies of quantity. D) why discrepancies of assortment occur. E) multichannel distribution.

157)

All of the following are regrouping activities except A) accumulating. B) bulk-breaking. C) sorting. D) assorting. E) channeling.

158)

Which of the following is not one of the regrouping activities? A) assorting B) ranking C) sorting D) bulk-breaking E) accumulating

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159) The regrouping activity that involves collecting products from many small producers so that the products can be handled more economically further along in the channel is called A) sorting. B) wholesaling. C) accumulating. D) assorting. E) bulk-breaking.

160) Yakima Valley Produce, Inc. buys artichokes from many small farmers, assembles them into larger quantities, and ships in carload quantities to a central market where they are sold to large food processors. This regrouping activity is called A) bulk-breaking. B) assorting. C) sorting. D) wholesaling. E) accumulating.

161) Small farmers in the mountains of Peru pick coffee beans by hand, obtaining only a bucket a day. They then sell them to buyers who put the beans in large bags to be shipped to processors. This regrouping activity is called A) assorting. B) wholesaling. C) bulk-breaking. D) sorting. E) accumulating.

162) When Amazon.com collects products from many small producers, the company is involved in

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A) assorting. B) accumulating. C) bulk-breaking. D) quantitizing. E) sorting.

163) AsianArt4U.com brings together the art produced by many different Asian painters and sculptors and offers them for sale on its website. This is an example of A) accumulating. B) sorting. C) a franchise channel. D) a discrepancy intermediary. E) bulk-breaking.

164) The regrouping activity that involves dividing carload or truckload shipments into smaller quantities as products get closer to final customers is called A) sorting. B) retailing. C) assorting. D) accumulating. E) bulk-breaking.

165)

Bulk-breaking

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A) means putting together a variety of products to give a target market what it wants. B) involves collecting products from many small producers. C) involves dividing larger quantities into smaller quantities as products get closer to the final market. D) means separating products into grades and qualities desired by different target markets. E) is most important with specialized producers of professional services.

166) InterContinental Hardware Co. buys carload quantities of bolts, screws, nuts, washers, and other hardware from a large producer in the Netherlands, divides these shipments into smaller quantities, and sells them to other wholesalers and retail chains. This regrouping activity is called A) assorting. B) wholesaling. C) accumulating. D) bulk-breaking. E) sorting.

167) Costco is a warehouse store that sells groceries, household items, and business products. Purchase quantities tend to be larger than in traditional stores that serve final consumers. For example, soft drinks are only sold in 24-can cases, not in 6-packs. Coffee is sold in 3-pound cans instead of 1-pound foil packs. Which regrouping activity is Costco shifting to the consumer? A) accumulating B) adjusting discrepancies C) assorting D) bulk-breaking E) sorting

168) When an online intermediary like Hulu scans all the episodes of the TV show NCIS and then offers them to its customers one episode at a time, it is an example of

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A) sorting. B) assorting. C) vertical integration. D) bulk-breaking. E) horizontal integration.

169) The regrouping activity that involves grading or sorting products into the grades and qualities desired by different target markets is called A) assorting. B) sorting. C) wholesaling. D) accumulating. E) allocation.

170) ________ means separating products into grades and qualities as desired by different target markets. A) Bulk-breaking B) Sorting C) Accumulating D) Assorting E) Discrepancy of quality

171) Lacey Springs Apple Co. buys fresh apples in truckload quantities, regroups the heterogeneous commodities into homogeneous lots according to grade and quality, and then sells them to retailers. This regrouping activity is called

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A) accumulating. B) bulk-breaking. C) sorting. D) wholesaling. E) assorting.

172) Retail stores that sell "seconds" and "irregular" products at discount prices are flourishing all over the country. These stores are needed because of which regrouping activity? A) accumulating B) bulk-breaking C) sorting D) wholesaling E) assorting

173) When an online intermediary like Hulu scans thousands of hours of programming each week and groups these programs into categories of digital programs (e.g. sports, crime, etc.), it is an example of A) vertical integration. B) sorting. C) bulk-breaking. D) assorting. E) licensing.

174) The regrouping activity that involves putting together a variety of products to give a target market what it wants is called

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A) assorting. B) bulk-breaking. C) wholesaling. D) accumulating. E) sorting.

175) Some sporting goods manufacturers do not make a "full line" of equipment, so the Sports World retail chain carefully selects the brands of several manufacturers to sell. This regrouping activity is called A) accumulating. B) assorting. C) retailing. D) bulk-breaking. E) sorting.

176) A wholesaler selling golf carts and mowers to golf courses might also carry grass seed and grass fertilizer. This would be an example of A) bulk-breaking. B) sorting. C) accumulating. D) assorting. E) discrepancy of quantity.

177) Every morning, Sycamore Dairy picks up milk that farmers have "milked" that morning. The dairy processes the milk and separates the cream from the milk. Some of the cream is then made into butter and packaged in various sizes of containers. The milk and remaining cream are blended into various products; sealed in pint, quart, and half-gallon containers; and then delivered to supermarkets in the quantities and assortments ordered. Sycamore Dairy is engaged in which regrouping activity?

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A) assorting B) accumulating C) sorting D) bulk-breaking E) All of the answers are correct.

178) Regarding the distribution of digital products, which of the following statements is accurate? A) Regrouping activities by a channel specialist can add value to the distribution of digital products. B) Digital products do not require distribution. C) Distribution of digital products can be very costly. D) Digital products do not face the same discrepancies as tangible goods. E) There would never be a need for channel specialist to handle the distribution of digital products.

179)

Traditional channels of distribution A) do not perform bulk-breaking activities. B) are usually preferred to other distribution arrangements. C) are easier to control than corporate channel systems. D) may involve little or no cooperation among channel members. E) are usually controlled through strong legal contracts.

180) Channel systems in which the various channel members make little or no effort to cooperate with each other are called ________ systems.

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A) traditional channel B) vertically integrated C) direct-to-customer channel D) franchising E) administered channel

181)

The desirability of a common product-market commitment is based on the idea that A) each member of the channel should focus on a different target market. B) the whole channel is competing with other channel systems. C) the producer should always be the channel captain. D) a channel can eliminate the marketing functions. E) All of these ideas are relevant.

182) Marketers need to foster cooperation with various members of a channel system to prevent A) channel competition. B) channel confusion. C) channel conflict. D) channel changing. E) channel surfing.

183) Which of the following is not a common cause of conflict between producers and channel partners in a channel system? A) lack of communication B) different objectives C) independent operations D) lack of a channel captain E) different target customers

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184)

Producers can positively manage channel conflict using all the following tactics except A) offering different products through different channels. B) serving different market segments through different channels. C) limiting channel member relationships to buying and selling activity. D) compensating participating channel members when conflict exists. E) identifying a channel captain.

185)

A common product-market commitment in a channel system helps to eliminate A) the need for a channel captain. B) unnecessary and costly duplication of marketing functions. C) all production-oriented channel members. D) competition among different channel systems. E) the need for marketing managers in individual firms.

186)

Traditional channels of distribution A) do not perform bulk-breaking activities. B) are usually preferred to other distribution arrangements. C) are more easily controlled than corporate channel systems. D) may involve little or no cooperation among channel members. E) are usually controlled through strong legal contracts.

187)

In traditional channel systems, the channel members

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A) consider traditional values—like cooperation and respect—as central to their relationship. B) have franchise contracts. C) usually have a common product-market commitment. D) make little or no effort to cooperate with each other. E) are integrated.

188) Channel systems in which the various channel members make little or no effort to cooperate with each other are called ________ systems. A) traditional channel B) vertically integrated C) direct-to-customer channel D) franchising E) administered channel

189)

Traditional channel systems

A) are characterized by strong ties between channel members. B) exhibit little cooperation between channel members. C) have channel members that look out for each other's best interest. D) have members that go to great lengths to cooperate with each other. E) usually feature a strong product-market commitment that is shared by all the members of the channel.

190)

Which statement about channels of distribution is true?

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A) Channels of distribution that include intermediaries result in higher distribution costs than channels without intermediaries. B) Channels of distribution should be designed to increase discrepancies of quantity between producers and consumers. C) Channels of distribution do not usually experience conflict as long as each channel member has profit as a goal. D) Channels of distribution usually require longer-term planning than other market mix elements, because it is more difficult to change channel decisions quickly. E) Channels of distribution are always characterized by conflict among channel members.

191) ________ channel conflict occurs between firms at different levels in the channel of distribution. A) Vertical B) Diagonal C) Horizontal D) Parallel E) Cyclical

192) Nature Fresh Cereal does not feel satisfied with the location and amount of shelf space it is given at Sunshine Health Food Markets. This creates a source of ________ channel conflict. A) vertical B) diagonal C) horizontal D) parallel E) placement

193) A wine producer wants a supermarket manager to display its wines in a desirable end-ofaisle location, but the supermarket manager refuses to give that valuable real estate to this producer. This is an example of ________ channel conflict.

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A) contractual B) vertical C) corporate D) horizontal E) administered

194) ________ channel conflict occurs between firms at the same level in the channel of distribution. A) Vertical B) Diagonal C) Horizontal D) Parallel E) Cyclical

195) Roscoe Hardware carries stock of the complete line of Ever-Green Push Lawn Mowers. Its competitor down the street sells the same mowers at a special price by special order but does not carry any inventory. This situation creates A) vertical channel conflict. B) exclusive distribution rights. C) a competitive discrepancy. D) horizontal channel conflict. E) reverse channels.

196) A local TV retailer hires knowledgeable salespeople to explain the differences among its models to customers, but a nearby discount store with very few sales staff sells the same TVs at a lower price. This is an example of ________ channel conflict.

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A) horizontal B) traditional C) vertical D) contractual E) corporate

197) Barnes and Noble, a multichannel bookshop, discovers that Amazon.com is selling a new blockbuster book by Dan Brown at a 25 percent discount over Barnes and Noble's in-store price—because Amazon.com has a lower overhead cost. This is an example of ________ channel conflict. A) vertical B) traditional C) horizontal D) administered E) contractual

198) The marketing manager for a producer of mattresses and box springs distributes its products through discount stores (like Costco), department stores, furniture stores, and specialty bedding stores. To avoid conflict with channel members, the marketing manager should A) offer purchase discounts based on the quantity of mattresses that the retailer sells. B) assume that all channel members have a common commitment to target consumers at the end of the channel. C) trust retailers to emphasize sales of his brand rather than the brand of some other manufacturer. D) develop different brands or product lines for different channels. E) expect one of the large retail chains to step up to the responsibilities of being the channel captain.

199)

Some channel conflict may be

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A) inevitable when channel members have different objectives. B) useful if that is what it takes for customers at the end of the channel to receive better value. C) avoided when a producer does not sell identical products through different (competing) channels. D) reduced if there is a channel captain who thinks about all of the members of a channel and helps to direct their activities. E) All of the answers are correct.

200)

To reduce conflicts in channels, a firm should A) offer different products through each channel. B) provide some compensation to members of the older channel. C) treat channel partners fairly even when one partner is more powerful. D) focus on segments not currently served by existing channels. E) All of the answers are correct.

201) A ________ is a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. A) channel executive B) channel captain C) distribution manager D) channel coordinator E) distribution leader

202) A manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts is a channel

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A) director. B) coordinator. C) captain. D) ombudsman. E) troubleshooter.

203)

A channel captain A) might be any member of the channel (that is, at any level in the channel). B) views the members of the channel as a unit. C) should help to make the channel more efficient by reducing conflict. D) All of the answers are correct.

204)

The text suggests that a channel captain should be a A) strong wholesaler. B) market-oriented producer. C) large retailer. D) Any of these—whoever can provide leadership—might be a channel captain.

205)

Which of the following is true of a producer-led channel system? A) The intermediaries do not support the producer at any stage. B) The system is implemented when producers are small. C) Intermediaries select the target market, while producers develop the product. D) The system is effective when a producer's brand requires penetration pricing. E) Producers fix the prices of their offerings.

206) In a channel in which retailers lead, intermediaries that gather, analyze, and interpret big data to generate insights about their customers' needs will

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A) seek out producers who can meet those needs with products at reasonable prices. B) lose their power to influence pricing. C) take a back seat in a producer-dominated channel system. D) lose their bargaining power against suppliers and customers. E) stop playing the role of channel captain.

207)

In a retailer-led channel system,strategy decisions regarding A) Promotion are handled by retailers. B) Price are completely handled by producers. C) target customers are handled by producers. D) Product are handled by retailers. E) Place are not a concern for the retailers.

208)

The role of channel captain

A) should be taken by producers, because they have more power. B) is taken to force other channel members to accept the channel captain's plan. C) should be taken by retailers, because they are closer to consumers. D) may not be necessary if the channel members are satisfied with the status quo. E) is designed to help a channel system compete more effectively with other channel systems.

209)

A good channel captain knows that

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A) direct-to-customer channels usually cost less and perform more efficiently than indirect channels. B) marketing functions can be shifted and shared within a channel but they cannot be completely eliminated. C) a traditional channel system works best. D) some marketing functions can usually be completely eliminated by using short channels instead of long channels. E) None of the answers are correct.

210) In a ________, the whole channel focuses on the same target market at the end of the channel. A) vertical marketing system B) horizontal marketing system C) parallel marketing system D) diagonal marketing system E) linear marketing system

211)

The main reason that vertical marketing systems are becoming more common is that

A) firms realize that working independently has advantages for channel members. B) firms increasingly understand competition among channel members is profitable. C) it's easy for multiple firms to coordinate a single marketing mix for a common target market. D) firms recognize coordination among channel members can increase sales for each channel member. E) only vertical marketing systems perform activities that adjust the quantities or assortments of products handled at each level in a channel of distribution.

212) A vertical marketing system owned and operated by a single firm is called a(n) ________ channel system.

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A) traditional B) administered C) contractual D) corporate E) nonprofit

213) A firm would prefer an administered channel system to a corporate channel system for all the following reasons except that A) managing all manufacturing, wholesaling, and retailing functions in a channel is too challenging. B) administered channel systems are more costly to operate than corporate systems. C) corporate channel systems offer more control over marketing activities than administered systems. D) administered channel systems offer good enough channel cooperation for the firms' distribution needs. E) administered channel systems have some of the same benefits of corporate channel systems but without the expense.

214)

A good reason for developing or joining a vertical marketing system is that

A) the whole channel focuses on the same target market at the end of the channel and seems to be more effective. B) market competition at each level of the channel eliminates inefficient firms and serves consumers' needs better. C) no member of the channel has to bear the costs of the regrouping activities. D) no member of the channel has to plan for the whole channel, since good decisions at each level run the channel. E) All of these are good reasons for developing or joining a vertical marketing system.

215) One type of vertical integration system that develops by acquiring firms at different levels of channel activity is called

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A) corporate. B) traditional. C) administered. D) contractual. E) technical.

216) In ________ channel systems the amount of cooperation among members of the channel is very high. A) contractual B) traditional C) corporate D) administered E) horizontal

217) The vertical marketing system that typically has the greatest amount of cooperation among channel members is the A) traditional channel system. B) administered channel system. C) contractual channel system. D) franchise channel system. E) corporate channel system.

218) A firm acquiring another firm at a different level of activity within a channel of distribution is known as A) vertical integration. B) establishing a tying contract. C) dual distribution. D) horizontal integration. E) a regrouping activity.

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219) If Walmart purchases a manufacturing plant to produce nothing but Walmart's dealer brand of laundry detergent, Walmart is engaging in A) monopoly. B) vertical integration. C) intertype competition. D) a contractual channel system. E) an administered channel system.

220)

A large food retailer acquiring a cheese factory is an example of A) dual distribution. B) vertical integration. C) establishing a tying contract. D) horizontal integration. E) internal expansion.

221) If a large furniture retailer were to purchase Drexel (a manufacturer of sofas and chairs), it would be an example of A) establishing a tying contract. B) an administered channel system. C) internal expansion. D) vertical integration. E) horizontal integration.

222) Yukon Sportswear, a manufacturer of textile products, bought out the wholesaler that had been handling its distribution in Canada. This is an example of

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A) dual distribution. B) reverse distribution. C) a contractual channel system. D) vertical integration. E) accumulating.

223)

Which of the following is not a likely advantage of vertical integration? A) lower capital requirements B) lower executive overhead C) better control of distribution D) better quality control E) greater buying power

224)

Which of the following is not an advantage of vertical integration? A) lower executive overhead B) better control of distribution C) easier adjustment of discrepancies of quantity and assortment D) greater buying power E) stable sources of supplies

225) A channel system in which the various members informally agree to cooperate with each other is called a(n) ________ system. A) contractual channel B) dual distribution C) traditional channel D) administered channel E) franchising

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226) In ________ channel systems, ordering is routinized, inventory and sales information is shared over computer networks, accounting is standardized, and promotion efforts are coordinated. A) contractual B) traditional C) administered D) integrated E) corporate

227) The vertical marketing system in which control is maintained via informal cooperation among the channel members is the A) administered channel system. B) corporate channel system. C) contractual channel system. D) franchise channel system. E) channel captain system.

228) A computer manufacturer runs training programs for its cooperating retailers' salespeople, as well as providing newspaper advertising layouts, point-of-purchase materials, and sales manuals. This is an example of a(n) A) administered channel system. B) contractual channel system. C) traditional channel system. D) vertically integrated corporate channel system. E) franchising system.

229) Rizzo Shoes has informal agreements with its wholesalers and retailers, and they cooperate pretty well by placing orders and sharing inventory and sales information over a computer network. Rizzo Shoes sells through a(n) ________ channel system.

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A) contractual B) traditional C) power leadership D) corporate E) administered

230)

Which of the following statements about channel systems is true?

A) Traditional channel systems are more efficient because of their greater freedom. B) Vertical integration works best when discrepancies of quantity are large. C) Most corporate channel systems use multichannel distribution. D) Some administered channel systems obtain the advantages of vertically integrated systems while still retaining flexibility. E) All of the answers are correct.

231) A channel system in which the various members agree by contract to cooperate with each other is called a(n) ________ system. A) multichannel distribution B) contractual channel C) traditional channel D) administered channel E) vertically integrated channel

232) In ________ channel systems, the channel members agree by contract to cooperate with each other. A) contractual B) traditional C) selective D) corporate E) administered

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233)

When planning channels of distribution, a marketing manager should know that

A) vertically integrated systems are seldom used, because of the difficulty of maintaining control. B) a contractual system offers both flexibility and stability for its members. C) the disadvantage of a corporate channel system is reduced control over distribution activities. D) the disadvantage of an administered system is that it is a very formal arrangement. E) None of the answers are correct.

234) Which of the following is the most common system for distributing consumer products in the United States? A) direct channel system B) vertical marketing system C) traditional channel system D) horizontal marketing system E) None of the answers are correct.

235)

Which of the following is not one of the degrees of market exposure? A) selective distribution B) multichannel distribution C) intensive distribution D) exclusive distribution

236) The 80/20 rule—that 80 percent of a company's sales often come from just 20 percent of its customers—is a good reason for marketers to use

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A) selective distribution. B) intensive distribution. C) exclusive distribution. D) international distribution. E) multichannel distribution.

237)

Intensive distribution means selling through A) only one channel of distribution. B) all responsible and suitable retailers or wholesalers. C) only one intermediary in a particular geographic area. D) only those intermediaries that give the product special attention. E) all retail outlets.

238)

Selective distribution means selling through A) retailers but not wholesalers. B) multichannel distribution. C) all responsible and suitable wholesalers. D) only those wholesalers and retailers who give the product special attention. E) only one wholesaler or retailer in each geographic area.

239)

Exclusive distribution means selling through A) the most prestigious retail outlets. B) only one wholesaler or retailer in a particular geographic area. C) only responsible and suitable retailers or wholesalers. D) retailers that handle specialty products. E) only those wholesalers or retailers who will give the product special attention.

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240) ________ means selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. A) Selective distribution B) Multichannel distribution C) Exclusive distribution D) Intensive distribution E) Aggressive distribution

241)

Intensive distribution is

A) selling through only those wholesalers or retailers who will give the product special attention. B) selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. C) selling through only one wholesaler or retailer in a particular geographic area. D) making a product available widely enough to satisfy target customers' needs but not exceed them. E) used to gain some of the advantages of exclusive distribution while still achieving fairly widespread market coverage.

242)

Intensive distribution is often very appropriate for A) shopping products and convenience products. B) convenience products and business supplies. C) business products of all classes. D) unsought products and specialty products. E) shopping, specialty, and unsought products.

243)

________ distribution is commonly used for convenience products and business supplies.

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A) Internal B) Intensive C) Selective D) Specialized E) Exclusive

244)

Intensive distribution

A) gives a retailer more incentive to promote a product than he or she would have with exclusive distribution. B) is not very likely to be used in combination with multichannel distribution. C) is more likely to be used with relatively high-priced products than with low-priced products. D) is often used for convenience products and business supplies. E) None of the answers are correct.

245)

A convenience product would probably be sold using A) intensive distribution. B) exclusive distribution. C) selective distribution. D) extensive distribution. E) sole-source distribution.

246) Intensive distribution at the retail level would probably be most appropriate for which of the following? A) sports coats B) batteries C) ten-speed bicycles D) tennis rackets E) 35mm cameras

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247) Coca-Cola's carbonated soft drinks are available in millions of locations worldwide. This is an example of ________ distribution. A) administered B) intensive C) horizontal D) selective E) exclusive

248) From a producer's viewpoint, which of the following is an advantage of intensive distribution over selective distribution? A) Intermediaries' price-cutting may be reduced. B) Intermediaries' facilities will be more convenient for customers. C) Intermediaries can be required to carry larger stocks. D) More aggressive selling can be expected from intermediaries. E) Better service can be required from intermediaries.

249)

Intermediaries are needed most when the desired degree of market exposure is A) selective. B) intensive. C) exclusive. D) administered. E) Intermediaries are needed equally for any degree of market exposure.

250)

Selective distribution means selling through

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A) retailers but not wholesalers. B) multichannel distribution. C) all responsible and suitable wholesalers. D) only those wholesalers and retailers who give the product special attention. E) only one wholesaler or retailer in each geographic area.

251) ________ means selling a product only through those intermediaries who will give the product special attention. A) Multichannel distribution B) Selective distribution C) Administered distribution D) Exclusive distribution E) Intensive distribution

252)

Which of the following is true of selective distribution? A) It is commonly needed for convenience products and business supplies used by all

offices. B) It is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. C) It is selling through only one intermediary in a particular geographic area. D) It is making a product available widely enough to satisfy target customers' needs but not exceed them. E) It is selling through only those intermediaries who will give the product special attention.

253) Which degree of market exposure would probably be most suitable for a heterogeneous shopping product that has achieved brand preference and sells for about $300?

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A) concentrated distribution B) selective distribution C) administered distribution D) intensive distribution E) exclusive distribution

254)

Selective distribution A) is likely to reduce high administrative expenses caused by a large proportion of small

orders. B) may be suitable for all categories of products. C) is becoming more popular. D) is a good idea if some of the available intermediaries are not financially solid. E) All of the answers are correct.

255) that

A selective distribution policy might be used to avoid selling to wholesalers or retailers

A) place orders that are too small. B) make too many returns. C) request too much service. D) have poor credit. E) All of the answers are correct.

256)

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257) ________ means selling a product through only one wholesaler or retailer in a particular geographic area. A) Exclusive distribution B) Direct distribution C) Intensive distribution D) Multichannel distribution E) Selective distribution

258)

Selling through only one wholesaler or retailer in a particular geographic area is called A) ideal market distribution. B) intensive distribution. C) selective distribution. D) exclusive distribution. E) equivalent distribution.

259)

Intermediaries are needed least when the desired degree of market exposure is A) intensive. B) ideal. C) selective. D) exclusive. E) Intermediaries are needed equally for any degree of market exposure.

260) Raymond Weil, a European manufacturer of premium watches, is trying to compete in the U.S. market with other fine watch brands. Its corporate website contains the following notice: "RAYMOND WEIL products are sold by official dealers only. The RAYMOND WEIL International Guarantee is offered exclusively to consumers in possession of a watch purchased from an official dealer." In the United States, Raymond Weil watches are not available in every jewelry or department store. For example, in large cities such as Boston, Washington, D.C., and San Francisco, there are only three retailers in each city that are official Raymond Weil dealers. Raymond Weil seems to be using Version 1

A) intensive distribution. B) selective distribution. C) exclusive distribution. D) extensive distribution. E) limited distribution.

261) If a producer's marketing manager wants intermediaries to take over all responsibility for promoting a product, the marketing manager should probably use A) exclusive distribution. B) selective distribution. C) intensive distribution. D) a vertically integrated distribution system. E) any of these, since every channel member must support a product with promotion.

262) If a producer has a technically superior and expensive product that has achieved brand preference, and the producer wants retailers to provide aggressive promotion and maximum customer service, this producer should seek A) multichannel distribution. B) exclusive distribution. C) administered distribution. D) intensive distribution. E) selective distribution.

263)

Exclusive distribution

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A) should generally be used only if it is not possible to generate intermediary interest in intensive distribution. B) is legal as long as it does not involve vertical channel arrangements. C) is an arrangement between a producer and intermediary that is illegal for most types of products in the United States; thus it is not very common. D) usually involves intermediaries who are willing to take over all responsibility for promoting the producer's product. E) None of the answers are correct.

264) Quiet Drive Mufflers are sold only through Car Parts Now retailers. This retailer has only one store in any given geographic area to minimize competition between stores. Quiet Drive Mufflers is using ________ distribution. A) intensive B) ideal C) selective D) specialized E) exclusive

265) When McDonald's corporate headquarters offers a local McDonald's franchise to a franchisee on Bourbon Street in New Orleans, it is an example of ________ distribution. A) intensive B) operational C) selective D) exclusive E) administered

266)

Which of the following statements about ideal market exposure is true?

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A) As a firm goes from exclusive to intensive distribution, it loses progressively more control over price and service offered by retailers. B) A producer should usually seek maximum market exposure. C) Intensive distribution means trying to sell through all retail stores. D) It is necessary to get almost 100 percent market exposure to justify national promotion. E) All these statements are true.

267) Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been A) shown to increase competition. B) a regular practice in the United States. C) encouraged in the United States but not in many international markets. D) a successful strategy for entering international markets. E) ruled illegal by the U.S. Supreme Court.

268)

Legal concerns about channel of distribution arrangements are most likely to arise when A) a traditional channel system is involved. B) there are horizontal arrangements between firms at the same level of the channel. C) the firm is using intensive distribution. D) a firm uses multichannel distribution to reach its target markets. E) a corporate channel system is involved.

269) The owners of all the Chrysler auto dealerships in a large metropolitan area have an informal meeting during a golf outing. During the meeting, they agree to limit their orders of a new model of automobile that has received excellent reviews from the trade press for its styling and handling characteristics. Restricting orders will permit the dealers to sell these models at a price that will be at or above the manufacturer's suggested retail price for the vehicle. As a result, the dealers will make more profit on each vehicle sold, due to the high demand for the new model. This type of agreement would be viewed by the courts as

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A) horizontal collusion that is illegal. B) horizontal collusion that is legal. C) vertical collusion that is legal. D) vertical collusion that is illegal. E) an exclusive distribution arrangement that is legal.

270)

Distribution agreements that limit sales by customer or territory

A) are always illegal. B) may be legal if they are horizontal agreements between producers and intermediaries. C) are definitely illegal if they are horizontal agreements among competing producers or intermediaries, but may be legal if they are vertical agreements. D) are definitely illegal if they are vertical agreements between producers and intermediaries. E) None of the answers are correct.

271) When selecting the degree of market exposure for a firm's products, it's important to remember that A) vertical arrangements between producers and intermediaries that limit sales by customer or territory are always illegal. B) the Federal Trade Commission prohibits exclusive distribution. C) vertical arrangements between producers and intermediaries that limit sales by customer or territory may be legal, according to the Supreme Court. D) horizontal arrangements among competing producers or intermediaries which limit sales by customer or territory are generally considered legal. E) None of the answers are correct.

272) If Penn Hills Mfg. Corp. gives the Johnstown Distributing Co. the exclusive right to distribute Penn Hills' products in Ohio, with the understanding that Johnstown can't sell Penn Hills' products outside Ohio or to other wholesalers in Ohio, the arrangement

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A) would be illegal, because the courts have ruled that all vertical arrangements between producers and intermediaries are illegal. B) might or might not be considered legal. The courts would weigh the possible good effects of this vertical arrangement against possible restrictions on competition. C) would be legal, because the courts have ruled that all vertical arrangements between producers and intermediaries are legal. D) would be illegal, because the courts have ruled that all horizontal arrangements between competitors are illegal. E) would be legal, because the courts have ruled that all horizontal arrangements between competitors are legal.

273) A producer using several competing channels to distribute its products to its target market is using ________ distribution. A) multichannel B) intensive C) administered D) horizontal E) selective

274)

Producers often use multichannel distribution because A) they want to sell both directly with a website and indirectly through intermediaries. B) big retail chains want to deal directly with producers. C) competitors use a variety of channels. D) present channel members are doing a poor job. E) All of the answers are correct.

275)

Multichannel distribution

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A) may involve using both direct and indirect channels simultaneously. B) may offer producers a way to reach customers they would not be able to reach with a single channel. C) is becoming more common. D) may create channel conflict. E) All of the answers are correct.

276)

Which of the following is not true about multichannel shopping?

A) Multichannel shoppers use different channels moving through the purchase process. B) Webrooming occurs when shoppers inspect a product in a physical store and purchase at a lower price online. C) Multichannel shopping includes shopping in different channels from the same retailer. D) Multichannel shopping can cause problems for retailers. E) Showrooming is a type of multichannel shopping.

277)

Which of the following statements about brick-and-mortar retailers is accurate?

A) Most brick-and-mortar retailers have an online presence. B) Brick-and-mortar stores offer the same product assortment in their physical and online stores. C) Sales volume for the online stores of traditional brick-and-mortar outlets is inconsequential. D) All brick-and-mortar stores must have an online store in order to succeed. E) Brick-and-mortar stores do best when limiting their online capabilities to the sharing of product information.

278) When consumers go to a brick-and-mortar store to inspect a product and then purchase from an online retailer, the practice is called

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A) shop-hopping. B) integrating. C) showrooming. D) arbitrage. E) web-hopping.

279) ________ is a multichannel selling approach in which a retailer provides a seamless customer experience from computer, mobile device, or brick-and-mortar store. A) Omnichannel B) Showrooming C) Scrambled merchandising D) Multiplatform E) Channeling

280) When Macy's department store makes sure that customers can go to Macys.com to find out if a sweater they want to purchase is in stock at a local store, it appears that Macy's is practicing A) target channeling. B) gateway management. C) platform selling. D) webrooming. E) omnichannel.

281)

The need for reverse channels may arise when A) a consumer buys something in error and wants to return it. B) a firm makes an error in completing an order. C) a product is recalled for safety reasons. D) a consumer changes his or her mind after purchasing a product. E) All these situations create a need for reverse channels.

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282) If a Universal computer monitor breaks while it is still under warranty, someone needs to get it to the repair center. In this case, Universal will need A) reverse channels. B) multichannels. C) intensive distribution. D) exclusive distribution. E) selective distribution.

283)

Reverse channels may be used to retrieve products from A) business customers. B) intermediaries. C) business customers and intermediaries. D) final consumers. E) All of the answers are correct.

284) In Europe, auto manufacturers are required by law to allow owners of their brands to give the cars back to the manufacturers at the end of their useful life. The manufacturers must then recycle and reuse at least 85 percent of any vehicle made after 2004. This is an example of a(n) A) integration law. B) horizontal law. C) contractual law. D) vertical law. E) "take back" law.

285)

Product recalls, returns, and recycling plans require some firms to use

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A) vertical integration. B) contractual channel systems. C) exclusive distribution. D) selective distribution. E) reverse channels.

286)

Exporting A) is selling some of what the firm produces to foreign markets. B) can be a way to get rid of surplus output. C) can come from a real effort to look for new opportunities. D) All of the answers are correct.

287) Selling products manufactured in the United States to foreign customers—often without any product changes—is called A) a joint venture. B) licensing. C) importing. D) contract manufacturing. E) exporting.

288)

The lowest-cost and lowest-risk way to enter a foreign market is through A) a joint venture. B) licensing. C) management contracting. D) direct investment. E) exporting.

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289) Which of the following is typically the lowest-risk approach for moving into international markets? A) licensing B) exporting C) joint venturing D) direct investment E) management contracting

290)

Which of the following statements about exporting is false?

A) Intermediaries can handle the arrangements as products are shipped outside the country. B) Channel relationships in international markets take time to build and shouldn't be treated lightly. C) Exporting requires a firm to establish permanent relationships with international partners. D) A firm often invests a minimal amount of time and money.

291) Josh Adams runs a large cattle farm in Texas. In order to take advantage of higher prices for beef in Europe, as compared to the United States, Josh has started selling cattle overseas by using an agent wholesaler who specializes in finding European customers for U.S. firms. He ships the cattle to Europe by water transport. Josh is engaged in A) exporting. B) management contracting. C) licensing. D) joint venturing. E) franchising.

292) ________ means selling the right to use some process, trademark, patent, or other right for a fee or royalty.

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A) Licensing B) Management contracting C) Joint venturing D) Exporting E) Direct investment

293) As a way to enter foreign markets, ________ refers to selling the right to use some process, trademark, patent, or other right for a fee. A) licensing B) management contracting C) direct investment D) joint venture E) exporting

294)

Licensing, in international marketing,

A) refers to foreign intermediaries agreeing to sell products produced in this country. B) requires a producer to pay a licensing fee to the country where it wants to sell its products. C) increases the risk that a company's production facilities will be taken over by the foreign country. D) means that a company is selling the right to use a process, trademark, patent, or other right for a fee or royalty. E) None of the answers are correct.

295) A producer that enters into a licensing agreement with a foreign company to better reach foreign customers is most likely selling the rights to use its

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A) production facilities. B) brand name. C) channels of distribution. D) sales force. E) All of these are equally likely.

296)

In a licensing agreement, the licensee

A) makes no initial investment to get started. B) does most of the marketing strategy planning for the markets it is licensed to serve. C) has more control over marketing than other approaches for entering international markets. D) assumes almost no risk in a foreign market. E) does not pay any fee or royalties to the licensor.

297) If Wilkinson were to sell Norelco the exclusive rights to produce and sell its brand of shavers in Japan for a 5 percent royalty on all sales, it would be using A) licensing. B) joint venturing. C) management contracting. D) exporting. E) direct investment.

298)

Which of the following is the easiest way for a firm to enter foreign markets? A) joint venture B) licensing C) multinational bargaining D) direct investment E) management contracting

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299) Sunkist sells foreign companies the right to use the Sunkist brand on soft drinks and citrus juices sold outside the United States. Sunkist gets both an initial fee and a royalty on the sale of goods bearing its brand name. Sunkist is engaged in A) exporting. B) management contracting. C) licensing. D) a joint venture. E) None of the answers are correct.

300) If a firm's involvement in international marketing is limited to managing others' production facilities, it is using A) exporting. B) licensing. C) direct investment. D) a joint venture. E) management contracting.

301) In international markets, a firm can sell its management and marketing know-how while letting locals own the production and distribution facilities by using A) licensing. B) exporting. C) joint venturing. D) management contracting. E) direct investment.

302) To minimize its own risks, the Boomtown Petroleum Corp. of Houston, Texas, operates a South American oil refinery that is owned by residents of that country. Boomtown is engaged in an activity known as

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A) management contracting. B) a joint venture. C) exporting. D) licensing. E) direct investment.

303) Worldwide Drilling, Inc. of Fort Worth, Texas, operates an oil well in Russia for its owners. Worldwide is involved in A) management contracting. B) exporting. C) a direct investment. D) a joint venture. E) licensing.

304) When the Rosco International chain of restaurants enters foreign markets, locals own the restaurant facilities but look to Rosco to provide expertise in management and marketing. Rosco uses the ________ approach to enter international markets. A) management contracting B) direct investment C) exporting D) joint venture E) licensing

305) If a producer agrees to enter into a management contracting arrangement with a zinc mining operation in Chile,

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A) the company should be prepared to invest large amounts in mining facilities. B) the company should be prepared to send people to Chile. C) success will depend on how well the Chilean managers know what needs to be done. D) the company must assume no political problems will arise, because otherwise the risk is very high. E) None of the answers are correct.

306)

A joint venture is

A) a firm that provides only management skills, while others own the production and distribution facilities. B) a firm selling the right to use some process, trademark, or other right for a fee. C) a separate firm owned by a parent company. D) a domestic firm entering into a partnership with a foreign firm. E) a firm getting rid of surplus inventory.

307) Oceanside Tools, Inc. of Newport, Rhode Island, has agreed to work with a Thai company to produce and sell chemicals in Thailand. The U.S. firm will provide technical and marketing know-how, while its Thai partner will provide knowledge of Thai markets and political connections. The partners will share the costs and profits 50/50. This type of international involvement is called A) direct investment. B) management contracting. C) licensing. D) multinational marketing. E) joint venturing.

308) Using the ________ approach to entering international markets gives a firm complete control of marketing strategy planning in the foreign market.

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A) joint venture B) management contracting C) direct investment D) licensing E) exporting

309) When Renault Motor Co. builds a new production facility in Venezuela and Renault is the sole owner of the facility, it is an example of a(n) ________ investment approach. A) indirect B) management contracting C) joint venture D) licensing E) direct

310) Midwest Tools, Inc. of Indianapolis, Indiana, owns a plant in Poland for manufacturing and selling machine tools in Europe. This type of international involvement is called A) management contracting. B) licensing. C) a joint venture. D) direct investment. E) multichanneling.

311) In general, marketers that seek greater control over their marketing mixes in the international environment will A) hire more marketing managers. B) invest more financial resources and take greater risks. C) use intensive distribution. D) choose to export or license. E) set up traditional global channels.

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312) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of the following describes WTB's channel arrangements? A) intensive distribution B) corporate channel system C) exclusive distribution D) traditional channel system E) reverse channels

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313) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of the following appears to best describe ATB's channel arrangements? A) intensive distribution B) exclusive distribution C) selective distribution D) global distribution E) direct distribution

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314) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of these companies appears to operate as a channel captain? A) WTB B) ATB C) NTB D) All these companies appear to be channel captains. E) None of these companies is a channel captain.

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315) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. A wholesaler for American Tennis Ball is likely to perform which of the following regrouping activities? A) accumulating B) bulk-breaking C) assorting D) All of the answers are correct.

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316) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. National Tennis Ball's channel arrangement A) is called horizontal distribution. B) is an example of intensive distribution. C) illustrates a traditional channel system. D) relies on exclusive distribution. E) is likely to be characterized by a high level of conflict between channel members.

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317) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which tennis ball manufacturer is involved in direct distribution? A) World Tennis Ball B) American Tennis Ball C) National Tennis Ball D) All of these firms use direct distribution. E) None of these firms uses direct distribution.

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318) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. Which of these companies uses a corporate channel of distribution? A) World Tennis Ball B) American Tennis Ball C) National Tennis Ball D) Both World Tennis Ball and National Tennis Ball use a corporate channel. E) There is not enough information to tell which company uses a corporate channel of distribution.

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319) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. These three tennis ball producers all rely on retailers to reach consumers who want to buy only a few balls at a time. Apparently they all think that this is an efficient way to A) deal with sorting activities. B) address discrepancies of quantity. C) handle discrepancies of assortment. D) minimize the potential for conflict in the channel. E) achieve intensive distribution.

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320) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. If American Tennis Ball adds more wholesalers and more retail outlets, itis likely to A) create horizontal channel conflict. B) lead to vertical channel conflict. C) require that the largest wholesaler take over the channel captain role. D) increase trust and cooperation in the channel. E) prompt both vertical and horizontal channel conflict.

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321) Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes tennis balls and sells them only in the United States.Raul Fernandez, the firm's marketing manager, is comparing his firm's distribution with two major competitors. 1) WTB sells its products through fourregional distributors, who then sell to 22 sporting goods wholesalers. The wholesalers sell to a total of 7,000 retail outlets. From its website, WTB also sells directly to any customer who will purchase a minimum quantity of 24 tennis balls. WTB cooperates with members of its channelbut maintains some control through its economic power and leadership. It helps to direct the activities of the whole channel and tries to avoid or resolve channel conflicts. 2) American Tennis Ball (ATB) is a competitor that sells through twodistributors—each with half the country. The distributors then sell through sixsporting goods wholesalers, and they, in turn, sell to 1,000 retail outlets (split between two national sporting goods chains and two general merchandise stores). ATB and its channel make little effort to work together. However, because of a relatively low level of competition between the distributors, the wholesalers, or the retail stores, each member of the channel gives the product special attention. 3) National Tennis Ball (NTB) sells its products through only three tennis specialty wholesalers that sell only to tennis clubs. NTB actually owns the wholesale firms that handle its products. NTB's balls are only available at certain tennis clubs and NTB limits coverage to only one club in a particular geographic area. If American Tennis Ball adds more retail outlets, which of the following would help it to manage channel conflict? A) assigning the channel captain role to the largest retail chain B) selling a different brand of tennis ball through the new retailers than what it sells through current retailers C) selecting new retail outlets that target the same customers as those who buy from its current retailers D) choosing new retailers in the same geographic market as its current retailers but who sell at lower prices E) dropping its national advertising and leave it to retailers to promote its tennis balls

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Answer Key Test name: Chap 10_17e 1) TRUE Place is concerned with making goods and services available in the right quantities and locations, when customers want them. 2) TRUE Place is concerned with making goods and services available in the right quantities and locations, when customers want them, and the selection and use of marketing specialists. 3) TRUE A channel of distribution is any series of firms or individuals who participate in the flow of products from producer to final user or consumer. 4) TRUE Specialists are often involved in how they come together to form a channel of distribution—any series of firms or individuals who participate in the flow of products from producer to final user or consumer. 5) TRUE Product classes help marketing managers decide how much market exposure will be needed in each geographic area. 6) FALSE Place decisions often have long-run effects. They're usually harder to change than Product, Promotion, and Price decisions. 7) TRUE Version 1

Website-based e-commerce systems give many firms direct access to customers it would have been impossible to reach in the past. 8) TRUE With the Internet, even small specialized firms are able to establish a web page and draw customers from all over the world. 9) FALSE With Internet, even small specialized firms are able to establish a web page and draw customers from all over the world. 10) TRUE If a firm is in direct contact with its customers it is in a better position to adjust its marketing mix quickly, because there is no need to convince other channel members to help. 11) FALSE Sometimes intermediaries that have the best contacts with the target market are hesitant to add unproven vendors or new products. 12) TRUE A firm may have to go direct if suitable intermediaries are not available or will not cooperate. 13) TRUE Many business products are sold direct-to-customer. 14) FALSE Many business products are sold direct-to-customer. This is understandable because in business markets there are fewer transactions, orders are larger, and customers may be concentrated in one geographic area. 15) FALSE Version 1

Service firms often use direct channels. If the service must be produced in the presence of customers, there may be little need for intermediaries. 16) FALSE Direct distribution refers to firms distributing directly to the final customer or consumer. Direct marketing refers to direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. 17) TRUE Sometimes direct marketing promotion is coupled with direct distribution from a producer to consumers. 18) TRUE The term direct marketing is primarily concerned with the Promotion area, not Place decisions. 19) TRUE If contractors or customers like to make all their purchases in one convenient stop, i.e., at a local wholesaler, the only practical way to reach them is through that wholesaler. 20) TRUE Intermediaries may further reduce a producer's need for working capital by buying the producer's output and carrying it in inventory until it's sold. 21) TRUE Marketing research is just one of the ways intermediaries can help producers in an indirect channel. 22) TRUE

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The most important reason for using an indirect channel of distribution is that an intermediary can often help producers serve customer needs better and at lower cost. 23) TRUE Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 24) FALSE Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. 25) FALSE The assortment and quantity of products customers want may be different from the assortment and quantity of products companies produce, leading to discrepancies of assortment and quantity. 26) FALSE Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final consumers or users normally want. 27) TRUE Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution. 28) FALSE Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution. They do not involve rearranging. 29) FALSE Version 1

Accumulating involves collecting products from many small producers. 30) TRUE Accumulating involves collecting products from many small producers. Accumulating the small products into larger quantities is a way of getting the lowest transporting rate. 31) FALSE Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. 32) TRUE Sorting means separating products into grades and qualities desired by different target markets. 33) TRUE Assorting means putting together a variety of products to give a target market what it wants. 34) FALSE Assorting means putting together a variety of products to give a target market what it wants. 35) TRUE Distribution costs can be very low for digital products (music, video games, and software) because there is often no physical good to distribute and they can travel over the Internet at little or no cost. 36) FALSE Distribution costs can be very low for digital products (music, video games, and software) because there is often no physical good to distribute and they can travel over the Internet at little or no cost. 37) TRUE Version 1

There are two basic types of conflict in indirect channels of distribution—vertical channel conflicts and horizontal channel conflicts. 38) TRUE Horizontal channel conflicts, one of the basic types of channel conflict, occur between firms at the same level in the channel of distribution. 39) FALSE Most marketing manages try to avoid conflicts that harm relationships with channel partners. Often different channels serve different target markets—and this alone minimizes conflict. 40) TRUE One strategy manages conflict by offering different products through each channel. 41) TRUE A channel captain is a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. 42) TRUE A channel captain is a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. 43) TRUE Most traditional channels don't have a recognized captain. 44) FALSE In the United States, producers frequently take the lead in channel relations. Sometimes wholesalers or retailers do take the lead, however. 45) TRUE

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Sometimes wholesalers or retailers do take the lead. They are closer to the final user or consumer and are in an ideal position to assume the channel captain role. 46) FALSE Vertical marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel. 47) FALSE In administered channel systems, the channel members informally agree to cooperate with each other. 48) TRUE In administered channel systems, the channel members informally agree to cooperate with each other. In contractual channel systems, the channel members agree by contract to cooperate with each other. 49) TRUE In contractual channel systems, the channel members agree by contract to cooperate with each other; hence they are also administered channel systems. 50) TRUE Vertical systems in the consumer products area have a healthy majority of retail sales. 51) FALSE Vertical marketing systems are becoming the major competitive units in the U.S. distribution system, and they are also growing rapidly in other parts of the world. 52) FALSE

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Vertical marketing systems are becoming the major competitive units in the U distribution system and are growing rapidly in other parts of the world as well. 53) TRUE Many marketing managers accept the view that a coordinated and cooperative channel system can help everyone in the channel. These managers are moving their firms from traditional channel systems and instead are developing or joining vertical marketing systems, where the focus is a longer-term commitment to channel members and the target market at the end of the channel. 54) TRUE Ideal market exposure makes a product available widely enough to satisfy target customers' needs but not exceed them. 55) FALSE Ideal market exposure makes a product available widely enough to satisfy target customers' needs but not exceed them. 56) TRUE Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 57) FALSE Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 58) FALSE Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. It is not between selective and exclusive. Rather, selective is between intensive and exclusive. Version 1

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59) TRUE Selective distribution is becoming more popular than intensive distribution as firms see that they don't need 100 percent coverage of a market to support national advertising. 60) FALSE Selective distribution is becoming more popular than intensive distribution as firms see that they don't need 100 percent coverage of a market to support national advertising. 61) TRUE According to the 80/20 rule, 80 percent of a company's sales often come from only 20 percent of its customers until it becomes more selective in choosing customers. Hence it is more applicable to firm that uses intensive distribution. 62) FALSE Selective distribution can produce greater profits not only for the producer but for all channel members. 63) TRUE Exclusive distribution is selling through only one intermediary in a particular geographic area. 64) TRUE Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court. 65) FALSE

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Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court. Vertical arrangements between producers and intermediaries are not always illegal, however. 66) TRUE In selective and intensive distribution, less formal arrangements are more typical compared to exclusive distribution. 67) TRUE Multichannel distribution occurs when a producer uses several competing channels to reach the same target market. 68) TRUE Multichannel distribution occurs when a producer uses several competing channels to reach the same target market, perhaps using several intermediaries in addition to selling directly. 69) TRUE Sometime big retail chains want large quantities and low prices, so a producer may sell directly to retail chains and rely on wholesalers to sell to smaller accounts. 70) TRUE Sometimes producers are forced to use multichannel distribution because their present channels are doing a poor job or aren't reaching some potential customers. 71) TRUE Some customers are multichannel shoppers who use different channels as they move through the purchase process. 72) TRUE

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Many shoppers are now webrooming—gathering information at an online store and then purchasing at the brick-and-mortar store. 73) TRUE This is the definition of omnichannel. Omnichannel is a multichannel selling approach in whicha single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 74) TRUE Omnichannel is a multichannel selling approach in which a single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 75) TRUE A sales channel report is a tool used by marketing managers to monitor sales for each channel. It lists unit or dollar volume sales for each channel and is used by firms that utilize multichannel distribution. 76) FALSE Reverse channels are used to retrieve products that customers no longer want. 77) FALSE Reverse channels are used to retrieve products that customers no longer want. 78) TRUE Reverse channels are used to retrieve products that are unwanted from intermediaries, business customers, or final consumers. 79) TRUE Some companies get into international marketing just by exporting, that is, selling some of what the firm produces to foreign markets. Version 1

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80) TRUE Some firms start exporting just to take advantage of excess capacity or even to get rid of surplus inventory. 81) TRUE Some firms work closely with intermediaries who develop appropriate marketing mix changes and handle problems such as customs, import and export taxes, shipping, and exchange rates. 82) TRUE Exporting involves the least risk and the least investment but also the least control of marketing. 83) TRUE Exporting involves the least risk and the least investment but also the least control of marketing. 84) TRUE The licensee in the foreign market takes most of the risk because it must make some initial investment to get started. 85) FALSE Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. Sharing the same platform is not an example of licensing. 86) TRUE Management contracting means that the seller provides only management and marketing skills, and others own the production and distribution facilities. 87) TRUE Management contracting is a relatively low-risk approach to international marketing, since no commitment is made to fixed facilities. Version 1

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88) TRUE In a joint venture, a domestic firm enters into a partnership with a foreign firm. 89) TRUE As with any partnership, in joint ventures there can be honest disagreements over objectives as well as operating policies, and therefore less control. Owning a separate subsidiary (direct investment) offers the most control. 90) TRUE Direct investment in international market is a big commitment and usually entails greater risks. 91) C Place decisions involve making goods and services available in the right quantities and locations, when customers want them. Recruiting, selecting, and managing the sales force is not a Place decision. It is a Promotion decision. 92) E Place decisions are usually harder to change than Product, Promotion, and Price decisions. 93) A Type of channel of distribution, type of intermediaries/collaborators, type of physical distribution facilities, and degree of market exposure desired are some of the Place decisions. Geographic pricing policy is a Price decision. 94) E

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Type of channel of distribution, type of intermediaries/collaborators, type of physical distribution facilities, and degree of market exposure desired are some of the Place decisions. How to train wholesalers' salespeople is a Promotion decision. 95) A A channel of distribution is any series of firms or individuals who participate in the flow of products from producer to final user or consumer. 96) C Place arrangements can dramatically change the competition in a product-market. 97) C Marketing managers may need to develop several strategies, each with its own Place arrangements. There may not be one Place arrangement that is "best." 98) D Different market segments view a product in different ways. Thus, marketing managers need to develop several strategies, each with its own Place arrangements. 99) B Place decisions are usually harder to change than Product, Promotion, and Price decisions. 100) B Place decisions are usually harder to change than Product, Promotion, and Price decisions. 101) A

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Heterogeneous shopping goods should have outlets that provide information—knowledgeable salespeople who can provide insights about different brands and models. 102) A Homogeneous shopping goods are best sold through low-cost retailers because customers focus mostly on low prices. 103) A Homogeneous shopping goods favor low-cost retailers, as customers focus mostly on low prices. Customers will search for specialty goods, so the higher cost of widespread distribution may not be needed. 104) D Business product classes reflect what buyers think about the products and how they are used. 105) D Place decisions often have long-run effects. They're usually harder to change than Product, Promotion, and Price decisions. 106) E Place decisions involve making goods and services available in the right quantities and locations, when customers want them, and the selection and use of marketing specialists. Place decisions relate to product classes and are harder to change than Product, Promotion, or Price decisions. 107) C One reason a producer would choose direct distribution is because it wants to maintain control of the marketing mix. Wholesalers and retailers usually carry competing products and will make decisions that are in their own interests—and this may not always be aligned with the interests of an individual producer. Version 1

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108) B If a firm is in direct contact with its customers, it is more aware of changes in customer attitudes.By working directly with customers, the company generates data, information, and knowledge about its market. 109) C Business products tend to be sold direct-to-customer in part because ecommerce systems can efficiently handle B2B orders once relationships are established. E-commerce systems make direct distribution easier. 110) D Producers may be especially inclined to handle the distribution function themselves when a suitable intermediary is not available. 111) B Direct selling involves personal sales contact between a representative of the company and an individual consumer. 112) C Direct marketing involves direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. 113) E Producers are especially inclined to use indirect distribution when an intermediary can serve customer needs better and at lower cost. 114) A The producer of a less well-known brand may need to demonstrate consumer demand for its product to convince an intermediary to carry it. 115) A

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Some firms use direct and indirect channels. When a company serves multiple target markets, it may choose to sell direct and through intermediaries. For example, Autolite uses direct channels to sell its spark plugs to automakers like Ford and uses intermediaries like Pep Boys to sell them to consumers. 116) E Many firms prefer to distribute directly to the final customer or consumer because they want to control the whole marketing job, can serve target customers at a lower cost, or can do the work more effectively than intermediaries. E-commerce systems make direct distribution easier. 117) E A growing number of consumer products are being sold direct to consumer. The growth of e-commerce systems and delivery services give many firms direct access to customers whom it would have been impossible to reach in the past. This lowers the cost for direct distribution. 118) A Direct distribution allows a firm to maintain control of the marketing mix. 119) B A firm may have to go direct if suitable intermediaries are not available or will not cooperate. 120) E

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Many business products are sold direct-to-customer because in business markets there are fewer transactions, orders are larger, and customers may be concentrated in one geographic area. If a firm is in direct contact with its customers, it is more aware of changes in customer attitudes and is in a better position to adjust its marketing mix quickly. 121) E Many business products are sold direct-to-customer. If a firm is in direct contact with its customers, it is more aware of changes in customer attitudes. Direct distribution allows a firm to maintain control of the marketing mix and control the whole marketing job. 122) A Most consumer products are sold through intermediaries. 123) C Many consumer product firms rely on direct selling, which involves personal sales contact between an individual consumer and a representative of the company (or an independent distributor of the company's products). Ravi is engaged in direct selling, but he is part of an indirect channel. 124) B Direct selling involves personal sales contact between a salesperson and a customer. 125) A Salespeople like Sofia are not company employees. They work independently, and the companies they sell for refer to them as dealers, distributors, agents, or some similar term. As a result, it is not technically direct producer-to-consumer distribution. 126) C Version 1

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Direct marketing involves direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. 127) A Direct distribution usually requires a significant investment in facilities, people, and information technology. 128) E Indirect channels are best when customers often have established buying patterns, a company has limited financial resources, the product is a consumer product, and retailers are conveniently located where consumers shop. 129) E An intermediary can reduce inventory costs, regroup products, provide delivery, grant credit, and serve customer needs better. 130) E Intermediaries may further reduce a producer's need for working capital by buying the producer's output and carrying it in inventory until it's sold. A wholesaler who knows local customers can help reduce credit risks. Intermediaries may also reduce a producer's need for market research. 131) A Even if a producer wants to handle the whole distribution job, sometimes it's simply not possible. In such situations, intermediaries are required. 132) E

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Producers are often located far from their customers and may not know how best to reach and serve them. Specialists develop to adjust these discrepancies of quantity and assortment. 133) A Specialists exist to resolve discrepancies and separations between producers and customers, such as when producers are located far from their customers and do not know how best to reach them. 134) B Regrouping activities by channel specialists adjust the quantities or assortments of products handled at each level in a channel of distribution. There are four regrouping activities: accumulating, bulkbreaking, sorting, and assorting. 135) C Specialists adjust assortment discrepancies through the regrouping activities of sorting and assorting. 136) B Specialists adjust quantity discrepancies through the regrouping activities of accumulating and bulk-breaking. 137) E Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. 138) B The assortment and quantity of products customers want may be different from the assortment and quantity of products companies produce, leading to discrepancies of assortment and quantity. 139) E Version 1

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Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 140) C Accumulating involves collecting products from many small producers. Accumulating the small products into larger quantities is a way of getting the lowest transporting rate and making it more convenient to handle. 141) B Dividing larger quantities into smaller quantities as products get closer to the final market is called bulk-breaking. For example, wholesalers may sell smaller quantities to other wholesalers or directly to retailers. Retailers continue breaking bulk as they sell individual items to their customers. 142) B Since music, television programs, movies, books, and more now exist in digital form, their distribution costs can be very low, as there is often no physical good to distribute. Even without a physical form, distribution remains an important marketing strategy decision for firms with digital products. 143) A Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 144) E Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. Version 1

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145) D Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 146) D Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 147) E Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 148) C Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 149) B Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 150) C Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 151) E

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Discrepancy of quantity means the difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want. 152) E Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. 153) C Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. 154) B Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. Wholesalers and retailers are required to adjust these discrepancies. 155) D Discrepancy of assortment means the difference between the lines a typical producer makes and the assortment final consumers or users want. Wholesalers and retailers are required to adjust these discrepancies. 156) B The assortment and quantity of products customers want may be different from the assortment and quantity of products companies produce, leading to discrepancies of assortment and quantity. 157) E

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There are four regrouping activities: accumulating, bulk-breaking, sorting, and assorting. 158) B There are four regrouping activities: accumulating, bulk-breaking, sorting, and assorting. 159) C Accumulating involves collecting products from many small producers. Accumulating the small products into larger quantities is a way of getting the lowest transporting rate and making it more convenient to handle. 160) E Accumulating involves collecting products from many small producers. Accumulating the small products into larger quantities is a way of getting the lowest transporting rate and making it more convenient to handle. 161) E Accumulating involves collecting products from many small producers. Accumulating the small products into larger quantities is a way of getting the lowest transporting rate and making it more convenient to handle. 162) B Accumulating involves collecting products from many small producers. 163) A Accumulating involves collecting products from many small producers. 164) E Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. Version 1

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165) C Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. 166) D Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. 167) D Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. 168) D Bulk-breaking involves dividing larger quantities into smaller quantities as products get closer to the final market. 169) B Sorting means separating products into grades and qualities as desired by different target markets. 170) B Sorting means separating products into grades and qualities as desired by different target markets. 171) C Sorting means separating products into grades and qualities as desired by different target markets. 172) C Sorting means separating products into grades and qualities as desired by different target markets. 173) B

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Sorting means separating products into grades and qualities as desired by different target markets. 174) A Assorting means putting together a variety of products to give a target market what it wants. 175) B Assorting means putting together a variety of products to give a target market what it wants. 176) D Assorting means putting together a variety of products to give a target market what it wants. 177) E Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution. In this example, Sycamore Dairy is involved in all four regrouping activities: accumulating, bulk-breaking, sorting, and assorting. 178) A Virtual products often face the same discrepancies and separations as tangible goods. Channel specialists can add value to the distribution of digital products by performing regrouping activities. 179) D In traditional channel systems, the various channel members make little or no effort to cooperate with each other. 180) A In traditional channel systems, the various channel members make little or no effort to cooperate with each other.

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181) B In a shared product-market commitment, all members focus on the same target market at the end of the channel and share the various marketing functions in appropriate ways. This desirability is based on the idea that the whole channel is competing with other channel systems. 182) C Because members of traditional channel systems often have different objectives and different ideas about how things should be done, channel conflict is common. Ideally, all the members of a channel system should have a shared product-market commitment, with all members focusing on the same target market at the end of the channel and sharing the various marketing functions. 183) E Common causes of channel conflict between producers and intermediaries include differing objectives, lack of communication, independent operations, and lack of a channel captain. Ideally, producers and intermediaries in a channel system are united in the goal of selling to the same target customers. 184) C Conflict is widespread in channel systems in which the various channel members make little or no effort to cooperate with each other. They buy and sell from each other, and that's the extent of their relationship. 185) B In a shared product-market commitment, all members focus on the same target market at the end of the channel and share the various marketing functions in appropriate ways. 186) D

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In traditional channel systems, the various channel members make little or no effort to cooperate with each other. 187) D In traditional channel systems, the various channel members make little or no effort to cooperate with each other. 188) A In traditional channel systems, the various channel members make little or no effort to cooperate with each other. 189) B In traditional channel systems, the various channel members make little or no effort to cooperate with each other. 190) D Channel decisions are Place decisions, and they often have long-run effects. They're usually harder to change than Product, Promotion, or Price decisions. 191) A Vertical channel conflicts occur between firms at different levels in the channel of distribution. 192) A Vertical channel conflicts occur between firms at different levels in the channel of distribution. 193) B Vertical channel conflicts occur between firms at different levels in the channel of distribution. 194) C

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Horizontal channel conflicts occur between firms at the same level in the channel of distribution. 195) D Horizontal channel conflicts occur between firms at the same level in the channel of distribution. 196) A Horizontal channel conflicts occur between firms at the same level in the channel of distribution. 197) C Horizontal channel conflicts occur between firms at the same level in the channel of distribution. 198) D Some firms manage conflict by offering different products through each channel. 199) E Some level of conflict may be inevitable or even useful, if that is what it takes for customers to receive better value. Some manufacturers try to serve different market segments through each channel, while others may use a channel captain to avoid or solve channel conflicts. 200) E Some firms manage conflict by offering different products through each channel, whether the channel is an old one or a new one. Manufacturers often try to serve different market segments through each channel. Treating channel partners fairly, even when one partner is more powerful, reduces conflict. 201) B

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A channel captain is a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. 202) C A channel captain is a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. 203) D A channel captain might be any member of the channel who views the members of the channel as a unit. They help to make the channel more efficient by reducing conflict. 204) D Producers frequently take the lead in channel relations, but sometimes wholesalers or retailers take the lead. 205) E In a producer-led channel system, producers select the target market, develop Products, set Price structures, invest in consumer and channel Promotions, and develop the Place setups. Intermediaries are then expected to finish the Promotion job in their respective Place. 206) A Intermediaries find that the ability to gather, analyze, and interpret big data that generate insights about their customers' needs gives them unique insights. They can then seek out producers who can meet these needs with products at reasonable prices. 207) A See Exhibit 10–3, which outlines how retailer-led and producer-led channels differ on strategy decisions. The exhibit shows that Promotion decisions in a retail-led channel are handled by retailers. 208) E Version 1

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The channel captain arranges for the necessary functions to be performed in the most effective way. 209) B The channel captain arranges for the necessary functions to be performed in the most effective way within a channel. 210) A Vertical marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel. 211) D Many marketing managers accept the view that a coordinated channel system focused on the same target market can help everyone in the channel. Such systems make sense because if the final customer doesn't buy the product, the whole channel suffers. 212) D A vertical marketing system owned and operated by a single firm is called a corporate channel system. 213) C While corporate channel systems offer the greatest control and cooperation to marketers, they also are costly and challenging to manage. An administered channel system offers many of the benefits of a corporate system, but without the cost and burden of management. 214) A Vertical marketing systems are channel systems in which the whole channel focuses on the same target market at the end of the channel. 215) A Corporate channel systems may develop by way of vertical integration— i.e., acquiring firms at different levels of channel activity. Version 1

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216) C As stated in Exhibit 10–4, in corporate channel systems there is a high amount of cooperation among the members of the channel. 217) E As stated in Exhibit 10–4, in corporate channel systems there is a high amount of cooperation among the members of the channel. 218) A Vertical integration means acquiring firms at different levels of channel activity. 219) B Vertical integration means acquiring firms at different levels of channel activity. 220) B Vertical integration means acquiring firms at different levels of channel activity. 221) D Vertical integration means acquiring firms at different levels of channel activity. 222) D Vertical integration means acquiring firms at different levels of channel activity. 223) A Vertical integration has potential advantages, such as stable sources of supplies, better control of distribution and quality, greater buying power, and lower executive overhead; however, capital requirements are likely to be higher, not lower.

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224) C Vertical integration has potential advantages, such as stable sources of supplies, better control of distribution and quality, greater buying power, and lower executive overhead; however, easier adjustment of discrepancies is not one of vertical integration's advantages. 225) D In administered channel systems, the channel members informally agree to cooperate with each other. 226) C In administered channel system, members can agree to routinize ordering, share inventory and sales information over computer networks, standardize accounting, and coordinate promotion efforts. 227) A In administered channel systems, the channel members informally agree to cooperate with each other. 228) A In an administered channel system, members can agree to routinize ordering, share inventory and sales information over computer networks, standardize accounting, and coordinate promotion efforts. 229) E In administered channel systems, the channel members informally agree to cooperate with each other, routinize ordering, share inventory and sales information over computer networks, standardize accounting, and coordinate promotion efforts. 230) D

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By developing administered or contractual channel systems, firms can often gain the advantages of vertical integration while retaining some of the flexibility of a traditional channel system. 231) B In contractual channel systems, the channel members agree by contract to cooperate with each other. 232) A In contractual channel systems, the channel members agree by contract to cooperate with each other. 233) B By developing contractual channel systems, firms can often gain the advantages of vertical integration while retaining some of the flexibility of a traditional channel system. 234) B For consumer products, vertical marketing systems are becoming the major competitive units in the U.S. distribution system. 235) B Ideal market exposure may be intensive distribution, selective distribution, or exclusive distribution. 236) A Many firms recognize that they don't need 100 percent coverage of a market (intensive distribution), as the majority of sales come from relatively few customers, and the others buy too little compared to the cost of working with them. This is called the 80/20 rule—80 percent of a company's sales often come from only 20 percent of its customers until it becomes more selective in choosing customers. This "rule" inclines many marketers to use selective distribution. Version 1

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237) B Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 238) D Selective distribution is selling through only those intermediaries that will give the product special attention. 239) B Exclusive distribution is selling through only one intermediary in a particular geographic area. 240) D Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 241) B Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 242) B Intensive distribution is commonly needed for convenience products and business supplies. 243) B Intensive distribution is commonly needed for convenience products and business supplies. 244) D Intensive distribution is commonly needed for convenience products and business supplies. 245) A

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Intensive distribution is commonly needed for convenience products and business supplies. 246) B Intensive distribution is commonly needed for convenience products and business supplies. Examples include printer cartridges, three-ring binders, and batteries. 247) B Intensive distribution is commonly needed for convenience products and business supplies. Customers want such products nearby. 248) B Intensive distribution is commonly needed for convenience products and business supplies. Customers want such products nearby. 249) B Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers (intermediaries) who will stock or sell the product. 250) D Selective distribution is selling through only those intermediaries who will give the product special attention. 251) B Selective distribution is selling through only those intermediaries who will give the product special attention. 252) E Selective distribution is selling through only those intermediaries who will give the product special attention. 253) B Version 1

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Selective distribution may be suitable for all categories of products. Only the best intermediaries are used and the company is able to sell the product where it sells best. 254) E Selective distribution may be suitable for all categories of products. A selective policy doesn't use intermediaries that place orders which are too small. It also doesn't use intermediaries that have poor credit ratings. Selective distribution is becoming more popular. 255) E A selective policy might be used to avoid selling to wholesalers or retailers that place orders that are too small, make too many returns, request too much service, or have a poor credit rating. 256) B Exclusive distribution is selling through only one intermediary in a particular geographic area. 257) A Exclusive distribution is selling through only one intermediary in a particular geographic area. 258) D Exclusive distribution is selling through only one intermediary in a particular geographic area. 259) D When a firm selects only one wholesaler or retailer in each geographic area, exclusive distribution is used. 260) C

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Producers may use exclusive distribution to help control prices and the service offered in a channel. They may select only one wholesaler or retailer in each geographic area. 261) A In exclusive distribution, a firm selects only one wholesaler or retailer in each geographic area, giving them all responsibility for promoting their product. 262) B Producers may use exclusive distribution to help control prices and the service offered in a channel. 263) D In exclusive distribution, a firm selects only one wholesaler or retailer in each geographic area, giving them all responsibility for promoting their product. 264) E Exclusive distribution is used when the firm selects only one wholesaler or retailer in each geographic area. 265) D Exclusive distribution is used when the firm selects only one wholesaler or retailer in each geographic area. Franchisors like McDonald's offer franchisees exclusive territories. 266) A As a firm moves from exclusive to intensive distribution, it loses more and more control over price and the service offered in a channel. In essence, it is trading control (in exclusive) for exposure (in intensive). 267) E

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Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court. 268) B Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court. 269) A Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court. 270) C Horizontal arrangements among competing retailers, wholesalers, or producers to limit sales by customer or territory have consistently been ruled illegal by the U.S. Supreme Court, but the legality of vertical arrangements is not so clear-cut. 271) C The legality of vertical arrangements between producers and intermediaries is not clear-cut. 272) B The legality of vertical arrangements between producers and intermediaries is not clear-cut. Courts can weigh the possible good effects against the possible restrictions on competition. 273) A Multichannel distribution occurs when a producer uses several competing channels to reach the same target market. 274) E Version 1

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Producers often use multichannel distribution because they want to sell direct and indirect; big retail chains want to deal directly with them; their present channels are doing a poor job or aren't reaching some potential customers; and they need to use a variety of channels to stay competitive. 275) E Multichannel distribution is becoming more common. It uses several intermediaries in addition to selling directly, helping firms to reach more customers. Some intermediaries resent this because they don't appreciate any competition in the channel or outside the channel. 276) B Many shoppers are now webrooming—gathering information at an online store and then purchasing at the brick-and-mortar store. When consumers go to a brick-and-mortar store to inspect a product (a showroom) and then purchase from an online retailer with a lower price, the practice is instead called showrooming. 277) A Today, most brick-and-mortar retailers have an online presence. These websites may simply provide product information or may be full-blown e-commerce websites. Retailers use this strategy to connect their physical stores with online channels to create a competitive advantage. 278) C When consumers go to a brick-and-mortar store to inspect a product (a showroom) and then purchase from an online retailer with a lower price, the practice is called showrooming. 279) A

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Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 280) E Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 281) E The need for reverse channels may arise in a variety of different situations: safety problems; company error in completing an order; consumer error in purchasing a product; or consumer change-of-mind. 282) A Reverse channels are used to retrieve products that customers no longer want. If a product breaks while it's still under warranty, someone needs to get it to the repair center. 283) E Reverse channels are used to retrieve products that are unwanted from intermediaries, business customers, or final consumers. 284) E Some "take back" laws require manufacturers to recycle or reuse hazardous materials or products at the end of their useful life, at no additional cost to the customer. 285) E Most firms focus on getting products to their customers; but some marketing managers must also plan for reverse channels—channels used to retrieve products that customers no longer want. 286) D Version 1

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Exporting means selling some of what the firm produces to foreign markets. Some firms start exporting just to get rid of surplus inventory; others do so to look for new opportunities. 287) E Exporting means selling some of what the firm produces to foreign markets. 288) E As stated in Exhibit 10–7, exporting involves the lowest investment, risk, and control of marketing. 289) B As stated in Exhibit 10–7, exporting involves the lowest investment, risk, and control of marketing. 290) C As stated in Exhibit 10–7, exporting involves the lowest investment, risk, and control of marketing. Exporting does not require any permanent relationships with partners. 291) A Exporting refers to selling some of what the firm produces to foreign markets. 292) A Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 293) A Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 294) D Version 1

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Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 295) B Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 296) B The licensee does most of the marketing strategy planning for the markets it is licensed to serve. 297) A Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 298) B Since the licensee in the foreign market takes most of the risk, licensing is often an easy way to enter international markets. 299) C Licensing means selling the right to use some process, trademark, patent, or other right for a fee or royalty. 300) E Management contracting means that the seller provides only management and marketing skills. 301) D Management contracting means that the seller provides only management and marketing skills, while others own the production and distribution facilities. 302) A

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Management contracting means that the seller provides only management and marketing skills, while others own the production and distribution facilities. 303) A Management contracting means that the seller provides only management and marketing skills, while others own the production and distribution facilities. 304) A Management contracting means that the seller provides only management and marketing skills, while others own the production and distribution facilities. 305) B In a management contracting arrangement the seller provides management and marketing skills, which would require it to send people to foreign countries. 306) D In a joint venture, a domestic firm enters into a partnership with a foreign firm. 307) E In a joint venture, a domestic firm enters into a partnership with a foreign firm. 308) C Direct investment gives the parent firm complete control of marketing strategy planning. 309) E Direct investment means that a parent firm has a division (or owns a separate subsidiary firm) in a foreign market. Version 1

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310) D Direct investment means that a parent firm has a division (or owns a separate subsidiary firm) in a foreign market. 311) B For marketers seeking to sell to international markets, the approaches with greater risk and required investment (direct investment and joint ventures) offer the benefit of greater control over the marketing mix used. 312) A Intensive distribution is selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. 313) C Selective distribution is selling through only those intermediaries who will give the product special attention. 314) A A channel captain is one who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts. 315) D Regrouping activities adjust the quantities or assortments of products handled at each level in a channel of distribution. Here the wholesaler for ATB is accumulating, bulk-breaking, and assorting. 316) D Exclusive distribution is selling through only one intermediary in a particular geographic area. 317) A

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Many firms prefer to distribute directly to the final customer or consumer. Website-based e-commerce systems and delivery services give many firms direct access to customers. 318) C In corporate channel systems there is corporate ownership all along the channel. 319) B Adjusting for discrepancy of quantity usually requires intermediaries— wholesalers and retailers. Discrepancy of quantity occur because individual producers want to produce large quantities of products, while individual consumers prefer to buy products in small quantities. 320) E Vertical conflicts occur between firms at different levels in the channel of distribution, whereas horizontal conflicts occur between firms at the same level in the channel of distribution. 321) B Some firms manage conflict by offering different products through each channel.

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CHAPTER 11 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Whenever Product includes a physical good, Place requires logistics decisions. ⊚ ⊚

true false

2) Logistics focuses on the handling of goods along a channel of distribution but not within individual firms. ⊚ ⊚

true false

3) For many physical goods, firms spend half or more of their total marketing dollars on physical distribution activities. ⊚ ⊚

true false

A firm may spend 50 percent or more of its total marketing dollars on PD activities. ⊚ ⊚

true false

5) Logistics costs do not vary between developed economies like the U.S. and developing economies like those of Africa. ⊚ ⊚

true false

Physical distribution is the part of marketing that is visible to most customers. ⊚ ⊚

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true false

7) In countries where physical distribution systems are inefficient, consumers face shortages of the products they need. ⊚ ⊚

true false

8) A marketing manager should never increase the total cost of distribution, even if this would result in a better customer service level for his or her target market. ⊚ ⊚

true false

9) Most physical distribution decisions involve trade-offs among costs, the customer service level, and sales. ⊚ ⊚

true false

10) Information technology involves a trade-off because it cannot improve service levels and cut costs at the same time. ⊚ ⊚

true false

11) Better information flows make it easier to coordinate activities, improve efficiency, and add value for the customer. ⊚ ⊚

true false

12) The physical distribution concept seeks to minimize the cost of distribution for a given customer service level. ⊚ ⊚

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true false

13) The physical distribution concept is based on the idea that selecting the lowest-cost transporting alternative and the lowest-cost storing alternative will result in the lowest total distribution cost. ⊚ ⊚

14)

true false

The PD concept seeks to maximize the profit for a given customer service level. ⊚ ⊚

true false

15) The physical distribution concept focuses on lower costs and better service to increase customer value. ⊚ ⊚

16)

true false

With the PD concept, firms decide what specific service level to provide their customers. ⊚ ⊚

true false

17) Retailers selling a new product that is in hot demand, like the latest movie release or a best-selling book, would be unlikely to incur higher costs for faster delivery (physical distribution). ⊚ ⊚

true false

18) PD service levels may be affected by the time taken to enter and process orders, but not by backorder procedures. ⊚ ⊚

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true false

19) Advance information on product availability affects physical distribution (PD) service levels. ⊚ ⊚

true false

20) The total cost approach involves evaluating each possible PD system and identifying only the transportation costs associated with each alternative. ⊚ ⊚

true false

21) The total cost approach to physical distribution focuses exclusively on the total cost of transporting a product. ⊚ ⊚

true false

22) The total cost approach to physical distribution management involves evaluating all the costs of alternative physical distribution systems, including transporting, storing, and handling costs. ⊚ ⊚

true false

23) The total cost approach ignores inventory carrying costs and excludes the use of cost accounting and economics tools. ⊚ ⊚

true false

24) Most marketing functions can be shared in a channel, but the storing function is almost always handled by the producer. ⊚ ⊚

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true false

25) A JIT system shifts greater responsibility for physical distribution activities forward in the channel. ⊚ ⊚

26)

true false

Just-in-time delivery reduces storing and handling costs for business customers. ⊚ ⊚

true false

27) Just-in-time delivery systems typically shift more responsibility for PD activities to the customer rather than the supplier. ⊚ ⊚

28)

true false

Every firm should try to use the just-in-time approach to physical distribution. ⊚ ⊚

true false

29) A channel of distribution is part of a broader network of relationships called a supply chain. ⊚ ⊚

30)

true false

A channel of distribution is part of a supply chain. ⊚ ⊚

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true false

31) A channel of distribution for a product involves more firms than a supply chain for the same product. ⊚ ⊚

32)

true false

A supply chain is the same thing as a channel of distribution. ⊚ ⊚

true false

33) The term supply chain can be misleading because the chain typically involves only two firms: a vendor (selling firm) and a customer (buying firm). ⊚ ⊚

true false

34) A supply chain includes all the activities involved in procuring materials, transforming them into products, and distributing them to customers. ⊚ ⊚

true false

35) The supply chain concept rests on the idea that distribution can usually be reduced if the firm that is the "weakest link" in the channel of distribution is eliminated. ⊚ ⊚

true false

36) A firm that uses of electronic data interchange (EDI) can easily share the information put in a standardized format between its different computers. ⊚ ⊚

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true false

37) In both a supply chain and a channel of distribution, the primary aim should be to create maximum value for the customer. ⊚ ⊚

true false

38) In both supply chains and channels of distribution, the primary aim should be for each firm to keep its own costs as low as possible. ⊚ ⊚

true false

39) The challenges of coordinating logistics functions in a supply chain have led to less sharing of information over the Internet and on websites. ⊚ ⊚

true false

40) Electronic data interchange is important in business markets in the United States, but it plays little role in international trade. ⊚ ⊚

true false

41) Transporting is the marketing function that makes products available when and where they need to be and involves a cost. ⊚ ⊚

42)

true false

Transporting costs usually add relatively little to the cost of valuable products. ⊚ ⊚

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true false

43) Transport costs represent a significant part of the cost of products that are already valuable relative to their size and weight. ⊚ ⊚

true false

44) In the United States, there is little competition among transporting firms for shipping business because government regulations control most transporting rates, routes, and schedules. ⊚ ⊚

true false

45) The best transporting mode is the one that provides the required level of service at the lowest cost. ⊚ ⊚

true false

46) Low transporting cost is not the only criterion for selecting the best mode of transportation. ⊚ ⊚

true false

47) In the United States, trucks carry more freight over more miles than any other mode of transportation. ⊚ ⊚

true false

48) Railroads are considered inefficient in transporting perishable items or those in urgent demand. ⊚ ⊚

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true false

49) Compared to other transportation alternatives, transportation by pipeline tends to have high costs and low dependability in meeting schedules. ⊚ ⊚

50)

Transport costs per pound for less-than-full carloads are less than for full loads. ⊚ ⊚

51)

true false

At least 75 percent of all U.S. freight moves, at least part of the way, by trucks. ⊚ ⊚

true false

52) For short distances and higher-value products, trucks may charge higher rates but provide slower service. ⊚ ⊚

true false

53) Although ships and barges are slow, they are the lowest-cost method of freight transporting and are useful when speed is not critical. ⊚ ⊚

true false

54) Compared to other modes of transportation, water transportation is medium in its dependability in meeting schedules and high in its ability to handle many varieties of goods. ⊚ ⊚

true false

55) When a firm uses airplanes for transportation of goods, it will incur high costs in packing, unpacking, and preparing goods for sale.

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⊚ ⊚

true false

56) Airfreight generally increases both transporting cost and the total cost of distribution because it tends to add to inventory costs, spoilage, theft, and damage. ⊚ ⊚

true false

57) Containerization is the method of grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. ⊚ ⊚

true false

58) Goods that might become separated or damaged during transport can benefit from containerization in shipping. ⊚ ⊚

true false

59) The sensors placed on trucks and train cars to monitor their movement can help managers in identifying opportunities to more effectively manage the economic and environmental costs of transportation. ⊚ ⊚

60)

true false

Transporting choices in developing countries are usually fewer in number. ⊚ ⊚

true false

61) Efforts to reduce the environmental effects of transporting usually increase the firm's distribution costs.

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⊚ ⊚

62)

true false

Inventory is the amount of goods being stored. ⊚ ⊚

true false

63) It is more expensive to produce large quantities of one size, and store the unsold quantity, than to have shorter production runs. ⊚ ⊚

true false

64) Storing allows producers and intermediaries to keep stock at convenient locations, ready to meet customers' needs. ⊚ ⊚

true false

65) Storing is the marketing function that increases the value of goods without involving any costs. ⊚ ⊚

true false

66) Public warehouses are storing facilities owned or leased by companies for their own use and have high managerial control. ⊚ ⊚

true false

67) Private warehouses (compared to public warehouses) are most appropriate when a firm has a regular need to store a large quantity of goods.

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⊚ ⊚

true false

68) Public warehouses (compared to private warehouses) provide greater economy and flexibility when a firm does not have a regular need to store a large volume of goods, but they provide fewer services than a firm's own warehouse could. ⊚ ⊚

true false

69) Bar codes, UPC numbers, and RFID tags make it easy for computers to monitor inventory, order stock, and track shipping costs. ⊚ ⊚

true false

70) A distribution center is a special kind of warehouse designed to perform regrouping activities. ⊚ ⊚

true false

71) The main function of a distribution center is to speed the flow of goods and avoid unnecessary storage. ⊚ ⊚

true false

72) A distribution center is a special kind of public warehouse designed specifically for storing perishable products. ⊚ ⊚

73)

true false

When both regrouping and storing are needed, a firm should add a distribution center.

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⊚ ⊚

true false

74) When a firm skips the distribution center concept and ships products directly from the manufacturing site to retail stores, the products may move more quickly but at a higher cost. ⊚ ⊚

true false

75) When it comes to relief efforts after a disaster, the key to getting the right supplies to the right place is centralized information sharing. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 76) Logistics, or physical distribution, is related to the ________ part of the marketing mix. A) Possession B) Place C) Production D) Promotion E) Product

77)

Which of the following is true of logistics in marketing strategy?

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A) It differs from physical distribution in its combinations of decisions. B) Even when the combinations of logistics decisions vary, they result in the same level of distribution service. C) It includes the transporting, storing, and handling of physical goods within individual firms. D) It specifically expands spatial separations between producers and consumers. E) A macro-marketing perspective suggests logistics costs are the same between any two countries.

78)

Which of the following is true of logistics costs? A) They are important to both firms and consumers. B) They don't vary from firm to firm. C) They are very similar across different countries. D) They represent less than one-fourth the expense attached to hospital supplies. E) They have little impact on a macro-marketing system.

79) In which of the following places would the logistics costs be most likely to run between 9 and 15 percent of GDP? A) China B) Singapore C) Europe D) Latin America E) Africa

80) As a percentage of GDP, which of the following most likely characterizes logistic costs incurred in developing economies in Africa?

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A) less than 9 percent B) 9 to 12 percent C) approximately 12 percent D) approximately 15 percent E) 30 percent or more

81)

Logistics, or physical distribution, is the ________ part of the marketing mix. A) Possession B) Placement C) Production D) Promotion E) Product

82)

Logistics decisions include all of the following except A) distribution service level. B) transporting of goods. C) handling of goods. D) prices to charge for delivery. E) storage of goods.

83)

Physical distribution differs from logistics in that A) logistics deals with storing, and physical distribution does not. B) logistics uses JIT to coordinate activities among firms, and physical distribution does

not. C) logistics includes customer service decisions, and physical distribution does not. D) logistics includes transporting goods, and physical distribution does not. E) None of these answers is correct, as physical distribution is another common name for logistics.

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84)

Logistics costs A) are important to both firms and consumers. B) don't vary from firm to firm. C) are very similar across different countries. D) total less than 10 percent of the cost of groceries. E) have little impact on a macro-marketing system.

85) About what percentage of the cost of hospital supplies in the United States is the result of logistics? A) 15 percent B) 20 percent C) 25 percent D) 33 percent E) 40 percent

86) About what percentage of GDP do the developed economies of the United States and Europe spend on logistics-related costs? A) 1 to 2 percent B) 5 to 7 percent C) 9 to 15 percent D) 20 to 25 percent E) 30 to 35 percent

87) About what percentage of GDP do the developing economies in Latin America and Africa spend on logistics-related costs?

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A) 10 percent B) 20 percent C) 30 percent D) 40 percent E) 50 percent

88)

To what does the physical distribution customer service level refer? A) It refers to the costs to carry a product in inventory. B) It refers to the length of time a product is stored in inventory. C) It refers to the effort put in by channel members to meeting customer needs. D) It refers to the location of distribution centers. E) It refers to the ability of a firm to deliver rapidly and dependably what customers

want.

89) Which of the following questions is likely to be important to a customer concerning a company's physical distribution practices? A) How much does the company spend to deliver the product? B) How dependably does the company deliver the product? C) How is the product stored before being delivered? D) What mode of transportation is being used? E) How is the product moved to its final destination?

90) Which of the following does not concern the physical distribution customer service level?

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A) Honda wants enough bumpers to build cars that day. B) A vacationer wants Avis to have his rental car clean and ready when he arrives at the rental car counter. C) Sears' shirts are priced at a fair value. D) McDonald's has enough large cups so that customers can buy the larger size drinks which are on sale. E) Safeway’s loaves of bread are in stock and not crushed when customers want them.

91) The physical distribution ________ is how rapidly and dependably a firm can deliver merchandise in demand through the appropriate channels. A) product service level B) trade-offs service level C) customer service level D) standard service level E) efficiency service level

92)

Which of the following is true of physical distribution? A) It should not require trade-offs for managers. B) It means that consumers get products for low prices. C) It includes transportation of products, but logistics does not. D) It is invisible to most consumers in the United States. E) It does not gain much attention when something goes wrong.

93)

Most physical distribution decisions involve trade-offs A) between the total cost of physical distribution and consumer service levels only. B) between transportation costs and inventory carrying costs only. C) among costs, consumer service levels, and sales. D) between sales and consumer service levels only. E) between availability and speed of delivery only.

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94)

What is the likely effect of information technology on physical distribution? A) It improves service levels but doesn't coordinate activities. B) While it cannot cut costs, it can coordinate activities. C) It can cut costs and improve service levels. D) It is overrated and generally fails to add value for customers. E) It improves service levels while raising costs.

95)

96)

Which of the following statements about physical distribution is false?

A) Marketers should always try to maximize the customer service level provided, regardless of cost. B) Physical distribution activities are invisible to most consumers unless something goes wrong. C) There are trade-offs among costs, the customer service level desired, and sales. D) Information technology can help marketers improve service and cut costs. E) In countries with inefficient distribution systems, consumers can face shortages of products they need.

97)

Which of the following statements concerning physical distribution trade-offs is false?

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A) The trade-offs that must be made in the physical distribution area can be complicated. B) The lowest-cost approach may not be the best, as customer service levels vary from one market to the other. C) Many firms are trying to address trade-off complications with e-commerce. D) Most physical distribution decisions involve trade-offs among costs, customer service level, and sales. E) An efficient physical distribution system does not have to make trade-offs for customers.

98) Which of the following is true of information technology's effect on physical distribution? A) It improves service levels but doesn't coordinate activities. B) While it cannot cut costs, it can coordinate activities. C) It can cut costs and improve service levels. D) It is overrated and generally fails to improve service levels and coordinate activities. E) It improves service levels while raising costs.

99) The ________ concept says that all transporting, storing, and product-handling activities of a business and a channel system should be thought of as part of one system that seeks to minimize the cost of distribution for a given customer service level. A) PERT B) product-market C) distribution center D) physical distribution E) unique marketing

100) Under the physical distribution concept, each of the following is coordinated as one system except

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A) delivery of manufactured products to storage. B) storage of products before final delivery. C) delivery of products to their final destination. D) design of products according to specifications. E) handling of products during transportation.

101) When a firm implements the physical distribution concept for its products, what does that imply? A) The firm treats physical distribution functions as separate and unrelated activities. B) The firm seeks to minimize the cost of distribution for a given customer service level. C) The firm supports individual functional activities rather than the whole physical distribution system. D) The firm spreads responsibility for different logistics activities among various departments. E) The firm focuses to increase customer value with better service at relatively high costs.

102)

The physical distribution concept says (or implies) that

A) transporting, storing, and product-handling are unrelated activities for cost control. B) the best distribution system is the lowest-cost one. C) a firm should seek to minimize the total cost of transporting, storing, and producthandling for a given level of customer service. D) if the transporting department minimizes its costs and the storing department minimizes its costs and the product-handling department minimizes its costs—then the total cost of physical distribution will be minimized. E) None of the answers are correct.

103)

The physical distribution (PD) concept is probably being used in a firm if

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A) inventories are set based on just-in-time delivery policies. B) the total cost of distribution is as low as possible. C) storing costs have been minimized. D) transporting, storing, and product-handling are seen as interrelated parts of one PD system. E) transporting costs have been minimized.

104)

A good marketing manager will try to A) set the desired customer service level before trying to minimize physical distribution

costs. B) minimize the total cost of physical distribution. C) maximize the level of customer service provided by his or her firm. D) minimize storing time and costs. E) provide customers with just-in-time delivery service.

105)

The right physical distribution system should be based primarily on A) the desired customer service level. B) how customers store the product. C) the physical characteristics of the product. D) what is the lowest-cost method of transportation for the product. E) the inventory level that allows the smoothest production runs.

106) The Stop & Shop grocery store has a program whereby customers can place their order online, Stop & Shop employees will pick and pack the customer’s groceries, and an independent contractor will deliver the groceries to the customer’s home. This program is a function of Stop & Shop’s ________ system.

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A) physical distribution B) channel C) vertical marketing system D) market positioning E) supply chain

107)

Which of the following observations about the total cost approach is true?

A) It provides quick results, as it excludes all transportation costs. B) It is an effective approach, as it ignores inventory carrying costs. C) It focuses on direct costs and doesn't consider the possible costs of lost sales. D) It limits the use of the tools of cost accounting and economics. E) It evaluates each possible physical distribution system and identifies all the costs of each alternative.

108) Fresh Farm Produce Co. has examined transportation costs and found that shipping its fruits and vegetables by rail to distant markets would cost them only $89,000, while airfreight would cost $250,000. The costs of the actual fruits and vegetables are the same for each transportation mode. In the context of implementing the total cost approach, what should Fresh Farm Produce do? A) It should try to determine other physical distribution costs before deciding on whether to use airfreight. B) It should immediately switch to rail to save money. C) It should conduct marketing research to determine which fruits and vegetables customers want most. D) It should immediately switch to airfreight because it is clearly a faster mode of transportation. E) It should ship with airfreight and store the fruits and vegetables in warehouses.

109)

The total cost approach to physical distribution management

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A) seeks to eliminate the storing function. B) seeks to minimize the cost of transportation. C) might suggest a high-cost transporting mode if storing costs could be reduced enough to lower total distribution costs. D) ignores inventory carrying costs. E) All of the answers are correct.

110) After evaluating all the alternatives and the costs of each, Vegpro Kenya decided the most efficient way to quickly get its fresh vegetables from Nairobi to European cities was to use air freight. Which of the following approaches was used by the firm in making this decision? A) diagonal B) total cost C) sustainability D) EDI E) layered

111) How the physical distribution functions are shared will have the greatest effect on ________ decisions. A) Price B) Promotion C) Product D) Positioning E) People

112)

How PD functions are shared will have the greatest effect on which of the other three Ps?

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A) Price decisions B) Promotion decisions C) Product decisions D) Positioning decisions E) People decisions

113) true?

For coordinating logistics activities among firms, which of the following statements is

A) Wholesalers in the channel should coordinate storage activities. B) Competitive firms usually share logistics coordination similarly. C) Retailers in the channel should coordinate transportation activities. D) Firms may share logistics coordination in multiple effective ways. E) Retailers in the channel should coordinate all storage and transport.

114) An elite fashion manufacturer distributes apparel products in retail outlets worldwide. The company chooses to forego coordinating physical distribution functions with other firms in the distribution channel. Which of the following is most likely to occur as a result? A) a competitive advantage for the manufacturing firm B) lower product delivery costs C) greater harmony across the supply chain D) significant gains in global market share E) discord concerning issues of physical distribution

115) Which of the following is likely true for suppliers using a just-in-time (JIT) delivery system?

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A) They can have facilities far away from their customers. B) They need to respond to customers' production schedules. C) They need not share information over computer networks. D) They cannot make smaller or more frequent deliveries. E) They can have long order lead times.

116)

Which of the following is true regarding JIT systems?

A) JIT systems do not have backup inventory. B) JIT usually entails less frequent deliveries. C) JIT requires manufacturers to add new warehouses. D) JIT requires suppliers to respond to very short order lead times and the customer's production schedule. E) JIT requires manufacturers to locate their facilities next to important customers.

117) Which of the following is an example of a JIT system shifting responsibility for PD activities backward in a distribution channel? A) A paint supplier is highly efficient at controlling logistics costs. Products are distributed at a high customer service level. B) An ice cream chain makes its own ice cream at each of its retail sites. Its customers are highly pleased with the product. C) A wholesale appliance distributer is inefficient at controlling logistics costs. It develops a reputation for low customer service levels. D) A book retailer is more efficient than its suppliers at controlling PD costs. Products are distributed at an acceptable customer service level. E) An automotive parts supplier is less efficient than its retail customers at controlling logistics costs. Products are distributed at a high customer service level.

118) A Samsung plant that manufactures televisions seeks to minimize its inventory and asks its suppliers to only deliver parts shortly before they are needed. Samsung is using ________ delivery systems.

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A) EDI B) PD concept C) rapid response D) containerization E) JIT

119)

Just-in-time (JIT) delivery A) is always the best approach. B) reduces customers' physical distribution costs. C) increases storing and handling costs. D) shifts responsibility for physical distribution activities forward in the channel. E) requires customers to have high quality standards in physical distribution activity.

120)

Which of the following is true regarding JIT systems?

A) JIT systems do not have backup inventory. B) JIT usually entails less frequent deliveries. C) JIT requires manufacturers to add new warehouses. D) JIT requires suppliers to respond to very short order lead times and the customer's production schedule. E) Manufacturers must locate their facilities next to important customers in order to practice JIT.

121)

Just-in-time (JIT) delivery

A) increases physical distribution costs for business customers. B) requires that a supplier be able to respond to the customer's production schedule. C) usually does not require e-commerce order systems and computer networks. D) means that deliveries are larger and less frequent. E) shifts greater responsibility for physical distribution activities from the supplier to the business customer.

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122)

Which of the following statements about just-in-time delivery is false?

A) Just-in-time shifts greater responsibility for physical distribution backward in the channel. B) Just-in-time reduces storing and handling costs for everyone in the channel. C) Just-in-time increases the coordination needed among channel members. D) Just-in-time reduces storing and handling costs for business customers.

123) Honda requires its brake suppliers to deliver parts to its production plants three hours before the parts are scheduled to be installed in a new car. This is an example of which logistics activity? A) EDI B) PD concept C) rapid response D) containerization E) JIT

124) The complete set of firms, facilities, and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers is called the A) supply chain. B) physical distribution group. C) logistics partnership. D) just-in-time team. E) strategic logistics partnership.

125) A jewelry maker's suppliers of gold, platinum, and silver; the warehouses that store its finished goods; and the trucks that deliver the product to retailers are all part of a

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A) private warehouse system. B) supply chain. C) modal transportation hub. D) distribution point. E) public warehouse network.

126)

Which of the following statements about supply chains is true?

A) All the firms in the chain of supply should work together to meet the needs of the customer at the end of the chain. B) Logistics functions are not shifted or shared among the firms in the chain of supply. C) Firms never outsource the whole job of planning and implementing their logistics systems. D) Supply chains always include at least three channels of distribution. E) Supply chains include the logistics activities involved in production and distribution, but not those involved in procuring materials.

127) Each of the following businesses is likely to be part of both the supply chain and the distribution channel for a cosmetics retailer except A) a warehouse that stores finished cosmetic products before shipping. B) a storage company that coordinates both storage and transport. C) a research and development firm focused on cosmetics testing. D) an air freight company that transports the cosmetic line overseas. E) a ground parcel service that ships wholesale orders to retail stores.

128)

A supply chain

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A) focuses on making services available, whereas a channel of distribution focuses on making goods available. B) may involve many firms, but only one manufacturer. C) includes all the activities involved in procuring materials, transforming them into products, and distributing them to customers. D) is easier to coordinate than a channel of distribution. E) None of the answers are correct.

129) A ________ is the complete set of firms, facilities, and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. A) supply chain B) physical distribution group C) logistics partnership D) just-in time group E) None of the answers are correct.

130) Which of the following statements about the supply chain for Ford Motor Company is false? A) The supply chain includes the Ford dealers that sell its cars to consumers. B) The supply chain does not include the production plants where Ford cars are built. C) The supply chain includes a supplier of tires to Ford's production plants. D) The supply chain includes a company that sells rubber to Ford's tire supplier. E) The supply chain includes trucks that deliver cars to Ford dealers.

131)

A supply chain

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A) is part of a broader network of relationships called a channel of distribution. B) is most effective when the objectives of the manufacturer at the beginning of the chain guide the activities of all other firms in the chain. C) requires skill in coordinating activities among different firms, which has prompted many firms to seek help from outside experts. D) focuses on procuring materials needed for production, so its main weakness is that it ignores customer needs. E) concerns only direct relationships between producers, while a channel of distribution may involve intermediaries.

132)

Which of the following statements about supply chains is false?

A) A supply chain includes all the activities involved in procuring materials, transforming them into products, and distributing them to customers. B) A supply chain includes one or more channels of distribution. C) The primary aim of any firm in a supply chain is to contribute to customer value by minimizing its own distribution costs. D) Few firms are willing to give "outsiders" access to information in their computer systems, so it is likely to be quite some time before computers have the kind of impact on managing a supply chain that they have had in other areas of business.

133)

Which of the following statements about supply chains is true?

A) All the firms in the chain of supply should work together to meet the needs of the customer at the end of the chain. B) Logistics functions are not shifted or shared among the firms in the chain of supply. C) Firms never outsource the whole job of planning and implementing their logistics systems. D) A supply chain always includes at least two channels of distribution. E) None of the answers are correct.

134) Which of the following problems led to the development of electronic data interchange (EDI)?

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A) firms using different transportation modes B) international telecommunication difficulties C) differences in order fulfillment processes D) computer system differences among firms E) differences in product output and quality levels

135)

Electronic data interchange (EDI)

A) puts information in a standardized format that can be shared between different computer systems. B) improves information flow between buyers and suppliers. C) allows customers to transmit orders directly to a supplier's computer. D) replaces many of the paper documents previously used for purchase orders and shipping reports. E) All of the answers are correct.

136) When a supplier's computer automatically processes an online order from a customer, schedules production activities for the order, and then sets up delivery of the finished product to the customer, what approach is being used? A) fast-schedule method B) electronic data interchange (EDI) C) containerization technique D) just-in-time (JIT) delivery system E) contractual method

137)

Which of the following statements about electronic data interchange is false?

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A) Inventory information is automatically updated. B) EDI has not yet spread to international markets. C) A customer transmits order information directly to the supplier's computer. D) EDI is very common in the United States. E) EDI puts information into a standardized format.

138) Most ethical issues in the area of physical distribution are concerned with communications about A) new product development. B) product availability. C) the location of retail stores. D) planned obsolescence of products. E) channel conflict.

139)

The transporting function adds value by A) making products available where they're needed. B) making JIT the best approach. C) making products available when they're needed. D) making products available when and where they're needed. E) making the storage function obsolete.

140) Which of the following has played a role in increasing competition within the transportation industry in the United States? A) increasing costs of PD overall B) increasing costs of product storage C) increasing costs of transportation D) decreasing governmental regulations E) decreasing role of technology

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141) As a percentage of selling price, which of the following has the highest transportation costs? A) ammonia B) canned soup C) HD television D) pain medication E) pea gravel

142)

Transportation helps to A) make products available when they're needed. B) achieve economies of scale in production. C) make products available where they're needed. D) make exchange easier. E) All of the answers are correct.

143) Which of the following products would have the lowest transporting costs as a percentage of the selling price? A) electronic equipment B) chemicals and plastics C) pharmaceuticals D) sand and gravel E) manufactured food

144)

Transporting cost as a percentage of selling price is lowest for

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A) bituminous coal. B) manufactured food. C) electronic equipment. D) iron ore. E) cabbage.

145)

Which of the following statements about the transporting function is true?

A) Among transportation modes, an advantage of air transport is its ability to handle a variety of goods. B) Because transportation costs are less than 1 percent of costs for most products, marketing managers do not need to consider them when making strategy decisions. C) Pipelines are generally one of the fastest modes of transportation. D) In most countries, government plays little role in transportation. E) Transporting costs can be a large part of the total cost for heavy products that are low in value.

146)

Good marketing strategy planners know that

A) transporting costs may limit a marketing manager's possible target markets. B) the transporting costs for some bulky or low-value products may be greater than their manufacturing costs. C) transporting is vital for mass distribution and modern urban life. D) the cost of shipping some "high-value" products to users is less than 5 percent of their selling price. E) All of the answers are correct.

147) Which of the following products would have the lowest transporting costs as a percentage of the selling price?

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A) electronic equipment B) chemicals and plastics C) pharmaceuticals D) sand and gravel E) manufactured food

148)

Transporting cost as a percentage of selling price is lowest for A) sand. B) factory machinery. C) pharmaceuticals. D) chemicals. E) cabbage.

149)

The transporting cost as a percentage of selling price is highest for A) factory machinery. B) electronic equipment. C) cabbage. D) manufactured food. E) sand and gravel.

150)

More freight is carried over more miles ________ than any other mode of transportation. A) by railroad B) by air C) by pipeline D) by truck E) over water

151)

Which of the following statements about transporting by rail is true?

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A) It is the slowest mode of transportation. B) It is the least expensive mode of transportation. C) It is good for long-distance transportation of heavy, bulky items at low cost. D) It is the most efficient at handling less-than-carload (LCL) shipments. E) It accounts for more than 25 percent of transport revenues.

152)

As a mode of transportation, railroad freight would be least suited for A) iron ore. B) sand. C) fresh fruit. D) automobiles. E) coal.

153)

Which of the following is true of the railroad transportation system?

A) The full carload rates are lower than less-than-carload (LCL) rates. B) Rail shipments usually move much faster than truck shipments. C) They transport the same products in less-than-carload lots faster than full carload shipments. D) They handle products only if they are shipped in full carload lots. E) They are well suited for perishable items, as they handle them efficiently.

154) The best way to ship a large shipment of coal (which is a heavy and bulky good) from Pennsylvania to California at a relatively low cost would be to use A) rail. B) water. C) trucks. D) air. E) a pipeline.

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155)

What is the likely advantage of transportation of goods by truck? A) Trucks are best at moving long quantities of goods for long distances. B) Trucks are a very low-cost mode of transportation. C) Trucks have valuable benefits like less spoilage, theft, and damage. D) Trucks can provide fast delivery. E) Trucks do not compete for high-value items.

156)

What is the disadvantage of transporting goods by truck? A) Trucks are not reliable in meeting delivery schedules. B) The number of locations served by trucks is very limited. C) Trucks have a limited ability to handle a variety of goods. D) The cost of transportation is higher than with pipeline or rail. E) Trucks are not suitable for moving small quantities of goods for shorter distances.

157)

All of the following are advantages of using trucks except A) flexibility. B) fast delivery speed. C) reliability in meeting delivery schedules. D) handling a variety of goods. E) serving a limited number of locations.

158)

Regarding alternative transporting modes,

A) trucks are good for speed, frequency, dependability, and number of locations served. B) pipelines are slower and less dependable than water transport but are also less expensive and able to serve more locations. C) air is faster, cheaper, and more dependable than rail. D) waterways are slow, costly, and unable to handle a variety of shipments.

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159) At least ________ percent of all freight shipped in the United States moves by truck at least part of the way from producer to user. A) 20 B) 75 C) 15 D) 5 E) 10

160) A marketing manager who wants to ship small quantities (1,500 pounds) of relatively high-value products for short distances at an economical cost should use A) inland waterways. B) pipelines. C) railroads. D) trucks. E) air.

161) The best way to ship computer parts from St. Louis, Missouri, to Columbus, Ohio, when the parts need to be at a factory in Columbus within three days, is to use A) a pipeline. B) rail. C) trucks. D) air. E) water.

162) Which of the following transportation modes is considered best at handling a variety of goods?

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A) truck B) rail C) water D) air E) pipeline

163) It is usually most economical to ship bulky nonperishable items, such as coal and iron ore, by A) water. B) pipeline. C) truck. D) air. E) None of these is a good answer, since the cost of shipping a product usually does not vary from one mode to another.

164)

The slowest transportation is typically by A) rail. B) water. C) truck. D) air. E) pipeline.

165)

What is the benefit of transporting by water? A) fast delivery speed B) least expensive mode for heavy freight C) very high dependability in meeting schedules D) high frequency of scheduled shipments E) serving a very extensive number of locations

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166) Considering weight, which one of the following transporting modes usually has the lowest cost? A) waterways B) air C) trucks D) railroads E) pipelines

167) Products that require a high frequency of scheduled shipments would be LEAST suited to travel by A) truck. B) rail. C) air. D) water. E) pipeline.

168) Tammy works in the logistics department of a company that manufactures tractors and other farm equipment in China for the U.S. market. Cost is her primary concern in getting products to farm states in the U.S. Midwest. Which mode(s) of transportation will Tammy most likely choose for the transportation of goods? A) water, then truck B) air, then rail C) air, then truck D) air alone E) water, then rail

169) The mode of transport that serves a very limited number of locations but has a high dependability in meeting schedules is

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A) truck. B) rail. C) water. D) air. E) pipeline.

170) Alex has to transport iron ore from New Orleans to Memphis. Which mode of transport is he more likely to use? A) air B) truck C) rail D) inland waterway E) monorail

171) The best way to ship a heavy product like iron ore from St. Louis, Missouri, to New Orleans, Louisiana, in the spring season with no arrival deadline is to use ________ transportation. A) air B) truck C) pipeline D) rail E) water

172) The mode of transport that is used primarily to move oil and natural gas and serves a very limited number of locations but has a high dependability in meeting schedules is

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A) trucks. B) railroads. C) waterways. D) airfreight. E) pipelines.

173)

For which of the following goods would air be the LEAST useful mode of transportation? A) high-fashion clothing B) oil C) flowers and bulbs from Holland D) emergency delivery of repair parts E) parts for the electronics industry

174)

Considering weight, the most expensive cargo transporting mode is A) pipelines. B) railroads. C) truck. D) inland waterways. E) airfreight.

175)

Shipping by air A) is most useful for smaller, high-value items. B) generally increases handling costs. C) is generally the most economical transportation method. D) generally increases storing costs. E) None of the answers are correct.

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176) In spite of high-cost, high-value, low-weight goods like high-fashion clothing and parts for the electronics industry are often shipped long distances by A) rail. B) water. C) air. D) pipeline. E) truck.

177) When a firm depends primarily on airplanes for its goods transportation, which of the following would be a related likely feature? A) high total cost of distribution B) high cost of packing and unpacking goods C) low inventory costs D) moderate cost of preparing goods for sale E) low dependability in meeting schedules

178)

Shipping by air A) is most useful for smaller, high-value items. B) may reduce handling costs. C) generally involves higher transportation costs than other modes of transportation. D) offers greater delivery speed. E) All of the answers are correct.

179)

Regarding airfreight, which of the following statements is true?

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A) Airfreight may reduce the total cost of distribution. B) Inventory costs usually increase, since only small quantities can be shipped at a time. C) Low-value, high-weight goods are often shipped by air. D) Airfreight may increase the cost of unpacking and preparing goods for sale. E) There are usually more problems from theft and damage with airfreight.

180)

Using airfreight instead of some other mode of transporting may result in A) lower packing costs. B) lower total cost of distribution. C) less damage in transit. D) higher transporting costs. E) All of the answers are correct.

181)

Airfreight A) has rates one-third the rates of trucks. B) efficiently delivers all types of goods. C) serves many more locations than trucks. D) can reduce the cost of preparing goods for distribution. E) can help reduce inventory costs.

182)

Regarding transportation modes, which of the following statements is false?

A) The majority of the pipelines in the United States are in the Southwest. B) Airfreight costs about the same as trucks for long distances, not counting the cost of transporting to and from the airport. C) Water transportation is the slowest shipping mode. D) Most cities in the United States are less than 200 miles from a major petroleum pipeline.

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183)

Which of the following statements is true regarding alternative transporting modes? A) Waterways serve the most locations. B) Airfreight is the most expensive transporting mode. C) Railways provide the lowest cost, considering weight. D) Trucks offer the fastest speed. E) Pipelines in the United States are located mostly in the Northeast.

184) Jackie works as a logistics and distribution manager for a company that ships expensive, high-quality fish all across the United States. Given the perishable nature and high prices of the product, and the value of freshness, which of the following transportation modes should be recommended by Jackie for logistics? A) airfreight B) truck C) railroad D) inland waterways E) pipeline

185)

What is the best way to ship spring tulips from Amsterdam, Netherlands, to Rome, Italy? A) water B) truck C) air D) rail E) pipeline

186)

Regarding alternative transporting modes, which of the following statements is true?

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A) Waterways usually provide the lowest cost way of shipping heavy freight. B) Airfreight is quickest. C) Pipelines offer reliability in moving oil and natural gas. D) Trucks serve the most locations. E) All of the answers are correct.

187) Which of the following, once used mostly in the military and by hobbyists, are now being used for delivery services all over the world? A) drones B) Strykers C) rocket packs D) off road golf carts E) ATVs

188)

Which of the following is true of the containerization method followed in logistics?

A) It is widely used by railroads but has not caught on with other modes. B) It makes it easier to load and unload products, but it increases the risk of damage. C) It has increased competition between railroads and water transport. D) It groups items into economical shipping quantities and seals them in protective containers for transit. E) It complicates handling of goods during shipping, as it focuses more on quantity than quality.

189) Air express companies place many small packages into specially designed cylinders that conform to the interior dimensions of a cargo airplane. This practice protects the smaller packages and helps to reduce distribution costs. The air express companies are practicing

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A) containerization. B) drop-boxing. C) freight forwarding. D) micro packaging. E) specific partitioning.

190) When Sony manufactures and packages televisions in Japan, stores them in large 8' × 8' × 20' "boxes," and then ships these boxes to Los Angeles by boat. This is an example of A) containerization. B) truck. C) pipeline. D) rail. E) drop-boxing.

191) A major benefit of ________ is that it protects the products and simplifies handling during shipping. A) fast freight B) truck service C) containerization D) airfreight E) JIT

192)

To what does the term inventory refer? A) It refers to the amount of goods being stored. B) It refers to minimizing storage costs. C) It refers to the amount of goods being sold. D) It refers to the marketing function of holding goods. E) It refers to the quality of goods being stored.

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193)

Why would Coca-Cola want to encourage its customers to store product in their homes? A) More of the product is used or consumed. B) The sales price of the product decreases. C) Shipping time to transport the product is reduced. D) Manufacturing time to produce the product is reduced. E) Shipping costs to transport the product are reduced.

194) A footwear company specializing in the production of ballet shoes normally produces shoes for women. The company is hired by several customers to produce shoes for men. Which of the following should the manufacturer consider in order to achieve economies of scale in shoe production? A) the amount of shoe production cost compared to the typical costs incurred in shipping B) the level of effort required to retool the company's manufacturing plant to produce only men's shoes C) the cost of producing one type of shoe at a time in large quantities and storing them for future sales D) the amount of shoe storage cost compared to the typical costs incurred in shipping E) the cost associated with efforts to increase customers that might also place orders for men's shoes

195) A tire manufacturer currently produces tires in small quantities as they are ordered. The company learns that it can reduce costs significantly by producing one type of tire at a time in large quantities and storing its unsold tires for later sale. Should the company switch to large quantity production?

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A) No, because this will prevent the company from providing tires as they are ordered. B) No, because this will cause the company to incur unexpected transportation costs. C) Yes, because this will help the company in achieving economies of scale in production. D) Yes, because this will allow the company to utilize JIT delivery systems. E) No, because this will not enable the company to improve its production speed per tire.

196)

Which of the following is true of storing goods as a marketing function?

A) The duration of storing by some channel members does not affect the behavior of other channel members. B) It allows the producer to keep stocks at convenient locations. C) It is related to Place, but not to Price. D) It is necessary when production of goods matches consumption. E) It cannot increase the value of any goods.

197)

When is it necessary for a firm to practice storing of goods? A) when there is more demand and no supply B) when product quality doesn't match demand C) when production doesn't match consumption D) when production doesn't match the quality demanded E) when products are produced in small batches

198)

Which of the following statements about the storing of goods is true?

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A) It excludes the costs of damage, theft, and reduced value if products get out of date. B) It is uncommon with mass production of goods. C) The duration of storing by some channel members does not affect the behavior of other channel members. D) It is considered beneficial for producers, but not for intermediaries. E) It involves the costs of putting products in inventory and taking them out again.

199)

Which of the following does not contribute to total inventory cost? A) costs of damage to products while in inventory B) costs of risks such as theft and fire C) costs of inventory becoming obsolete D) increase in the value of goods E) handling costs

200)

Which of the following is a feature of public warehouses as storing facilities? A) low unit charges B) high managerial control C) very high fixed investments D) less flexibility E) high adequacy for the product line

201)

Compared to a public warehouse, a private warehouse A) requires no fixed investment. B) has lower unit costs even if volume is low. C) has less flexibility. D) lacks convenience for the product line. E) offers less managerial control.

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202) A cheese processor has regular need for regional storage of a large quantity of cheese. If it is interested in getting high managerial control and high adequacy for its product line, it should probably use ________ warehouses. A) public B) private C) general merchandise D) commodity E) specific merchandise

203)

Which of the following is true about public warehouses?

A) They are leased by companies for their own use. B) They are designed to speed the flow of goods. C) They are very expensive. D) They are useful for manufacturers that must maintain stock in many locations, including foreign countries. E) They are used by firms who must regularly store large volumes of goods.

204)

Which of the following statements about the choice of storing facilities is true? A) Public warehouses are storing facilities owned or leased by companies for their own

use. B) Private warehouses are most useful when a company does not have a regular need for space. C) Public warehouses are independent storing facilities and provide a full range of services. D) Private warehouses are specially designed to speed the flow of goods. E) Public warehouses are used when a large volume of goods must be stored regularly.

205)

Public warehouses

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A) generally do not provide all the services that could be obtained in a company's own branch warehouse. B) are not usually responsible for the risk of damage in the warehouse. C) provide flexibility, because the user pays only for the space used. D) are not very useful to manufacturers who must maintain stocks in many locations, including foreign countries. E) All of the answers are correct.

206)

Compared to private warehouses, public warehouses A) are not any more flexible, because long-term leases are usually required. B) may not always be conveniently available or adequate for the current product line. C) require no fixed investment, but per-unit storing costs are usually higher. D) reduce managerial flexibility. E) All of the answers are correct.

207) There are big shifts in demand from season to season for the lawn mowers produced by GreenVision Co., and its need for storage facilities also varies. For its storage needs, GreenVision should think about using A) airfreight. B) private warehousing facilities. C) distribution centers. D) public warehousing facilities. E) commodity warehousing facilities.

208)

Modern one-story warehouses typically do not have

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A) power-operated lift trucks. B) electric hoists. C) battery-operated motor scooters. D) roller-skating order pickers. E) freight elevators.

209) When a firm wants to monitor its inventory, order the needed stock, and track storing and shipping costs with the help of computers, it should use A) supply chain coding tags. B) consumer code data. C) supplier identification tags. D) consumer data tags. E) electronic radio frequency identification tags.

210)

Which of the following is true of distribution centers? A) They are designed to facilitate the flow of products through the channel. B) They are the same as public warehouses. C) They are not places where regrouping activities such as bulk-breaking are performed. D) They increase storing costs. E) They are designed to eliminate all storage.

211)

Which of the following statements about inventory and storage is true?

A) A distribution center is used to avoid unnecessary storing costs. B) Only government agencies can store products in public warehouses. C) Decisions about inventory levels are usually not of concern to marketing managers, as inventory levels are best determined based on the amount of the product produced. D) Achieving customer service goals makes a large inventory almost inevitable. E) Minimizing storage costs will lead to lower total distribution costs.

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212) Speeding the flow of products and avoiding unnecessary storing costs is the primary function of a A) commodity warehouse. B) distribution center. C) merchant wholesaler. D) public warehouse. E) private warehouse.

213) Which of the following correctly represents the order of activities most likely to be performed on goods arriving at a distribution center? A) sort into groups, move to loading dock, move to the vehicle for distribution B) put in long-term storage, retrieve from groups, stack on pallets, load for shipping C) sort into groups, put in long-term storage, retrieve from groups, load for shipping D) load for shipping, sort into groups, retrieve from groups, stack on pallets E) sort into groups, stack on pallets, load for shipping, retrieve from groups

214)

Which of the following types of activities is/are likely to occur at a distribution center? A) sorting of products and moving them to loading docks B) sorting of goods and short-term storing C) shipping goods directly from manufacturer site to retail stores D) tracking storing and shipping costs by computers E) long-term storage of inventory before shipping

215) A manufacturer that transports products to retail outlets directly instead of using a distribution center is most likely to encounter which of the following?

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A) equivalent delivery speed at lower cost B) faster delivery speed at higher cost C) slower delivery speed at equivalent cost D) faster delivery speed at equivalent cost E) slower delivery speed at lower cost

216) Which of the following best reflects the order in which activities are most likely to be performed on goods arriving at a distribution center? A) sort into groups, retrieve from groups, stack on pallets, load for shipping B) put in long-term storage, retrieve from groups, stack on pallets, load for shipping C) sort into groups, put in long-term storage, retrieve from groups, load for shipping D) load for shipping, sort into groups, retrieve from groups, stack on pallets E) sort into groups, stack on pallets, load for shipping, retrieve from groups

217)

Each of the following types of activities is likely to occur at a distribution center except A) moving products to loading docks. B) sorting of goods mid-shipment. C) placing products on transport vehicles. D) regrouping of products in transit. E) long-term storage of inventory before shipping.

218)

Compared to a warehouse, a distribution center is A) designed to provide more efficient use of storage space. B) concerned with eliminating the need for bulk-breaking. C) designed to eliminate all storage. D) set up to speed the flow of products toward the consumer. E) a storage facility used by several intermediaries to share costs.

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219) A(n) ________ is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. A) gateway for inventory B) RFID warehouse C) UPC storage facility D) distribution center E) shopping mall

220)

Distribution centers A) are designed to facilitate the flow of products through the channel. B) are the same as public warehouses. C) are not places where regrouping activities—such as bulk-breaking—are performed. D) increase storing costs. E) are designed to eliminate all storage.

221)

Which of the following statements about inventory and storage is true?

A) A distribution center is used to avoid unnecessary storing costs. B) Only government agencies can store products in public warehouses. C) Decisions about inventory levels are usually not of concern to marketing managers, since inventory levels are best determined based on the amount of the product produced. D) Achieving customer service goals makes a large inventory almost inevitable. E) Minimizing storage costs will lead to lower total distribution costs.

222)

In regard to logistics, which of the following is LEAST effective in a disaster situation?

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A) aid agencies stockpiling drugs, tents, and blankets for times of emergency B) having one central communications hub C) system for color coding aid boxes to indicate their contents D) use of IT systems to manage incoming donations, storage, and shipping priorities E) aid agencies arranging open orders with suppliers who can instantly ship supplies where needed

223) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. United's shipments to international markets often rely on containerization. The likely reason for this is that

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A) the tools are shipped by airfreight. B) it makes it easier to move shipments between different transportation modes. C) containerization is very useful for small, frequent shipments. D) containerization allows a firm to carry less inventory. E) All of these are good reasons for relying on containerization.

224) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. In designing the right physical distribution system, United Tools should primarily focus on

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A) the inventory level that its current warehouse can support. B) the lowest-cost transportation method for each of its products. C) where customers store their inventory. D) the desired customer service level. E) the physical characteristics of each product.

225) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. Which physical distribution system is best suited for Ralston Supply?

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A) airfreight B) inland waterways C) truck D) rail and warehouse E) This cannot be determined without more information.

226) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. Which physical distribution system should Harter choose for Ricotta Tool Co.?

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A) airfreight B) inland waterways C) truck D) rail and warehouse E) This cannot be determined without more information.

227) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

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A) is implementing the physical distribution concept. B) works to provide just-in-time delivery to both of its wholesalers. C) needs to buy its own fleet of trucks. D) uses the distribution system with the lowest transportation cost. E) All of the answers are correct.

228) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. One of United's biggest customers has placed a very large, heavy order. Its warehouse is in a location served by all transport modes, and the customer has directed United to ship the order by the mode with the lowest transport costs. In this situation, United will probably ship the tools by

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A) airfreight. B) truck. C) waterways. D) railroad.

229) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. To help in managing excess inventory, United Tools would most likely use

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A) a private warehouse. B) a public warehouse. C) the piggyback mode. D) a distribution center. E) All of these would help in managing excess inventory.

230) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. When United Tools considers its total inventory cost, which of the following would not be included?

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A) costs of damage to products while in inventory B) costs of inventory becoming obsolete C) cost of a storage facility D) cost of money tied up in inventory E) All of these should be included in total inventory cost.

231) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. United ships to the regional distribution centers of one of the retail hardware chains that it serves. The main advantage of the distribution centers for the retailer is likely to be that they

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A) can store a larger inventory than in traditional warehouses. B) eliminate the need for electronic communications between the distribution centers and the individual stores. C) speed the flow of tools from the factory to the stores. D) None of these is an advantage of distribution centers.

232) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. United Tools is considering building a new private warehouse for its tools. Which of the following is a benefitof private warehouses?

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A) low unit-storage cost, if volume is high B) very flexible, if storage needs expand or contract in the future C) low fixed investment D) All of the answers are correct.

233) Use this information for questions that refer to the United Tools case. Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers—a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers. Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for its products is fairly consistent over time, so inventory is easy to manage. Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option—and the distribution service levels that can be achieved—are as follows:

Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service—level even if that means some products will occasionally be out of—stock if it gets products at a lower price. For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Crosscountry shipments usually go by rail, while regional shipments usually go by truck. As marketing manager, United's Terry Harter should realize that

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A) transporting costs may limit her choice of target markets. B) a supply chain can only consist of one distribution channel. C) the lowest-cost distribution system is the best alternative. D) None of the answers are correct.

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Answer Key Test name: Chap 11_17e 1) TRUE Whenever Product includes a physical good, Place requires logistics decisions. 2) FALSE Logistics is the transporting, storing, and handling of goods both within individual firms and along a channel of distribution. 3) TRUE For some products, a company may spend half or more of its total marketing dollars on physical distribution activities. 4) TRUE For some products, a company may spend half or more of its total marketing dollars on physical distribution activities. 5) FALSE Developed economies in the United States spend about 9 to 15 percent of GDP on logistics-related costs, while in the developing economies of Africa costs are 30 percent or more. 6) FALSE PD is a part of marketing that is invisible to most consumers. 7) TRUE In countries where physical distribution systems are inefficient, consumers face shortages of the products they need. 8) FALSE

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Most customers would prefer very good service at a very low price. But that combination is hard to provide because it usually costs more to provide higher levels of service. 9) TRUE Most physical distribution decisions involve trade-offs among costs, the customer service level, and sales. 10) FALSE Information technology, data, and analytics can improve service levels and cut costs at the same time. 11) TRUE Better information flows make it easier to coordinate activities, improve efficiency, and add value for the customer. 12) TRUE The physical distribution (PD) concept seeks to minimize the cost of distribution for a given customer service level. 13) FALSE The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level. 14) FALSE The physical distribution (PD) concept seeks to minimize the cost of distribution for a given customer service level. 15) TRUE The physical distribution concept seeks to minimize the cost of distribution for a given customer service level. Lower costs and better service help increase customer value. Version 1

16) TRUE With the PD concept, firms work together to decide what aspects of service are most important to customers at the end of the channel. They then find the least expensive way to achieve the target level of service. 17) FALSE Fast PD service can be critical for retailers that appeal to consumers who are eager to get a new product that is in hot demand. 18) FALSE Refer to Exhibit 11–3. The time to enter and process orders and backorder procedures affects PD service levels. 19) TRUE Refer to Exhibit 11–3. Advance information on product availability affects PD service levels. 20) FALSE The total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative. 21) FALSE The total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative. 22) TRUE The total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative. 23) FALSE The total cost approach uses the tools of cost accounting and economics. Costs that otherwise might be ignored, like inventory carrying costs, are considered.

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24) FALSE Physical distribution functions can and should be divided within the channel. There is no right sharing arrangement. 25) FALSE A JIT system shifts greater responsibility for PD activities backward in the channel. 26) TRUE A key advantage of JIT for business customers is that it reduces their storing and handling costs. 27) FALSE A JIT system shifts greater responsibility for PD activities backward in the channel. A JIT system requires that a supplier have extremely high quality control in every PD activity. 28) FALSE JIT is not always the best approach. 29) TRUE Relationships within the distribution channel are sometimes part of a broader network of relationships in the supply chain. 30) TRUE Relationships within the distribution channel are sometimes part of a broader network of relationships in the supply chain. 31) FALSE Relationships within the distribution channel are sometimes part of a broader network of relationships in the supply chain, which is the complete set of firms. 32) FALSE Version 1

A distribution channel is sometimes part of a broader network of relationships in the supply chain. 33) FALSE The supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 34) TRUE Supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 35) FALSE All the firms in a supply chain should work together to meet the needs of the customer at the very end of the chain. That way, at each link along the chain, the shifting and sharing of logistics functions and costs are handled, resulting in the most value for the final customer. 36) TRUE Electronic data interchange (EDI) is an approach that puts information in a standardized format easily shared between different computer systems. 37) TRUE In both a supply chain and a channel of distribution, firms should work together to meet the needs of the customer. That way, at each link along the chain, the shifting and sharing of logistics functions and costs are handled in a way that results in the most value for the final customer. 38) FALSE

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In both a supply chain and a channel of distribution, firms should work together to meet the needs of the customer. 39) FALSE Physical distribution decisions will continue to improve as more firms are able to have their computers "talk" to each other directly and as websites help managers get access to up-to-date information whenever they need it. 40) FALSE Most international transportation firms rely on EDI links with their customers. 41) TRUE Transporting is the marketing function of moving goods. Transportation makes products available when and where they need to be, at a cost. 42) TRUE The cost of transportation adds little to the total cost of products that are already valuable relative to their size and weight. 43) FALSE Transport costs add little to the cost of products that are already valuable relative to their size and weight. 44) FALSE Government often plays an important role in the development of a country's transportation system, including its roads, harbors, railroads, and airports; and as regulations decreased in the United States, competition in the transportation industry increased. 45) TRUE The best transporting mode should provide the level of service required at as low a cost as possible. Version 1

46) TRUE The best transporting alternative depends on the product, other physical distribution decisions, and what service level the company wants to offer. 47) FALSE In the United States, railroads carry more freight over more miles than any other mode. 48) TRUE Railroads carry heavy and bulky goods such as coal, steel, and chemicals. 49) FALSE Refer to Exhibit 11–5. Transportation by pipelines has the following features: low-cost, slow delivery speed, high dependability in meeting schedules, and more. 50) FALSE Less-than-carload shipments take a lot of handling, which means they usually move more slowly and at a higher price per pound than carload shipments. 51) TRUE At least 75 percent of U.S. consumer products travel at least part of the way from producer to consumer by truck. 52) FALSE In countries with good highway systems, trucks can give extremely fast service. Trucks compete for high-value items. 53) TRUE Water transportation is the slowest shipping mode, but it is usually the lowest-cost way of shipping heavy freight. Version 1

54) TRUE See Exhibit 11–5. Water transportation has a very high ability to handle a variety of goods and medium dependability in meeting schedules. 55) FALSE Using planes may reduce the cost of packing, unpacking, and preparing goods for sale and may help a firm reduce inventory costs by eliminating outlying warehouses. 56) FALSE Valuable benefits of airfreight's speed are less spoilage, theft, and damage. 57) TRUE Containerization is the method of grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. 58) TRUE Containerization protects the products and simplifies handling during shipping. 59) TRUE Transportation companies routinely place sensors on trucks and train cars to monitor their movement. These sensors generate a lot of data. Managers use this to identify opportunities to more effectively manage the economic and environmental costs of transportation. 60) TRUE Transportation choices are usually limited in developing countries. 61) TRUE

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Protecting the environment does cost more, but today the public expects companies to transport products in an environmentally sound and safe manner. 62) TRUE Inventory is the amount of goods being stored. 63) FALSE Storing is necessary when production of goods doesn't match consumption. It's often cheaper to produce large quantities of one size, and store the unsold quantity, than to have shorter production runs. 64) TRUE Storing allows producers and intermediaries to keep stock at convenient locations, ready to meet customers' needs. 65) FALSE Storing can increase the value of goods, but storing always involves costs too. 66) FALSE Public warehouses are independent storing facilities that have low managerial control. 67) TRUE Firms use private warehouses when a large volume of goods must be stored regularly. 68) FALSE Public warehouses are independent storing facilities. They can provide all the services that a company's own warehouse can provide. 69) TRUE

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Bar codes, universal product code (UPC) numbers, and electronic radio frequency identification (RFID) tags make it easy for computers to monitor inventory, order needed stock, and track storing and shipping costs. 70) FALSE A distribution center is a special kind of warehouse designed to speed the flow of goods. 71) TRUE A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 72) FALSE A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 73) FALSE A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 74) TRUE Some firms prefer to skip the distribution center altogether and ship products directly from where they are manufactured to retail stores. This may move products more quickly, but usually at a higher cost. 75) TRUE Coordination of relief efforts is possible only if there is good information. Agencies need to know what supplies are available, where they are located, what needs are greatest, and where and how quickly deliveries can be made. Having one central communications hub and IT systems specifically dedicated to the task are key. 76) B Version 1

Place requires logistics decisions. 77) C Logistics is the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix, both within individual firms and along a channel of distribution. Physical distribution (PD) is another common name for logistics. 78) A Logistics costs are very important to both companies and consumers. 79) C Developed economies such as that of the United States and those of Europe spend about 9 to 15 percent of GDP on logistics-related costs, while in the developing economies of Latin America and Africa, costs are 30 percent or more. 80) E In the developing economies of Latin America and Africa, logistics costs are 30 percent of GDP or more. 81) B Place requires logistics decisions. 82) D Logistics is the transporting, storing, and handling of goods in ways that match target customers' needs with a firm's marketing mix. Physical distribution (PD) is another common name for logistics. "Prices to charge for delivery" is a Price decision. 83) E Physical distribution (PD) is another common name for logistics. 84) A Version 1

Logistics costs are very important to both companies and consumers. 85) D Logistics costs represent more than one-third the expense attached to hospital supplies. 86) C Developed economies in the United States and Europe spend about 9 to 15 percent of GDP on logistics-related costs. 87) C In the developing economies of Latin America and Africa, logisticsrelated costs are 30 percent or more. 88) E The physical distribution customer service level concerns how rapidly and dependably a firm can deliver what the customers want. 89) B Regarding physical distribution, customers think in terms of how rapidly and dependably a firm can deliver what the customers want. Customers don't care how a product was moved or stored or what some channel member had to do to provide it. 90) C The physical distribution customer service level concerns how rapidly and dependably a firm can deliver what the customers want. Whether "Sears' shirts are priced at a fair value" is a Price decision. 91) C The physical distribution customer service level concerns how rapidly and dependably a firm can deliver what the customers want. 92) D Version 1

Most consumers in the United States don't think much about physical distribution. It is invisible to them. 93) C Most physical distribution decisions involve trade-offs among costs, customer service levels, and sales. 94) C Information technology, data, and analytics can improve service levels and cut costs at the same time. Better information flows make it easier to coordinate activities, improve efficiency, and add value for the customer. 95) C Most physical distribution decisions involve trade-offs among costs, customer service levels, and sales. 96) A There are trade-offs among costs, the customer service level, and sales. Most customers would prefer very good service at a very low price; but that combination is hard to provide because it usually costs more to provide higher levels of service. 97) E Most physical distribution decisions involve trade-offs among costs, customer service levels, and sales. 98) C Information technology, data, and analytics can improve service levels and cut costs at the same time. 99) D

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The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level. 100) D Under the physical distribution concept, all transporting, storing, and product-handling activities of a business should be coordinated as one system. Design of products would not be included under the physical distribution concept. 101) B The physical distribution concept seeks to minimize the cost of distribution for a given customer service level. 102) C The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system that seeks to minimize the cost of distribution for a given customer service level. 103) D The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system. 104) A Firms work together to decide what aspects of service are most important to customers at the end of the channel. They then focus on finding the least expensive way to achieve the target level of service. 105) A

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Firms work together to decide what aspects of service are most important to customers at the end of the channel. They then focus on finding the least expensive way to achieve the target level of service. 106) A PD can be a source of competitive advantage if firms match needs and service level. These days, many grocery customers expect more convenience and speed as part of their PD service. 107) E The total cost approach involves evaluating each possible PD system and identifying all the costs of each alternative. 108) A In selecting a PD system, the total cost approach involves evaluating each possible PD system and identifying all of the costs of each alternative. 109) C In selecting a PD system, the total cost approach involves evaluating each possible PD system and identifying all the costs of each alternative. 110) B By using the total cost approach, Vegpro Kenya compared different PD systems for shipping ready-to-eat fresh produce from fields in Kenya to grocery stores in major European cities. 111) A How the PD functions are shared affects the other three Ps—especially Price. 112) A How the PD functions are shared affects the other three Ps—especially Price. Version 1

113) D There is no right sharing arrangement for coordinating logistics among firms. Physical distribution can be varied endlessly in a marketing mix and in a channel system. 114) E If firms in the channel do not plan and coordinate how they will share PD activities, PD is likely to be a source of conflict rather than a basis for competitive advantage. 115) B A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. Thus, e-commerce order systems and information sharing over computer networks are often required. JIT suppliers often locate their facilities close to important customers. Trucks may make smaller and more frequent deliveries. 116) D A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. 117) A A JIT system shifts greater responsibility for PD activities backward in the channel. If the supplier can be more efficient than the customer could be in controlling PD costs—and still provide the customer with the service level required—this approach can work well for everyone in the channel. 118) E A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. 119) B Version 1

A key advantage of JIT for business customers is that it reduces their PD costs. 120) D A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. 121) B A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. 122) B JIT reduces PD costs for business customers, especially storing and handling costs; but it increases costs for suppliers. 123) E A JIT system usually requires that a supplier respond to very short order lead times and the customer's production schedule. 124) A A supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 125) B The supply chain includes the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 126) A All the firms in the supply chain should work together to meet the needs of the customer at the very end of the chain. Version 1

127) C A supply chain includes all firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. A cosmetics testing firm might be included in the supply chain of the cosmetics, but it would not be part of the distribution channel. 128) C A supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 129) A A supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 130) B A supply chain is the complete set of firms and facilities and logistics activities that are involved in procuring materials, transforming them into intermediate or finished products, and distributing them to customers. 131) C Coordinating all the elements of PD has always been a challenge, even in a single firm. Trying to coordinate orders, inventory, and transportation throughout the whole supply chain is even tougher. Companies like Marsh and IBM provide consulting services and software to help firms manage complex supply chains. 132) D Version 1

Physical distribution decisions will continue to improve as more firms are able to have their computers "talk" to each other directly and as websites help managers get access to up-to-date information whenever they need it. Consulting services are also available from outside experts. 133) A All the firms in the supply chain should work together to meet the needs of the customer at the very end of the chain. 134) D Until recently, differences in computer systems from one firm to another hampered the flow of information. Many firms attacked this problem by adopting electronic data interchange (EDI), an approach that puts information in a standardized format easily shared between different computer systems. 135) E Electronic data interchange (EDI) puts information in a standardized format that is shared between different computer systems. In many firms, EDI has replaced many paper documents like purchase orders and shipping reports. It allows customers to transmit orders directly to the supplier's computer. 136) B With EDI, a customer transmits order information directly to the supplier's computer, and the supplier's computer immediately processes the order and schedules production, order assembly, and transportation. 137) B Most international transportation firms rely on EDI links with their customers. 138) B Version 1

Some ethical issues that arise in the PD area concern communications about product availability. 139) D Transportation makes products available when and where they need to be, at a cost. 140) D As regulations decreased in the United States, competition in the transportation industry increased. 141) E Refer to Exhibit 11–4. As a percentage of selling price, transportation costs are higher for sand and gravel products than for chemicals, manufactured foods, electronic equipment, and pharmaceutical products. 142) E Transportation aids economic development and exchange. Transportation makes products available when and where they need to be, at a cost; and it can help achieve economies of scale in production. 143) C Refer to Exhibit 11–4. Pharmaceuticals have 1 percent transporting cost as percent of selling price. The cost of transportation adds little to the total cost of products like pharmaceuticals that are already valuable relative to their size and weight. 144) C Refer to Exhibit 11–4. Electronic equipment has a 3 percent transporting cost as percent of selling price. 145) E Transporting costs can be a large part of the total cost for heavy products that are low in value, like sheet aluminum. Version 1

146) E Transporting costs limit the target markets a marketing manager can serve. Without low-cost transportation, there would be no mass distribution. Transport costs add little to the cost of products that are valuable relative to their size and weight but are a large part of the total cost for heavy products of low value. 147) C The cost of transportation adds little to the total cost of products like pharmaceuticals that are already valuable relative to their size and weight. 148) C The cost of transportation adds little to the total cost of products like pharmaceuticals that are already valuable relative to their size and weight. 149) E Transporting costs can be a large part of the total cost for heavy products of low value, like raw materials. 150) A Railroads carry more freight over more miles than any other mode. 151) C Railroads carry heavy and bulky goods such as coal, steel, and chemicals over long distances at relatively low cost. Water transportation is the slowest shipping mode and is usually the lowest-cost way of shipping items. 152) C Railroad freight usually moves more slowly than truck shipments, so it is not suitable for perishable items. Version 1

153) A With railroads, less-than-carload (LCL) shipments move more slowly and at a higher price per pound than full carload shipments. 154) A Railroads carry heavy and bulky goods such as coal, steel, and chemicals over long distances at relatively low cost. 155) D In countries with good highway systems, trucks can give extremely fast service. 156) D Refer to Exhibit 11–5. The cost of transportation by truck is higher than transportation by pipeline, water, and railroads, but it is cheaper than air transportation. 157) E As stated in Exhibit 11–5, the number of locations served by trucks is very extensive. 158) A As stated in Exhibit 11–5, trucks are good for speed, frequency, dependability, and the number of locations served. 159) B At least 75 percent of U.S. consumer products travel at least part of the way from producer to consumer by truck. 160) D The flexibility and speed of trucks make them better at moving small quantities of goods for shorter distances at an economical cost. 161) C Version 1

At least 75 percent of U.S. consumer products travel at least part of the way from producer to consumer by truck, and trucks can give extremely fast service. 162) C Water transportation is the slowest shipping mode but handles a variety of goods. 163) A Inland waterways are important, especially for bulky, nonperishable products such as iron ore, grain, and gravel. 164) B Water transportation is the slowest shipping mode. 165) B Water transportation is the lowest-cost way of shipping heavy freight. 166) A Water transportation is lowest-cost way of shipping heavy freight. 167) D See Exhibit 11–5. Water transportation has a very low frequency of scheduled shipments. 168) A Water transportation is the slowest shipping mode, but it is usually the lowest-cost way of shipping heavy freight. It is very important for international shipments and often the only practical approach. Once in the United States, trucks could provide speed, frequency, dependability, and service to lots of locations. 169) E

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As shown in Exhibit 11–5, pipelines serve a very limited number of locations but have a high dependability in meeting schedules. 170) D Inland waterways are important, especially for bulky, nonperishable products such as iron ore, grain, and gravel. 171) E Inland waterways are important, especially for bulky, nonperishable products such as iron ore, grain, and gravel. 172) E Refer to Exhibit 11–5. Pipelines serve a very limited number of locations but have a high dependability in meeting schedules. They are used primarily to move oil and natural gas. 173) B Pipelines are used primarily to move oil and natural gas. Airlines are not used for this purpose. 174) E High-value, low-weight goods are often shipped by air, which is the most expensive cargo transporting mode. 175) A High-value, low-weight goods are often shipped by air. 176) C High-value, low-weight goods like high-fashion clothing and parts for the electronics industry are often shipped by air. 177) C

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Using planes may reduce the cost of packing, unpacking, and preparing goods for sale and may help a firm reduce inventory costs. Although the transporting cost of air shipments may be higher, the total cost of distribution may be lower. 178) E High-value, low-weight goods are often shipped by air. However, it's the most expensive cargo transporting mode. Its greater speed may offset the added cost. Also, it reduces handling costs. 179) A The transporting cost of air shipments may be higher, but the total cost of distribution may be lower. 180) E Valuable benefits of airfreight's speed are less spoilage, theft, and damage. Using planes may reduce the cost of packing and unpacking, and though the transporting cost of air shipments may be higher, the total cost of distribution may be lower. 181) E Airplanes may help a firm reduce inventory costs by eliminating outlying warehouses. 182) B Airfreight rates are on average three times higher than trucking rates. 183) B The most expensive cargo transporting mode is airplane. 184) A High-value, low-weight goods, and perishable products are often shipped by air.

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185) C High-value, low-weight goods, and perishable products are often shipped by air. Flowers, for example, now are jet-flown to points all over the world. 186) E Water transportation is usually the lowest-cost way of shipping heavy freight. The fastest cargo transportation mode is airplane. Pipelines are used primarily to move oil and natural gas. Trucks can travel on almost any road and serve the most locations of any mode. 187) A Small unmanned aircraft, called drones, have been used in the military and by hobbyists. They are now being used for delivery services all over the world. 188) D Containerization involves grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. This protects the products and simplifies handling during shipping. The problems of loading and unloading goods several times are reduced with containerization. 189) A Containerization is grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. 190) A Containerization is grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination.

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191) C Containerization protects the products and simplifies handling during shipping. 192) A Inventory is the amount of goods being stored. 193) A If consumers "store" the product, more of it may be used or consumed. That's why Breyer's likes customers to buy its half-gallon packages. The "inventory" is right there in the freezer—and ready to be eaten— whenever the impulse hits. 194) C It's often cheaper to produce large quantities of one size, and store the unsold quantity, than to have shorter production runs. Thus, storing goods allows the producer to achieve economies of scale in production. 195) C It's often cheaper to produce large quantities of one size, and store the unsold quantity, than to have shorter production runs. Thus, storing goods allows the producer to achieve economies of scale in production. 196) B Storing allows producers and intermediaries to keep stocks at convenient locations, ready to meet customers' needs. 197) C Storing is necessary when production of goods doesn't match consumption. 198) E Refer to Exhibit 11–6. Storing involves handling costs (to put products in inventory and take them out again). Version 1

199) D As stated in Exhibit 11–6, costs of damage to products while in inventory, costs of risks such as theft and fire, costs of inventory becoming obsolete, and handling costs contribute to total inventory cost. 200) A As stated in Exhibit 11–7, public warehouses may have very low unit costs; charges are made only for the space needed. 201) C As stated in Exhibit 11–7, a private warehouse has less flexibility when compared to a public warehouse. 202) B Firms use private warehouses when a large volume of goods must be stored regularly. 203) D Public warehouses are useful for manufacturers that must maintain stocks in many locations, including foreign countries. 204) C Public warehouses are independent storing facilities and they can provide all the services that a company's own warehouse can provide. 205) C A company might choose a public warehouse if it doesn't have a regular need for space and pays for the space only when it is used. 206) B As stated in Exhibit 11–7, public warehouses may not always be conveniently available or adequate for the current product line. 207) D Version 1

A company might choose a public warehouse if it doesn't have a regular need for space and when its business is seasonal. 208) E Modern warehouses eliminate the need for elevators and permit the use of power-operated lift trucks, battery-operated motor scooters, rollerskating order pickers, electric hoists, and hydraulic ramps. 209) E Electronic radio frequency identification (RFID) tags can make it easy for computers to monitor inventory, order needed stock, and track storing and shipping costs. 210) A A distribution center is a special kind of warehouse designed to speed the flow of goods. It is widely used by firms at all channel levels. 211) A A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 212) B A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 213) A Goods that arrive at a distribution center are likely to be sorted into groups by workers and equipment immediately as they come in and are then moved to an outgoing loading dock and to the vehicle that will take them to their next stop. 214) A

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Distribution centers are warehouses designed to speed the flow of goods and avoid unnecessary storing costs. Workers and equipment immediately sort the products as they come in and then move them to an outgoing loading dock and the vehicle that will take them to their next stop. Products may be regrouped or sorted but not stored at these facilities. 215) B Some firms prefer to skip the distribution center altogether and ship products directly from where they are manufactured to retail stores. This may move products more quickly, but usually at a higher cost. 216) A Goods that arrive at a distribution center are likely to be sorted into groups and retrieved from groups before being stacked on pallets and loaded for shipping. Distribution centers do not provide long-term storage. 217) E Distribution centers are warehouses designed to speed the flow of goods and avoid unnecessary storing costs. Many products buzz through a distribution center without ever tarrying on a shelf. Workers and equipment immediately sort the products as they come in and then move them to an outgoing loading dock and the vehicle that will take them to their next stop. Products may be regrouped or sorted but not stored at these facilities. 218) D A distribution center is a special kind of warehouse designed to speed the flow of goods. 219) D

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A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 220) A A distribution center is a special kind of warehouse designed to speed the flow of goods. 221) A A distribution center is a special kind of warehouse designed to speed the flow of goods and avoid unnecessary storing costs. 222) A Aid agencies have learned from recent efforts. Instead of stockpiling drugs, tents, and blankets, agencies are learning to rely on outsourcing. Agencies arrange open orders with suppliers who must be prepared to instantly ship supplies whenever and wherever they are needed. 223) B Containerization is grouping individual items into an economical shipping quantity and sealing them in protective containers for transit to the final destination. This protects the products and simplifies handling during shipping.

224) D Customers don't care how a product was moved or stored or what some channel member had to do to provide it. Rather, customers think in terms of the physical distribution customer service level.

225) A Airfreight is expensive, but it is fast and growing. Ralston Supply expects a very high customer service level of 90 percent, so airfreight is the best suited PD system.

226) C Ricotta Tool Co. is willing to settle for a 70 percent customer service level. Given all the information provided, Harter should choose truck as the PD system.

227) A

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The physical distribution (PD) concept says that all transporting, storing, and product-handling activities of a business and a whole channel system should be coordinated as one system.

228) C Water transportation is the slowest shipping mode, but it is usually the lowest-cost way of shipping heavy freight.

229) B Public warehouses are independent storing facilities. A company might choose a public warehouse if it doesn't have a regular need for space or when its business is seasonal.

230) E As stated in Exhibit 11–6, costs of damage to products while in inventory, inventory becoming obsolete, a storage facility, and capital invested in the inventory all contribute to total inventory cost.

231) C A distribution center is a special kind of warehouse designed to speed the flow of goods.

232) A As stated in Exhibit 11–7, private warehouses have low unit cost if volume is very high.

233) A Transporting costs limit the target markets a marketing manager can serve.

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CHAPTER 12 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) When making goods and services available to customers, producers must choose one path and stick to it. ⊚ ⊚

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2) Retailing includes all of the activities involved in reselling goods to final consumers, but it does not include the sale of services to final consumers, since services must be produced in the presence of the consumer. ⊚ ⊚

true false

3) The majority of all retail stores in the United States have annual average sales of less than $1 million. ⊚ ⊚

true false

4) Less than 15 percent of retail stores in the United States have annual average sales of $5 million or more. ⊚ ⊚

true false

5) Almost half of all retail sales are made by the largest stores—those with sales of over $5 million a year. ⊚ ⊚

true false

6) The growth of cooperative chains of retail stores is due to the desire of small retailers to achieve some of the benefits of large-scale corporate chains.

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7) In a franchise operation, the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units. ⊚ ⊚

Franchise holders account for about a half of all retail sales. ⊚ ⊚

true false

Franchising now accounts for about a third of all retail sales. ⊚ ⊚

true false

10) A retailer's marketing strategy decisions will ultimately determine both its positioning and how it is differentiated from other retailers. ⊚ ⊚

true false

11) The marketing strategies for the two shoe retailers Foot Locker and Zappos are very different, but both are successful. ⊚ ⊚

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12) The marketing strategies for the two shoe retailers Foot Locker and Zappos are very different. Zappos' strategy is successful, while Foot Locker'sstrategy is not. ⊚ ⊚

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13) It's oversimplified to classify retailers and their strategies on the basis of a single characteristic—such as sales volume, services, product assortment, etc. ⊚ ⊚

true false

14) Retailers and their strategies can easily be classified based on the type of merchandise they sell. ⊚ ⊚

true false

15) Single-line stores that used to carry anything they could sell in reasonable volume used to be the main retailers in the United States. ⊚ ⊚

true false

16) Most "conventional" retailers are single-line or limited-line stores that have very low expenses relative to sales. ⊚ ⊚

true false

17) Conventional retailers who are single-line or limited-line stores have high expenses relative to sales, so they try to keep their prices up by avoiding competition on identical products. ⊚ ⊚

18)

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In most countries, small limited-line retailers still account for the majority of all retailers. ⊚ ⊚

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19) Specialty shops are limited-line stores; they aim at a carefully defined target market with a unique product assortment, good service, and knowledgeable salespeople. ⊚ ⊚

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20) Specialty shops will continue to be a part of the retailing scene as long as customers have varied tastes and the money to satisfy them. ⊚ ⊚

true false

21) Department stores are stores that usually try to serve customers seeking a variety of convenience products. ⊚ ⊚

true false

22) Department stores are larger stores that are organized into many separate departments and offer many product lines. ⊚ ⊚

23)

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Department stores keep growing in numbers, sales, and market share. ⊚ ⊚

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24) As compared to mass-merchandisers, conventional retailers have a “buy low and sell high” philosophy. ⊚ ⊚

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25) The mass-merchandising concept means that retailers can succeed by selling a large volume of merchandise to a target market at low prices. ⊚ ⊚

true false

26) Retailers who follow a policy of "buy low and sell high" are practicing the "massmerchandising concept." ⊚ ⊚

27)

true false

Warehouse clubs started the move to mass-merchandising. ⊚ ⊚

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28) The basic idea for supermarkets developed in the United States in the 1960s, when consumers started to move from the cities to the suburbs. ⊚ ⊚

true false

29) Large sales volume and efficient operation are usually very important for supermarkets, since net profits usually run at 1 to 2 percent of sales or less. ⊚ ⊚

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30) Mass-merchandisers have become the primary place to shop for many frequently purchased consumer products. ⊚ ⊚

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31) A "supercenter" carries all the goods and services that a consumer might routinely purchase. ⊚ ⊚

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32) A consumer who went to shop at a "supercenter" would probably expect not only to be able to buy food and health care products but also to leave dry cleaning or have shoes repaired. ⊚ ⊚

true false

33) Supercentersare very large stores that specialize in selling a big variety of infrequently purchased products that would otherwise be hard for consumers to find. ⊚ ⊚

34)

In addition to food, warehouse clubs carry homogeneous shopping goods. ⊚ ⊚

35)

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In addition to food, warehouse clubs emphasize heterogeneous shopping goods. ⊚ ⊚

36)

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Category killers is another name for single-line mass-merchandisers. ⊚ ⊚

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37) Stockturn rate refers to the rate at which single-line mass-merchandisers put specialized retailers out of business. ⊚ ⊚

38)

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A company with a high stockturn rate is selling product quickly. ⊚ ⊚

true false

39) Because of their higher margins, faster turnover, and narrower assortments, convenience food stores have the potential to be more profitable than supermarkets. ⊚ ⊚

true false

40) Convenience food stores now compete with supermarkets, gas stations, and fast-food outlets. ⊚ ⊚

true false

41) The sale of candy from a vending machine at a bus station is not considered retailing, since no store is involved. ⊚ ⊚

true false

42) The major advantage of vending machine retailing is that the costs are low relative to the volume they sell. ⊚ ⊚

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true false

43) When RedBox rents DVD movies from vending machines at McDonald's, it is acting as a channel captain, not a retailer. ⊚ ⊚

44)

true false

Automatic vending accounts for 15 percent of total U.S. retail sales. ⊚ ⊚

true false

45) Door-to-door selling now accounts for less than 1 percent of retail sales in the United States. ⊚ ⊚

true false

46) Internationally, door-to-door selling is growing in popularity and, in the United States, it accounts for more than 15 percent of all retail sales. ⊚ ⊚

true false

47) Electronic shopping, which puts catalogs on cable TV or Internet websites, has not yet succeeded. ⊚ ⊚

true false

48) Home shopping methods—like cable TV shopping channels and catalogs—now use a multichannel approach by adding a website. ⊚ ⊚

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true false

49) Stores without a physical location that sell exclusively on the Internet are known as online retailers. ⊚ ⊚

50)

true false

Online sales make up about 50 percent of all retail sales in the United States. ⊚ ⊚

true false

51) One advantage that online retailers have, compared to physical stores, is offering a wide assortment. ⊚ ⊚

52)

true false

Today, more than half of all books, movies, and music are sold online. ⊚ ⊚

true false

53) One advantage physical stores have over online stores is simplified price and product feature comparison. ⊚ ⊚

54)

More than one-third of people in the United States buy something online once a week. ⊚ ⊚

55)

true false

Some customers find online shopping more convenient than shopping in a physical store. ⊚ ⊚

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true false 9

56) To overcome the limitation of not being able to physically inspect a product before purchasing online, many online retailers now provide photos and videos that demonstrate the product. ⊚ ⊚

true false

57) Omnichannel is a multichannel selling approach in which a single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. ⊚ ⊚

true false

58) A customer goes to the Ace Hardware website and finds out that there are three Philips LED light bulbs he wants to purchase in stock at their local store. The customer then goes to the store and finds those light bulbs in stock. Ace Hardware is practicing an omnichannel approach. ⊚ ⊚

true false

59) To fight back against the online presence of brick-and-mortar stores, some online-only retailers are opening physical locations to help deliver a better shopping experience to customers. ⊚ ⊚

true false

60) The "wheel of retailing" theory says that new retailers enter the market as high-status, high-margin, high-price operators and then evolve into discount stores as competition becomes more intense. ⊚ ⊚

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true false

61) The development of department stores and supermarkets is explained by the "wheel of retailing" theory. ⊚ ⊚

true false

62) The "wheel of retailing" theory fails to explain some major retailing developments, such as vending machines and convenience food stores, that did not enter the market with a low-price emphasis. ⊚ ⊚

true false

63) The development of vending machines and convenience food stores is not explained by the "wheel of retailing" theory. ⊚ ⊚

true false

64) Scrambled merchandising is carrying any product lines a store thinks it can sell profitably. ⊚ ⊚

true false

65) Scrambled merchandising refers to the practice of conventional retailers handling many products within a limited-line, even though many of these products have to be sold at a low profit. ⊚ ⊚

true false

66) Retailers who carry any product line that will sell profitably are practicing scrambled merchandising. ⊚ ⊚

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true false

67)

Scrambled merchandising means mixing product lines for higher profits. ⊚ ⊚

68)

true false

The product life-cycle concept applies to retailers as well as products. ⊚ ⊚

true false

69) Application of the product life-cycle concept to retailing suggests that all types of retailers are in early market growth due to continually increasing family income. ⊚ ⊚

true false

70) The supercenter retailing format began in the United States and then was exported to other countries. ⊚ ⊚

71)

Consumers in less-developed nations have the income to support mass distribution. ⊚ ⊚

72)

true false

In-store shopping varies a lot from country to country, but online shopping does not. ⊚ ⊚

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true false

73) According to the U.S. Census Bureau, wholesaling is defined as the activities of firms that sell to retailers but do not sell in large amounts to final consumers, manufacturers, or other institutional users. ⊚ ⊚

true false

74) Wholesalers are more likely to dominate distribution channels in more advanced economies than in less-developed ones. ⊚ ⊚

true false

75) Progressive wholesalers are becoming more concerned with their customers and with adding value in their channels. ⊚ ⊚

true false

76) Wholesalers are adapting their marketing strategies, and changes are under way, even though they may be invisible to consumers. ⊚ ⊚

true false

77) Although wholesalers no longer dominate channels in the United States, they do provide a necessary function, and some of the biggest B2B e-commerce sites are wholesaler operations. ⊚ ⊚

true false

78) Manufacturers' sales branches are warehouses that producers set up at separate locations away from their factories. ⊚ ⊚

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true false

79) Manufacturers' sales branches operate like wholesalers, but the U.S. Census Bureau does not consider them wholesaling establishments because they do not involve a separate warehouse. ⊚ ⊚

true false

80) One reason manufacturers' sales branches handle over 25 percent of wholesale sales is that they are located in the best market areas. ⊚ ⊚

true false

81) Manufacturers usually operate sales branches in areas where sales potential is very low because intermediaries are not interested in serving such markets. ⊚ ⊚

true false

82) Agent wholesalers usually have higher operating expenses (as a percentage of sales) than merchant wholesalers. ⊚ ⊚

true false

83) When considering cost as a percent of sales, agent wholesalers are more expensive than manufacturers' sales branches. ⊚ ⊚

84)

true false

Merchant wholesalers account for almost 85 percent of all wholesalers. ⊚ ⊚

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true false

85)

Merchant wholesalers account for about 64 percent of all wholesale sales. ⊚ ⊚

true false

86) Merchant wholesalers own or take title to the products they sell and are the most common type of wholesaling establishment. ⊚ ⊚

true false

87) In Japan, products are often bought and sold by a series of merchant wholesalers on their way to the business user or retailer. ⊚ ⊚

true false

88) A hardware wholesaler that buys nails from a manufacturer and then sells them to retail hardware stores is a merchant wholesaler. ⊚ ⊚

89)

true false

Service wholesalers may be general merchandise, single-line, or specialty wholesalers. ⊚ ⊚

true false

90) General merchandise wholesalers handle a wide variety of nonperishable items and usually serve many different kinds of retail stores. ⊚ ⊚

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true false

91) In consumer products, single-line wholesalers serve single-line and limited-line retail stores. ⊚ ⊚

true false

92) Specialty wholesalers usually sell a very narrow range of products and compete with other wholesalers who have a broader range of products by offering expert technical help and/or service to their customers. ⊚ ⊚

true false

93) Of all service wholesalers, specialty wholesalers carry the narrowest range of products and offer the most service. ⊚ ⊚

94)

true false

Limited-function wholesalers provide only some of the wholesaling functions. ⊚ ⊚

true false

95) Limited-function wholesalers provide all the basic wholesaling functions, except that they do not take title to the products they sell. ⊚ ⊚

true false

96) Cash-and-carry wholesalers are limited-function wholesalers who do not grant credit but otherwise operate like service wholesalers. ⊚ ⊚

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true false

97) Cash-and-carry wholesalers are more common in underdeveloped nations than in the United States, where big warehouse clubs have taken much of the business. ⊚ ⊚

true false

98) In the United States, big warehouse clubs have taken much of the cash-and-carry wholesalers' business. ⊚ ⊚

true false

99) Drop-shippers have low operating costs because they do not actually handle the products they sell. ⊚ ⊚

true false

100) Drop-shippers keep adequate quantities of every product they carry in their own warehouses so that they can ship them out quickly. ⊚ ⊚

true false

101) Truck wholesalers may provide almost the same services as full-service wholesalers, but they usually specialize in perishable products that regular wholesalers prefer not to carry. ⊚ ⊚

true false

102) A retailer that buys from a rack jobber needs to have an employee who is a specialist in the products the rack jobber handles. ⊚ ⊚

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true false

103) Catalog wholesalers usually sell to business customers who don't have a local wholesaler or otherwise are not called on by other wholesalers. ⊚ ⊚

true false

104) Agent wholesalers do not own the products they sell, but they usually perform even more functions than a service wholesaler. ⊚ ⊚

true false

105) Agent wholesalers typically provide even more functions than full-service merchant wholesalers. ⊚ ⊚

true false

106) Agent wholesalers operate at relatively low cost—sometimes 2 to 6 percent of their selling price. ⊚ ⊚

107)

Agent wholesalers are very common in international marketing. ⊚ ⊚

108)

true false

Manufacturers' agents sell related products for several competing manufacturers. ⊚ ⊚

109)

true false

More than half of all agent wholesalers are manufacturers' agents.

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⊚ ⊚

110)

true false

Manufacturers' agents don't cost the producer anything until something sells. ⊚ ⊚

true false

111) Manufacturers' agents earn higher commissions for introducing new products than they do for selling established products. ⊚ ⊚

true false

112) Manufacturers' agents are usually much less expensive than a company's own sales force in market areas where sales potential is low. ⊚ ⊚

true false

113) Manufacturers' agents do not take title to the products they sell and are paid a commission on sales. ⊚ ⊚

true false

114) Manufacturers' agents are mainly used as an inexpensive way to continue getting sales for a product once a company's own sales force has successfully introduced it to the market. ⊚ ⊚

true false

115) Export or import agents are basically merchant wholesalers who specialize in international trade.

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⊚ ⊚

true false

116) Export and import agents are basically manufacturers' agents who specialize in international trade. ⊚ ⊚

117)

Brokers usually have a long-term relationship with the buyers and sellers. ⊚ ⊚

118)

true false

Brokers usually have a temporary relationship with the buyer and seller. ⊚ ⊚

true false

119) The "product" that brokers sell is information about what buyers need and what supplies are available. ⊚ ⊚

120)

A broker's "product" is market information. ⊚ ⊚

121)

true false

Over time, use of the Internet will result in a larger number of brokers. ⊚ ⊚

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true false

122) Agents and brokers are wholesalers that take title to the merchandise and products that they sell. ⊚ ⊚

true false

123) A selling agent takes over the whole marketing job of producers, not just the selling function. ⊚ ⊚

true false

124) A manufacturers' agent represents manufacturers in some specified geographic area, while selling agents usually handle the entire output of one or more producers. ⊚ ⊚

true false

125) Selling agents avoid working for a manufacturer that is having financial trouble because of the high risk. ⊚ ⊚

126)

true false

A combination export manager is a blend of manufacturers' agent and selling agent. ⊚ ⊚

true false

127) Auction companies are used for products where demand and supply conditions change rapidly. ⊚ ⊚

128)

true false

With auction companies, demand and supply interact to determine the price.

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⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 129) Ajax Corp. makes several different items that are often used as party favors. Which of the following best describes the type of intermediary that Ajax should use to make its goods available to customers? A) Ajax should use any intermediary that best facilitates its marketing strategy. B) Ajax should choose to not use an intermediary and distribute directly to customers in its target market. C) Ajax should use national retailers for the best exposure. D) Ajax should use any intermediary it is comfortable with as long as it picks one type and sticks with it. E) None of the answers are correct.

130)

Retailing refers to A) the sale of products to final consumers. B) the sale of both business and consumer products. C) the sale of consumer products to wholesalers, retailers, or final consumers. D) the performance of regrouping activities. E) None of the answers are correct.

131)

________ covers all the activities involved in the sale of products to final consumers. A) Distributing B) Retailing C) Manufacturing D) Wholesaling E) Marketing

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132)

Retailing covers all the activities involved in the sale of products to A) final consumers. B) organizational and business customers. C) producer/suppliers. D) intermediaries. E) government agencies.

133)

Which of the following is not retailing? A) A vacuum cleaner manufacturer hires its own sales force to sell door to door. B) A private ambulance service takes an accident victim to a hospital and charges him

$100. C) A group of students sell donuts to people passing by their dorm. D) A book wholesaler has a mail-order catalog which offers discounts to final consumers who buy by mail. E) A company purchases computers and resells them to local businesses.

134)

Which of the following is true of service retailing? A) The retailer is often the producer. B) It is not actually considered retailing. C) It must also sell a physical good in order to be considered retailing. D) It is retailing if done for a recognized retailer. E) The service must be ancillary to the purchase.

135)

Which of the following is not a franchise operation?

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A) Subway (food) B) H& R Block (tax work) C) Kinko's (copy center) D) 7-Eleven (convenience store) E) All of these are franchise operations.

136)

Regarding retail sales in the United States, it is true that

A) consumers spend $5.5 trillion buying goods and services from U.S. retailers. B) almost 75 percent of all retail sales are made by the largest stores—those with sales over $5 million a year. C) corporate chains account for about 50 percent of retail sales. D) franchising accounts for one-third of retail sales. E) All of the answers are correct.

137)

Regarding retailer store size, it is true that

A) almost 75 percent of all retail sales are made by smaller stores—those with annual sales less than $1 million. B) almost 75 percent of all retail sales are made by the largest stores—those with annual sales over $5 million a year. C) small retailers are unimportant and can safely be ignored by most manufacturers and wholesalers. D) big retailers do a lot of business, but they make up less than 5 percent of stores. E) None of the answers are correct.

138)

Data on retail sales show that

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A) about three-quarters of all retail stores have annual sales over $1 million. B) very large retailers account for a small percentage of total retail sales. C) manufacturers and wholesalers are more numerous than retailers in the United States. D) only about 15 percent of all retailers have annual sales over $5 million. E) U.S. consumers spend almost $10 trillion per year in purchases from retailers.

139)

What is the most accurate definition of the term corporate chain?

A) a firm that owns and manages more than one store B) retailer-sponsored groups formed by independent retailers that run their own buying organizations and conduct joint promotion efforts C) wholesaler-sponsored groups that work with "independent" retailers D) franchisors who develop good marketing strategies and who carry out the strategy in their own units E) a firm that owns a single store but operates through multiple franchisors

140)

A corporate chain A) is formed by independent retailers that work together. B) is sponsored by a wholesaler. C) is formed when a firm owns and manages more than one store. D) involves franchisees that pay commissions and fees to the parent company. E) rarely apply advertising and promotion costs across stores.

141)

Franchise operations A) generally have very loose ties between the franchisor and franchise holders. B) are expected to decline in the future because the service sector of the economy is

failing. C) currently account for about a third of all retail sales. D) do not form chains. E) account for about half of all retail sales.

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142) A company's decision about whether to offer special services (entertainment or gift wrapping, for example) falls under which of the following marketing mix categories? A) Price B) Place C) Product D) Promotion E) Positioning

143)

Which of the following best describes the Product decisions used by Zappos.com? A) carries well-known brands B) frequent discounting C) choices of which credit cards to accept D) large advertising budget E) offers high levels of customer service

144)

A "good" retail strategy planner knows that A) it's a mistake to try to develop a strategy that isn't equally appealing to all social class

groups. B) the failure rate among beginning retailers is quite high. C) emotional needs are more important than economic needs in choosing a retailer. D) it's a mistake to try to develop a strategy that isn't equally appealing to all income groups. E) it should try to appeal to all target markets.

145)

Which of the following could be considered a part of a retailer's Product decisions?

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A) number of salespeople B) publicity through posting on Facebook C) frequency and level of sales prices D) number and location of stores E) after-sale service

146)

Which of the following would not be considered part of a retailer's Product? A) selection of brands B) entertainment C) gift wrapping D) after-sale service E) store hours

147)

A retailer's decisions about Place would include decisions about which of the following? A) a physical store and/or an online store B) salesperson training C) whether to offer a store credit card D) which brands to sell E) in-store displays

148)

An online retailer's Promotion decisions would include which of the following? A) level of after-sale service B) which brands to sell C) frequency of discounts D) which credit cards to accept E) whether to offer online videos and reviews

149)

A retailer's Price decision would not include which of the following?

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A) delivery charges B) discount policies C) frequency of sales D) store credit card E) store hours

150) Which of the following is relevant regarding why some consumers prefer one retailer over another? A) convenience B) shopping atmosphere C) assortment carried D) service E) All of the answers are correct.

151) The manager of a local electronics store decides to offer its customers a gift-wrapping service for the holidays. This is a decision about A) Product. B) Place. C) Promotion. D) Price.

152) When a supermarket manager decides to offer online ordering at the store's website, what is the decision about? A) Product B) Place C) Promotion D) Price E) Production

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153) When a supermarket manager decides to set up an end-of-aisle display for 12-pack containers of Coke Zero, what is the decision about? A) Product B) Place C) Promotion D) Price E) Perspective

154) When a department store manager decides to offer its customers a free trial of Clinique's new skin cream, what is the decision about? A) Product B) Place C) Promotion D) Price E) Opportunity

155) When a supermarket manager decides the amount to charge customers for home delivery of grocery items, which of the Four Ps is that decision about? A) Product B) Place C) Promotion D) Price E) Parity

156) When the manager of an electronics store decides to accept American Express credit cards from its customers, what is the decision about?

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A) Product B) Place C) Promotion D) Price

157) When Best Buy decides to offer a store credit card (Best Buy VISA), this is a decision about A) Product. B) Place. C) Promotion. D) Price.

158)

Most conventional retailers in the United States are A) supermarkets. B) mass-merchandisers. C) limited-line stores. D) specialty stores. E) department stores.

159)

The product line of a limited-line retailer is best described as A) including a wide assortment. B) reflecting a narrow price range. C) carrying inventory that comes from European sources. D) popular products at low prices to get fast turnover. E) a small range of one specific type of product.

160)

Which of the following is the best example of a conventional retailer?

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A) a limited-line store B) a department store C) a supermarket D) a convenience (food) store E) an online retailer

161)

Single-line stores are also known as A) general stores. B) limited-line stores. C) specialty shops. D) department stores. E) boutique stores.

162)

A limited-line store is to a single-line store as A) a tennis shop is to a sporting goods store. B) a paint store is to a drugstore. C) quality is to price. D) an online retailer is to a movie theater. E) full service is to self-service.

163)

A typical problem for limited-line retailers is that

A) it is almost impossible for them to satisfy any particular target markets better than other types of retailers. B) their marketing strategy usually relies only on low price. C) they usually cannot carry enough items in a line for any customers to find what they want. D) many of the items they carry are slow-moving. E) All of these are problems for limited-line retailers.

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164)

Which of the following statements about single- and limited-line stores is true?

A) Many are small, with high expenses relative to sales. B) They often build a relationship with their customers and earn a position as the place to shop for a certain type of product. C) Such stores face the costly problem of having to stock some slow-moving items in order to satisfy their target markets. D) Most conventional retailers are single- or limited-line stores. E) All of the answers are correct.

165)

Limited-line stores

A) specialize in certain lines of related products rather than a wide assortment. B) carry anything they can sell in reasonable volume. C) are a type of unconventional general store. D) are larger stores that are organized into many separate departments and offer many product lines. E) seldom build good relationships with their customers.

166) A ________ is a type of conventional limited-line store that is usually small and has a distinct "personality." A) general store B) mass-merchandising shop C) specialty shop D) department store E) hypermarket

167) A ________ aims at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service.

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A) general store B) mass-merchandising shop C) specialty shop D) department store E) convenience store

168)

Specialty shops

A) offer fewer services than the typical limited-line store. B) have trouble deciding what to carry because it's hard for them to get to know what their customers want. C) rely heavily on knowledgeable salesclerks. D) usually sell convenience products. E) None of the answers are correct.

169)

Specialty shops generally

A) want to be known for the distinctiveness of their product assortment and the special services they offer. B) sell homogeneous shopping products. C) are very good at speeding turnover. D) carry complete lines—like department stores. E) All of the answers are correct.

170) The "Fashion Place" carries a carefully selected and distinctive assortment of traditional women's business clothing and accessories for upper-class executives in Boston. It emphasizes customer service with its well-trained salesclerks. The store is probably a

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A) small department store. B) specialty shop. C) convenience store. D) single-line store. E) limited-line store.

171) "Soak" is a retailer with two locations in a major metropolitan area, both of which are in large, popular shopping centers. It carries a unique assortment of high-quality shower and bath products, such as soaps, bubble bath, and bath oils. One of its most popular products is a "bath bomb"—a round ball that fizzes and releases aromatic bath oils when placed in a bathtub filled with warm water. The small staff at the store is very knowledgeable about the store's products and provides a high level of customer service. "Soak" would be classified as a A) convenience store. B) department store. C) discount house. D) specialty shop. E) general store.

172) Compared to more conventional retailers, which of the following retailers offer both expanded assortment and service? A) mass-merchandisers B) door-to-door salespeople C) direct-mail retailers D) specialty shops E) supermarkets

173)

Which of the following characterizes department stores?

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A) They are no longer a major retail force in large U.S. cities. B) They have increased in number since the 1970s. C) They usually offer many product lines. D) They have increased their share of retail business since the 1970s. E) They are not threatened by mass-merchandising retailers.

174)

Department stores A) usually aim at customers seeking convenience products. B) have accounted for a larger share of retail sales every year since 1950. C) have no trouble holding their own against mass-merchandisers. D) are organized into separate departments. E) All of the answers are correct.

175)

Which of the following statements about department stores is false?

A) Department stores are basically a group of limited-line stores under one roof. B) Department stores are decreasing in number, average sales per store, and share of retail business. C) Department stores usually aim at customers seeking shopping products. D) Department stores are usually strong in customer service. E) Department store sales have significantly increased since the 1970s.

176)

Department stores

A) are large stores that emphasize depth and distinctiveness rather than variety. B) have declined since the 1970s because of competition from well-run limited-line stores and mass-merchandisers. C) are usually weak in customer service. D) usually emphasize specialty products. E) All of the answers are correct.

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177) ________ stores are usually strong in customer services, including credit, merchandise return, delivery, and sales help. A) General B) Limited-line C) Department D) Specialty E) Luxury

178)

The mass-merchandising concept A) suggests aiming at small but profitable target markets. B) focuses on increasing sales and speeding turnover by lowering prices. C) supports the conventional retailer's "buy low and sell high" philosophy. D) stresses the need for conventional stores. E) All of the answers are correct.

179) The ________ says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. A) wheel of retailing theory B) production concept C) mass-merchandising concept D) sales concept E) primary industry theory

180)

Which of the following are not conventional retailers?

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A) single-line stores B) general stores C) supermarkets D) limited-line stores

181) Compared to conventional retailers, which of the following types of retailers offers a wider product assortment but less service? A) convenience stores B) supermarkets C) telephone order retailers D) department stores E) limited-line stores

182)

Expanded assortment and/or reduced margins and service are characteristic of A) supermarkets. B) convenience stores. C) specialty shops. D) the Internet. E) department stores.

183) The first retailers to really show the importance of the mass-merchandising concept were the operators of A) general stores. B) supermarkets. C) single-line stores. D) department stores. E) limited-line stores.

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184)

Which of the following retailers were the first to adopt the mass-merchandising concept? A) department stores B) discount houses C) supermarkets D) general stores E) supercenters

185)

Supermarkets A) usually earn net profits that are at least 15 percent of sales. B) were late adopters of the mass-merchandising concept. C) usually carry about 100,000 product items per store. D) are designed to maximize efficiency. E) All of the answers are correct.

186)

Regarding supermarkets, which of the following statements is true?

A) It's best to think of supermarkets as "conventional retailers." B) Supermarket net profits after taxes usually are about 1 to 2 percent of sales or less. C) Worldwide, supermarkets make up the majority of food stores. D) The early supermarkets were based on the premise that consumers would pay more for better selection and service. E) All of the answers are correct.

187)

Supermarkets are

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A) stores offering "hard goods" at substantial price cuts to customers. B) large, self-service stores with many departments that emphasize "soft goods" and staples but still follow the discount house's emphasis on lower margins to get faster turnover. C) large stores specializing in groceries, with self-service and wide assortments. D) very large stores that try to carry not only food and drug items but all goods and services that the consumer purchases routinely. E) a convenience-oriented variation of the conventional limited-line food stores.

188)

Regarding supermarkets, which of the following is false? A) They introduced self-service to reduce their costs. B) After-tax profits are very—goodaveraging 10 to 15 percent of sales. C) The average size of a supermarket is 40,000 square feet. D) They average about $20 million a year in sales. E) They got their start as an experiment during the Depression.

189) Large self-service retail stores that emphasize lower margins to get faster turnover— especially on "soft goods"—are called A) mass-merchandisers. B) convenience food stores. C) department stores. D) specialty shops. E) single-line stores.

190)

Mass-merchandisers A) locate only in large downtown areas with large sales potential. B) are large, self-service stores that stress low prices to get faster turnover. C) emphasize nationally-advertised "hard goods." D) usually have about as much floor space as the average supermarket. E) All of the answers are correct.

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191) Which of the following are large, self-service stores with many departments that emphasize "soft goods" and staples and offer lower prices to get faster turnover? A) supermarkets B) discount houses C) supercenters D) mass-merchandisers E) direct-mail retailers

192)

Mass-merchandisers A) face a bright future and increasing profits—because of decreasing competition. B) offer lower prices to get faster turnover. C) operate on the "buy low, sell high" philosophy. D) try to reduce costs by reducing inventory turnover. E) None of the answers are correct.

193)

Which of the following is not true for mass-merchandisers?

A) They emphasize “soft goods” and staples. B) They are now the primary place to shop for many frequently purchased consumer products. C) They generally run a self-service operation. D) They are concerned with maintaining high inventory turnover. E) They are to be small.

194)

A supercenter

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A) tries to provide all of a customer's routine needs at a low price. B) probably would not affect nearby supermarkets. C) is just another name for a mass-merchandiser. D) is a large department store that uses supermarket methods. E) None of these answers is true.

195) Very large retail stores that carry not only foods but all goods and services that consumers purchase routinely are called A) supercenters. B) general stores. C) supermarkets. D) mass-merchandisers. E) department stores.

196)

Which of the following chains is the largest food retailer in the United States? A) Kroger's B) Safeway C) Walmart D) Target E) Kmart

197)

Warehouse clubs such as Sam's Club and Costco A) usually operate in large, no-frills facilities. B) have been successful targeting small-business customers. C) emphasize homogeneous shopping products. D) usually charge consumers an annual membership fee. E) All of the answers are correct.

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198)

Regarding retailing, which of the following statements is false?

A) Supermarkets average about $20 million in sales per year. B) Single-line mass-merchandisers have not been successful—probably because their assortments are so limited. C) Mass-merchandisers put less emphasis on knowledgeable salespeople than more conventional retailers. D) Supercenters try to meet all the customers’ routine needs at a low price. E) The average mass-merchandiser has nearly 60,000 square feet of floor space.

199)

Which of the following would be considered a retailing "category killer"? A) PetSmart (pet supplies) B) Best Buy (electronics) C) Home Depot (home improvements) D) IKEA (furniture) E) All of these are "category killers."

200)

Which of the following would not be considered a retailing "category killer"? A) Office Depot (office supplies) B) PayLess (drugstores) C) Lowe's (home improvements) D) Barnes and Noble (books) E) 7-11 (convenience goods)

201) Mass merchandising focuses on low prices and fast turnover. Which marketing analytic measures inventory turnover?

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A) stockturn rate B) total cost approach C) performance analysis D) predictive analysis E) triple bottom line

202)

Which of the following statements about stockturn rate is accurate? A) It is also called inventory turnover. B) It is a measure of a retailer's health. C) It measures how quickly a retailer's inventory sells. D) It is the number of times the average inventory is sold in a year. E) All of the answers are correct.

203) While reviewing this month's numbers, a retail manager noticed that the stockturn rate was much higher than last month. What does this mean? A) Product is selling more quickly this month than last. B) Product is selling less quickly this month compared to last. C) Their costs have risen. D) Their profits have declined. E) None of these answers relates to stockturn rate.

204)

The retailer's monthly numbers show rising inventory, which means A) a lower stockturn rate. B) more inventory turnover. C) greater profits. D) a successful marketing mix. E) product is selling quickly.

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205)

Convenience (food) stores offer A) wide assortments. B) low prices. C) more customer service than supermarkets. D) a limited assortment of "fill-in" items. E) online bargains.

206)

Convenience (food) stores

A) have no competitors. B) charge about the same prices as nearby supermarkets. C) try to earn better profits by high margins on a narrow assortment that turns over quickly. D) offer greater width of assortment but less depth than most supermarkets. E) average 60,000 square feet in size.

207)

Which of the following statements about convenience stores is false? A) Many convenience stores also sell gasoline. B) Prices on individual items are usually lower than in a supermarket. C) They have begun to compete with fast-food restaurants. D) They have a more limited assortment than do supermarkets.

208)

Regarding automatic vending, which of the following statements is false?

A) It is important for soft drinks, candy bars, and snack foods. B) Costs are relatively high because the machines are expensive to stock and repair. C) Although its growth has been spectacular, automatic vending still accounts for less than 2 percent of total U.S. retail sales. D) A major advantage is customer convenience. E) They cannot be used to sell higher-margin products.

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209)

Which of the following is true of vending machines?

A) Vending machine sales now account for almost 20 percent of consumer spending. B) Vending machine retailing requires a lower margin to cover costs than for comparable products sold in stores. C) Vending machine retailing has been declining. D) Vending machine sales now include higher-margin products like bathing suits. E) None of the answers are correct.

210) Compared to conventional retailers, which of the following types of retailers has added more convenience while reducing product assortment? A) specialty shops B) category killers C) vending machines D) mass-merchandisers E) super warehouses

211)

Door-to-door selling at consumers' homes A) meets some consumers' needs for convenience. B) is gaining popularity in international markets. C) started in the pioneer days. D) is losing popularity in the United States. E) All of the answers are correct.

212) Compared to conventional retailers, which of the following types of retailers has added more convenience while reducing product assortment?

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A) door-to-door salespeople B) department stores C) specialty shops D) single-line stores E) supercenters

213)

In the United States, door-to-door shopping accounts for ________ percent of retail sales. A) less than 1 B) 3 C) 5 D) 7 E) just over 10

214)

Which of the following characterizes vending machines and door-to-door retailing?

A) expanded assortment, reduced margins, and more information B) added convenience and higher-than-conventional margins; but usually reduced assortment C) expanded assortment and/or reduced margins and service D) expanded assortment and service E) expanded assortment and service; and more information.

215)

Time-pressured, dual-career families are a prime target market for A) specialty shops. B) department stores. C) door-to-door selling. D) online shopping. E) category killers.

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216)

Expanded assortment, reduced margins, and more information are characteristics of A) club stores. B) specialty shops. C) mail order. D) online shopping. E) department stores.

217)

Retailing on the Internet A) can provide consumers with a broad array of product information. B) accounts for about ten percent of total retail sales. C) is growing rapidly. D) equates to lower operating costs and sometimes to lower prices. E) All of the answers are correct.

218)

Which of the following items is most likely to be purchased online? A) office equipment and supplies B) cars and trucks C) groceries D) beauty items E) health supplies

219)

Retailing on the Internet A) makes it hard for consumers to compare products or prices. B) is limited to only a few mass-merchandisers. C) makes it possible to view an almost unlimited assortment of products. D) is not expected to grow very fast. E) All of the answers are correct.

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220) A store that does not have a physical location that customers can visit and that sells exclusively online is known as a(n) A) online retailer. B) brick-and-mortar store. C) export agent. D) general store. E) agent wholesaler.

221) Based on the textbook's definition, which of the following is an example of an online retailer? A) eBay B) Home Depot C) Costco D) Macy's E) All of the answers are correct.

222)

Which of the following is among the differences between online and in-store customers?

A) In-store customers can immediately inspect the product. B) Online customers usually have access to a wider product assortment. C) In-store customers can usually immediately use the product. D) Online customers usually have better access to comparative information about products. E) All these answers describe differences between online and in-store customers.

223)

Which of the following is not true about how online retailers use big data?

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A) Online retailers personalize customer shopping experiences with big data. B) Online retailers can track what consumers do on their website. C) Online retailers can tell if a consumer watches a video on its site. D) It is illegal for online retailers to monitor what customers activity on a competitor's site. E) Online retailers can pull information from a customer's Facebook page.

224)

Which of the following statements about retailing on the Internet is true? A) More product information is readily available online. B) Online product assortments available are not limited by the customer's location. C) Price comparisons are easy when shopping online. D) Product inspection is available online through photos and videos. E) All of the answers are correct.

225)

Which of the following statements about brick-and-mortar retailers is accurate?

226) FashionMart, a brick-and-mortar clothing retailer, offers free Wi-Fi in its stores and urges customers to launch its app when entering the store to view additional sales and loyalty credits. Which of the following best applies to this scenario?

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A) Smartphones are the newest shopping channel. B) Large brick-and-mortar stores offer a larger product assortment in-store to entice customers to shop there. C) Online retailers are opening physical spaces. D) Both webrooming and showrooming involve the use of mobile devices in-store. E) Multichannel shopping causes problems for retailers.

227) ________ is a multichannel selling approach in which a retailer provides a seamless customer experience from computer, mobile device, or brick-and-mortar store. A) Omnichannel B) Showrooming C) Scrambled merchandising D) Multiplatform E) Channeling

228) When Macy's department store makes sure that customers can go to Macys.com to find out if a sweater they want to purchase is in stock at a local store, it appears that Macy's is practicing A) target channeling. B) gateway management. C) platform selling. D) webrooming. E) omnichannel.

229) After searching for a desk that moves up and down so she can alternate between sitting and standing during the day, Myra locates one she likes on the Office Mart website. According to the site, the local Office Mart has two such desks in stock. Myra purchases the desk online and then goes out to the store later to pick it up. With regard to Office Mart, which of the following does this best exemplify?

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A) an omnichannel strategy B) stockturn rate C) the wheel or retailing D) the mass-merchandising concept E) automatic vending

230)

The "wheel of retailing" theory says that

A) retailers go through cycles from high costs and prices to lower costs and profits. B) general stores will dominate U.S. retailing again in the next century. C) new types of retailers enter as low-status, low-margin, low-price operators and eventually offer more services and charge higher prices. D) None of the answers are correct.

231)

The retail life cycle of which type of retailer began before the 1900s? A) variety stores B) single-line mass-merchandisers C) department stores D) Internet merchants E) supercenters

232)

The retail life cycle of which of the following took the longest to reach market maturity? A) department stores B) mass-merchandisers C) supermarkets D) variety stores E) fast-food outlets

233)

Which of the following types of retailers has not yet reached market maturity?

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A) supercenters B) online retail C) variety stores D) department stores E) catalog showrooms

234)

Which of the following reached market maturity over a 15-year period starting in 1970? A) catalog showrooms B) fast-food outlets C) single-line mass merchandisers D) mass-merchandisers E) supercenters

235) Which of the following is not an explanation for why retailers continue to evolve and change? A) wheel of retailing theory B) automated vending C) in-store technology D) scrambled merchandising E) retailer life cycles

236) The idea that new types of retailers begin as low-status, low-margin, low-price operators and then—if successful—evolve into more conventional retailers offering more services is called the A) wheel of retailing theory. B) pyramid concept. C) scrambled merchandising concept. D) superstore concept. E) mass-merchandising concept.

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237) The ________ says that new types of retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices. A) production concept B) wheel of retailing theory C) mass-merchandising concept D) sales concept E) break-even analysis

238)

To what does scrambled merchandising refer?

A) retailers shifting from one product-market to another (e.g., a food retailer shifting to clothing) B) limited-line retailers carrying narrow product assortments C) retailers carrying any product lines they can sell profitably D) displays of impulse products in supermarkets E) incompatible price and promotion policies

239)

Scrambled merchandising is carrying A) any product lines that a store thinks it can sell profitably. B) discounted product lines. C) a specific product line and offering yearly discounts. D) a number of product lines and offering a clearance sale twice a year. E) a limited product line at a high price aimed at a small number of consumers.

240)

Which of the following is best illustrated by a supermarket that sells jewelry?

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A) the superstore concept B) scrambled merchandising C) the wheel of retailing D) target marketing E) omnichannel

241) A new grocery store features a bank, a pharmacy, a flower shop, a full-service bakery, a café, photo processing, and equipment rentals, in addition to its normal grocery product lines. The store is engaging in A) the wheel of retailing. B) showrooming. C) scrambled merchandising. D) the retail life cycle. E) the omnichannel approach.

242)

Over the last 150 years, the number of years to market maturity has been A) increasing. B) decreasing. C) staying about the same. D) started small, increased, and is now shrinking quickly. E) exhibiting no particular pattern.

243)

Which of the following is not true about retailing in different nations?

A) New retailing ideas rarely spread to other countries. B) Mass-merchandising requires mass markets. C) Retailers in slow-growth developing countries have looked abroad for growth. D) Cultural differences influence preferences for online shopping. E) Less-developed countries often don't have the income to support mass distribution retailers.

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244)

Which of the following statements about retailing in international markets is false?

A) Among countries with high levels of access to the Internet, online shopping behavior is similar. B) Brick-and-mortar retailers adapt strategies when moving into new international markets. C) Mass-merchandisers find it difficult to grow in less-developed nations. D) The supercenter concept started in Europe and spread to other nations E) Slow growth in home markets motivates many retailers to move into international markets.

245) Regarding a study of the shopping behavior of 20,000 online shoppers in Europe, which of the following statements is false? A) Seven different segments were identified based on shopper needs. B) French shoppers most often fell into the "time-oppressed optimizers" segment. C) British shoppers were among the highest countries with "time-oppressed optimizers." D) The "price-oriented bargain hunters" market segment preferred to shop at stores and rummage for bargains. E) About 10 percent of Italians regularly purchase online.

246) Which of the following is least likely to accurately describe a wholesaler of digital recorders in the entertainment industry? A) It maintains a tracking system to monitor product delivery. B) It fulfills orders for electronics stores throughout the United States. C) It ships digital recorders to retailers by truck and air freight. D) It sells digital recorders to final consumers over the Internet. E) Its customers sell digital recorders to final consumers worldwide.

247)

What is the main difference between retailing and wholesaling?

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A) Retailing involves selling to other merchants and wholesaling does not. B) Retailing involves selling to business customers and wholesaling does not. C) Technology is more important in wholesaling than in retailing. D) Wholesaling involves selling mainly to other merchants and business customers, but retailing involves selling mainly to final consumers. E) Wholesaling involves selling to final consumers and retailing does not.

248) Business firms that sell to retailers and other merchants, and/or to industrial, institutional, and commercial users—but which do not sell in large amounts to final consumers—are A) retailers. B) collaborators. C) producers. D) wholesalers. E) intermediaries.

249) The U.S. Census Bureau defines wholesaling as being concerned with the activities of those persons or establishments that A) sell to retailers and other merchants, but that do not sell in large amounts to final consumers. B) sell to industrial users. C) sell to institutional users. D) sell to commercial users. E) All of the answers are correct.

250)

Wholesaling is concerned with the activities of A) manufacturers who set up branch warehouses at separate locations. B) persons or establishments that sell to industrial, institutional, and commercial users. C) persons or establishments that sell to retailers. D) All of the answers are correct.

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251)

Which of the following statements about wholesaling is false? A) Wholesalers that add value are more likely to survive. B) Voluntary chains can bind wholesalers closer to their customers. C) Some retail chains refuse to deal with wholesalers. D) Wholesaling is in decline. E) Wholesaling is largely absent from B2B e-commerce.

252)

Which of the following statements about wholesaling is false?

A) Progressive wholesalers are more concerned about their customers and with channel systems. B) For some producers, delivery services like UPS and FedEx have replaced the need for wholesalers. C) Large retail chains refuse to deal with some wholesalers. D) A hundred years ago, wholesalers dominated distribution channels. E) The number of wholesalers in the United States has steadily increased in the last 20 years.

253) Which of the following types of wholesalers is LEAST likely to have costs under 5 percent of sales? A) import agent for rare ceramic works B) manufacturer's agent for plastics producers C) selling agent for musical equipment D) single-line wholesaler of industrial tools E) export cyberbroker for handmade carpets

254)

Regarding wholesaling, which of the following is true?

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A) Merchant wholesalers have higher sales than agent wholesalers, but their costs (as a percent of sales) are over three times as high. B) There are many more manufacturers' sales branches than merchant wholesalers. C) Manufacturers' sales branches have higher costs than agent wholesalers and account for a smaller percentage of total sales. D) Good marketing managers select the type of wholesaler with the lowest cost when planning channels of distribution. E) All of the answers are correct.

255) Regarding types of wholesalers, which of the following has the highest costs as a percent of sales? A) manufacturers' sales branches (with stock) B) merchant wholesalers C) brokers D) manufacturers' agents E) agent wholesalers

256) Regarding wholesalers, which of the following types has the lowest costs as a percent of sales? A) specialty wholesalers B) merchant wholesalers C) manufacturers' sales branches D) agent wholesalers E) service wholesalers

257)

Regarding wholesalers, which of the following are the most numerous?

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A) service wholesalers B) agent wholesalers C) limited-function wholesalers D) manufacturers' sales branches E) merchant wholesalers

258) Warehouses that producers set up at separate locations away from their factories are known as A) progressive wholesalers. B) manufacturers' sales branches. C) corporate chains. D) hypermarkets. E) retail production centers.

259) A good share of total U.S. wholesale sales are made by manufacturers' sales branches because A) they are well-managed. B) the branches are usually placed in the best market areas. C) costs are lower due to the elimination of some marketing functions. D) about half of all wholesale businesses are owned by manufacturers. E) All of the answers are correct.

260) A producer has a few territories where many big customers are concentrated, but most of its target customers are spread all over the country. Which of the following is true?

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A) The company should use manufacturers' agents in the best territories and sales branches in the others, since good agents won't work in the smaller territories. B) The company should use sales branches everywhere, since it will cost more to use manufacturers' agents. C) The company will probably have to rely only on manufacturers' agents, since they will only be willing to take the widely scattered markets if they can have the good territories too. D) The company should use sales branches in the concentrated territories and manufacturers' agents in the others—assuming the concentrated territories are large enough to support sales branches. E) All of the answers are correct.

261) Based on averages, which of the following businesses is likely to have the highest costs as a percent of sales? A) manufacturers' agent for textile producers B) broker for industrial machinery C) general merchandise wholesaler based in the United States. D) export agent for American-made furniture E) import agent for specialty items from China

262) The main difference between merchant wholesalers and other wholesalers is that merchant wholesalers A) are more aggressive at selling than agent wholesalers. B) offer fewer wholesaling functions. C) have the lowest operating expenses as a percent of sales. D) own (take title to) the products they handle. E) are willing to perform retailing functions also.

263)

Merchant wholesalers

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A) own the products they sell. B) often specialize by certain types of products or customers. C) take title to the products they are selling for some period before selling to customers. D) constitute almost 85 percent of the wholesaling establishments in the United States. E) All of the answers are correct.

264)

The two basic types of merchant wholesalers are A) single-line and limited-function. B) agents and merchants. C) service and general-line. D) service and limited-function. E) single-line and general-line.

265)

________ are merchant wholesalers that provide all the wholesaling functions. A) Cash-and-carry wholesalers B) Service wholesalers C) Limited-function wholesalers D) Drop-shippers E) Catalog wholesalers

266)

Which of the following is not a type of service wholesaler? A) general merchandise B) cash-and-carry C) specialty D) single-line E) general-line

267)

Which of the following is not a type of service wholesaler?

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A) broker B) single-line wholesaler C) general-line wholesaler D) general merchandise wholesaler E) specialty wholesaler

268) Sierra Plumbing, Inc. buys plumbing supplies, pipes, and tools from different manufacturers and resells them to construction companies. Sierra is most likely a(n) A) rack jobber. B) service (merchant) wholesaler. C) drop-shipper. D) agent wholesaler. E) manufacturers' agent.

269) ________ wholesalers are service wholesalers that carry a wide variety of nonperishable items. A) General merchandise B) Limited-function C) General-line D) Specialty E) Drop-shipper

270)

Compared to specialty wholesalers, general merchandise wholesalers handle A) a narrower line—or perhaps only a specific line—of merchandise. B) almost no physical products. C) a very narrow assortment of products. D) products they do not own—while specialty wholesalers do own their products. E) a broader variety of products.

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271) C.D. Jamison Co. is a wholesaler in Norfolk, Virginia. It carries a wide variety of merchandise from various producers—everything from bar soap and shampoo to cameras and stereo equipment—that is sold in retail stores on U.S. Navy bases and Navy ships. C.D. Jamison owns the products it resells and provides all the wholesaling functions. C.D. Jamison is a(n) A) manufacturer sales branch. B) agent wholesaler. C) single-line wholesaler. D) specialty wholesaler. E) general merchandise wholesaler.

272) A full-service wholesaler in Santa Fe takes title to the products it stocks—a full line of home repair products for independent hardware stores. This wholesaler is a A) selling agent. B) broker. C) specialty wholesaler. D) rack jobber. E) single-line wholesaler.

273) McGovern's Supply stocks electronics repair parts and related supplies and tools from various producers. McGovern's sells primarily to small TV and electronic repair shops throughout the country that only want to order one or two items at a time. Orders are usually shipped out on UPS trucks. It appears that McGovern's is a A) single-line wholesaler. B) manufacturers' agent. C) drop-shipper. D) truck wholesaler. E) rack jobber.

274)

General-line wholesalers are wholesalers that

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A) carry a very narrow range of products and offer more information and service than other service wholesalers. B) carry a wide variety of nonperishable items. C) operate like service wholesalers except that the customer must pay cash. D) provide only some wholesaling functions. E) carry a narrower line of merchandise than general merchandise wholesalers.

275)

Which of the following is an example of a service merchant wholesaler? A) drop-shipper B) specialty wholesaler C) catalog wholesaler D) auction company E) personal shopper

276) Which type of wholesaler carries a very narrow range of products but offers more information and service than other service wholesalers? A) general merchandise B) limited-function C) general-line D) specialty E) catalog

277)

A wholesaler that carries only health foods instead of a full line of groceries is a A) general merchandise wholesaler. B) limited-function wholesaler. C) general-line wholesaler. D) cash-and-carry wholesaler. E) specialty wholesaler.

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278) A full-service wholesaler in Madrid takes title to the "Asian foods" she sells to supermarkets, gourmet shops, and restaurants. This wholesaler is a A) manufacturers' agent. B) specialty wholesaler. C) selling agent. D) single-line wholesaler. E) general merchandise wholesaler.

279) A manufacturer of which of the following product lines would be most likely to use a specialty wholesaler? A) electric appliances B) hardware items C) lumber D) plastic materials E) industrial cleaning supplies

280)

Which of the following is not a limited-function merchant wholesaler? A) a truck wholesaler B) a general-line wholesaler C) a rack jobber D) a drop-shipper E) a catalog wholesaler

281)

Which of the following is not a type of limited-function wholesaler?

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A) specialty wholesaler B) catalog wholesaler C) truck wholesaler D) drop-shipper E) cash-and-carry wholesaler

282)

Limited-function wholesalers A) usually cost more than single-line wholesalers. B) include manufacturers' agents. C) own (take title to) the products they sell. D) usually cost more than specialty wholesalers. E) All of the answers are correct.

283)

Which of the following is an example of a limited-function merchant wholesaler? A) cash-and-carry wholesaler B) broker C) mill supply house D) general-line wholesaler E) specialty wholesaler

284)

A cash-and-carry wholesaler does not A) store inventory. B) anticipate customers' needs. C) take title to the products he or she sells. D) grant credit. E) stock the products he or she sells.

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285) In the United States, warehouse clubs such as Sam's and Costco have taken away much of the business of A) rack jobbers. B) cash-and-carry wholesalers. C) truck wholesalers. D) specialty wholesalers. E) manufacturers' agents.

286)

A drop-shipper is an example of a(n) A) limited-function merchant wholesaler. B) service merchant wholesaler. C) agent wholesaler. D) producer. E) manufacturer's agent.

287) ________ are a type of limited-function wholesaler that owns products they sell, but do not actually handle, stock, or deliver them. A) Rack jobbers B) Catalog wholesalers C) Drop-shippers D) Truck wholesalers E) Cash-and-carry wholesalers

288)

Drop-shippers

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A) have high operating costs because they do transporting and storing. B) do not stock the products they sell. C) do not take title to the products they sell. D) do not emphasize selling. E) do not anticipate their customers' needs.

289)

Which of the following wholesalers do not carry stock for their customers? A) specialty wholesalers B) drop-shippers C) cash-and-carry wholesalers D) single-line wholesalers E) catalog wholesalers

290)

Drop-shippers

A) are used because it is cheaper for producers to ship to them by rail and let the dropshipper drop the products off at local retailers with small trucks. B) never take title to the products they sell. C) typically sell large shipments—e.g., rail carloads. D) have very high operating expenses. E) are full-service merchant wholesalers.

291)

Which of the following products is most likely to be sold by a drop-shipper? A) skis B) toothpaste C) greeting cards D) printing supplies E) coal

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292) Andy Cole sells fiberglass resins and fiberglass wire to the many small sailboat manufacturers in southern California. He takes title to the products but does not handle them. Instead, the resins are shipped in 50-gallon barrels directly from the producer to the sailboat manufacturers. Cole is a A) selling agent. B) cash-and-carry wholesaler. C) manufacturers' agent. D) specialty wholesaler. E) drop-shipper.

293)

Truck wholesalers A) usually sell perishable products that other wholesalers prefer not to carry. B) don't own the products they sell. C) usually sell in large quantities—e.g., truckloads. D) don't stock the products they sell. E) None of the answers are correct.

294) Which type of limited-function wholesaler offers the advantage that they promptly deliver perishable products that regular wholesalers prefer not to carry? A) catalog wholesalers B) rack jobbers C) truck wholesalers D) drop-shippers E) specialty wholesalers

295)

Which of the following is a limited-function merchant wholesaler?

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A) an auction company B) a broker C) a manufacturers' agent D) a general-line wholesaler E) a rack jobber

296)

A rack jobber is an example of a(n) A) limited-function merchant wholesaler. B) service merchant wholesaler. C) agent wholesaler. D) producer. E) personal shopper.

297)

Rack jobbers

A) specialize in hard-to-handle assortments of products that a retailer does not want to manage. B) own the products they sell but they do not actually handle, stock, or deliver them. C) promptly deliver perishable products that regular wholesalers prefer not to carry. D) sell out of catalogs that may be distributed widely to smaller industrial customers or retailers. E) are basically manufacturers' agents who specialize in international trade.

298)

Rack jobbers

A) don't own the products they sell. B) apply their knowledge of the local market to many stores. C) are full-service merchant wholesalers. D) are different from most wholesalers because they specialize in giving small retailers long-term credit. E) All of the answers are correct.

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299) A grocery store or mass-merchandiser might rely on a ________ to decide which paperback books or magazines it sells. A) catalog wholesaler B) rack jobber C) truck wholesaler D) drop-shipper E) specialty wholesaler

300) A national grocery store chain has decided to sell an assortment of hobby, gardening, and cook books. Buyers in the chain's main office are not certain what to stock because they think that consumers in different areas of the country will probably be interested in different books. The store managers have said they don't know what to order either. The chain should probably get help from a A) broker. B) cash-and-carry wholesaler. C) specialty wholesaler. D) rack jobber. E) manufacturers' agent.

301)

Meg O'Brien is just starting as a rack jobber. She will

A) do what a lot of grocery store managers don't want to do. B) need a lot of money to get started, since all her customers will expect 30 days to pay their bills. C) not have to know very much about the preferences of the consumers who buy the products she handles. D) never actually handle or deliver the products in her line. E) probably get tired of visiting farmers' markets.

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302) Capitol Periodical Distributors is a wholesaler providing assistance to retailers that want to carry books and magazines. A retailer provides Capitol with a certain amount of floor space, and Capitol uses the space to install display racks. Capitol fills the racks with magazines and books that would be suitable for the retailer's target market. Every week a representative from Capitol comes in to remove any outdated publications and refill the racks. This practice helps the retailer serve its customers better than if the retailer tried to manage the books and magazines itself. Capitol Periodical Distributors is a A) specialty wholesaler. B) drop-shipper. C) catalog wholesaler. D) rack jobber. E) cash-and-carry wholesaler.

303) Will Bishop sells a wide assortment (in small quantities) of "emergency" home repair items (fuses, electrical tape, small packets of nails) to grocery and convenience stores. He owns the products he handles, and displays them for his customers. Bishop is a A) manufacturers' agent. B) selling agent. C) rack jobber. D) cash-and-carry wholesaler. E) truck wholesaler.

304) A grocery store chain has decided to sell a small assortment of fast moving auto repair items but is not certain what stock to carry in which stores and does not want to leave the decision to the local store manager. The chain should probably get help from a A) broker. B) cash-and-carry wholesaler. C) specialty wholesaler. D) rack jobber. E) manufacturers' agent.

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305) ________ sell hardware, jewelry, and sporting goods out of a catalog to small industrial or retail customers that other wholesalers may not call on. A) Specialty wholesalers B) Cash-and-carry wholesalers C) Selling agents D) Catalog wholesalers E) Truck wholesalers

306)

Which of the following statements about limited-function wholesalers is true?

A) Cash-and-carry wholesalers serve small retailers but don't provide credit. B) Truck wholesalers sell perishable products that other wholesalers prefer not to carry. C) Rack jobbers specialize in nonfood products that sell in small quantities. D) Catalog wholesalers sell hardware, jewelry, sporting goods, and general merchandise and often cater to small industrial or retailer customers. E) All these statements are true.

307)

Agent wholesalers are

A) mainly concerned with buying and selling. B) used by small companies that want a wholesaler to assume all of the risk of carrying inventory. C) specialists in certain geographic areas, rather than specializing by product or customer type. D) at a disadvantage because manufacturers expect them to pay for products before they are shipped. E) None of the answers are correct.

308)

The main difference between agent wholesalers and merchant wholesalers is

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A) the kind of selling they do. B) that agent wholesalers do not own the products they sell while merchant wholesalers do. C) that no agent wholesalers physically handle products, while all merchant wholesalers do. D) in their attitudes regarding the marketing concept. E) There is no difference. An agent wholesaler is a merchant wholesaler.

309)

Agent wholesalers A) own the products they sell. B) provide more functions than merchant wholesalers. C) focus on buying and selling merchandise. D) have higher costs of operation than merchant wholesalers. E) All of the answers are correct.

310)

Which of the following statements about agent wholesalers is false? A) Agent wholesalers do not own the products they sell. B) Their main purpose is to help in buying and selling. C) They normally specialize by customer type and by product or product line. D) They are more common in international trade than in domestic trade. E) They usually provide a larger number of functions than limited-function wholesalers.

311)

Which of the following is a characteristic of agent wholesalers? A) They are more common in domestic trade than in international trade. B) They operate at relatively high costs. C) They own the products they sell. D) They normally specialize by customer type and by product or product line. E) None of the answers are correct.

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312)

Which of the following is not an agent wholesaler? A) a drop-shipper B) an auction company C) a selling agent D) a broker E) a manufacturers' agent

313)

Which of the following wholesalers own (take title to) the products they sell? A) selling agents B) combination export managers C) brokers D) manufacturers' agents E) None of these wholesalers own the products they sell.

314)

A manufacturers' agent A) sells noncompeting products for several manufacturers in a limited territory. B) is often replaced by a manufacturer's own sales force when sales rise. C) is paid a commission on sales. D) can be especially useful to a small manufacturer with a narrow line of new products. E) All of the answers are correct.

315)

Manufacturers' agents usually work for A) manufacturers' sales branches. B) only one manufacturer. C) selling agents. D) several manufacturers of noncompeting lines. E) service wholesalers.

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316)

What kinds of products does a manufacturers' agent sell?

A) similar products for several noncompeting producers, for a commission on what is actually sold B) different products for several noncompeting producers, for a commission on what is actually sold C) similar products for several competing producers, for a commission on what is actually sold D) different products for several competing producers, for a commission on what is actually sold E) different products for several competing producers, for a fixed salary irrespective of sales

317) Which of the following wholesalers would be most helpful to a small manufacturer of computer components who wants to obtain distribution in several major markets and still retain control of the marketing of its products? A) manufacturers' agents B) rack jobbers C) selling agents D) brokers E) manufacturers' sales branches

318)

Manufacturers' agents A) are frequently used by manufacturers to help introduce a new product. B) typically have a temporary relationship with a manufacturer, until a specific item is

sold. C) usually handle products for only a few companies since the cost of adding additional lines is quite high. D) usually handle a full assortment of products from competing manufacturers. E) buy large inventories from small manufacturers—helping them acquire working capital.

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319)

Manufacturers' agents A) don't cost the producer anything until something sells. B) aren't very useful for introducing new products. C) usually perform storing and transporting functions. D) usually handle the competing lines of several manufacturers. E) All of the answers are correct.

320) Jason Everson represents producers of several noncompeting industrial product lines. When he visits his clients, he carries a catalog from each one of the producers he represents. He goes through the catalogs with his clients and then places orders on their behalf with the producers, who pay Jason a commission based on what he sells. Jason is a(n) A) auctioneer. B) broker. C) selling agent. D) rack jobber. E) manufacturer's agent.

321) Debbie Wood sells food products to grocery wholesalers and large supermarket chains in Tallahassee. She sells for several manufacturers with noncompeting lines of food products— earning a 5 percent sales commission. She neither handles nor owns the products she sells. Debbie is a A) manufacturers' agent. B) rack jobber. C) broker. D) truck wholesaler. E) selling agent.

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322) Dolly Westin calls on the many gift shops in Savannah and sells a variety of unique decorative glass items, wind chimes, and picture frames produced by the companies that she represents. The store owners can order from Dolly rather than from the three different producers she represents. Apparently, Dolly is a A) selling agent. B) rack jobber. C) drop-shipper. D) broker. E) manufacturers' agent.

323)

________ are basically manufacturers' agents who specialize in international trade. A) Selling agents B) Auction companies C) Brokers D) Export or import agents E) Drop-shippers

324)

A broker's "Product" is A) financial skills—and perhaps credit. B) market contacts for new products. C) information about what buyers need and what supplies are available. D) good storage and transportation facilities. E) All of these are included in a broker's "Product."

325)

All of the following are true of brokers except that

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A) they bring buyers and sellers together. B) they are especially useful when buyers and sellers do not come into the market very often. C) they usually have a permanent relationship with the buyer and seller. D) the broker's product is information about what buyers need and what supplies are available. E) they earn commissions based on completion of transactions between buyers and sellers.

326) Until recently, Triad Equipment, Inc. took trade-ins when it sold new equipment to manufacturers. Now, Triad has a new owner who wants to sell the inventory of used equipment quickly to the best available buyer. He should look for a A) manufacturer's sales branch. B) broker. C) selling agent. D) manufacturers' agent. E) sales finance company.

327) Sebastian and Clere Franklin bought a tire recapping facility from a man who had decided to retire. They were going to convert the building to a studio for dance lessons, so they wanted to sell off the inventory of recapped tires and equipment for whatever they could get. The Franklins don't know any buyers who might be interested in these products. Which of the following types of wholesalers would be most helpful? A) rack jobbers B) brokers C) specialty wholesalers D) selling agents E) manufacturers' agents

328) Which of the following is unique to export-import brokers, differentiating them from general brokers?

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A) They usually have a temporary relationship with the buyer and seller while a particular deal is negotiated. B) They specialize in bringing together buyers and sellers from different countries. C) They are especially useful when buyers and sellers do not come into the market very often. D) They earn a commission from whichever party hired them when the transaction is completed. E) The broker's product is information about what buyers need and what supplies are available.

329)

________ take over the whole marketing job of producers, not just the selling function. A) Brokers B) Selling agents C) Auction companies D) Export and import brokers E) Service wholesalers

330) A wholesaler who takes over the whole marketing job nationally for one or a few manufacturers is called a A) merchant wholesaler. B) manufacturers' agent. C) broker. D) specialty wholesaler. E) selling agent.

331)

Which of the following statements about selling agents is true?

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A) They take over the whole marketing job for a producer. B) They may handle the entire output of one or more producers, even competing producers. C) They may provide a producer with working capital. D) They may even take over the affairs of the producer's whole business. E) All of the answers are correct.

332)

A producer is most likely to use a "selling agent" if A) he or she lacks marketing know-how and working capital. B) he or she produces a broad product line. C) he or she mainly needs aggressive selling. D) his or her target customers are concentrated in a small geographic area. E) he or she sells a technical product that needs a lot of follow-up service.

333) Sandi Barefoot sells the entire output of several small companies based in Silicon Valley. Each of the companies designs and produces remote control devices. Sandi has almost complete control of pricing and selling because the engineers who started the companies are mainly interested in inventing things. In addition, Sandi often provides working capital to the producers, who have very limited financial resources. Sandi is paid a substantial commission on all sales. Sandi is a A) broker. B) selling agent. C) field warehouser. D) manufacturers' agent. E) factor.

334)

Regarding wholesalers, which of the following descriptions is accurate?

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A) manufacturers' agent: does not own the products, usually carries stocks, represents several competing manufacturers within a geographic area B) merchant wholesaler: does not take title to products, takes possession, provides full service, and usually handles a broad variety of products C) broker: does not own the products, does not take possession, major function is selling, and does not anticipate customer needs D) selling agent: does not own the products, does the whole marketing job nationally, and may handle competing lines E) All these descriptions of different wholesalers are correct.

335) A(n) ________ is a blend of manufacturers' agent and selling agent—handling the entire export function for several producers of similar but noncompeting lines. A) import broker B) auction company C) export broker D) combination export manager E) export or import agent

336)

Which of the following statements about agent wholesalers is false?

A) Agent wholesalers based in a foreign market can be helpful in working through government red tape because they know the local business customs. B) Export and import brokers bring together buyers and sellers from different countries. C) Manufacturers' agents can call on international customers at no cost to the producer until something sells. D) Export and import agents are basically selling agents who specialize in international trade. E) Agent wholesalers are common in international trade.

337) If a small U.S. producer with limited financial resources and little marketing know-how wants to sell its products in international markets, it should use a(n)

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A) export commission house. B) factor. C) export agent. D) combination export manager. E) export broker.

338)

The major function of auction companies is to A) deliver the products they handle. B) help finance by owning products. C) take title to the products they sell. D) provide a place where buyers and sellers can complete a transaction. E) All of these are major functions of auction companies.

339)

Auction companies A) take over the whole marketing job of producers. B) work almost as members of a company's sales force. C) take title to the products they resell. D) provide a place where buyers bid to complete a transaction with a seller. E) All of the answers are correct.

340)

Traditionally, auction companies would most likely be used for A) children's clothing. B) sports equipment. C) used cars. D) small appliances. E) industrial chemicals.

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341) ________ provide a place where buyers and sellers can come together and bid to complete a transaction. A) Export agents B) Brokers C) Auction companies D) Selling agents E) Rack jobbers

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342) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of the following terms best describes the Publisher's Helper business?

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A) rack jobber B) broker C) drop-shipper D) selling agent

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343) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses is a franchise?

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A) Reddy and Sons B) Cuzco's C) Publisher's Helper D) Games Unlimited

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344) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these business uses scrambled merchandising as a big part of its strategy?

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A) Katrina's Salon B) Johnson's Health and Beauty Supplies C) Cuzco's D) Publisher's Helper

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345) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses has followed the "wheel of retailing" theory?

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A) Games Unlimited B) Katrina's Salon C) Walden's Leather D) Valu Grocer

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346) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses would be classified as a specialty shop?

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A) Walden's Leather B) Cuzco's C) Publisher's Helper D) Valu Grocer

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347) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses relies on the mass-merchandising concept?

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A) Publisher's Helper B) Cuzco's C) Walden's Leather D) Reddy and Sons

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348) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses best fits the definition of a limited-line store?

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A) Johnson's Health and Beauty Supplies B) Valu Grocer C) Cuzco's D) Walden's Leather

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349) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. ________ would be classified as an agent wholesaler.

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A) Reddy and Sons B) Publisher's Helper C) Johnson's Health and Beauty Supplies D) Valu Grocer E) None of these businesses would be classified as an agent wholesaler.

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350) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses best fits the definition of a limited-function merchant wholesaler?

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A) Games Unlimited B) Publisher's Helper C) Reddy and Sons D) Valu Grocer E) Cuzco's

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351) Use this information for questions that refer to the Centerville Retailers and Wholesalers case. Carol Lamb has lived in Centerville all her life. She owns a retail store that sells hobby and craft supplies. She bought the store after working there for 7 years. Carol has just been asked to head up the Retailers and Wholesaler Group of the Centerville Chamber of Commerce. The most active chamber members in her group are described below: Walden's Leather is part of a regional chain of stores that sells leather goods—mostly men's and women's clothing—with the upscale Walden's brand name. Walden's primarily relies on its own stores, where knowledgeable salespeople offer great service. Walden products are also soldon a limited basisin some fine department stores. Publisher's Helper is a small business started by Audrey Yang that provides and stocks display racks for paperback books and magazines. Most retailers welcome the service Audrey provides, in part because she does her own research to determine which paperback books and magazines sell best in Centerville. Cuzco's is Centerville's alternative to Walmart. The store sells a wide variety of merchandise. The company used to concentrate its product mix on small appliances, but now Cuzco's carries any product that it can sell profitably. Its low prices stimulate faster turnovers and higher sales volumes. Games Unlimited sells video games. Jamie Carraway, who owns the local store, signed a contract with Games Unlimited and follows strict rules covering her store's operations and the Games Unlimited marketing strategy. She pays that company a fee for promotion it provides along withcommissions on her sales. Johnson's Health and Beauty Supplies sells cosmetics and other health and beauty products to retailers and salons throughout the greater Centerville area. It owns the goods it sells to these retailer customers, and it provides all the wholesaling functions they need. Valu Grocer is an independent grocery store that belongs to an organization sponsored by a large food wholesaler. The fiftygrocery stores that share the Valu Grocer name are linked by contracts that include basic operating procedures, storefront designs, and joint promotion efforts. Reddy and Sons sells equipment for several different manufacturers of plastic molding in the Centerville area. It earns a commission from each manufacturer on the products it sells for that manufacturer, but it does not take ownership of the equipment it sells, nor does it install the equipment. Katrina's Salon started out as a low-status, low-price, low-margin hair salon 15 years ago. After some success, the company moved into a nicer storefront, raised prices, and now operates in the middle of the market. Which of these businesses best fits the definition of a service merchant wholesaler?

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A) Publisher's Helper B) Valu Grocer C) Reddy and Sons D) Johnson's Health and Beauty Supplies

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Answer Key Test name: Chap 12_17e 1) FALSE Producers can choose a variety of different paths to make goods and services available to customers. Many producers use more than one of these paths to get products to customers. 2) FALSE Retailing covers all the activities involved in the sale of products to final consumers, whether the product is a physical good, a service, or a blend of both. 3) TRUE Just over half of all the retail stores in the United States have annual sales of less than $1 million. 4) TRUE Less than 15 percent of the retail stores in the United States account for annual average sales of $5 million or more. 5) FALSE The large retail stores have sales more than $5 million annually; they account for almost 75 percent of all retail sales. 6) TRUE Competitive pressure from corporate chains encouraged the development of both cooperative chains and voluntary chains. 7) TRUE

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In a franchise operation, the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units. 8) FALSE Franchise holders' sales account for about a third of all retail sales. 9) TRUE Franchise holders' sales account for about a third of all retail sales. 10) TRUE A retailer's chosen combination of the Four Ps determines how target customers perceive its offering (its positioning) and how it is differentiated from other retailers. The marketing mix must provide superior value to some target market or the retailer will fail. 11) TRUE Zappos and Foot Locker are successful shoe retailers with different marketing strategies; both keep target customers coming back. 12) FALSE Zappos and Foot Locker are successful shoe retailers with different marketing strategies; both keep target customers coming back. 13) TRUE Due to many variations, it's oversimplified to classify retailers and their strategies on the basis of a single characteristic such as merchandise, services, sales volume etc. 14) FALSE It's oversimplified to classify retailers and their strategies on the basis of a single characteristic such as merchandise, services, sales volume etc. 15) FALSE Version 1

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About 150 years ago, general stores, which carried anything they could sell in reasonable volume, were the main retailers in the United States. 16) FALSE Most conventional retailers are single-line or limited-line stores with high expenses relative to sales. 17) TRUE Conventional retailers who are single-line or limited-line stores try to keep their prices up by avoiding competition on identical products. 18) TRUE In most countries, conventional retailers, who are single-line or limitedline stores, still handle the vast majority of all retailing sales. 19) TRUE A specialty shop is a type of conventional limited-line store that aims at a carefully defined target market by offering a unique product assortment, knowledgeable salespeople, and better service. 20) TRUE Specialty shops will probably continue to be a part of the retailing scene as long as customers have varied tastes and the money to satisfy them. 21) FALSE Department stores are large stores that are organized into many separate departments and offer many product lines; each department is like a separate limited-line store. They are usually strong in customer services. 22) TRUE Department stores are large stores that are organized into many separate departments and offer many product lines. They are usually strong in customer services.

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23) FALSE In the United States, the number of department stores, the average sales per store, and their share of retail business has declined continuously since the 1970s. 24) TRUE Conventional retailers, like single-line and limited-line stores, have a “buy low and sell high” philosophy which is rejected by many modern retailers who subscribe to the mass-merchandising concept. 25) TRUE The mass-merchandising concept says that retailers should offer low prices to get faster turnover and greater sales volumes to larger target markets. 26) FALSE Many conventional retailers have a "buy low and sell high" philosophy; the mass-merchandising concept, however, is followed by massmerchandisers. 27) FALSE Supermarkets started the move to mass-merchandising. 28) FALSE The basic idea for supermarkets developed in the United States during the 1930s Depression. 29) TRUE Supermarkets are planned for maximum efficiency with large-volume sales. Net profits in supermarkets usually run a thin 1 to 2 percent of sales or less. 30) TRUE

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Mass-merchandisers, which are large self-service stores that emphasize soft goods, have become the primary place to shop for many frequently purchased consumer products. 31) TRUE Supercenters or hypermarkets are very large stores that carry all goods and services that the consumer purchases routinely. They try to meet all the customer's routine needs at a low price. 32) TRUE Supercenters are very large stores that try to meet all a customer's routine needs at a low price. 33) FALSE Supercenters or hypermarkets are very large stores that carry all the goods and services that the consumer purchases routinely. 34) TRUE Warehouse clubs carry food, appliances, yard tools, tires, and other items that many consumers see as homogeneous shopping items. 35) FALSE Warehouse clubs carry food, appliances, yard tools, tires, and other items that many consumers see as homogeneous shopping items. 36) TRUE Single-line mass-merchandisers are called category killers because it's so hard for less specialized retailers to compete. 37) FALSE The stockturn rate is the number of times the average inventory is sold in a year. 38) TRUE Version 1

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The stockturn rate is the number of times the average inventory is sold in a year. A high stockturn rate means that product is selling quickly. A low stockturn rate indicates a rising inventory and means that product is not selling quickly enough. 39) TRUE Convenience food stores offer convenience, not assortment, and often charge prices 10 to 20 percent higher than nearby supermarkets. 40) TRUE Many of the convenience food stores are competing with fast-food outlets, supermarkets, and gas stations. 41) FALSE Vending machine sales are a form of retail sales; they account for about 1.5 percent of total U.S. retail sales. Traditionally soft drinks, candy bars, and snack foods have been sold by vending machines. 42) FALSE The major advantage of vending machine retailing is the convenience of the customer. It is costly to operate vending machines. 43) FALSE Vending machine sales are a form of retail sales. RedBox is a retailer. 44) FALSE Vending machine sales account for about 1.5 percent of total U.S. retail sales. 45) TRUE While gaining popularity in some international markets like China, doorto-door selling now accounts for less than 1 percent of retail sales in the United States.

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46) FALSE While gaining popularity in some international markets like China, doorto-door selling now accounts for less than 1 percent of retail sales in the United States. 47) FALSE Customers can shop at home by watching cable television channels dedicated to shopping, and then calling in their orders by phone. QVC and Home Shopping Network operate in the United States, Japan, and some European countries. 48) TRUE Cable TV shopping channels and catalogs, which are home shopping methods, use a multichannel approach by adding a website. 49) TRUE Online retailers are stores that sell exclusively or almost exclusively online. These stores do not have a physical store that consumers can visit. 50) FALSE Despite the increasing comfort with shopping online, online sales make up only about 10 percent of all U.S. retail sales. 51) TRUE Online retail offers wide assortments and low prices. See Exhibit 12–5. 52) TRUE More than half of all books, movies, and music are sold online, and about 40 percent of computer and consumer electronics and a third of office equipment and supplies are from online sales. 53) FALSE

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Price and feature comparison is an advantage of shopping online. See Exhibit 12–5. 54) FALSE More and more people are comfortable shopping online—with more than a third buying something online once a week. 55) TRUE The Internet makes shopping convenient in different ways, as compared to physical stores. 56) TRUE Many online stores provide photos and videos that demonstrate products to overcome the limitation of not being able to physically inspect a product before purchasing online. 57) TRUE This is the definition of omnichannel. Omnichannel is a multichannel selling approach in whicha single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 58) TRUE Omnichannel is a multichannel selling approach in which a single retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 59) TRUE A few formerly online-only retailers are investing in brick-and-mortar stores to deliver a better shopping experience to their customers. 60) FALSE

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The "wheel of retailing" theory says that new retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices. 61) TRUE Department stores, supermarkets, and mass-merchandisers went through the cycle described in the "wheel of retailing" theory. 62) TRUE The "wheel of retailing" theory does not explain all major retailing developments; vending machines entered as high-cost, high-margin operations, and convenience food stores are high-priced. 63) TRUE The wheel of retailing theory doesn't explain some major retailing developments, such as vending machines and convenience food stores. 64) TRUE Scrambled merchandising refers to carrying any product lines that modern retailers think they can sell profitably. 65) FALSE Scrambled merchandising refers to carrying any product lines that modern retailers think they can sell profitably. Conventional retailers tend to specialize by product line. 66) TRUE Scrambled merchandising refers to carrying any product lines that modern retailers think they can sell profitably. 67) TRUE

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Scrambled merchandising refers to carrying any product lines that modern retailers think they can sell profitably. It includes scrambling the product mix for higher margins or faster turnover. 68) TRUE The product life cycle applies to retailers as well as products. A retailer with a new idea may have big profits for a while; but it can count on speedy imitation and a squeeze on profit as competition increases. That puts pressure on the original firm to change or lose its market. 69) FALSE The product life-cycle concept suggests that some conventional retailers are in decline as life and death cycles of retailing continue. Some innovators like the online retailers are still in the market growth stage. Other retailers are in market maturity in the United States but are only now beginning to grow in other countries. 70) FALSE The supercenter concept initially developed in Europe and was adapted to the United States. 71) FALSE Consumers in less-developed nations often don't have the income to support mass distribution. 72) FALSE Online shopping behavior, and therefore online retailing, varies considerably across countries. 73) FALSE

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According to the U.S. Census Bureau, wholesaling is concerned with the activities of persons or establishments that sell to retailers and other merchants, or to industrial, institutional, and commercial users, but do not sell in large amounts to final consumers. 74) FALSE Wholesalers once dominated distribution channels in the United States and most other countries. This situation still exists in less-developed economies. 75) TRUE Progressive wholesalers are becoming more concerned with their customers and with finding new ways to add value in the channel. 76) TRUE Wholesalers are adapting their marketing strategies and finding new ways to add value in the channel. 77) TRUE Some of the biggest B2B e-commerce sites are wholesaler operations in the United States. 78) TRUE Manufacturers' sales branches are warehouses that producers set up at separate locations away from their factories. 79) FALSE Manufacturers' sales branches are warehouses that producers set up at separate locations away from their factories; they're classified as wholesalers by the U.S. Census Bureau and by government agencies in many other countries. 80) TRUE

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In the United States, the manufacturers' sales branches account for about 26.3 percent of total wholesale sales. One reason sales per branch are so high is that the branches are usually placed in the best market areas. 81) FALSE Manufacturers' sales branches are usually placed in the best market areas and sales per branch are high; they handle 26.3 percent of total wholesale sales. 82) FALSE As shown in Exhibit 12–7, merchant wholesalers have higher operating expenses as a percentage of sales than agent wholesalers. 83) FALSE As stated in Exhibit 12–7, when considering cost as a percent of sales, agent wholesalers are less expensive than manufacturers' sales branches. 84) TRUE Exhibit 12–7 shows that almost 85 percent of the wholesaling establishments in the United States are merchant wholesalers. 85) TRUE Merchant wholesalers handle over 64 percent of wholesale sales. 86) TRUE Merchant wholesalers own or take title to the products they sell and represent the most common type of wholesaling establishment. 87) TRUE In Japan, products are often bought and sold by a series of merchant wholesalers on their way to the business user or retailer. 88) TRUE

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Merchant wholesalers specialize by certain types of products or customers. General merchandise wholesalers carry a wide variety of nonperishable items such as hardware, electrical supplies, etc. 89) TRUE There are three types of service wholesalers: (1) general merchandise, (2) single-line, and (3) specialty. 90) TRUE General merchandise wholesalers carry a wide variety of nonperishable items such as hardware, electrical supplies, furniture, drugs, cosmetics, and automobile equipment; they serve different kinds of retail stores. 91) TRUE In consumer products, single-line (or general-line) wholesalers serve the single-line and limited-line retail stores. 92) TRUE Specialty wholesalers carry a very narrow range of products and offer more information and service than other service wholesalers. A specialty wholesaler of business products might limit itself to fields requiring special technical knowledge or service. 93) TRUE Specialty wholesalers carry a very narrow range of products and offer more information and service than other service wholesalers. 94) TRUE Limited-function wholesalers provide only some wholesaling functions. 95) FALSE Limited-function wholesalers provide only some of the wholesaling functions.

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96) TRUE Cash-and-carry wholesalers operate like service wholesalers except that the customer must pay cash. Full-service wholesalers often refuse to grant credit. 97) TRUE Cash-and-carry operators are common in less-developed nations; but in the United States, big warehouse clubs have taken much of this business. 98) TRUE In the United States, big warehouse clubs have taken much of the cashand-carry wholesalers’ business. 99) TRUE Drop-shippers do not actually handle, stock, or deliver the products and so have low operating costs. 100) FALSE Drop-shippers do not actually handle, stock, or deliver the products. They get orders and pass them on to producers. Then the producer ships the order directly to the customer. 101) TRUE Truck wholesalers specialize in delivering products that they stock in their own trucks. Their big advantage is that they promptly deliver perishable products that regular wholesalers prefer not to carry. 102) FALSE Rack jobbers specialize in hard-to-handle assortments of products that a retailer doesn't want to manage; one might rely on a rack jobber to decide which product it sells. 103) TRUE

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Catalog wholesalers sell out of catalogs that may be distributed widely to customers or retailers that might not be called on by other wholesalers. Many of its customers don't have a local wholesaler. 104) FALSE Agent wholesalers do not own the products they sell. They normally specialize by customer type and by product or product line; but they usually provide even fewer functions than the limited-function wholesalers. 105) FALSE Agent wholesalers usually provide even fewer functions than the fullservice or limited-function wholesalers. 106) TRUE Agent wholesalers operate at relatively low cost; sometimes 2 to 6 percent of their selling price or less in the case of website sales. 107) TRUE Agent wholesalers are very common in international trade. 108) FALSE A manufacturers' agent sells similar products for several noncompeting producers. 109) TRUE More than half of all agent wholesalers are manufacturers' agents. 110) TRUE Manufacturers' agents don't cost the producer anything until something sells. This is considered a big plus of using manufacturers' agents. 111) TRUE

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For introducing new products, manufacturers' agents may earn 10 to 15 percent commission, while their commission on large-volume established products may be quite low—as lowas 2 percent. 112) TRUE If an area's sales potential is low, a company may use a manufacturers' agent because the agent can do the job at low cost. 113) TRUE Manufacturers' agents earn a commission on what is actually sold and they do not take title to the products they sell. 114) FALSE If an area's sales potential is low, a company may use a manufacturers' agent. Once a product sells well, a producer may think the rate is high and begin using its own sales reps. 115) FALSE Export or import agents are basically manufacturers' agents who specialize in international trade. 116) TRUE Export or import agents are basically manufacturers' agents who specialize in international trade. 117) FALSE Brokers usually have a temporary relationship with the buyer and seller while a particular deal is negotiated. 118) TRUE Brokers usually have a temporary relationship with the buyer and seller while a particular deal is negotiated. 119) TRUE Version 1

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The broker's product is information about what buyers need and what supplies are available. 120) TRUE The broker's product is information about what buyers need and what supplies are available. 121) FALSE The Internet provides consolidation of information and new opportunities. A smaller number of cyberbrokers will cut costs and dominate the business with larger databases of buyers and sellers. 122) FALSE Agents and brokers work for a commission; they do not own or take title to the products they sell. 123) TRUE Selling agents take over the whole marketing job of producers, not just the selling function. 124) TRUE A selling agent may handle the entire output of one or more producers. The manufacturers' agent is confined to a specific area. 125) FALSE Financial trouble is one of the main reasons a producer calls in a selling agent. The selling agent may provide working capital. 126) TRUE A combination export manager is a blend of manufacturers' agent and selling agent, handling the entire export function for several producers of similar but noncompeting lines. 127) TRUE Version 1

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Auction companies are used for products, such as livestock, fur, tobacco, and used cars, where demand and supply conditions change rapidly. 128) TRUE Auction companies provide a place where buyers (demand) and sellers (supply) can come together and bid to complete a transaction. 129) A A producer should select intermediaries that best facilitate its strategy. Producers can, and often do, choose a variety of different paths to make goods and services available to customers. 130) A Retailing covers all the activities involved in the sale of products to final consumers. 131) B Retailing covers all the activities involved in the sale of products to final consumers. 132) A Retailing covers all the activities involved in the sale of products to final consumers. 133) E Retailing covers all the activities involved in the sale of products to final consumers. 134) A In the case of service retailing like dry cleaning, fast food, tourist attractions, online bank accounts, or hair salons, the retailer is often the producer. 135) E Version 1

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In a franchise operation, the franchisor develops a good marketing strategy, and the retail franchise holders carry out the strategy in their own units. All of the examples provided are franchise operations. 136) E Consumers spend $5.5 trillion a year buying goods and services from U.S. retailers. Almost 75 percent of all retail sales are by stores with sales over $5 million a year. Corporate chains account for about 50 percent of retail sales. Franchising accounts for one-third of retail sales. 137) B Almost 75 percent of all retail sales are by stores with sales of over $5 million a year. 138) D Less than 15 percent of the retail stores have annual sales over $5 million. 139) A A corporate chain is a firm that owns and manages more than one store and often it's many. 140) C A corporate chain is a firm that owns and manages more than one store—and often it's many. 141) C Franchise holders' sales account for about a third of all retail sales. 142) C This represents an element of Product. See Exhibit 12–3. 143) A

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While Zappos recently added clothing, handbags, housewares, and beauty supplies to its product assortment, its core product line remains shoes. Zappos' wide product line includes more than 150,000 styles and 1,400 brands—including many styles in well-known brands like Nike, Timberland, and Bandolino. It has a relatively small budget for its advertising on television, print, online, and the bottom of the plastic bins in airport security lines. Advertising, customer service, and discounting are not Product decisions. 144) B Strategy planning is critical to the survival of retailers. To avoid this, a retailer should carefully identify possible target markets. 145) E Exhibit 12–3 shows that a retailer's Product includes components like width and depth of product assortment, special services, and after-sale service. The exhibit shows the others as decisions around other Ps. 146) E Exhibit 12–3 shows that a retailer's Product includes components like width and depth of product assortment, special services, and after-sale service. The exhibit shows the others as decisions around other Ps. 147) A As per Exhibit 12–3, a retailer's decisions on place include physical stores and/or over the Internet, number and location of stores, shopping atmosphere, store size/layout/design, and home delivery options. The exhibit shows the others as decisions around other Ps. 148) E As per Exhibit 12–3, Promotion decisions include advertising, publicity, salespeople and helpful information, which include online videos and reviews. Version 1

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149) E As per Exhibit 12–3, Price decisions involve store credit cards, discount policies, frequency and level of sales prices, and delivery charges or other charges. 150) E There are various reasons why some consumers prefer one retailer over another. Exhibit 12–3 shows factors like assortment carried, service, convenience, shopping atmosphere, store size, etc. 151) A Product decisions involve special services like special orders, entertainment, and gift wrap. 152) B Place decisions include where stores will be located, such as online and/or brick-and-mortar, the number of stores, etc. 153) C Promotion involves letting customers know about the business and the goods and services offered through advertising, salespeople, and other approaches. 154) C Promotion involves publicity, advertising, displays, online videos, online reviews, salespeople, and other approaches. 155) D Price decisions involve store credit cards, discount policies, frequency and level of sales prices, and delivery charges or other charges. 156) D Price decisions include whether to accept credit cards or not, charge for delivery, and how frequently to offer products at discounted sales prices. Version 1

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157) D Price decisions involve store credit cards, discount policies, frequency and level of sales prices, and delivery charges or other charges. 158) C Most conventional retailers are single-line or limited-line stores that specialize in certain lines of related products rather than a wide assortment. 159) E Most conventional retailers today are single-line or limited-line stores— stores that specialize in certain lines of related products rather than a wide assortment. Many specialize not only in a single line, such as clothing, but also in a limited line within the broader line. Within the clothing line, a retailer might carry only shoes, formal wear, or even neckties but offer depth in that limited line. 160) A Most conventional retailers are single-line or limited-line stores that specialize in certain lines of related products rather than a wide assortment. 161) B Single-line stores are also known as limited-line stores. 162) A Single-line or limited-line stores are stores that specialize in certain lines of related products rather than a wide assortment. 163) D Limited-line retailers face the costly problem of having to stock some slow-moving items in order to satisfy their target markets. 164) E Version 1

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Most conventional retailers are single-line or limited-line stores that build relationships with their customers and earn a position as the place to shop for a certain type of product.; they are small with high expenses relative to sales; and they face the costly problem of having to stock some slow-moving items in order to satisfy their target markets. 165) A Single-line or limited-line stores specialize in certain lines of related products rather than a wide assortment. 166) C A specialty shop is a type of conventional limited-line store, which is usually small with a distinct personality. Specialty shops sell special types of shopping products. 167) C Specialty shops aim at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. 168) C Specialty shops aim at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. 169) A Specialty shops aim at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. 170) B

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Specialty shops aim at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. 171) D Specialty shops aim at a carefully defined target market by offering a unique product assortment, knowledgeable salesclerks, and better service. 172) D Specialty shops offer a unique product assortment with knowledgeable salesclerks, and better service. 173) C Department stores are large stores that are organized into many separate departments and offer many product lines. 174) D Department stores are large stores that are organized into many separate departments and offer many product lines. 175) E Department stores have many separate departments, each like a separate limited-line store; they can handle a wide variety of shopping products with strong customer services. In the United States, the number of department stores, the average sales per store, and their share of retail business has declined significantly since the 1970s. 176) B In the United States, the number of department stores, the average sales per store, and their share of retail business has declined continuously since the 1970s. Well-run limited-line stores and mass-merchandisers compete with department stores. Version 1

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177) C Department stores are usually strong in customer services, including credit, merchandise return, delivery, and sales help. 178) B The mass-merchandising concept states that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. 179) C The mass-merchandising concept states that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. 180) C The meaning of the term conventional retailers includes single-line stores, limited-line stores, and general stores. Supermarkets started the move to mass-merchandising. 181) B Supermarkets are large stores specialized in groceries, with self-service and wide assortments. 182) A Supermarkets are large stores specialized in groceries, with self-service and wide assortments. Net profits in supermarkets usually run a thin 1 to 2 percent of sales or less. 183) B U.S. supermarkets were the first mass-merchandisers; and the massmerchandising concept is now used by many retailers. 184) C

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U.S. supermarkets were the first mass-merchandisers; and the massmerchandising concept is now used by many retailers. 185) D Supermarkets are planned for maximum efficiency. 186) B Net profits in supermarkets usually run a thin 1 to 2 percent of sales or less. 187) C Supermarkets are large stores specializing in groceries, with self-service and wide assortments. 188) B Net profits in supermarkets usually run a thin 1 to 2 percent of sales or less. 189) A Mass-merchandisers are large self-service stores that emphasize soft goods and staples. They emphasize lower margins to get faster turnover. 190) B Mass-merchandisers are large self-service stores that emphasize soft goods and staples. They emphasize lower margins to get faster turnover. 191) D Mass-merchandisers are large self-service stores that emphasize soft goods and staples. They offer lower prices to get faster turnover. 192) B Mass-merchandisers offer lower prices to get faster turnover. 193) E

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Mass-merchandisers are large self-service stores that emphasize “soft goods” and staples and offer lower prices to get faster turnover. They've become the primary place to shop for many frequently purchased consumer products. 194) A A supercenter tries to meet all the customer's routine needs at a low price. 195) A Supercenters or hypermarkets are very large stores that carry food, drug items, and other goods and services that the consumer purchases routinely. 196) C Walmart's supercenters have turned Walmart into the largest food retailer in the United States. 197) E Warehouse clubs like Sam's Club and Costco carry homogeneous shopping items and charge consumers an annual membership fee to shop in these large, no-frills facilities. Their growth has been fueled by sales to small-business customers. 198) B Single-line mass-merchandisers attract large numbers of customers with their large assortments and low prices. They've been very successful; it's hard for less specialized retailers to compete against them. 199) E

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Category killers attract large numbers of customers with their large assortment and low prices in a specific product category. Staples (office supplies), Best Buy (electronics), Home Depot (home improvements), and IKEA (furniture) are considered category killers. 200) E Category killers attract large numbers of customers with their large assortment and low prices in a specific product category. 7-11 is a convenience store. 201) A The stockturn rate measures the number of times the average inventory is sold in a year. It helps to measure how quickly inventory is selling. 202) E The stockturn rate—or inventory turnover—is the number of times the average inventory is sold in a year. It is one indication of the health of a retailer and measures how quickly its inventory sells. A low stockturn rate means that product is not selling quickly enough. 203) A The stockturn rate measures the number of times the average inventory is sold in a year. It helps to measure how quickly inventory is selling. A higher stockturn rate means a faster inventory turnover. 204) A Rising inventory (and a lower stockturn rate) means that product is not selling quickly enough. 205) D Convenience stores limit their stock to pickup or fill-in items like bread, milk, beer, gas, etc. 206) C Version 1

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Convenience stores offer convenience, and not assortment; they often charge prices 10 to 20 percent higher than nearby supermarkets. 207) B Convenience stores often charge prices 10 to 20 percent higher than nearby supermarkets. 208) E Vending machine sales account for about 1.5 percent of total U.S. retail sales. Vending machines can be costly to operate, but they are convenient for consumers. Traditionally, soft drinks, candy bars, and snack foods are sold by vending machines. Now some higher-margin products are beginning to use this channel. 209) D Standard Hotels uses poolside vending machines to sell bathing suits. 210) C Vending machines can be costly to operate, but they are convenient for consumers. Their product assortments are limited. 211) E Door-to-door selling started in the pioneer days. It meets some consumers' need for convenient personal attention. While gaining popularity in some international markets, it now accounts for less than 1 percent of retail sales in the United States. 212) A Door-to-door selling meets some consumers' need for convenient personal attention. Product assortments are limited. 213) A Door-to-door shopping accounts for less than 1 percent of retail sales in the United States. Version 1

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214) B Both automatic vending and door-to-door retailing provide customer convenience. By their very nature (limited physical storage space), they have narrow assortments. 215) D Customers can shop via any Internet connection (computer or smartphone) at any time of the day or night. 216) D A consumer can get a very wide assortment from different sellers on the Internet. An online shopper has access to product descriptions, cost and specifications, photos, videos, reviews, etc. 217) E Internet retailing is growing fast.. Online sales are growing about 15 percent per year, whereas total retail sales are growing around 4 percent. 218) A Online shopping is still not very common for many of the most frequent purchases people make—groceries and health and beauty for example. It is also not common for many of the biggest purchases people make, like cars and trucks. In other categories, however, the share of online sales is much greater. For instance, a third of office equipment and supplies are bought online. 219) C With just the click of a mouse, an online shopper has access to product descriptions and specifications, photos and video demonstrations, and reviews posted by other consumers. 220) A

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Online retailers are stores without a physical location that consumers can visit and that sell exclusively or almost exclusively online. 221) A According to the definition, the only online retailer in the group is eBay. Online retailers do not have a physical store that consumers can visit and sell exclusively or almost exclusively online. Home Depot, Costco, and Macy's sell products online but have brick-and-mortar stores that customers can visit. 222) E An online shopper has access to wider product assortments with product descriptions and specifications, photos, videos, reviews etc.; however, for in-store customers, being able to inspect the product before purchase and use it immediately after purchase are definite advantages. See Exhibit 12–5. 223) D Cookies (small data files placed on a customer's computer) can even tell a retailer what a shopper does at a competitor's site. 224) E With just the click of a mouse, an online shopper has access to product descriptions, cost and specifications, photos, videos, reviews etc.; a consumer can get a very wide assortment from different sellers on the Internet; and price comparisons are easy. 225) A Today, most brick-and-mortar retailers have an online presence. These websites may simply provide product information or may be full-blown e-commerce websites. Some larger brick-and-mortar stores do substantial sales volume through their online stores.

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226) A Consumers are increasingly comfortable shopping on their smartphones. Some brick-and-mortar retailers see an opportunity to leverage this trend with websites and apps that deliver extra services to customers in physical stores. 227) A Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 228) E Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 229) A Omnichannel is a multichannel selling approach in which a retailer provides a seamless customer shopping experience from computer, mobile device, or brick-and-mortar store. 230) C The wheel of retailing theory says that new types of retailers enter the market as low-status, low-margin, low-price operators and then evolve into more conventional retailers offering more services with higher operating costs and higher prices. 231) C The retail life cycle of department stores began in the mid-1800s. See Exhibit 12–6. 232) A

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Of the retail operations mentioned, the retail life cycle of department stores took the longest to reach market maturity—approximately 100 years. See Exhibit 12–6. 233) B Online retail arose in the mid-1990s. It has not yet reached market maturity in its retail life cycle. See Exhibit 12–6. 234) A As a specific type of retail operation, catalog showrooms reached market maturity over a 15-year period, beginning in 1970. 235) B Each of these is a reason for changes in retail, except that the emergence of automatic vending occurred decades ago and its emergence is no longer a major influence on retail. 236) A The wheel of retailing theory says that new types of retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices. 237) B The wheel of retailing theory says that new types of retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices. 238) C Scrambled merchandising refers to retailers carrying any product lines they can sell profitably. 239) A Version 1

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Scrambled merchandising refers to retailers carrying any product lines they can sell profitably. 240) B Scrambled merchandising refers to carrying any product lines the modern retailers think they can sell profitably. 241) C Scrambled merchandising refers to carrying any product lines the modern retailers think they can sell profitably. 242) B As shown in Exhibit 12–6, retailer life cycles seem to be getting shorter. 243) A New retailing approaches that succeed in one part of the world are often quickly adapted to other countries. 244) A Even when infrastructure is in place, cultural factors influence preferences for online shopping. For example, a European study of 20,000 clothing shoppers identified seven segments based on their shopping needs. 245) B A European study of 20,000 clothing shoppers identified seven segments based on their shopping needs. One segment, nicknamed "time-pressed optimizers," was particularly interested in online shopping. Only 3 percent of Italian shoppers and 6 percent of French shoppers fell into this segment—as compared to 16 percent of Brits and 18 percent of Germans. Another segment, "price-oriented bargain hunters," enjoyed going to many stores and rummaging to find bargain merchandise. 246) D Version 1

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Wholesaling is concerned with the activities of those persons or establishments that sell to retailers and other merchants, or to industrial, institutional, and commercial users, but that do not sell in large amounts to final consumers. 247) D Retailing is involved in selling to final consumers. Wholesaling is concerned with selling to retailers and other merchants, or to industrial, institutional, and commercial users, but not to final consumers. 248) D Wholesaling is concerned with the activities of those persons or establishments that sell to retailers and other merchants, or to industrial, institutional, and commercial users, but that do not sell in large amounts to final consumers. 249) E Wholesaling is concerned with the activities of those persons or establishments that sell to retailers and other merchants, or to industrial, institutional, and commercial users, but that do not sell in large amounts to final consumers. 250) D Wholesaling is concerned with selling to retailers and other merchants, or to industrial, institutional, and commercial users. Manufacturers' sales branches are also considered wholesalers. 251) E Some of the biggest B2B e-commerce sites on the Internet are wholesaler operations. 252) E

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These factors have combined to decrease the number of wholesalers in the United States. There are about 400,000 wholesalers today— following a steady decline over the last 20 years. 253) D Agent wholesalers are likely to have costs of about 3.7% of sales. A single-line wholesaler is a type of merchant wholesaler; these wholesalers are likely to have costs over 13% of sales. See Exhibit 12–7 254) A Exhibit 12–7 shows that merchant wholesalers have higher sales than agent wholesalers, but their costs as a percent of sales are more than three times that of agent wholesalers. 255) B As shown in Exhibit 12–7, merchant wholesalers have 13.1% costs as a percent of sales. This is the highest costs as a percent of sales. 256) D As shown in Exhibit 12–7, agent wholesalers have 3.7% costs as a percent of sales. This is the lowest costs as a percent of sales. 257) E Exhibit 12–7 shows that merchant wholesalers form the highest percent (84.9) of wholesale establishments. 258) B Manufacturers' sales branches are warehouses that producers set up at separate locations away from their factories. 259) B One reason sales per branch are so high is that the branches are usually placed in the best market areas.

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260) D Manufacturers' sales branches are usually placed in the best market areas. If sales potential is low in other areas, then the producer should use manufacturers' agents because agents can do the job at low cost. 261) C A general merchandise wholesaler is a type of merchant wholesaler. Merchant wholesalers tend to have the highest costs as a percent of sales (13.1%), compared to agent wholesalers (3.7%) and manufacturer sales branches (7.9%). 262) D Merchant wholesalers own or take title to the products they sell. 263) E Merchant wholesalers own the products they sell. They often specialize by certain types of products or customers and take title to the products they are selling for some period before selling to customers. Almost 85 percent of the wholesaling establishments in the United States are merchant wholesalers. 264) D The two basic types of merchant wholesalers are service wholesalers, who provide all the wholesaling functions; and limited-function wholesalers, who provide only some wholesaling functions. 265) B Service wholesalers are merchant wholesalers that provide all the wholesaling functions. 266) B The three types of service wholesalers are (1) general merchandise, (2) single-line or general-line, and (3) specialty. Version 1

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267) A The three types of service merchant wholesalers are (1) general merchandise, (2) single-line or general-line, and (3) specialty. 268) B Service wholesalers are merchant wholesalers that provide all the wholesaling functions. 269) A General merchandise wholesalers are service wholesalers that carry a wide variety of nonperishable items such as hardware, electrical supplies, furniture, drugs, etc. 270) E General merchandise wholesalers carry a wide variety of nonperishable items. Specialty wholesalers carry a very narrow range of products. 271) E General merchandise wholesalers are service wholesalers that carry a wide variety of nonperishable items such as hardware, electrical supplies, furniture, drugs, cosmetics, and automobile equipment. 272) E Single-line wholesalers carry a narrower line of merchandise than general merchandise wholesalers. They own or take title to the products they sell. 273) A Single-line wholesalers carry a narrower line of merchandise. In consumer products, they serve the single-and limited-line stores. In business products, they cover a wider geographic area and offer more specialized service. 274) E Version 1

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General-line or single-line wholesalers carry a narrower line of merchandise than general merchandise wholesalers. 275) B The three types of service merchant wholesalers are (1) general merchandise, (2) single-line or general-line, and (3) specialty. 276) D Specialty wholesalers carry a very narrow range of products and offer more information and service than other service wholesalers. 277) E A consumer products specialty wholesaler might carry only health foods instead of a full line of groceries. 278) B Specialty wholesalers are service wholesalers that carry a very narrow range of products and take title to the products they sell. In consumer products, they serve the single- and limited-line stores. 279) D Specialty wholesalers are service wholesalers that carry a very narrow range of products and offer more information and service than other service wholesalers. A wholesaler for plastic materials is an example. 280) B Limited-function wholesalers include truck wholesalers, rack jobbers, drop-shippers, and catalog wholesalers. A general-line wholesaler is a service wholesaler. 281) A Limited-function wholesalers include truck wholesalers, cash-and-carry wholesalers, drop-shippers, and catalog wholesalers. A specialty wholesaler is a service wholesaler. Version 1

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282) C Limited-function wholesalers take title to the products they sell; but they provide only some wholesaling functions. 283) A Limited-function wholesalers include cash-and-carry wholesalers, truck wholesalers, drop-shippers, rack jobbers, and catalog wholesalers. 284) D Cash-and-carry wholesalers do not grant credit; the customer must pay cash. 285) B In the United States, big warehouse clubs serve as cash-and-carry wholesalers. 286) A Limited-function merchant wholesalers include drop-shippers, truck wholesalers, cash-and-carry wholesalers, rack jobbers, and catalog wholesalers. 287) C Drop-shippers are limited-function wholesalers that own or take title to the products they sell; but they do not actually handle, stock, or deliver them. 288) B Drop-shippers own or take title to the products they sell, but they do not actually handle, stock, or deliver them. 289) B Drop-shippers own or take title to the products they sell, but they do not actually handle, stock, or deliver them.

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290) C Drop-shippers commonly sell bulky products like lumber. 291) E Drop-shippers commonly sell bulky products, for which additional handling would be expensive and possibly damaging. 292) E Drop-shippers own or take title to the products they sell, but they do not actually handle, stock, or deliver them. 293) A A big advantage of truck wholesalers is that they promptly deliver perishable products that regular wholesalers prefer not to carry. 294) C A big advantage of truck wholesalers is that they promptly deliver perishable products that regular wholesalers prefer not to carry. 295) E Limited-function merchant wholesalers include cash-and-carry wholesalers, drop-shippers, truck wholesalers, rack jobbers, and catalog wholesalers. 296) A Limited-function merchant wholesalers include cash-and-carry wholesalers, drop-shippers, truck wholesalers, rack jobbers, and catalog wholesalers. 297) A Rack jobbers specialize in hard-to-handle assortments of products that a retailer doesn't want to manage; they display the products on their own wire racks.

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298) B Rack jobbers know which titles sell in the local area and apply that knowledge in many stores. 299) B A grocery store or mass-merchandiser might rely on a rack jobber to decide which paperback books or magazines it sells. 300) D A grocery store or mass-merchandiser might rely on a rack jobber to decide which paperback books or magazines it sells. The wholesaler knows which titles sell in the local area and applies that knowledge in many stores. 301) A Rack jobbers specialize in hard-to-handle assortments of products that a retailer doesn't want to manage. 302) D Rack jobbers specialize in hard-to-handle assortments of products that a retailer doesn't want to manage. Rack jobbers usually display the products on their own wire racks. 303) C Rack jobbers usually display the products on their own wire racks. They own the products they handle. 304) D In a related example, a grocery store or mass-merchandiser might rely on a rack jobber to decide which paperback books or magazines it sells. The wholesaler knows which titles sell in the local area and applies that knowledge in many stores. 305) D Version 1

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Catalog wholesalers sell out of catalogs to smaller industrial customers or retailers that might not be called on by other wholesalers; they sell lines such as hardware, jewelry, sporting goods, and computers. 306) E Cash-and-carry operators do not grant credit to small businesses. Truck wholesalers deliver perishable products that regular wholesalers prefer not to carry. Rack jobbers specialize in hard-to-handle assortments of products. Catalog wholesalers sell out of catalogs to smaller industrial customers or retailers; they sell hardware, jewelry, sporting goods, and computers. 307) A Agent wholesalers do not own the products they sell. Their main purpose is to help in buying and selling. 308) B Agent wholesalers are wholesalers who do not own the products they sell. Merchant wholesalers own or take title to the products they sell. 309) C Agent wholesalers do not own the products they sell. Their main purpose is to help in buying and selling. 310) E Agent wholesalers usually provide even fewer functions than the limited-function wholesalers. 311) D Agent wholesalers normally specialize by customer type and by product or product line. 312) A

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Agent wholesalers include manufacturers' agents, brokers, selling agents, and auction companies. A drop-shipper is a limited-function merchant wholesaler. 313) E Agent wholesalers do not own the products they sell. They include manufacturers' agents, brokers, selling agents, combination export managers, etc. 314) E A manufacturers' agent sells similar products for several noncompeting producers, for a commission on sales. A manufacturers' agent is used by small producers when their sales volumes are small. When sales rise, a producer may think the rate is high and begin using its own sales reps. 315) D A manufacturers' agent sells similar products for several noncompeting producers. 316) A Manufacturers' agent sells similar products for several noncompeting producers, for a commission on what is actually sold. 317) A Small producers often use manufacturers' agents everywhere because their sales volume is too small. Agents can be especially useful for introducing new products. 318) A Manufacturers' agents can be especially useful for introducing new products. For this service, they may earn a 10 to 15 percent commission. 319) A

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The big plus of manufacturers' agents is that they already call on some customers and can add another product line at relatively low cost and at no cost to the producer until something sells. 320) E A manufacturers' agent sells similar products for several noncompeting producers, for a commission on what is actually sold. 321) A A manufacturers' agent sells similar products for several noncompeting producers, for a commission on what is actually sold. 322) E A manufacturers' agent sells similar products for several noncompeting producers for a commission on what is actually sold. 323) D Export or import agents are basically manufacturers' agents who specialize in international trade; they operate in every country. 324) C A broker's product is information about what buyers need and what supplies are available. 325) C Brokers usually have a temporary relationship with the buyer and seller while a particular deal is negotiated. 326) B Brokers are useful when buyers and sellers don't come into the market very often. The broker's product is information about what buyers need and what supplies are available. 327) B Version 1

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Brokers are useful when buyers and sellers don't come into the market very often. The broker's product is information about what buyers need and what supplies are available. 328) B Export and import brokers operate like other brokers, but they specialize in bringing together buyers and sellers from different countries. 329) B Selling agents take over the whole marketing job of producers, not just the selling function. 330) E Selling agents take over the whole marketing job of producers and not just the selling function. A selling agent may handle the entire output of one or more producers. 331) E Selling agents take over the whole marketing job of producers; they may handle the entire output of one or more producers, even competing producers; they may provide working capital but may also take over the affairs of the business. 332) A A selling agent may handle the entire output of one or more producers. The selling agent may provide working capital to the producer. 333) B Selling agents may handle the entire output of one or more producers, even competing producers, with almost complete control of pricing, selling, and advertising. They may provide working capital but may also take over the affairs of the business. 334) D Version 1

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Selling agents may handle the entire output of one or more producers, even competing producers, with almost complete control of pricing, selling, and advertising; they do not own the products. 335) D A combination export manager is a blend of manufacturers' agent and selling agent who handles the entire export function for several producers of similar but noncompeting lines. 336) D Export or import agents are basically manufacturers' agents who specialize in international trade. 337) D A combination export manager is a blend of manufacturers' agent and selling agent; he or she can handle the entire export function for several producers of similar but noncompeting lines. 338) D Auction companies provide a place where buyers and sellers can come together and bid to complete a transaction. 339) D Auction companies provide a place where buyers and sellers can come together and bid to complete a transaction. 340) C Traditionally auction companies are important in certain lines—such as livestock, fur, tobacco, and used cars—where demand and supply conditions change rapidly. 341) D Auction companies provide a place where buyers and sellers can come together and bid to complete a transaction. Version 1

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342) A Rack jobbers display the products on their own wire racks. They can be relied on to decide which paperback books or magazines to sell. The wholesaler knows which titles sell in the local area and applies that knowledge in many stores. 343) D In a franchise operation, the franchisor develops a good marketing strategy for the retail franchise holders to carry out in their own units. Each franchise holder benefits from the larger company's experience, buying power, promotion, and image in exchange for commissions and fees. 344) C Scrambled merchandising refers to carrying any product lines the modern retailers think they can sell profitably. It includes selling anything they can move in volume and offer them higher margins or faster turnover. 345) B The wheel of retailing theory says that new retailers enter the market as low-status, low-margin, low-price operators and then, if successful, evolve into more conventional retailers offering more services with higher operating costs and higher prices. 346) A Specialty shops are conventional limited-line stores to sell special types of shopping products, such as high-quality sporting goods, exclusive clothing, etc. They offer a unique product assortment, knowledgeable salesclerks, and better service. 347) B

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The mass-merchandising concept says that retailers should offer low prices to get faster turnover and greater sales volumes by appealing to larger markets. 348) D Limited-line stores specialize in certain lines of related products rather than a wide assortment; they specialize not only in a single line such as clothing, but also in a limited line within the broader line. Within the clothing line, a retailer might carry only shoes, formal wear, or even neckties. 349) A Agent wholesalers do not own the products they sell. They operate at relatively low cost, sometimes 2 to 6 percent of their selling price or less. They normally specialize by customer type and by product or product line. 350) B Publisher's Helper is a rack jobber. It provides only some wholesaling functions. 351) D Service merchant wholesalers own or take title to the products they sell. They provide all the wholesaling functions.

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CHAPTER 13 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Promotion is communicating information between the seller and the potential buyer or others in the channel to influence attitudes and behavior. ⊚ ⊚

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2) The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. ⊚ ⊚

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3) The marketing manager's promotion job is to tell target customers that the right Product is available at the right Place at the right Price. ⊚ ⊚

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4) A marketing manager can choose from only two promotion methods—personal selling and mass selling. ⊚ ⊚

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Direct spoken communication between sellers and potential customers is personal selling. ⊚ ⊚

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6) Personal selling involves direct spoken communication between sellers and potential customers. ⊚ ⊚

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7) With personal selling, the company's marketing mix can be adapted to the needs of each target market, but personal selling is usually quite expensive. ⊚ ⊚

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8) Face-to-face communication with large numbers of customers at the same time is mass selling. ⊚ ⊚

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Spoken communication with large numbers of customers at the same time is mass selling. ⊚ ⊚

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10) When the target market is large and spread out, mass selling may be less expensive than personal selling. ⊚ ⊚

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11) A major advantage of mass selling is that the source can receive immediate feedback from the receiver. ⊚ ⊚

12)

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Mass selling includes both advertising and publicity. ⊚ ⊚

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13) Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. ⊚ ⊚

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14) Publicity is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. ⊚ ⊚

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15) Publicity is the nonpersonal presentation of ideas, goods, or services, which are paid for by an identified sponsor. ⊚ ⊚

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16) Because publicity is "free," it is usually far less effective than advertising if the firm has a new message. ⊚ ⊚

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17) More money is spent on media costs for publicity each year than is spent on media costs for advertising. ⊚ ⊚

18)

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Publicity allows a firm to avoid media costs. ⊚ ⊚

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19) Sales promotion can be aimed at intermediaries, at final consumers, or even at a firm's own employees. ⊚ ⊚

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20) Sales promotion may be aimed at final consumers, retailers, wholesalers, or a company's own employees. ⊚ ⊚

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21) Sales promotion is special advertising or personal selling that is aimed at intermediaries in the channel. ⊚ ⊚

22)

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Contests and coupons given to consumers are good examples of sales promotion. ⊚ ⊚

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23) In comparison with other promotion methods, sales promotion can neither be implemented quickly nor get results quickly. ⊚ ⊚

24)

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Firms spend less money on advertising than on personal selling or sales promotion. ⊚ ⊚

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25) A sales promotion manager's job is choosing the right media and developing the advertisements.

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26)

It is the job of a sales promotion specialist to come up with an effective promotion blend. ⊚ ⊚

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Deciding on the right promotion blend should be the job of the advertising manager. ⊚ ⊚

28)

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It is the job of the marketing manager to come up with an effective promotion blend. ⊚ ⊚

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29) Because the advertising, sales, and sales promotion managers all have similar outlooks and experiences, they usually work together very well to develop the right promotion blend. ⊚ ⊚

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30) Integrated marketing communications means the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. ⊚ ⊚

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31) A firm that adopts the integrated marketing communications concept tries to coordinate all its promotion communications to a target customer to convey a consistent and complete message. ⊚ ⊚

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32) The basic idea behind integrated marketing communications is that all firms in a channel of distribution have input in developing the advertising campaign for the product. ⊚ ⊚

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33) Developing integrated marketing communications is more difficult when different firms in the channel handle different aspects of the promotion effort. ⊚ ⊚

34)

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The general objective of promotion is to affect buyer behavior. ⊚ ⊚

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35) The right promotion blend depends on what the firm wants to accomplish, so the objective must be clearly defined. ⊚ ⊚

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36) The three general promotion objectives of informing, persuading, and reminding are all concerned with providing more information. ⊚ ⊚

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37) The informing objective in promotion is simply a matter of educating the consumer about the firm's product. ⊚ ⊚

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38) The four promotion jobs of the AIDA model are to get Attention, to hold Interest, to arouse Desire, and to obtain Action. ⊚ ⊚

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39) The four promotion jobs of the AIDA model are to get Attention, to Inform, to eliminate Doubt, and to change Attitudes. ⊚ ⊚

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40) According to the AIDA model, promotion should try to change Attitudes, shape Intentions, arouse Desire, and cause Activity. ⊚ ⊚

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41) In the traditional communication process, a receiver tries to deliver a message to a source through a message channel. ⊚ ⊚

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42) A major advantage of mass selling is that the source—the seller—can get immediate feedback from the receiver. ⊚ ⊚

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43) "Noise" in the traditional communication process is any distraction that reduces the effectiveness of the communication process. ⊚ ⊚

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44) During the traditional communication process, a source does decoding and a receiver does encoding. ⊚ ⊚

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45) Communication often breaks down because the receiver's decoded message is different than the message the source encoded. ⊚ ⊚

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46) For communication to be effective, there must be a common frame of reference between the source and the receiver. ⊚ ⊚

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47) The message channel may be as important as the message itself in influencing the receiver. ⊚ ⊚

48)

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Most direct marketing communications are designed to prompt immediate feedback. ⊚ ⊚

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49) Achieving a measurable, direct response from specific target customers is the heart of direct marketing. ⊚ ⊚

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50)

Direct mail and email are two tools commonly used for direct-response promotion. ⊚ ⊚

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51) Direct-response promotion using email enables marketers to reach customers through other media. ⊚ ⊚

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52) In addition to mail, direct-response promotion may include websites, broadcast, email, and interactive media. ⊚ ⊚

53)

Direct-response promotion targets specific individuals who respond directly. ⊚ ⊚

54)

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Direct-response promotion targets groups instead of individuals. ⊚ ⊚

55)

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Direct-response promotion usually relies on a CRM database. ⊚ ⊚

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56) Direct-response promotion usually relies on a customer relationship management database to target specific prospects.

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57) In direct-response promotion, CRM databases have been successful in targeting final consumers but have been of little help in targeting business customers. ⊚ ⊚

58)

The traditional view of promotion has focused on communication initiated by the seller. ⊚ ⊚

59)

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The traditional view of promotion has focused on communication initiated by the buyer. ⊚ ⊚

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60) With new types of interactive promotion, the communication process is often initiated by the buyer. ⊚ ⊚

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61) In customer-initiated communication, it is common for the customer to initiate communication with an Internet search process. ⊚ ⊚

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62) In customer-initiated interactive communication, the most common message channel to use for search is the Internet and a search engine like Google. ⊚ ⊚

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63) Customer-initiated interactive communication makes it easy for a consumer to get as much information as desired. ⊚ ⊚

64)

In customer-initiated communication, the customer decides how much information to get. ⊚ ⊚

65)

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In customer-initiated communication, the source decides how much information to send. ⊚ ⊚

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66) In customer-initiated interactive communication, marketers must stand up and grab attention in order to be selected by the customer. ⊚ ⊚

67)

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In customer-initiated interactive communication, noise is no longer a factor. ⊚ ⊚

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68) In the customer-initiated communication process, marketing managers should simply ignore online information they do not create. ⊚ ⊚

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69) Communication that customers receive during the customer-initiated communication process is not helpful when the customer is actively gathering purchase information. ⊚ ⊚

70)

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The most common criticisms of promotion relate to exaggerated claims. ⊚ ⊚

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71) A complete promotion blend may need to consider channel members (along the channel) as well as customers (at the end of the channel). ⊚ ⊚

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72) Pushing (a product through a channel) means using normal promotion efforst to help sell the whole marketing mix to intermediaries. ⊚ ⊚

true false

73) Pushing a product through a channel relies on very aggressive promotion to final consumers to try to get them to ask intermediaries for the product. ⊚ ⊚

true false

74) The pushing approach recognizes the value of cooperation among firms in a distribution channel. ⊚ ⊚

75)

true false

A pushing effort might include sales promotion as well as personal selling.

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⊚ ⊚

true false

76) One reason personal selling is important in promotion to intermediaries is that marketing mixes often have to be adjusted from one geographic territory to another and from one intermediary to another. ⊚ ⊚

true false

77) In the pushing effort, an intermediary is likely to pay more attention to the producer that offers it the best profit potential. ⊚ ⊚

true false

78) The idea behind a pulling policy is that customer demand helps to pull the product through the channel. ⊚ ⊚

true false

79) The pulling approach emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. ⊚ ⊚

true false

80) Pulling a product through a channel of distribution focuses promotion efforts on wholesalers and retailers to get them interested in a producer's marketing mix. ⊚ ⊚

true false

81) Producers with well-branded consumer products and well-established channels typically emphasize personal selling—rather than advertising—in their promotion blends. Version 1

⊚ ⊚

82)

true false

Promotion to business customers emphasizes personal selling. ⊚ ⊚

true false

83) Personal selling dominates the promotion mix in business markets. This is practical, since there are fewer of these customers and their purchases are typically larger. ⊚ ⊚

true false

84) It is usually too expensive for personal selling to do the whole promotion job for business products, so mass selling is useful too. ⊚ ⊚

true false

85) The AIDA model focuses on markets as a whole, while the adoption-curve model focuses on individuals. ⊚ ⊚

true false

86) The adoption curve shows when different groups will accept new ideas, assuming that the promotion effort should stay the same for all groups. ⊚ ⊚

true false

87) The adoption curve shows that it is important to keep the promotion effort the same as time passes so consumers won't be confused.

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⊚ ⊚

true false

88) The adoption-curve concept suggests that some groups within a market tend to be leaders in accepting new ideas. ⊚ ⊚

true false

89) The adoption curve emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. ⊚ ⊚

90)

true false

Consumers who are innovators tend to be young and well educated. ⊚ ⊚

true false

91) An innovator is more likely to rely on information from an impersonal source (such as an article in a scientific magazine) than from a company's salesperson. ⊚ ⊚

true false

92) Early adopters are respected by their peers—and often are opinion leaders—so what they think about a product is especially important for reaching later adopter groups. ⊚ ⊚

true false

93) Personal selling is likely to be an effective method of promotion for reaching the opinion leaders in the early adopter group.

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⊚ ⊚

true false

94) Early adopters tend to rely on impersonal and scientific information sources, or other innovators, rather than on salespeople. ⊚ ⊚

true false

95) The early majority avoid risk by waiting until many early adopters have tried a product to see if they liked it. ⊚ ⊚

96)

true false

Early adopters are uninterested in the technical performance of a new idea or product. ⊚ ⊚

true false

97) The late majority are less likely to follow opinion leaders and may need some pressure from their own group before they try a new product. ⊚ ⊚

true false

98) Average-sized business firms that are less specialized often fit in the category of laggards. ⊚ ⊚

true false

99) The adoption-curve concept suggests that it is essential to stimulate early adoption by the laggards or the product will never get beyond introduction.

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⊚ ⊚

true false

100) During the market introduction stage of the product life cycle, the basic promotion objective is informing. ⊚ ⊚

101)

true false

Primary demand is demand for a company's own brand. ⊚ ⊚

true false

102) In the market growth stage, more competitors enter the market, and promotion emphasis shifts from selective demand to primary demand. ⊚ ⊚

true false

103) In the market growth stage, sales promotion is targeted at salespeople or channel members to get them interested in selling the new product. ⊚ ⊚

true false

104) Mass selling and sales promotion dominate the promotion blends of consumer products firms in the market maturity stage. ⊚ ⊚

true false

105) During the market maturity stage of the product life cycle, the basic promotion objective is persuading.

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⊚ ⊚

true false

106) The total cost of mass media may force a small firm to use promotion alternatives that are more expensive on a per contact basis. ⊚ ⊚

true false

107) Computing a percentage of either past sales or sales expected in the future is the most common method of budgeting for promotion expenditures. ⊚ ⊚

true false

108) The task method of budgeting bases the budget on the job to be done now, not on what was spent in the past. ⊚ ⊚

109)

true false

The task method of budgeting focuses on the amount being spent by competitors. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 110) Which of the following are the basic types of promotion? A) personal selling, mass selling, sales promotion, and publicity B) only mass selling and sales promotion C) only sales promotion and personal selling D) only mass selling and personal selling E) only personal selling and publicity

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111) GEICO's aggressive advertising campaign of the late 1990s was designed to accomplish which of the following objectives? A) Target the low-risk market of federal employees. B) Win customers away from established competitors. C) Target the high-risk market of military personnel. D) Enable the company to avoid filing bankruptcy. E) Continue widespread recognition of the brand.

112)

Which of the following is a promotion method? A) mass selling B) personal selling C) sales promotion D) publicity E) All of the answers are correct.

113)

Promotion does not include A) personal selling. B) sales promotion. C) advertising. D) introductory price dealing. E) publicity.

114)

Communicating with customers is known as the ________ portion of the marketing mix.

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A) Place B) Positioning C) Promotion D) Pricing E) Production

115)

Promotion is mainly concerned with

A) obtaining a favorable corporate image. B) telling the target market that the right Product is available in the right Place at the right Price. C) obtaining maximum publicity—at the lowest cost. D) informing the public about the firm's offerings to maximize sales. E) getting people to buy a firm's product—even when it isn't needed.

116)

Promotion is concerned with

A) how suitable messages are communicated to target customers. B) communicating information between seller and buyer or others in the channel to influence attitudes and behavior. C) informing customers that the right Product is available at the right Place at the right Price. D) blending personal selling, mass selling, sales promotion, and publicity. E) All of these are parts of Promotion.

117) ________ is communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior.

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A) Price B) Product C) Promotion D) Place E) Process

118)

Personal selling A) is indirect written communication between buyers and sellers. B) is indirect spoken communication between buyers and sellers. C) is not usually combined with other aspects of promotion in the total marketing mix. D) gets immediate feedback from consumers. E) is one of the least expensive components of a communications program.

119)

Regarding promotion methods, which of the following statements is true?

A) Personal selling can provide immediate feedback. B) Publicity is any paid form of nonpersonal presentation of ideas, goods, or services. C) Advertising is usually more tailored to the individual needs and attitudes of target customers than personal selling. D) Sales promotion activities produce results very slowly compared to advertising. E) Advertising is the most expensive form of promotion method.

120)

Which of the following best describes the nature of personal selling? A) It involves direct spoken communication between sellers and potential customers. B) It costs less than advertising for reaching a large, widespread market. C) It tries to communicate with many customers at the same time. D) It refers to "promoting" at trade shows, demonstrations, and contests. E) It is less flexible than mass selling.

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121)

Personal selling A) involves direct spoken communication between sellers and potential customers. B) is communicating with large numbers of potential customers at the same time. C) is less flexible than mass selling. D) is included in most marketing mixes, as it is inexpensive. E) involves advertising and publicity.

122)

Compared with other promotion methods, personal selling A) is less expensive when the target customers are numerous and widespread. B) is less effective in overcoming sales resistance. C) is less flexible in adapting to customers' needs and attitudes. D) provides more immediate feedback. E) All of the answers are correct.

123) A telemarketer calls a college student on the phone and offers a one-year subscription to Business Week at a 50 percent discount. This is an example of A) personal selling. B) mass selling. C) publicity. D) sales promotion. E) advertising.

124)

Which of the following is not true when comparing mass selling to personal selling? A) Mass selling is less expensive when the target customers are numerous and scattered. B) Mass selling doesn't provide immediate feedback. C) Mass selling is less flexible in adapting to customers' needs and attitudes. D) Publicity is not a form of mass selling. E) Personal selling includes customer service.

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125)

Advertising

A) is the only form of mass selling. B) is also called sales promotion. C) is concerned with promotion using samples, coupons, and contests. D) involves direct spoken communication between sellers and potential customers. E) is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.

126)

Advertising

A) is less expensive than personal selling for reaching large and widespread target markets. B) is any paid form of nonpersonal presentation of ideas, goods, or services by an identified seller. C) is not the same as publicity. D) is less flexible than personal selling. E) All of the answers are correct.

127)

How does advertising differ from any other form of promotion? A) It tries to attract attention to the firm and its offerings without having to pay media

costs. B) It is any unpaid form of nonpersonal presentation of ideas, goods, or services. C) It must be paid for, while another form of mass selling—publicity—is unpaid. D) It is the main form of personal selling which includes the use of traditional media as well as new media. E) It involves direct spoken communication between sellers and potential customers.

128)

Which of the following statements about advertising spending is false?

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A) Advertising in newspapers or on TV is a form of mass selling. B) Personal selling can be expensive, so it is often combined with mass selling and sales promotion. C) Placing a video on a company website or YouTube is a form of publicity. D) On average, more money is spent on advertising that on personal selling or sales promotion. E) Sales promotion can be aimed at final consumers, a company's own sales force, or wholesalers or retailers.

129)

Which of the following is not true with respect to publicity? A) Publicity attempt to attract attention to the firm without having to pay media costs. B) Publicity includes a company's website and the material it posts on the website. C) Publicity includes word-of-mouth communication. D) Publicity for B2B includes trade shows. E) Publicity includes coverage in the press.

130)

Which of the following accurately characterizes publicity?

A) It is generally less useful than advertising for promoting a truly new product. B) It is mass selling that avoids paying media costs. C) It is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. D) It is more expensive than all other promotion methods. E) It is more flexible than personal selling.

131)

Which of the following statements about publicity is true?

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A) It is any paid form of nonpersonal presentation of ideas, goods, or services by a sponsor. B) It is the main form of mass selling, which includes only the use of traditional media. C) If a firm has a really new message, publicity may be less useful than advertising. D) It includes posts on a company's website, viral videos, word-of-mouth communication, a company's Facebook page, and its "tweets" on Twitter. E) It tries to attract attention to the firm and its offerings by paying substantial media costs.

132) To encourage potential buyers to take its new Model 3 sedan for a test drive, BMW posts a video on its website of the Model 3 speeding down a winding mountain road. This is an example of A) single-customer marketing. B) advertising. C) publicity. D) personal selling. E) sales promotion.

133) To encourage potential buyers to purchase a ticket to its upcoming concert, a rock band posts a YouTube video of an earlier performance on Facebook and on the website of its next performance. This is an example of A) single-customer marketing. B) advertising. C) publicity. D) personal selling. E) sales promotion.

134) An automobile company posts a video of its new solar-powered car on its page in a popular social networking site. This is an example of a firm

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A) using paid media to create a brand image. B) using social media for publicity. C) applying personal selling to get immediate response. D) conducting a social audit. E) showing its support for corporate social responsibility through sales promotion.

135) To encourage potential customers to buy a recently-released book, Amazon provides online reviews written by others who have already read the new book. This is an example of A) single-customer marketing. B) advertising. C) publicity. D) personal selling. E) sales promotion.

136) A car company sent three automobile magazines some technical information and explanations about the features of its innovative new model. One of the magazines later printed a story about the car. This is an example of A) personal selling. B) advertising. C) publicity. D) sales promotion. E) None of the answers are correct.

137) A computer software company sent three computer magazines some information about the latest release of its popular software program. One of the magazines printed a story about the new version. This is an example of

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A) personal selling. B) advertising. C) publicity. D) sales promotion. E) None of the answers are correct.

138) A motion picture studio that secures interviews in several national papers regarding plans for its upcoming film releases is using which of the following promotion methods? A) sales promotion B) personal selling C) advertising D) mass selling E) publicity

139)

Which of the following statements about sales promotion is true?

A) It can complement a firm's personal selling and mass selling efforts. B) It involves direct spoken communication between sellers and potential customers. C) It is any paid form of nonpersonal presentation of goods or services by an identified sponsor. D) It is "free," like publicity. E) It consists of personal selling and mass selling.

140)

Sales promotion can be aimed at A) intermediaries. B) a company's own sales force. C) final consumers or users. D) All of the answers are correct.

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141)

Which of the following is not an example of sales promotion? A) establishing frequent buyer programs B) running contests for the company's salespeople C) securing favorable media coverage D) providing samples to customers E) providing coupons for products

142)

Coupons, trade shows, calendars, sweepstakes, and sales contests are all examples of A) publicity. B) advertising. C) mass selling. D) sales promotion. E) personal selling.

143) Relative to other promotion methods, ________ can usually be implemented quickly and get results sooner. A) mass selling B) advertising C) publicity D) personal selling E) sales promotion

144)

________ is a promotion activity that tries to spark immediate interest in the consumer. A) Personal selling B) Advertising C) Publicity D) Sales promotion E) Press release

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145)

Which of the following would not be an example of sales promotion?

A) a flyer placed on a homeowner's door, announcing a new lawn service B) a coupon offering a "buy one, get one free" deal at a pizza restaurant C) a free sample of a new breakfast cereal mailed to consumers D) a special display of snack chips placed in a grocery store's main aisle E) a contest in which a fast-food chain distributes "scratch-off" game pieces to promote a new movie

146)

Which of the following is not an example of sales promotion? A) a small toy in a "kid's pack" at a Wendy's fast-food restaurant B) a half-page ad in the telephone Yellow Pages for a security service C) an auto bumper sticker that says "Buy American" D) samples of a new brand of cheese given away at a supermarket E) a display of fishing equipment by a sporting goods store in a shopping mall

147)

Which of the following is not an example of sales promotion? A) a banner ad on The Wall Street Journal's stock page B) a bumper sticker that says, "Drink more milk" C) samples of a new low-fat snack cracker given away at a supermarket D) a display of fishing equipment by a sporting goods store in a shopping mall E) a small toy in a kid's "Happy Meal" at McDonald's

148)

Which of the following is an example of sales promotion?

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A) a contest to motivate a company's own sales force B) point-of-purchase displays at the checkout counters of a retail store C) price-off coupons distributed to consumers' homes D) a trade show for wholesalers E) All of the answers are correct.

149) Which of the following sales promotion activities is aimed primarily at final users of a product? A) sales contests B) meetings C) coupons D) merchandising aids E) training materials

150)

Which of the following statements about promotional expenses is true?

A) Promotion money is spent primarily on advertising. B) The many ads that people see on the web, in magazines and newspapers, and on TV are impressive and inexpensive. C) All the special sales promotions add up to less money than advertisements. D) Firms spend more money on advertising than on sales promotion. E) Firms spend less money on advertising than on personal selling.

151)

Which of the following observations concerning promotional methods is false?

A) Each promotion method has its own strengths and weaknesses. B) Promotion methods should complement each other when used in combination. C) Each promotion method involves its own distinct activities. D) All promotion methods require a similar type of expertise. E) It is the responsibility of the marketing manager to determine the right blend of promotion methods.

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152) A small pet supply company assigns its sales manager to make the strategic decision regarding what blend of promotion methods the company should use for the coming year. Is the sales manager an appropriate choice for the role in this company? A) Yes, because the sales manager is likely to have a great deal of experience in public relations. B) Yes, because the sales manager most likely functions as the company's marketing manager. C) No, because the sales manager is focused on managing the company's mass-selling effort. D) No, because the sales manager will likely hire an outside agency to develop company ads. E) No, because the sales manager is likely to be less experienced than other managers at this job.

153) Charissa works at a computer software company where it is her responsibility to determine the blend of promotion methods in a strategy decision. Which of the following is most likely her job title? A) marketing manager B) sales promotion manager C) advertising manager D) public relations manager E) sales manager

154) Typically, the ________ is responsible for building good distribution channels and implementing "Place" policies. A) public relations manager B) sales manager C) advertising manager D) human resources manager E) recruitment manager

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155) Which of the following manages a firm’s mass-selling effort in television, newspapers, magazines, online, and on social media sites? A) public relations manager B) sales manager C) advertising manager D) brand manager E) sales promotion manager

156) Liam works for Sports Goop, a company that makes high-performance gels that runners use for energy during long-distance races. Under Liam’s management, Sports Goop spends a substantial amount of money by having a table and handing out samples at most major longdistance races across the country. Which of the following most likely describes Liam’s position at Sports Goop? A) sales promotion manager B) public relations manager C) advertising manager D) marketing communications manager E) sales manager

157) Communication with noncustomers, including labor, public interest groups, stockholders, and the government is generally referred to as A) public relations. B) sales promotion. C) advertising. D) branding. E) publicity.

158) Determining the blend of promotion methods is a strategy decision that is the responsibility of the

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A) brand ambassador. B) finance manager. C) personnel manager. D) marketing manager. E) recruitment manager.

159)

Deciding on the appropriate promotion blend is a job for the firm's A) advertising agency. B) marketing manager. C) advertising manager. D) sales manager. E) sales promotion manager.

160) Blending the firm's promotion efforts to convey a complete and consistent message is the goal of A) sales management communications. B) sales promotion communications. C) integrated promotional marketing. D) integrated marketing communications. E) integrated sales promotion.

161) Which of the following involves intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message? A) integrated marketing communications B) online marketing C) branding D) digital marketing E) product positioning

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162) text?

Which of the following is not one of the basic promotion objectives discussed in the

A) to inform B) to remind C) to manipulate D) to persuade

163) A cleaning service that provides a description of its services via its website is most likely accomplishing which of the following promotion objectives? A) persuading B) informing C) prioritizing D) strategizing E) reminding

164) Which of the following promotional objectives is most likely being accomplished when a window company compares its windows to those of a competitor to show homebuilders why its products are superior? A) planning B) rebutting C) persuading D) reminding E) informing

165) Which of the following promotional objectives is most likely being accomplished when a real estate agent sends her customers a yearly calendar containing the agent's business logo?

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A) planning B) informing C) reminding D) persuading E) rebutting

166) A retailer's promotion objective might be to ________ its target market about its marketing mix. A) inform B) persuade C) remind D) Any of these might be a promotion objective.

167) What basic promotion objective should be emphasized by a producer introducing a really new product which satisfies customer needs better than any existing product? A) persuading B) reminding C) maximizing D) informing E) communicating

168) What basic promotion objective should be sought by a producer whose product is very similar to its many competitors' products? A) persuading B) promoting C) communicating D) informing E) reminding

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169) What basic promotion objective can be sought by a producer who has won brand insistence among its target customers? A) persuading B) reminding C) informing D) communicating E) promoting

170) If customers already have a positive attitude about a product, which promotional objective would you recommend? A) inform B) remind C) persuade D) educate E) change position

171) Clearwater Office Supply sells frequently purchased office supplies to businesses in a metropolitan area. It is a well-established company with a large share of the market. Its promotion should probably focus on A) reminding. B) stimulating primary demand. C) informing. D) innovators. E) making the demand curve less elastic.

172) Hershey's places a simple ad for its "Kisses" chocolates in Sports Illustrated. The ad shows only a photo of the product with no copy words. This is an example of a(n) ________ promotion objective.

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A) persuading B) reminding C) informing D) pioneering E) promoting

173) Southwest Airlines' "Ding" widget pops up on your computer desktop to let you know of lower fares to cities you want to visit. This is an example of a(n) ________ promotion objective. A) persuading B) reminding C) informing D) pioneering

174) The basic promotion objectives and adoption process fit very neatly with an actionoriented model, which is called the A) bricks and clicks model. B) bait and hook model. C) AIDA model. D) DAGMAR model. E) economic buyer model.

175)

The AIDA model A) focuses on what happens after the adoption process is complete. B) shows that the promotion effort is done once desire is aroused. C) consists of four basic promotion jobs. D) suggests that mass media can get consumers' attention only if that is what consumers

desire. E) All of the answers are correct.

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176)

The AIDA model includes all of the following promotion jobs except A) increasing demand. B) obtaining action. C) arousing desire. D) getting attention. E) holding interest.

177)

The AIDA model consists of A) Awareness, Influence, Decoding, and Advertising. B) Attention, Interest, Desire, and Action. C) Appraisal, Insight, Discernment, and Action. D) Advertise, Influence, Desire, and Attention. E) Awareness, Information, Design, and Attention.

178)

The AIDA model's four basic promotion jobs are concerned with A) attention, interest, desire, and action. B) action, interest, desire, and acceptance. C) awareness, interest, demand, and action. D) attention, internalization, decision, and action. E) awareness, interest, decision, and acceptance.

179)

The AIDA model consists of which four promotion jobs? A) getting Attention, building Intrigue, arousing Desire, and obtaining Action B) becoming Aware, holding Interest, arousing Desire, and providing Assistance C) getting Attention, holding Interest, creating Demand, and obtaining Action D) getting Attention, holding Interest, arousing Desire, and obtaining Action E) becoming Aware, holding Interest, arousing Desire, and obtaining Action

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180) The basic promotion objective of informing consumers corresponds to which stage(s) of the AIDA model? A) getting Attention B) holding Interest C) getting Attention and holding Interest D) getting Attention and arousing Desire E) obtaining Action

181)

The traditional communication process does not include A) response. B) receiver. C) encoding. D) feedback. E) source.

182) The slogan from the GEICO ads, "15 minutes could save you 15 percent or more on your car insurance," is an example of which of the following elements of the communication process? A) message B) source C) receiver D) encoder E) feedback

183) Which of the following is most likely to be the encoding of a message in the communication process?

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A) An industrial chemical manufacturer advertises its products in industry magazines. B) An industrial chemical manufacturer determines what information to include in its ads. C) A construction company executive reads about a chemical product in a trade magazine. D) A construction company executive asks his purchase department to order a new product. E) Certain industry magazines are chosen by a chemical manufacturer for placement of its ads.

184) BMW places a TV ad for its new 7-series sedan in the highly-rated Academy Awards program. In the traditional communication model, BMW is the A) source. B) encoder. C) decoder. D) receiver. E) message channel.

185) In the traditional communication model, the source can receive immediate feedback as the result of A) sales promotion. B) mass selling. C) advertising. D) personal selling. E) publicity.

186) A potential customer watches a TV ad for the new BMW 7-series sedan during the highly-rated Academy Awards program. In the traditional communication model, the potential customer is the

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A) source. B) message channel. C) receiver. D) encoder.

187)

Any distraction that reduces the effectiveness of the communication process is called A) resonance. B) static. C) clutter. D) interference. E) noise.

188)

Noise, in the traditional communication process, refers to A) any distractions that reduce the effectiveness of the communication process. B) radio advertising interference only. C) messages which are too loud or bold. D) efforts by a firm's competitors to block its message channel. E) the encoded message before it is decoded.

189)

Which of the following best illustrates communication noise?

A) A TV ad is recorded at a higher volume than is used for most TV shows. B) A motorist doesn't hear a radio ad because she is being stopped by a police officer for speeding. C) A political candidate rides through town in a car with a loudspeaker asking pedestrians to vote for her. D) Magazine sales reps telephone consumers to offer low-price subscriptions. E) A Pepsi ad that has rap music in the background.

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190)

Which of the following best illustrates communication noise?

A) Magazine sales reps telephone consumers to offer low-price subscriptions. B) A TV ad is recorded at a higher volume than is used for most TV shows. C) A political candidate rides through town in a car with a loudspeaker asking pedestrians to vote for her. D) None of these alternatives clearly illustrates "noise."

191) A group of male college students are watching a professional football game in a sports bar and socializing with each other during the commercials. In the traditional communication model, the socializing during the commercials is the A) source. B) receiver. C) noise. D) decoding. E) encoding.

192) A live-at-home college student is watching a "Mad Men" TV program but walks to the refrigerator to get a soft drink during a commercial. In the traditional communication model, the walk to the refrigerator is the A) source. B) receiver. C) noise. D) decoding. E) encoding.

193) A Hewlett-Packard sales rep is making a presentation about a new printer product to a group of purchasing agents when one of the agents withdraws to read a text message. In the traditional communication model, the text reading is the

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A) source. B) receiver. C) noise. D) decoding. E) encoding.

194) While watching a television program, Liza gets a phone call just as a commercial is starting. She presses the "mute" button on the television's remote control and takes the call, so she pays no attention to the commercial. In terms of the communication process, the telephone call is an example of A) encoding. B) noise. C) decoding. D) feedback. E) the message channel.

195) The source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver is referred to as A) transmutation. B) exposition. C) decoding. D) encoding. E) recoding.

196) An advertising manager is trying to decide what words to use in a magazine ad for the new Ford Focus. In the traditional communication model, the ad manager is the

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A) source. B) receiver. C) noise. D) encoder. E) decoder.

197)

Decoding is A) the process of the receiver translating the message. B) the process of the source deciding what it wants to say. C) the process of the source translating the message into words. D) any distraction that reduces the effectiveness of the communication process. E) the process of transferring information from the subordinate to the superior.

198) A busy mom is watching TV when a commercial for a new type of kitchen cleaning product by Procter & Gamble is presented. She considers whether the new product will clean better than her existing cleaning products. In the traditional communication model, the mom is the A) decoder. B) source. C) noise. D) encoder. E) message channel.

199)

Which of the following represents the traditional communication process?

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A) Source– Encoding – Message channel – Decoding – Receiver – Feedback B) Source– Encoding – Message channel – Receiver – Feedback C) Source – Encoding – Message channel – Noise – Receiver – Feedback D) Source – Message channel – Decoding – Receiver – Feedback E) Source – Noise – Message channel – Receiver – Feedback

200)

Which of the following statements about the communication process is true? A) The source is the sender of the message. B) The receiver is the potential customer. C) Encoding is done by the source. D) The receiver does decoding. E) All of the answers are correct.

201)

Poor communication is likely if A) there is no noise in the message channel. B) the source and the receiver do not have a common frame of reference. C) the encoder and the decoder are not the same person. D) immediate feedback is not possible. E) the source and the receiver don't have personal contact.

202)

The communication process shows that

A) sources and receivers need a common frame of reference to communicate effectively. B) the receiver is usually not influenced by the nature of the message channel. C) sources decode messages and receivers encode them. D) all media appear to be equally effective as message channels. E) source sends feedback to the receiver.

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203)

Good marketing managers know that A) a major advantage of personal selling is that noise can be eliminated. B) noise in the communication process improves promotion effectiveness. C) the trustworthiness of the source does not affect how receivers evaluate a message. D) different audiences may interpret a message differently. E) All of these alternatives are true.

204) A potential customer watches a TV ad for the new BMW 7-series sedan during the highly-rated Academy Awards program. In the traditional communication model, the TV is the A) source. B) message channel. C) receiver. D) encoder. E) decoder.

205) Producers that advertise in Good Housekeeping magazine sometimes show that they have the Good Housekeeping "seal of approval." This illustrates their recognition of the importance of the ________ in the communication process. A) feedback B) noise C) decoding D) encoding E) message channel

206) Direct-response promotion usually relies on a(n) ________ database to target specific prospects with specific interests.

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A) customer relationship management B) sales force management C) entity-attribute-value model D) enterprise relationship management E) multidimensional preference

207) Direct marketing communication designed to prompt immediate feedback by customers is also called A) direct mail advertising. B) direct-response promotion. C) interactive communication. D) online marketing. E) downward communication.

208) In the 30-minute TV infomercial for a new type of home gym equipment, a toll-free 800 number is prominently displayed across the bottom of the screen. This is an example of ________ promotion. A) latent-response B) delayed-response C) indirect-response D) laggard-response E) direct-response

209) When Chase Bank mails a 30-day offer for a new pre-approved credit card with a $2,000 limit to a college student, this is an example of

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A) direct-response promotion. B) integration. C) publicity. D) indirect-response promotion. E) mass selling.

210) Southwest Airlines sends an email to frequent-flier customers offering a special low price between selected cities if the plane ticket is purchased within the next four days. This is an example of A) direct marketing. B) integration. C) publicity. D) indirect-response promotion. E) mass selling.

211) Greenpeace sends a mail request for a financial contribution to someone who has donated to its causes in the past. This is an example of A) direct marketing. B) integration. C) publicity. D) indirect-response promotion. E) mass selling.

212) Hewlett-Packard sends an email to key business customers announcing a special low price on a new type of printer that is faster and produces better-quality color documents than any of its current printers. This is an example of

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A) direct-response promotion. B) integration. C) publicity. D) indirect-response promotion. E) mass selling.

213) A pharmaceutical company plans to introduce a new brand of pain reliever targeted at senior citizens. The company purchases a mailing list containing the names and addresses of elderly people who are known to take pain relievers on a regular basis to deal with chronic ailments such as arthritis. The company then sends informational brochures about the new product to the people on the list, along with a coupon they can return to get a free sample. The names of the people who respond are entered into a special database, and these people are then sent information about other products. This company is engaged in A) publicity response. B) personal selling. C) direct-response promotion. D) decoding response. E) noise interference.

214) Which of the following is not an accurate statement about the use of email for directresponse promotion? A) Most target customers use email. B) Email offers a relatively low cost compared to other types of promotion. C) Personalized messages are not needed or helpful. D) Email messages can link to videos. E) Creative email messages can grab customer attention.

215) A customer who searches the Yellow Pages for information regarding a business is taking on which of the following dual roles in the communication process?

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A) feedback and encoder B) receiver and message channel C) receiver and initiator D) source and initiator E) encoder and decoder

216) When an individual searches online for information regarding a business, the Internet performs which of the following roles in the communication process? A) noise B) message channel C) feedback D) encoder E) receiver

217) When an individual initiates the communication process by searching for information about a business, which of the following search tools is he or she most likely to use? A) newspaper advertisement B) television advertisement C) business newsletter D) Internet E) billboard advertisement

218) Each of the following statements regarding online promotional communications is true, except that

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A) marketing managers need not focus on online information they don't create. B) online complaints can serve the purpose of highlighting unmet customer needs. C) marketing managers need to know where customers are likely to search for information and monitor what is being said there. D) customers often make purchases based on information that was not influenced by the product's marketing manager. E) customers who search online often find messages outside the marketer's control.

219)

Which of the following statements about communication processes is (are) true?

A) Targeting is important in both traditional and customer-initiated interactive communication. B) The seller starts the communication in the traditional communication process. C) Noise can distract the process in traditional and customer-initiated interactive communication. D) The buyer starts the communication in the customer-initiated interactive communication process. E) All these statements are true.

220)

In the customer-initiated interactive communication process, A) the message channel is no longer a factor. B) noise is no longer a factor. C) messages typically must be very short and simple. D) the buyer starts the process. E) None of the answers are correct.

221) Which of the following statements is true about the customer-initiated communication process?

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A) The marketer targets more of its promotion effort at specific individuals who respond directly. B) A firm relies on a CRM database to target specific prospects. C) A customer initiates the communication process with a decision to search for information in a particular message channel. D) A seller initiates the communication process with a decision to search for information in a particular message channel. E) There is a transfer of information from higher-level management to production workers.

222) When a purchasing agent from Ford Motor Co. is trying to find information about a new type of component that might be used in the production of a new Ford SUV, the most common message channel for the purchasing agent to use to search is A) television. B) newspapers. C) radio. D) the Internet. E) trade magazines.

223)

The most common criticisms of promotion relate to A) celebrity endorsements. B) publicity videos. C) online reviews. D) exaggerated claims. E) promotional contests.

224)

When developing a good promotion blend, a marketing manager should

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A) be more concerned with persuading the target customers than informing or reminding. B) determine who the firm is trying to influence. C) realize that the right blend depends more on what customers expect than on what the firm wants to accomplish. D) realize that promotion to final consumers is usually based on "pulling." E) None of the answers are correct.

225) Which of the following involves using normal promotion effort to help sell the whole marketing mix to possible channel members? A) pushing B) pulling C) encoding D) decoding E) controlling

226) Which promotional approach emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user? A) pulling B) pushing C) encoding D) decoding E) franchising

227) A producer using normal promotion effort—personal selling, sales promotion, and advertising—to help sell a whole marketing mix to possible channel members has a(n)

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A) selective distribution policy. B) target marketing policy. C) intensive distribution policy. D) pushing policy. E) pulling policy.

228) Nantucket Hammocks, Inc. uses dealer incentives, discounts, and sales contests in order to encourage retailers to give special attention to selling its products. Nantucket Hammocks is using A) exclusive distribution. B) a corporate channel system. C) dual distribution. D) an administered channel system. E) pushing.

229) American Tourister, Inc., a producer of luggage, is planning to introduce a new product line. The marketing manager is having her sales force call on retailers to explain American Tourister's consumer advertising plans, the unique features of the new luggage, how the distributors can best promote it, and what sales volume and profit margins they can reasonably expect. This is an example of A) a pulling policy. B) intensive distribution. C) selective distribution. D) a pushing policy. E) exclusive distribution.

230) The Canyonlands Corporation is introducing a new product next month. To prepare for the introduction, the marketing manager is having his sales force call on distributors to explain the unique features of the new product, how the distributors can best promote it, and what sales volume and profit margins they can reasonably expect. In addition, Canyonlands is budgeting 2 percent of its estimated sales for magazine advertising. This is an example of

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A) selective distribution. B) a pulling policy. C) exclusive distribution. D) a pushing policy. E) intensive distribution.

231) A producer of household batteries for flashlights, radios, and other small electronic devices wants to increase its sales relative to its competitors. The company enters into an arrangement with a supplier of bicycles to develop an incentive for retail buyers to order more batteries. Salespeople for the battery company tell each buyer that for every 20 cases of batteries ordered, the buyer will get a new bicycle. The buyer can keep the bicycle or use it as part of an in-store contest promotion. The battery company's promotion effort aimed at retail buyers is A) pushing in the channel. B) pulling by customers. C) integrated marketing communications. D) buyer-initiated communication. E) None of these is a good answer.

232) A salesperson for Procter & Gamble calls on key wholesalers to explain why they should stock and sell a new type of Procter & Gamble shampoo to retailers. This is an example of A) pulling. B) AIDA. C) encoding. D) pushing. E) decoding.

233)

Which of the following statements about promotion to intermediaries is false?

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A) When suppliers offer similar products and compete for attention and shelf space, intermediaries usually pay attention to the one with the best profit potential. B) Sales managers handle most of the important communication with intermediaries who do not want empty promises. C) Sales promotions targeted at intermediaries usually focus on short-term arrangements that will improve the intermediary's profits. D) Trade ads usually encourage intermediaries to contact the supplier for more information, and then a salesperson takes over. E) During sales promotion, intermediaries want to know what they can expect in return for their cooperation.

234) Which of the following is true about the relation between promotion blends and the promotion target? A) Pushing in the channel means using normal promotion to intermediaries. B) Service-oriented companies often try to design ads targeted at customers that also communicate to their own employees. C) Promotion to intermediaries emphasizes personal selling. D) Pushing within the firm involves promotion to employees, especially salespeople. E) All of the answers are correct.

235) When firms promote products to their own employees as part of an internal marketing effort, they are using a ________ approach. A) digital marketing B) pulling C) personal selling D) telemarketing E) pushing

236)

Which of the following statements defines a sales meeting?

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A) It is a type of external marketing effort. B) It is basically a variation on the pulling approach. C) It is a type of internal marketing effort, which is a variation on the pushing approach. D) It is a method of promotion implemented where the employees' effort is an expendable part of the product. E) It is a type of internal marketing effort that is a combination of both the pushing approach and the pulling approach.

237) A producer using very aggressive promotion to get final consumers to ask intermediaries for a new product has a(n) ________ policy. A) pulling B) target marketing C) selective distribution D) pushing E) intensive distribution

238)

________ means getting customers to ask intermediaries for the product. A) Pulling B) Pushing C) Branding D) Underwriting E) Forecasting

239)

A producer might use a pulling policy rather than a pushing policy if

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A) intermediaries are reluctant to handle a new product. B) it is offering a very high-tech product to a small product-market. C) its sales force has been very successful getting wholesalers and retailers to handle its product. D) it has a very limited promotion budget. E) All of the answers are correct.

240)

Pulling is promotion targeted at A) end customers. B) company employees. C) wholesalers. D) all intermediaries. E) competitor’s intermediaries.

241) Which of the following strategies is most likely to be used in a push promotion to intermediaries in a sales channel? A) A retailer of flat-screen TVs runs ads in local newspapers. B) Consumers in a geographic area learn about a new flat-screen TV through television ads. C) Consumers in a geographic area contact a TV retailer to ask about a specific model of TV. D) A TV retailer provides free maintenance plans with every flat-screen TV a customer buys. E) A TV wholesaler includes a free flat-screen TV with every ten TVs that a retailer buys.

242) Clairol Corp. is introducing a new brand of shampoo in a highly competitive market. Wholesalers might be willing to handle the new product, except that retailers are already complaining about overcrowded shelf space. Therefore, Clairol has decided to spend $10 million on TV advertising and send free samples to 3,000,000 households to convince consumers of the new product's superiority and to get them to ask for it at their retail stores. Clairol is using

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A) dual distribution. B) a pulling policy. C) direct marketing. D) a pushing policy. E) a sampling distribution.

243) A producer of disposable diapers is planning to introduce a new brand of diapers that is specially designed for large babies who are hard to fit with regular diapers. The company mails coupons for the new brand to all the consumers in its database of disposable diaper users. The coupons offer consumers a $2 discount off the regular price of a pack of diapers. The company sends an accompanying letter advising consumers to bring the coupons to their favorite store and use them. If the brand is not in stock, the letter encourages consumers to ask the store manager to stock the new brand. This promotion effort by the company is an example of A) pushing in the channel. B) pulling by customers. C) integrated marketing communications. D) buyer-initiated communication. E) None of the answers are correct.

244) Gillette spent $100 million in its first year of advertising for a new type of razor and blades. All its advertising was directed at final consumers in the hope that these consumers would go to retailers and ask for the product by name. This is an example of A) pulling. B) AIDA. C) encoding. D) pushing. E) decoding.

245)

In promotion to final consumers,

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A) advertising, publicity, and sales promotion are the dominant promotion methods. B) mass selling can be used to bring customers to a store where personal selling may be used. C) effective mass selling may build enough brand familiarity that little personal selling is needed. D) personal selling is effective for consumer electronics and automobiles. E) All of the answers are correct.

246)

Producers and wholesalers that target business customers typically emphasize A) publicity. B) mass selling. C) personal selling. D) advertising. E) sales promotions.

247)

Wholesalers spend the largest share of their promotion money on A) personal selling. B) direct-mail advertising. C) advertising. D) sales promotion. E) publicity.

248) Personal selling is most likely to dominate a producer's promotion blend when the target customers are A) organizational and business buyers. B) young married couples. C) teenagers. D) working wives. E) senior citizens.

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249) Which of the following forms of promotion might a business buyer use to help find a solution for a current need? A) an Internet search B) sellers’ websites C) ads in trade magazines D) trade shows E) All of the answers are correct.

250) A large textile company has determined that it needs a new software system to help manage its product. The company’s purchasing manager has been tasked with identifying different options for the company to review. Where is the purchasing agent most likely to start their search? A) an Internet search B) cold calls to various software companies C) flipping through trade magazine D) attending a trade show E) sending out formal RFPs

251)

The adoption curve shows A) when different groups accept ideas. B) how quickly a firm should drop current products. C) the relationship between promotion spending and sales. D) when a firm should introduce a new product. E) All of the answers are correct.

252)

The adoption-curve concept is most closely related to which of the following?

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A) noise in the communication process B) sales promotion aimed at a company's own sales force C) the product life cycle D) selective demand E) the AIDA model

253)

The adoption curve shows that

A) most new products are introduced too slowly. B) the marketing plan for a new product should schedule most of the promotion spending right when the product is first introduced. C) some groups accept a new idea before others. D) a firm should stick to the same promotion effort as time passes. E) All of the answers are correct.

254)

The adoption curve

A) emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. B) emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. C) is any distraction that reduces the effectiveness of the communication process. D) is the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. E) puts more emphasis on technology and less on relationships.

255) Which of the following shows the correct sequence of market acceptance of a new idea, as represented in the adoption curve?

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A) early adopters, innovators, laggards, early majority, late majority B) early majority, late majority, early adopters, innovators, laggards C) early adopters, early majority, late majority, innovators, laggards D) innovators, early majority, late majority, early adopter, laggards E) innovators, early adopters, early majority, late majority, laggards

256)

Which of the following groups is likely to be the first to adopt a new product? A) early majority B) innovators C) late majority D) early adopters E) laggards

257) A retailer's target customers are young, well educated, and mobile, with many contacts outside their local social group and community. They are eager to try new ideas and are willing to take risks. These target customers are A) innovators. B) laggards. C) early adopters. D) the late majority. E) the early majority.

258)

The innovators are the group of customers who

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A) have fewer contacts outside their own social group or community. B) tend to have the greatest contact with salespeople. C) tend to avoid risk and wait to consider a new idea after many early adopters have tried it—and liked it. D) tend to be older, less well educated, and cling to the status quo, thinking it is the safest way. E) are likely to be mobile and have many contacts outside their local social group and community.

259)

The best way to reach innovators is through A) the mass media. B) salespeople. C) local opinion leaders. D) impersonal and scientific information sources. E) salespeople and the mass media.

260)

Which of the following statements about innovators is false?

A) Innovators tend to rely on impersonal and scientific information sources, or other innovators, rather than salespeople. B) Innovators often search for information on the Internet, read articles in technical publications, or look for informative ads in special-interest magazines. C) Innovators tend to be young and well educated and are eager to try a new idea. D) Innovators need strong social pressure from their own peer group before they adopt a new product. E) Innovators are also constituted by specialized business firms who are willing to take the risk of doing something new.

261)

Which of the following adopter groups is described correctly?

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A) laggards: respectable B) innovators: willing to take risks C) late majority: follow the innovators D) early majority: opinion leaders E) early adopters: traditional

262)

Compared to innovators, early adopters A) adopt a new idea earlier. B) tend to have greater contact with salespeople. C) rely more heavily on scientific or impersonal information sources. D) are more willing to take risks. E) are far less frequently opinion leaders.

263)

Early adopters A) tend to rely on information sources that are not controlled by marketers. B) tend to be opinion leaders. C) are the first adoption-curve group to buy a product. D) are commonly called buzz agents. E) All of the answers are correct.

264)

The best way to reach early adopters is through A) impersonal and scientific information media. B) salespeople and mass media. C) innovators. D) the mass media. E) opinion leaders.

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265) A research report shows that a magazine's readers are well-respected by their peers and high in opinion leadership. They tend to be younger, more mobile, and more creative than later adopters; but they have fewer contacts outside their own social group or community than innovators. A firm might advertise to the readers of this magazine if it is targeting A) laggards. B) innovators. C) the early majority. D) early adopters. E) the late majority.

266) The ________ can help the promotion effort by spreading word-of-mouth information and advice among other consumers. A) innovators B) late majority customer group C) laggards D) early adopters E) nonadopters

267) Which of the following adopter groups is most important to "sell"—given the importance of opinion leaders? A) late majority B) early majority C) laggards D) innovators E) early adopters

268)

Early adopters

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A) can help the promotion effort by spreading word-of-mouth information and advice among other consumers. B) tend to rely on impersonal and scientific information sources, or other innovators, rather than salespeople. C) avoid risk and wait to consider a new idea after laggards have tried it—and liked it. D) make little use of marketing sources of information-mass media and salespeople. E) tend to look to the early majority group for advice.

269)

Which of the following is not true concerning adoption-curve groups?

A) The early adopter group tends to have the greatest contact with salespeople. B) Early adopters are often unusual people who are not seen as opinion leaders. C) Innovators rely more on impersonal sources of information than on salespeople. D) Business firms in the innovator group are usually rather specialized and willing to take risks. E) The early majority group have a lot of contact with mass media, salespeople, and opinion leaders.

270)

The early majority have a lot of contact with A) innovators. B) the mass media only. C) the mass media, salespeople, and early adopter opinion leaders. D) impersonal and scientific information sources. E) salespeople only.

271)

The early majority group

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A) tends to have the greatest contact with salespeople. B) tends to cling to the status quo and think it's the safe way. C) prefers to do things the way they have been done in the past and are very suspicious of new ideas. D) tends to avoid risk and waits to consider a new idea after many early adopters have tried it—and liked it. E) can help the promotion effort by spreading word-of-mouth information and advice among other consumers.

272) A retailer's target market consists of people who usually will not consider a new idea until others have tried it and liked it. These potential customers have a lot of contact with mass media and salespeople but usually are not opinion leaders. These target customers are A) early adopters. B) laggards. C) innovators. D) the early majority. E) the late majority.

273)

Regarding adopter groups, which of the following statements is true? A) Innovators rely on the mass media and salespeople. B) The early majority usually aren't opinion leaders. C) Laggards rely primarily on opinion leaders. D) Early adopters make little use of salespeople. E) The late majority make the most use of salespeople.

274) With regard to a new product, the early majority is most interested in how the new product will

Version 1

A) offer greater convenience. B) change the technology landscape. C) be viewed by the public at large. D) technically perform. E) conform with the status quo.

275)

Identify the characteristic nature of late majority. A) They make a lot of use of mass media. B) They respond more to social pressure from other late adopters than to salespeople. C) They make a lot of use of salespeople. D) They use salespeople and have much contact with the early majority. E) They have a lot of contact with early adopters.

276)

Business firms in the late majority group A) are willing to take the risk of doing something new. B) tend to be older and less well educated. C) are the smallest businesses with the least specialization. D) tend to be highly specialized. E) tend to be conservative, smaller-sized firms with little specialization.

277)

Regarding adoption-curve groups, which of the following is true?

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A) By the time the early majority buy a product it is usually in the market maturity stage of the product life cycle. B) The early adopters have many contacts outside their own social group and are important in spreading information to laggards. C) Business firms in the late majority group tend to be conservative, smaller-sized firms with little specialization. D) The laggard group may be slow to adopt, but it is so large that it is very important to reach its members. E) None of the answers are correct.

278) A retailer's target customers are skeptical and cautious about new ideas. Strong social pressure from their own peer group may be needed before they adopt a new product. These target customers are A) the early majority. B) laggards. C) innovators. D) early adopters. E) the late majority.

279) Jeanne Bowman is an active, healthy, 80-year-old widow and mother of five grown children who range in age from 42 to 60 years old. She is well-informed and very conservative in her social and political views. Like many people in her age group, she is cautious when it comes to high-technology products, but in the last three years, she has purchased a cell phone and learned to use email, mainly due to the urging of her children and friends. She has just decided to purchase a DVD player because she watched a DVD movie at her daughter's home and really liked the quality of the picture. As was the case with her other high-tech purchases, a family member will accompany her when she buys the DVD player. Regarding Jeanne's adoption of DVD technology, she seems to be in the ________ group.

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A) innovator B) early adopter C) early majority D) late majority E) laggard

280) Regarding the adoption curve, marketers may determine that there is little to be gained from trying to inform or influence the A) innovators. B) early adopters. C) early majority. D) late majority. E) laggards.

281)

Which of the following is not true of laggards or nonadopters?

A) Laggards or nonadopters are usually the smallest businesses with the least specialization. B) Laggards or nonadopters tend to be older and less well educated. C) Laggards or nonadopters rely mainly on other laggards for information. D) Laggards or nonadopters are suspicious of new ideas. E) Laggards or nonadopters are likely to be mobile and have contacts outside their social group.

282) ________ prefer to do things the way they have been done in the past and are very suspicious of new ideas.

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A) Innovators B) Early adopters C) Laggards or nonadopters D) The late majority customer group E) Opinion leaders

283)

A marketing manager should realize that the adoption-curve concept implies

A) the firm's promotion target should always be the innovators. B) the laggards are cautious, but they are willing to adopt a new product quickly if advertising gets their attention. C) using different promotional mixes for different adopter groups. D) the firm's promotion target should always be the opinion leaders. E) None of the answers are correct.

284) Selecting an effective promotion blend to reach a firm's promotion objectives requires careful consideration of the A) nature of competition. B) promotion budget available. C) product life-cycle stage. D) All of the answers are correct.

285) A producer is likely to focus its promotion effort on stimulating primary demand at which stage in the product life cycle? A) market introduction B) market growth C) market maturity D) sales decline E) when selective demand is over

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286)

In the market introduction stage

A) the main job is to persuade customers to buy, and keep buying, the company's product. B) the basic promotion objective is informing. C) more competitors enter the market. D) promotion emphasis shifts from building primary demand to stimulating selective demand. E) mass selling and sales promotion dominate the promotion blends of consumer products firms.

287)

Primary demand is

A) the demand for the general product idea. B) just the demand for the company's own brand. C) the main form of mass selling. D) any unpaid form of nonpersonal presentation of ideas, goods, or services. E) any paid form of nonpersonal presentation of ideas, or services by an identified sponsor.

288) During the market growth stage of the product life cycle, a producer would focus promotional efforts on creating ________ demand for its own brand. A) competitive B) customer C) selective D) discerning E) persuasive

289) A producer is likely to focus its promotion effort on stimulating selective demand at which stage in the product life cycle?

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A) market introduction B) market growth C) market maturity D) sales decline E) when primary demand is exhausted

290)

Which of the following is true regarding product life cycles and promotion?

A) During market introduction, the basic promotion objective is to remind. B) In sales decline, the amount spent on promotion usually increases as firms use reminder promotion to increase demand. C) Persuading becomes important in the market growth stage. D) In market maturity, more competitors enter the market and the promotion emphasis must now shift to building selective demand for the firm's own brand. E) Promotion blends have to be constant at different life-cycle stages.

291)

Which of the following is not true of the market growth stage?

A) The main job is to persuade customers to buy, and keep buying, the company's product. B) The promotion must build primary demand, and not just for the company's own brand. C) More competitors enter the market, and mass selling becomes more economical. D) The promotion emphasis shifts to stimulating selective demand. E) Salespeople and personal selling work toward expanding the number of outlets and cementing relationships with channel members.

292) A firm with a product in the market maturity stage of the product life cycle is likely to focus on which basic promotion objective?

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A) pioneering B) publicizing C) informing D) lagging E) persuading

293)

In the promotion blend during the market maturity stage of the product life cycle,

A) the total amount spent on promotion usually decreases. B) the total amount spent on promotion may rise as competition increases. C) the basic promotion objective is informing. D) the promotion emphasis starts to shift from building primary demand to building selective demand. E) None of the answers are correct.

294)

What happens during the market maturity stage?

A) Sales promotion may be targeted at channel members to get them interested in selling the new product. B) Mass selling becomes more economical. C) Business products require less aggressive personal selling. D) Mass selling and sales promotion may dominate the promotion blends of consumer products firms. E) The main job is to persuade customers to buy, and keep buying, the company's product.

295)

Regarding promotion blends, which of the following statements is true?

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A) Consumer products producers should rely almost completely on personal selling in the market maturity stage. B) Reminding becomes important in the market introduction stage. C) More targeted promotion is needed during the sales decline stage of the product life cycle. D) Informing becomes important in the market growth stage. E) None of these statements is true.

296)

What happens during the sales decline stage?

A) The total amount spent on promotion usually decreases as firms try to cut costs to remain profitable. B) Firms do not need targeted promotion to reach customers. C) Personal selling will probably dominate the promotion blends of consumer products firms. D) Promotion emphasis shifts from stimulating selective demand to building primary demand. E) Sales promotion is primarily targeted at intermediaries to get them interested in selling the product.

297) A pest control company using the most common method of promotional budget planning is most likely to base its promotional budget on which of the following? A) a percentage of expected future sales revenue from pest control jobs B) advertising costs incurred by related businesses within the same area C) customer reviews of other pest control companies in the local market D) a detailed analysis of the requirements of the promotion objectives E) survey data from customers regarding company promotion methods

298) A document archiving company develops its promotional budget based on detailed plans from the tasks to be accomplished by its marketing campaign. The company is most likely to be using which of the following methods of promotional budget planning?

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A) percentage method B) task method C) historical patterns method D) ratio method E) discount method

299)

The most common method of setting the marketing budget is to A) let internal politics decide. B) estimate what competitors are spending. C) determine the cost of the tasks to be accomplished. D) use all uncommitted revenue. E) use some predetermined percentage of past or forecast sales.

300)

The most common method of budgeting for marketing expenses is to A) match competitors' spending. B) allocate any funds not already allocated to other functions. C) allocate enough to completely eliminate the cost of lost customers. D) allocate for the job that needs to be done. E) allow for a percentage of either past or forecasted sales.

301) sales

Budgeting for promotion expenditures by computing a percentage of past or expected

A) is the most common method of setting the promotion budget. B) is a complex method of budgeting. C) will increase promotional expenditures when business is poor. D) is especially suitable for new products. E) None of the answers are correct.

Version 1

302)

The most sensible method for budgeting for promotion expenses is to

A) allocate some fixed percentage of net sales. B) allocate all available funds. C) allocate money for direct-response promotion first and then use money that's left for integrated marketing communications. D) match expenditures with competitors. E) use the task method.

303)

When setting a marketing budget, A) the most objective approach is to use "pushing" approaches. B) the only practical alternative is to match what competitors are spending. C) the most sensible approach is to determine the cost of the tasks to be accomplished. D) the task method is likely to result in too low a budget when sales are going well. E) it is generally best to simply use some predetermined percentage of past or forecast

sales.

304)

The task method of budgeting for promotion expenditures

A) links the budget to the promotion objectives set by the company. B) involves determining the promotion methods that will effectively achieve the communication tasks required. C) involves determining the promotion methods that are most economical for the relevant communication tasks. D) makes sense for any marketing expenditure. E) All of the answers are correct.

305) In which method of budgeting is the spending level based on the number of new customers desired and the percentage of current customers that the firm must retain to leverage investments in already established relationships?

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A) basing the budget on the job to be done B) basing the budget on any uncommitted revenue C) setting the budget as a certain number of cents or dollars per sales unit D) matching expenditures with competitors E) setting the budget as a certain number of dollars per person

306) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. The plan for Planet Savers emphasizes which element of the promotion blend? A) advertising B) publicity C) personal selling D) sales promotion E) direct-response promotion

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307) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. If Yummy relies on a sales contest to stimulate sales of Cherry Walrus, itwould be an example of A) advertising. B) personal selling. C) sales training. D) sales promotion. E) publicity.

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308) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. For a new product like Planet Savers, which of the following would you expect to be a primary objective of the promotion that is planned? A) control of the message channel B) increased promotional push C) informing consumers D) reminding ice cream shop managers and retailers E) persuading consumers who otherwise wouldn't eat ice cream

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309) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. Which of the following illustrates communication noise? A) A radio ad for Planet Savers is recorded at a higher volume than the music. B) A consumer waiting in line for an ice cream cone can't see the sign promoting Cherry Walrus because the store is so crowded. C) A consumer who thinks that environmentally friendly ice cream is a stupid idea decides to try the new Planet Savers flavor anyway. D) A TV ad for Yummy Fudge-on-a-Stick features a large group of children singing and eating Yummy ice cream E) All of these examples illustrate noise.

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310) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. Which of the following illustrates customer-initiated interactive communication? A) People who enter Yummy's online contest receive a "2 for 1" coupon for Yummy's new flavors. B) A customer goes to Yummy's website to see if Yummy has an ice cream shop that is nearby. C) A consumer goes to the CNN website and selects a video clip from World Cup Soccer, but at the start of the clip there is a short ad that shows kids eating Yummy Mondaes. D) A gamer at an online website ends a game and encounters a pop-up ad for Yummy Fruit-on-a-Stick. E) Consumers who participate in an online marketing survey are later called and interviewed about which of Yummy's ads they remember and why.

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311) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. The promotion for Yummy Mondaes is a good example of A) pushing. B) direct-response promotion. C) pulling. D) integrated marketing communications. E) noise in the communication process.

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312) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. The Yummy Fudge-on-a-Stick promotion plan relies on A) direct-response promotion. B) integrated marketing communications. C) pushing. D) pulling. E) noise in the communication process.

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313) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. According to your textbook, with a new product like Planet Savers, a marketing manager should A) attempt to obtain publicity. B) target initial communications toward innovators and early adopters. C) use an informing promotional objective. D) All of the answers are correct.

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314) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. The brand manager who puts together a promotion blend for Yummy Mondaes should A) realize that the right blend depends more on what customers expect than what the firm wants to accomplish. B) determine who the firm is trying to influence. C) determine the one right promotion blend and then implement it. D) be primarily concerned with informing rather than persuading.

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315) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. Based on where the product category is in the product life cycle, promotion for Yummy Fruiton-a-Stick should A) emphasize ways that Yummy Fruit-on-a-Stick is best. B) be cut back or dropped so that money can be used on products that contribute to customer equity. C) use reminder advertising. D) build primary demand.

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316) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. If Yummy wanted to target opinion leaders, which of the following groups is most likely to include them? A) innovators B) early adopters C) laggards D) late majority E) early majority

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317) Use this information for questions that refer to the Yummy Ice Cream case. Kelly Stich, marketing manager for Yummy Ice Cream Products, is thinking about some of her products and her promotion plans for the coming year. Yummy Ice Cream Products is introducing a new ice cream treat called Planet Savers. This treat uses ice cream produced with environmentally friendly processes that save energy and protect the ozone. Yummy plans to send articles to magazines, local newspapers, and environmental groups that explain the environmentally safer treat. The product also has a unique texture and different flavor. Stich wants to use counter cards and in-store signs to let people know about Cherry Walrus, the company's new flavor. She is also developing sales training materials that will teach ice cream scoopers in Yummy's ice cream stores to promote the product. Right after Cherry Walrus is introduced, each store will also hand out coupons that are good for one day only. Yummy Mondaes is a product that has been around for 25 years. It is Yummy's take on the classic ice cream sundae, but white-brownie and coffee-flavored crumbles are added to make it extra special. The company sells this product in one-quart and two-quart containers through major grocery store chains. It relies on personal selling and price discounts to retailers to move more of the product. The company does very little consumer promotion for this product. Yummy Fudge-on-a-Stick is a new product of fudge-flavored ice cream on a stick. Yummy plans to sell it through retail grocery stores and is launching an aggressive advertising program that will use television, radio, newspaper, magazines, and the Internet. Most of its promotion will be directed at consumers. Two years ago, the company introduced Yummy Fruit-on-a-Stick, an all-natural frozen fruit product on a stick. The product category has been popular, continues to grow, and is in the market growth stage of the product life cycle. To get the most out of its promotion spending, Yummy should probably develop its budget by A) allocating some fixed percentage of net sales. B) matching expenditures with competitors. C) allocating money to the needs of new products first, then use any leftover money for other products. D) using the task method. E) spending all available funds.

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Answer Key Test name: Chap 13_17e 1) TRUE Promotion is communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior. 2) TRUE The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. 3) TRUE The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. 4) FALSE Marketing managers can choose from several basic types of promotion: personal selling, mass selling, sales promotion, and publicity. 5) TRUE Personal selling involves direct spoken communication between sellers and potential customers. 6) TRUE Personal selling involves direct spoken communication between sellers and potential customers. 7) TRUE

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Salespeople get immediate feedback, which helps them to adapt. Although some personal selling is included in most marketing mixes, it can be very expensive. 8) FALSE Mass selling is communicating with large numbers of potential customers at the same time. 9) FALSE Mass selling is communicating with large numbers of potential customers at the same time. 10) TRUE When the target market is large and scattered, mass selling can be less expensive. 11) FALSE Mass selling is communicating with large numbers of potential customers at the same time. It is less flexible than personal selling. Immediate feedback is possible under personal selling. 12) TRUE Mass selling deals with the strategy planning decisions related to advertising and publicity. 13) TRUE Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 14) FALSE Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services (but publicity people are paid). 15) FALSE Version 1

Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services (but publicity people are paid). 16) FALSE Publicity people try to attract attention to the firm and its offerings without having to pay media costs. Some publicity involves getting favorable coverage in newspaper stories, magazines, or television. Publicity may be more useful than advertising. 17) FALSE Advertising must be purchased; publicity is "free." 18) TRUE Publicity people try to attract attention to the firm and its offerings without having to pay media costs. 19) TRUE Sales promotion may be aimed at consumers, at intermediaries, or at a firm's own employees. 20) TRUE Sales promotion may be aimed at consumers, at intermediaries, or at a firm's own employees. 21) FALSE Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 22) TRUE Sales promotion may be aimed at consumers, at intermediaries, or at a firm's own employees. Contests and coupons are good examples of sales promotion.

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23) FALSE Relative to other promotion methods, sales promotion can usually be implemented quickly and get results sooner. Most sales promotion efforts are designed to produce immediate results. 24) TRUE All the special sales promotions, coupons, sweepstakes, trade shows, and the like add up to even more money. In total, firms spend less money on advertising than on personal selling or sales promotion. 25) FALSE Sales promotion managers manage their company's sales promotion efforts. In some companies, a sales promotion manager has independent status and reports directly to the marketing manager. 26) FALSE Determining the blend of promotion methods is a strategy decision and it is the responsibility of the marketing manager. 27) FALSE Determining the blend of promotion methods is a strategy decision and it is the responsibility of the marketing manager. 28) TRUE Although many specialists may be involved in planning for and implementing specific promotion methods, determining the blend of promotion methods is a strategy decision and it is the responsibility of the marketing manager. 29) FALSE

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Although many specialists may be involved in planning for and implementing specific promotion methods, determining the blend of promotion methods is a strategy decision and it is the responsibility of the marketing manager. 30) TRUE Effective blending of all of the firm's promotion efforts should produce integrated marketing communications: the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. 31) TRUE Effective blending of all the firm's promotion efforts should produce integrated marketing communications: the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. 32) FALSE The basic idea behind integrated marketing communications is to intentionally coordinate every communication from a firm to a target customer so that they all convey a consistent and complete message. 33) TRUE Getting consistency is harder when different firms handle different aspects of the promotion effort. To get effective coordination, everyone involved with the promotion effort must clearly understand the plan for the overall marketing strategy. 34) TRUE Promotion objectives (informing, persuading, and reminding) must be clearly defined because the right promotion blend depends on what the firm wants to accomplish. All try to affect buyer behavior by providing more information. Version 1

35) TRUE Promotion objectives (informing, persuading, and reminding) must be clearly defined because the right promotion blend depends on what the firm wants to accomplish. All try to affect buyer behavior by providing more information. 36) TRUE Promotion objectives (informing, persuading, and reminding) must be clearly defined because the right promotion blend depends on what the firm wants to accomplish. All try to affect buyer behavior by providing more information. 37) TRUE Potential customers must know something about a product if they are to buy it. The informing objective involves showing that the product meets consumer needs better than other products. 38) TRUE The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 39) FALSE The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 40) FALSE The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 41) FALSE It's useful to think about a whole communication process, which involves a source trying to reach a receiver with a message. The source uses a message channel to carry the message. Version 1

42) FALSE A major advantage of personal selling is that the seller can get immediate feedback from the receiver. 43) TRUE Noise is any distraction that reduces the effectiveness of the communication process. 44) FALSE Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver. Decoding is the receiver translating the message. 45) TRUE Difficulty in the communication process occurs during encoding and decoding. The meanings of various words and symbols may differ depending on the attitudes and experiences of the two groups. People need a common frame of reference to communicate effectively. 46) TRUE The source and the receiver need a common frame of reference to communicate effectively. 47) TRUE The communication process is complicated even more because the message is coming from a source through some message channel, the carrier of the message. A particular message channel may enhance or detract from a message. 48) TRUE Most direct marketing communications are designed to prompt immediate feedback, a direct response by customers. 49) TRUE Version 1

Most direct marketing communications are designed to prompt immediate feedback, a direct response by customers. That's why this type of communication is often called direct-response promotion. 50) TRUE Direct mail and email are two tools commonly used for direct-response promotion. 51) TRUE Emails give customers a chance to click through to photos and videos. Media tools such as these help them decide whether to make a donation or place an order. 52) TRUE In addition to mail, direct-response customers can simply click to go to a website to see photos, watch a video, make a donation, or place an order. 53) TRUE Most direct marketing communications are designed to prompt immediate feedback, a direct response by customers. 54) FALSE The challenge of developing promotions that reach specific target customers has prompted many firms to turn to direct marketing: direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. 55) TRUE Direct-response promotion usually relies on a CRM database to target specific prospects. 56) TRUE

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A customer relationship management (CRM) database allows advertisers to reach customers with specific interests. For the best response, marketing managers carefully segment their customers and use mail or email to deliver targeted messages. 57) FALSE In direct-response promotion, CRM databases allow advertisers to reach customers with specific interests. For the best response, marketing managers carefully segment their customers and use mail or email to deliver targeted messages. CRMs are also useful for business customers. 58) TRUE Traditional thinking about promotion and for that matter about the communication process has usually been based on the idea that it's the seller who initiates communication. 59) FALSE Traditional thinking about promotion and for that matter about the communication process has usually been based on the idea that it's the seller who initiates communication. 60) TRUE A customer (receiver) initiates the communication process with a decision to search for information in a particular message channel. The most common and far-reaching message channel to use for search is the Internet, through search engines like Google or Bing. 61) TRUE In customer-initiated communication, customers commonly initiate communication with an Internet search. The most popular search engines include Google and Bing. 62) TRUE Version 1

Customer-initiated communication uses the most common and farreaching message channel to search, known as the Internet, through a search engine like Google. 63) TRUE Searchable message channels usually feature an archive of existing messages on a number of topics. There may be millions of available topics. The receiver reviews and screens the various options and decides what information to look at more closely. 64) TRUE The customer reviews and screens the various options and decides which messages to pursue. 65) FALSE The receiver reviews and screens the various options and decides what information to look at more closely. 66) TRUE A customer has so many options that it's important for a marketer to be among the first to grab that customer's attention. 67) FALSE In customer-initiated interactive communication, noise can be a problem and lead the searcher in a different direction. 68) FALSE Marketing managers should not ignore online information they do not create. Marketing managers need to know what is being posted on other websites where customers may go for information. 69) FALSE

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Communication that customers receive during the customer-initiated communication process is often timely—it frequently occurs when a customer is actively gathering purchase information. 70) TRUE The most common criticisms of promotion relate to exaggerated claims. 71) TRUE When a channel of distribution involves intermediaries, their cooperation can be crucial to the success of the overall marketing strategy. Pushing is an approach that emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. 72) TRUE Pushing (a product through a channel) means using normal promotion efforts (personal selling, advertising, and sales promotion) to help sell the whole marketing mix to possible channel members. 73) FALSE Pushing (a product through a channel) means using normal promotion efforts (personal selling, advertising, and sales promotion) to help sell the whole marketing mix to possible channel members. 74) TRUE The pushing approach emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. 75) TRUE Pushing involves using normal promotion efforts—personal selling, advertising, and sales promotion. 76) TRUE Version 1

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A salesperson can answer questions about important details on pricing, markups, promotion assistance, and allowances. A salesperson can also help the firm determine when it should adjust its marketing mix from one intermediary to another. 77) TRUE When suppliers offer similar products and compete for attention and shelf space, intermediaries usually pay attention to the one with the most profit potential. 78) TRUE Pulling means getting customers to ask intermediaries for the product. Most producers focus a significant amount of promotion on customers at the end of the channel. This helps to stimulate demand and pull the product through the channel of distribution. 79) FALSE Pulling means getting customers to ask intermediaries for the product. This helps to stimulate demand and pull the product through the channel of distribution. 80) FALSE Pulling means getting customers to ask intermediaries for the product. Most producers focus a significant amount of promotion on customers at the end of the channel. This helps to stimulate demand and pull the product through the channel of distribution. 81) FALSE The large number of consumers almost forces producers of consumer products and retailers to emphasize advertising, publicity, and sales promotion. Effective mass selling may build brand familiarity so that little personal selling is needed.

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82) TRUE Producers and wholesalers that target business customers often emphasize personal selling. This is practical because there are fewer of these customers and their purchases are typically larger. 83) TRUE Producers and wholesalers that target business customers often emphasize personal selling. This is practical because there are fewer of these customers and their purchases are typically larger. 84) TRUE While personal selling dominates in business markets, mass selling is necessary too. This is because salespeople spend less than half their time actually selling. The rest is consumed by such tasks as traveling, paperwork, sales meetings, and strictly service calls. 85) FALSE The AIDA and adoption processes look at individuals. Research on how markets accept new ideas has led to the adoption-curve model. The adoption curve shows when different groups accept ideas. 86) FALSE The adoption curve shows when different groups accept ideas. But promotion efforts usually need to change over time to adjust to differences among the adopter groups. 87) FALSE The adoption curve shows when different groups accept ideas. But promotion efforts usually need to change over time to adjust to differences among the adopter groups. 88) TRUE

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The adoption curve shows when different groups accept ideas. It emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. 89) TRUE The adoption curve shows when different groups accept ideas. It emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. 90) TRUE The innovators are the first to adopt. They are eager to try a new idea and willing to take risks. Innovators tend to be young and well educated. 91) TRUE Innovators tend to rely on impersonal and scientific information sources, or other innovators, rather than on salespeople. They often search for information on the Internet, read articles in technical publications, or look for informative ads in special-interest magazines. 92) TRUE Early adopters are well-respected by their peers and often are opinion leaders. Their acceptance is crucial. The next group, the early majority, look to the early adopters for guidance. 93) TRUE Early adopters tend to have the greatest contact with salespeople. Mass media are important information sources too. Marketers should be very concerned with attracting and selling to the early adopter group. 94) FALSE Of all the groups, early adopters tend to have the greatest contact with salespeople. 95) TRUE Version 1

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The early majority avoids risk and waits to consider a new idea after many early adopters have tried it and liked it. 96) FALSE Along with the innovators, the early adopters are often most interested in the technical performance of any new idea or product. 97) TRUE The late majority are cautious about new ideas. Often they are older and more set in their ways, so they are less likely to follow early adopters. Strong social pressure from their own peer group may be needed before they adopt a product. 98) FALSE Laggards (nonadopters) prefer to do things the way they've been done in the past and are very suspicious of new ideas. They tend to be older and less well educated. Average-sized business firms that are less specialized are usually in the early majority group. 99) FALSE The laggards tend to be older and less well educated. The smallest businesses with the least specialization often fit this category. They cling to the status quo and think it's the safe way. Instead, it's essential to win over innovators and early adopters. 100) TRUE During market introduction, the basic promotion objective is informing. 101) FALSE Demand for the general product idea and not just for the company's own brand is known as primary demand. 102) FALSE

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In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand. 103) FALSE In the market growth stage, the main job is to persuade customers to buy, and keep buying, the company's product. 104) TRUE In the market maturity stage, mass selling and sales promotion may dominate the promotion blends of consumer products firms. Business products may require more aggressive personal selling, perhaps supplemented by more advertising. 105) TRUE During the market maturity stage, persuading is common and reminding may also be quite effective. 106) TRUE Total cost for some mass media may force small firms, or those with small promotion budgets, to use promotion alternatives that are more expensive per contact. 107) TRUE The most common method of budgeting for promotion expenditures is to compute a percentage of either past sales or sales expected in the future. 108) TRUE The task method bases the budget on the job to be done. It helps a marketing manager to set priorities so that the money spent produces specific results. 109) FALSE

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The task method bases the budget on the job to be done. It helps a marketing manager to set priorities so that the money spent produces specific results. 110) A Marketing managers can choose from several basic types of promotion: personal selling, mass selling, sales promotion, and publicity. 111) B After becoming a wholly-owned subsidiary of Berkshire Hathaway in 1996, GEICO's management sought to accelerate earnings growth by targeting new markets. However, achieving growth in the mature auto insurance market meant that GEICO would need to take customers away from better known competitors such as Allstate and State Farm. If that were not already difficult enough, many prospects didn't even know about GEICO. It was decided that an aggressive advertising campaign could increase awareness of GEICO, bring in new customers, and result in profitable growth. 112) E Marketing managers can choose from several basic types of promotion: personal selling, mass selling, sales promotion, and publicity. 113) D Marketing managers can choose from several basic types of promotion: personal selling, mass selling, and sales promotion. Advertising and publicity are forms of mass selling. "Introductory price dealing" is part of Price, not Promotion. 114) C Promotion is communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior. Version 1

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115) B The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. 116) E Promotion is communicating information between the seller and potential buyer or others in the channel. The Promotion part of the marketing mix involves telling target customers that the right Product is available at the right Place at the right Price. Marketing managers choose from several basic types of promotion: personal selling, mass selling, sales promotion, and publicity. 117) C Promotion is communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior. 118) D Personal selling involves direct spoken communication between sellers and potential customers. Salespeople get immediate feedback, which helps them to adapt. 119) A Personal selling involves direct spoken communication between sellers and potential customers. Salespeople get immediate feedback, which helps them to adapt. 120) A Personal selling involves direct spoken communication between sellers and potential customers. 121) A Version 1

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Personal selling involves direct spoken communication between sellers and potential customers. 122) D Personal selling involves direct spoken communication between sellers and potential customers. Salespeople get immediate feedback, which helps them adapt. 123) A Personal selling involves direct spoken communication between sellers and potential customers. Salespeople get immediate feedback, which helps them to adapt. 124) D Mass selling is communicating with large numbers of potential customers at the same time. It's less flexible than personal selling and doesn't provide immediate feedback, but when the target market is large and scattered, mass selling can be less expensive. 125) E Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor. 126) E Advertising is the main form of mass selling. It's not the same as publicity (which is free). It is less flexible than personal selling, but when the target market is large, mass selling can be less expensive. It is any paid form of nonpersonal presentation of ideas. 127) C Advertising is any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor, whereas publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. Version 1

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128) D Many people incorrectly think that promotion money gets spent primarily on advertising—because advertising is all around them. But all the special sales promotions—coupons, sweepstakes, trade shows, and the like—add up to even more money. Similarly, much personal selling happens in the channels and in other business markets. In total, most firms spend less money on advertising than on personal selling or sales promotion. 129) D Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. Publicity people try to attract attention to the firm and its offerings without having to pay media costs. Publicity includes a company's website and the material it posts on the website, viral videos, word-of-mouth communication, a company's Facebook page, its "tweets" on Twitter, and coverage it receives in the press. 130) B Publicity is any unpaid form of mass selling involving nonpersonal presentation of ideas, goods, or services without having to pay media costs. 131) D Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral videos, word-ofmouth communication, a company's Facebook page, and its "tweets" on Twitter. It can also include coverage it receives in the press—for example when a movie is reviewed in the newspaper. 132) C

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Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral videos, word-ofmouth communication, a company's Facebook page, and its "tweets" on Twitter. It can also include coverage it receives in the press—for example when a movie is reviewed in the newspaper. 133) C Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral videos, word-ofmouth communication, a company's Facebook page, and its "tweets" on Twitter. It can also include coverage it receives in the press—for example when a movie is reviewed in the newspaper. 134) B Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral videos, word-ofmouth communication, a company's Facebook page, and its "tweets" on Twitter. 135) C Publicity includes a wide range of different types of media: a company's website and the material it posts on the website, viral videos, word-ofmouth communication, a company's Facebook page, and its "tweets" on Twitter. It can also include coverage it receives in the press—for example when a movieor restaurant is reviewed in the newspaper. 136) C Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. 137) C Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. Version 1

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138) E Publicity is any unpaid form of nonpersonal presentation of ideas, goods, or services. 139) A Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. It may be aimed at consumers, at intermediaries, or at a firm's own employees. 140) D Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. It may be aimed at consumers, at intermediaries, or at a firm's own employees. 141) C Sales promotion refers to promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. Media coverage is a form of publicity. 142) D Coupons, trade shows, calendars, sweepstakes, and sales contests are examples of sales promotion. 143) E Relative to other promotion methods, sales promotion can usually be implemented quickly and get results sooner. In fact, most sales promotion efforts are designed to produce immediate results. 144) D

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Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 145) A Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 146) B Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. A half-page ad in the telephone Yellow Pages for a security service is an example of advertising, not sales promotion. 147) A Sales promotion refers to promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. A banner ad on The Wall Street Journal's stock page is an example of advertising, not sales promotion. 148) E Coupons, trade shows, calendars, sweepstakes, and sales contests are examples of sales promotion. 149) C Coupons are a sales promotion activity aimed at final consumers or users. 150) E

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Many people incorrectly believe that promotion money is spent primarily on advertising because advertising is all around them. But firms spend less money on advertising than on personal selling or sales promotion. 151) D Each promotion method has its own strengths and weaknesses. Each method also involves its own distinct activities and requires different types of expertise. Determining the blend of promotion methods is a strategy decision—and it is the responsibility of the marketing manager. 152) B Sales managers are typically responsible for managing personal selling. In smaller companies, however, the sales manager may also act as the marketing manager and be responsible for advertising and sales promotion. Marketing managers are usually responsible for determining the blend of promotion methods a company uses. 153) A Although many specialists may be involved in planning for and implementing specific promotion methods, determining the blend of promotion methods is a strategy decision—and it is the responsibility of the marketing manager. 154) B Sales managers are concerned with managing personal selling. Often they are responsible for building good distribution channels and implementing Place policies. 155) C

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Advertising managers manage their company’s mass-selling effort—in television, newspapers, magazines, online, and on social media sites. Their job is to choose the right media and messaging and to design those into advertising. 156) A Sales promotion managers manage their company’s sales promotion effort. If a firm’s sales promotion spending is substantial, if probably should have a specific sales promotion manager. 157) A Communication with noncustomers, including labor, public interest groups, stockholders, and the government, is called public relations. 158) D Although many specialists may be involved in developing promotion methods, determining the blend of those methods is a strategy decision and is the responsibility of the marketing manager. 159) B Although many specialists may be involved in developing promotion methods, determining the blend of those methods is a strategy decision and is the responsibility of the marketing manager. 160) D Effective blending of all the firm's promotion efforts should produce integrated marketing communications, which is the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. 161) A

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Integrated marketing communications is the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. 162) C The three basic promotion objectives are: informing, persuading, and reminding target customers about the company and its marketing mix. All try to affect buyer behavior by providing more information. 163) B Potential customers must know something about a product if they are to buy it. An informing objective can show that it meets customer needs better than other products. A small business might want to have a service regularly clean its offices. The owner might begin by searching on the Internet. There they might find a local cleaning company's website with information about various services. 164) C A persuading objective means the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, its product. A persuading objective often tries to demonstrate how one brand is better than others. A salesperson for Andersen Windows tries to convince home builders about the quality and affordability of Andersen Windows as compared to those of a competitor, so the builder will choose Andersen for future housing projects. 165) C

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If target customers already have positive attitudes about a firm's marketing mix—or a good relationship with a firm—a reminding objective might be suitable. Customers who have been attracted and sold to once are still targets for competitors' appeals. Reminding them of their past satisfaction may keep them from shifting to a competitor. An accountant working for a small local firm might phone his or her customers once every few months to "check in" and see if they have any questions. This serves as a reminder that the accountant is there and available. 166) D The three basic promotion objectives are informing, persuading, and reminding target customers about the company and its marketing mix. 167) D A firm with a really new product may not have to do anything but inform consumers about it. An informing objective can show that it meets consumer needs better than other products. 168) A A persuading objective means the firm will try to develop a favorable set of attitudes so customers will buy, and keep buying, its product. A persuading objective often tries to demonstrate how one brand is better than the others. 169) B Customers who have been attracted and sold to once are still targets for competitors' appeals. Reminding them of their past satisfaction may keep them from shifting to a competitor. 170) B

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If target customers already have positive attitudes about a firm's marketing mix or a good relationship with a firm, a reminding objective might be suitable. Reminding them of their past satisfaction may keep them from shifting to a competitor. 171) A If target customers already have positive attitudes about a firm's marketing mix or a good relationship with a firm, a reminding objective might be suitable. Reminding them of their past satisfaction may keep them from shifting to a competitor. 172) B If target customers already have positive attitudes about a firm's marketing mix or a good relationship with a firm, a reminding objective might be suitable. Reminding them of their past satisfaction may keep them from shifting to a competitor. 173) B Reminding the customers of their past satisfaction may keep them from shifting to a competitor. Promotion also can simply remind the customer about that favorable experience and confirm the adoption decision. 174) C The basic promotion objectives and adoption process fit very neatly with another action-oriented model called AIDA. 175) C The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 176) A The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. Version 1

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177) B The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 178) A The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 179) D The AIDA model consists of four promotion jobs: (1) to get Attention, (2) to hold Interest, (3) to arouse Desire, and (4) to obtain Action. 180) C Getting attention is necessary to make consumers aware of the company's offering, and holding interest gives the communication a chance to build the consumer's interest in the product. 181) A As stated in Exhibit 13–3, the traditional communication process does not include response. 182) A The slogan itself is the message being sent in the communication process. GEICO is the source of the message, and the viewers are the receivers. 183) B Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver. Decoding is the receiver translating the message. 184) A The source, the sender of a message, is trying to deliver a message to a receiver, a potential customer. Version 1

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185) D One major advantage of personal selling is that the source (the seller) can get immediate feedback from the receiver. 186) C The source, the sender of a message, is trying to deliver a message to a receiver, a potential customer. 187) E Noise is any distraction that reduces the effectiveness of the communication process. Conversations and snack-getting during TV ads are noise. 188) A Noise is any distraction that reduces the effectiveness of the communication process. 189) B Noise is any distraction that reduces the effectiveness of the communication process. 190) D Noise is any distraction that reduces the effectiveness of the communication process. None of these statements illustrate "noise." 191) C Noise is any distraction that reduces the effectiveness of the communication process. Conversations and snack-getting during TV ads are noise. 192) C Noise is any distraction that reduces the effectiveness of the communication process. Conversations and snack-getting during TV ads are noise. Version 1

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193) C Noise is any distraction that reduces the effectiveness of the communication process. 194) B Noise is any distraction that reduces the effectiveness of the communication process. Conversations and snack-getting during TV ads are noise. 195) D Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver. 196) D Encoding is the source deciding what it wants to say and translating it into words or symbols that will have the same meaning to the receiver. 197) A Decoding is the receiver translating the message. This process can be very tricky. The meanings of various words and symbols may differ depending on the attitudes and experiences of the encoder and decoder. 198) A Decoding is the receiver translating the message. The meanings of various words and symbols may differ depending on the attitudes and experiences of the encoder and decoder. 199) A Traditional communication process consists of the Source, Encoding, Message channel, Decoding, Receiver, and Feedback. 200) E

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The source is the sender of a message; the potential customer is the receiver. Encoding deals with translating the message into words or symbols that will have the same meaning to the receiver. Decoding is the receiver translating the message. 201) B Encoding and decoding need a common frame of reference to in order to communicate effectively. 202) A The meanings of various words and symbols may differ depending on the attitudes and experiences of the two groups (sources and receivers). People need a common frame of reference to communicate effectively. 203) D Different audiences may interpret a message differently. Such differences are common in international marketing when cultural differences or translation are problems. 204) B The communication process is complicated even more because the message is coming from a source through some message channel, that is, the carrier of the message. A source can use many message channels to deliver a message. 205) E The communication process is complicated even more because the message is coming from a source through some message channel, that is, the carrier of the message. A source can use many message channels to deliver a message. 206) A

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Direct-response promotion usually relies on a customer relationship management (CRM) database to target specific prospects. 207) B Most direct marketing communications are designed to prompt immediate feedback—a direct response by customers. Therefore, this type of communication is often called direct-response promotion. 208) E Most direct marketing communications are designed to prompt immediate feedback—a direct response by customers. Therefore, this type of communication is often called direct-response promotion. 209) A Most direct marketing communications are designed to prompt immediate feedback—a direct response by customers. Therefore, this type of communication is often called direct-response promotion. 210) A Direct marketing is direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. Effective email programs give customers targeted information they find timely and useful. 211) A Direct marketing is direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. Effective programs give customers targeted information they find timely and useful. 212) A

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Direct marketing is direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. This is also called direct-response promotion. Effective email programs give customers targeted information they find timely and useful. 213) C Direct marketing is direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling. This is also called direct-response promotion. 214) C Personalized and creative messages can get customer attention in a crowded email box. 215) C The traditional communications process assumes that it's the seller ("source") who initiates communication. In many cases that is true, but in other situations the customer ("receiver") initiates the process. For example, a consumer enters "pizza delivery" into Google or asks a retail salesperson for help, and organizational buyers phone salespeople to ask questions or request bids. 216) B The most common and far-reaching message channel to use for search is the Internet. 217) D The most common and far-reaching message channel to use for search is the Internet. 218) A

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Consumers can collect information from a wide range of sources along the journey to making a purchase decision. Although some of those information sources are outside the control of a marketing manager, that doesn't mean those sources should be ignored. Marketing managers can still make sure that they have plenty of product pictures—and that they are easy to post on Pinterest and Instagram. They can also monitor what is being said about the brand online. Whereas online compliments let the firm know what it is doing well, complaints can highlight unmet customer needs—and give managers a chance to turn things around. 219) E Noise is any distraction that reduces the effectiveness of the communication process. To stimulate attention, interest, and desire is one reason that targeting is so important. Traditional thinking is based on the idea that the seller initiates communication. In customer-initiated interactive communication, the buyer initiates the communication process. 220) D As stated in Exhibit 13–5, the customer-buyer ("receiver") initiates the communication process. 221) C A customer (receiver) initiates the communication process with a decision to search for information in a particular message channel. The most common and far-reaching message channel to use for search is the Internet. 222) D The most common and far-reaching message channel to use for search is the Internet. 223) D Version 1

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The most common criticisms of promotion relate to exaggerated claims. If an advertisement or a salesperson claims that a product is the "best available," it can be a personal opinion or the statement may require a proof. 224) B There is no one right promotion blend for all situations. Each blend must be developed as part of a marketing mix. 225) A Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 226) B Pushing emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. 227) D Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 228) E Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 229) D Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. Version 1

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230) D Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 231) A Pushing means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 232) D The pushing approach emphasizes the importance of securing the wholehearted cooperation of channel members to promote the product in the channel and to the final user. 233) B Salespeople handle most of the important communication with wholesalers and retailers. These clients don't want empty promises. They want to know what they can expect in return for their cooperation and help. 234) E Pushing means using normal promotion efforts to intermediaries; service-oriented firms design promotion that targets customers and employees; promotion to intermediaries emphasizes personal selling; and pushing within the firm targets employees, especially salespeople. 235) E Some firms emphasize promotion to their own employees—especially salespeople or others in contact with customers. This type of internal marketing effort is basically a variation on the pushing approach. 236) C Version 1

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Some firms emphasize promotion to their own employees—especially salespeople or others in contact with customers. A firm's annual sales meeting is a type of internal marketing effort, which is a variation on the pushing approach. 237) A Most producers focus a significant amount of promotion on customers at the end of the channel. This helps to stimulate demand and pull the product through the channel of distribution. Pulling is getting customers to ask intermediaries for the product. 238) A Pulling means getting customers to ask intermediaries for the product. 239) A A producer might use a pulling policy when intermediaries are reluctant to handle a product. 240) A Pulling means getting customers to ask intermediaries for the product. Pulling is promotion targeted at end customers. See Exhibit 13–6. 241) E Push promotions to intermediaries within a sales channel usually concentrate on personal selling. When suppliers offer similar products and compete for attention and shelf space, intermediaries usually pay attention to the one with the most profit potential. Sales promotions targeted at intermediaries often focus on short-term arrangements that will improve the intermediary's profits. For example, a soft-drink bottler might offer a convenience store a free case of drinks with each two cases it buys. The free case improves the store's profit margin on the whole purchase. And the increased inventory encourages the convenience store to get behind selling the soft drinks. Version 1

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242) B Most producers focus a significant amount of promotion on customers at the end of the channel. This helps to stimulate demand and pull the product through the channel of distribution. Pulling is getting customers to ask intermediaries for the product. 243) B Most producers focus a significant amount of promotion on customers at the end of the channel. This helps stimulate demand and pull the product through the channel of distribution. Pulling is getting customers to ask intermediaries for the product. 244) A Most producers focus a significant amount of promotion on customers at the end of the channel. This helps stimulate demand and pull the product through the channel of distribution. Pulling is getting customers to ask intermediaries for the product. 245) E The large number of consumers almost forces producers of consumer products and retailers to emphasize advertising, publicity, and sales promotion. Effective mass selling may build enough brand familiarity that little personal selling is needed, although personal selling can be effective too. Often mass selling can be used to bring customers to a store where personal selling may be used. Personal selling to final consumers is often found only in channel systems for more expensive products like financial services, furniture, consumer electronics, designer clothing, and automobiles. 246) C

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Producers and wholesalers that target business customers often emphasize personal selling. This is practical because there are fewer of these customers and their purchases are typically larger. 247) A Producers and wholesalers that target business customers often emphasize personal selling. This is practical because there are fewer of these customers and their purchases are typically larger. 248) A Personal selling dominates in business markets. Producers and wholesalers that target business customers often emphasize personal selling. This is practical because there are fewer of these customers and their purchases are typically larger. 249) E Business buyers often engage in Internet searches to identify solutions for current needs, so it is important for a seller’s website to appear near the top of the search results. Ads in trade magazines might also be used to inform potential customers about a solution. Domestic and international trade shows can also inform potential customers and help sellers to identify prospects. 250) A Business buyers often engage in Internet searches to identify solutions for current needs, so it is important for a seller’s website to appear near the top of the search results. Otherwise, it has no opportunity to draw buyers’ attention and build interest for the firm’s products. 251) A The adoption curve shows when different groups accept ideas. It emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. Version 1

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252) C The adoption curve helps explain why a new product goes through the product life-cycle stages. 253) C The adoption curve emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. 254) B The adoption curve emphasizes the relations among groups and shows that individuals in some groups act as leaders in accepting a new idea. 255) E As stated in Exhibit 13–7, innovators, early adopters, early majority, late majority, and laggards is the correct sequence of market acceptance of a new idea, as represented in the adoption curve. 256) B The innovators are the first to adopt. They are eager to try a new idea and willing to take risks. Innovators tend to be young and well educated. 257) A The innovators are the first to adopt. They are eager to try a new idea and willing to take risks. Innovators tend to be young and well educated. 258) E The innovators are the first to adopt. They are eager to try a new idea and willing to take risks. Innovators tend to be young and well educated. They are likely to be mobile and have many contacts outside their local social group and community. 259) D Innovators tend to rely on impersonal and scientific information sources, or other innovators, rather than salespeople. Version 1

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260) D The innovators are eager to try a new idea and willing to take risks. They tend to be young and well educated. Business firms in the innovator group are often specialized and willing to take the risk of doing something new. Innovators tend to rely on impersonal and scientific information sources. 261) B Business firms in the innovator group are often specialized and willing to take the risk of doing something new. 262) B Early adopters tend to have the greatest contact with salespeople. 263) B Early adopters are well-respected by their peers and often are opinion leaders. They tend to be younger, more mobile, and more creative than later adopters. 264) B Early adopters tend to have the greatest contact with salespeople. Mass media are important information sources too. 265) D Early adopters are well-respected by their peers and often are opinion leaders. They tend to be younger, more mobile, and more creative than later adopters; but unlike innovators, they have fewer contacts outside their own social group or community. 266) D The early adopters can help the promotion effort by spreading word-ofmouth information and advice among other consumers. 267) E Version 1

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Early adopters are well-respected by their peers and often are opinion leaders. Marketers should be very concerned with attracting and selling the early adopter group. 268) A The early adopters can help the promotion effort by spreading word-ofmouth information and advice among other consumers. 269) B Early adopters are well-respected by their peers and often are opinion leaders. They tend to be younger, more mobile, and more creative than later adopters. 270) C The early majority have a great deal of contact with mass media, salespeople, and early adopter opinion leaders. Members usually aren't opinion leaders themselves. 271) D The early majority avoids risk and waits to consider a new idea after many early adopters have tried it—and liked it. Average-sized business firms that are less specialized often fit in this category. 272) D The early majority avoids risk and waits to consider a new idea after many early adopters have tried it and liked it. They have a great deal of contact with mass media, salespeople, and early adopter opinion leaders. 273) B Members of early majority usually aren't opinion leaders themselves. 274) A The early majority is often most interested in knowing how adopting a new idea will help them solve a problem or offer greater convenience. Version 1

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275) B The late majority make little use of marketing sources of informationmass media and salespeople. Strong social pressure from their own peer group may be needed. 276) E The late majority are cautious about new ideas. Often, they are older and more set in their ways, so they are less likely to follow early adopters. Business firms in this group tend to be conservative, smaller-sized firms with little specialization. 277) C The late majority are cautious about new ideas. Often, they are older and more set in their ways, so they are less likely to follow early adopters. Business firms in this group tend to be conservative, smaller-sized firms with little specialization. 278) E The late majority are cautious about new ideas. In fact, strong social pressure from their own peer group may be needed before they adopt a new product. 279) D The late majority are cautious about new ideas. Often, they are older and more set in their ways, so they are less likely to follow early adopters. In fact, strong social pressure from their own peer group may be needed before they adopt a new product. 280) E It may not pay to bother with the laggard group, as they prefer to do things the way they've been done in the past and are very suspicious of new ideas. They tend to be older and less well educated.

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281) E Laggards or nonadopters prefer to do things the way they've been done in the past and are very suspicious of new ideas. They tend to be older and less well educated. The smallest businesses with the least specialization often fit this category. The main source of information for laggards is other laggards. 282) C Laggards or nonadopters prefer to do things the way they've been done in the past and are very suspicious of new ideas. 283) C Promotion efforts usually need to change over time to adjust to differences among the adopter groups. 284) D Promotion blends usually have to change to achieve different promotion objectives at different life-cycle stages. Competition and size of budget affect promotion efficiency and blend. 285) A During market introduction, the basic promotion objective is informing. If the product is a truly new idea, the promotion must build primary demand. 286) B During market introduction, the basic promotion objective is informing. 287) A Primary demand is the demand for the general product idea, not just for the company's own brand. 288) C

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In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand for a company's own brand. 289) B In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand. 290) C In the market growth stage, the main job is to persuade customers to buy, and keep buying, the company's product. 291) B In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand for a company's own brand. 292) E In the market maturity stage, mass selling and sales promotion may dominate the promotion blends of consumer products firms. The main job is to persuade customers that "our brand is better, really." Reminding can be useful, too. 293) B In market maturity, the total dollars allocated to promotion may rise as competition increases. 294) D In the market maturity stage, mass selling and sales promotion may dominate the promotion blends of consumer products firms. 295) C

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During the sales decline stage, the total amount spent on promotion usually decreases as firms try to cut costs to remain profitable. Since some people may still want the product, firms need more targeted promotion to reach these customers. 296) A During the sales decline stage, the total amount spent on promotion usually decreases as firms try to cut costs to remain profitable. 297) A The most common method of budgeting for promotion expenditures is to compute a percentage of either past sales or sales expected in the future. 298) B The most sensible approach to budgeting promotion expenditures is the task method—basing the budget on the job to be done. It helps a marketing manager to set priorities so that the money spent on promotion produces specific and desired results. The firm can assemble its total promotion budget directly from detailed plans rather than by simply relying on historical patterns or ratios. 299) E The most common method of budgeting for promotion expenditures is to compute a percentage of either past sales or sales expected in the future. 300) E The most common method of budgeting for promotion expenditures is to compute a percentage of either past sales or sales expected in the future. 301) A The most common method of budgeting for promotion expenditures is to compute a percentage of either past sales or sales expected in the future. 302) E Version 1

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The most sensible approach to budgeting promotion expenditures is the task method. 303) C The most sensible approach is the task method-basing the budget on the job to be done. 304) E The task method is basing the budget on the job to be done. It determines which promotion objectives are most important and which promotion methods are most economical and effective for the communication tasks relevant to each objective. This approach makes sense for any marketing expenditure. 305) A The task method is basing the budget on the job to be done. It prioritizes promotion objectives based on budget and communication effectiveness. 306) B Yummy plans to send articles to magazines, local newspapers, and environmental groups. This is practicing publicity, which is any unpaid form of nonpersonal presentation of ideas, goods, or services. 307) D Relying on a sales contest to stimulate sales is sales promotion aimed at wholesalers or retailers. 308) C With a new product, informing would be the primary objective. 309) B

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Noise is any distraction that reduces the effectiveness of the communication process. It is a distraction if the store is so crowded that a consumer waiting in line for an ice cream cone can't see the sign promoting Cherry Walrus. 310) B For customer-initiated interactive communication, the most common and far-reaching message channel to use for search is the Internet. A customer goes to Yummy's website to see if Yummy has an ice cream shop that is nearby, so the customer initiates the communication with Yummy. 311) A The promotion for Yummy Mondaes is a good example of pushing, which means using normal promotion effort—personal selling, advertising, and sales promotion—to help sell the whole marketing mix to possible channel members. 312) D The Yummy Fudge-on-a-Stick promotion plan relies on pulling, which means getting customers to ask intermediaries for the product. 313) D With a new product like Planet Savers, a marketing manager should attempt to get publicity (which is free); target initial communications toward innovators and early adopters; and use an informing objective to tell everyone the product is available. 314) B

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The manager who puts together a promotion blend for Yummy Mondaes should determine who the firm is trying to influence. Each unique market segment may need a separate marketing mix and a different promotion blend. If the target continues to be retailers, that is a much different target market than consumers. 315) A In the market growth stage, more competitors enter the market, and promotion emphasis shifts from building primary demand to stimulating selective demand. Therefore, promotion for Yummy Fruit-on-a-Stick should emphasize ways that Yummy Fruit-on-a-Stick is best. 316) B Early adopters are well-respected by their peers and often are opinion leaders. They tend to be younger, more mobile, and more creative than later adopters. Yummy would target this group. 317) D The task method bases the budget on the job to be done. It determines which promotion objectives are most important and which promotion methods are most economical and effective for the communication tasks relevant to each objective.

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CHAPTER 14 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Personal selling techniques vary little from country to country. ⊚ ⊚

true false

2) While face-to-face with prospects, a salesperson can adjust what he or she says or does to take into consideration culture and other behavioral influences. ⊚ ⊚

Personal selling is often a company's largest single operating expense. ⊚ ⊚

true false

About 10 percent of the total U.S. labor force is in sales work. ⊚ ⊚

true false

5) In the United States, almost as many people are employed in sales work as they are in advertising. ⊚ ⊚

true false

6) In the United States, about 20 times more people are employed in selling than in advertising. ⊚ ⊚

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7) Good salespeople try to help customers buy by presenting both the advantages and disadvantages of a product and showing how it will satisfy the customer's needs. ⊚ ⊚

true false

Good salespeople try to sell the customer, regardless of other factors. ⊚ ⊚

true false

9) Salespeople often are responsible for representing the customer inside their own company as well as representing their company to the customer. ⊚ ⊚

true false

10) Salespeople may represent their company to customers and, in turn, represent their customers within the company. ⊚ ⊚

11)

true false

Only the salespeople in a company actually do personal selling. ⊚ ⊚

true false

12) Sales reps often must plan whole marketing strategies for their own geographic territories. ⊚ ⊚

13)

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Although the salesperson's job may change constantly, there are three basic sales tasks.

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⊚ ⊚

14)

The three basic sales tasks are order-getting, order-taking, and sales prospecting. ⊚ ⊚

15)

true false

The three basic sales tasks are order-getting, order-taking, and supporting. ⊚ ⊚

true false

16) A salesperson's main task might be order-getting, order-taking, or supporting, but sometimes one salesperson does all three tasks. ⊚ ⊚

true false

17) A salesperson who aggressively seeks out possible buyers with a well-organized sales presentation designed to sell a product is a missionary sales rep. ⊚ ⊚

18)

Order getters are concerned with finding new opportunities for the company. ⊚ ⊚

19)

true false

Order getters are even more important for business products than for consumer products. ⊚ ⊚

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20) Producers of all kinds of products, especially business/consumer products, have a great need for order getters. ⊚ ⊚

true false

21) A good order getter tries to sell solutions to the customer's problems, not just physical products. ⊚ ⊚

true false

22) Agent wholesalers—particularly manufacturers' agents and brokers—are often order getters. ⊚ ⊚

true false

23) Once the order-getting is done and customers have become established, producers sometimes try to save money by eliminating the order getter and using their own order takers. ⊚ ⊚

true false

24) Retail order getters are usually needed for unsought consumer productsand are desirable for heterogeneous shopping products as well. ⊚ ⊚

true false

25) Homogeneous shopping products need order getters more than heterogeneous shopping products. ⊚ ⊚

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26)

Order getters complete most sales transactions. ⊚ ⊚

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27) A salesperson who completes routine sales made regularly to target customers is an order taker. ⊚ ⊚

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28) Order takers should work on improving the whole relationship with the customer, not just on completing a single transaction. ⊚ ⊚

true false

29) A producer's order taker may explain details, handle complaints, and train the customer's employees. ⊚ ⊚

true false

30) Missionary salespeople usually work for wholesalers and provide special promotion help to producers whose products are widely distributed. ⊚ ⊚

true false

31) Developing goodwill and stimulating demand are tasks performed by missionary salespeople. ⊚ ⊚

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32) Scientists or engineers—who may have little interest in sales but do provide technical assistance to order getters—are called technical specialists. ⊚ ⊚

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33) Customer service reps are usually specialists who are involved in helping potential customers before a purchase is made. ⊚ ⊚

true false

34) Customer service reps are more useful for "keeping" customers than for "winning" new customers. ⊚ ⊚

35)

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Customer service involves a breakdown in some aspect of the marketing mix. ⊚ ⊚

true false

36) When a customer service rep works to solve a customer's problem, it often involves taking steps to remedy what went wrong. ⊚ ⊚

true false

37) Providing effective customer service is relatively simple because it is usually clearer how to repair a negative experience than it is to provide an initial purchase experience that is satisfying to the customer. ⊚ ⊚

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38) From a marketing management perspective, it's best to think of customer service as part of Promotion, not part of Product. ⊚ ⊚

39)

true false

Poor customer service is likely to reduce a firm's customer equity. ⊚ ⊚

true false

40) According to the customer equity approach, in order for a business to grow it must choose one of three paths: (1) acquiring new customers, (2) retaining current customers, or (3) enhancing the purchases from current customers. ⊚ ⊚

41)

true false

Customer service reps are customer advocates, but they need company support. ⊚ ⊚

true false

42) Team selling might involve a technical specialist, an order getter, and a customer service rep all working together on a specific account. ⊚ ⊚

43)

true false

Team selling occurs when different people work together on a specific account. ⊚ ⊚

true false

44) A major accounts sales force is used when a company wants to be certain that its most important customers get a special selling effort.

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true false

45) Moen, a maker of plumbing fixtures, employs a major accounts sales force and gives special attention and support to the firm's largest accounts, such as Home Depot and Lowe's. ⊚ ⊚

true false

46) Telephone selling (telemarketing) to consumers is still extremely popular, despite the National Do Not Call Registry. ⊚ ⊚

true false

47) Although telephone selling by an inside sales group can save time and money in business markets, it has been declining in recent years. ⊚ ⊚

true false

48) An inside sales force is often used to reach small or hard-to-reach customers that a firm might otherwise promote to with mass selling or ignore altogether. ⊚ ⊚

true false

49) A sales territory is the geographic area that is the responsibility of one salesperson or several working together. ⊚ ⊚

true false

50) When deciding how many salespeople are needed, the first step is to determine how many sales reps are used by competing companies.

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true false

51) When companies sell different products that require very different knowledge or skills, they can have salespeople specialize by product line. ⊚ ⊚

true false

52) Even though some sales tasks can be handled effectively and economically using technology, a sales rep is still needed to build relationships. ⊚ ⊚

true false

53) Digital self-service is particularly effective when the customer needs routine information on a recurring basis. ⊚ ⊚

54)

Digital self-service increases costs. ⊚ ⊚

55)

true false

Digital self-service lowers costs. ⊚ ⊚

true false

56) It is primarily the sales manager's job to decide what types of information technology tools salespeople need and how they will be used. ⊚ ⊚

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57) It is the sole responsibility of the sales manager to decide what types of tools are needed and how they will be used. ⊚ ⊚

true false

58) Some firms are adopting new software and hardware technologies to get a competitive advantage in personal selling. ⊚ ⊚

true false

59) Because the use of new information technologies can change how well the sales job is done, their use should be left up to individual sales reps. ⊚ ⊚

true false

60) A company that provides its sales reps with information technology tools should expect that reps will do a better job with administrative tasks but that they will be less effective in their actual sales calls. ⊚ ⊚

true false

61) The sales manager's decision to use new information technologies has costs as well as benefits. ⊚ ⊚

true false

62) Using multiple interviews and background checks to select "born salespeople" works so well that it almost guarantees success.

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63)

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A job description is a written statement of what a salesperson is expected to do. ⊚ ⊚

true false

64) Job descriptions are not necessary for personal selling because all salespeople are expected to do the same task: sell products. ⊚ ⊚

true false

65) The job description should provide clear guidelines concerning (1) who should be selected, (2) how they are trained, (3) how well they are performing, and (4) how they should be paid. ⊚ ⊚

66)

true false

Firms often hire new salespeople and immediately send them out on the road. ⊚ ⊚

true false

67) A firm's initial sales training program should cover company policies, product information, building relationships with customers, and selling skills. ⊚ ⊚

68)

true false

Salespeople usually earn more than top management. ⊚ ⊚

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true false

69) A company's salespeople are usually paid more than its office help or production workers, but less than top management. ⊚ ⊚

true false

70) Regarding sales force compensation, straight salary gives the most security for a salesperson, while straight commission gives the most incentive. ⊚ ⊚

true false

71) Most sales managers offer their salespeople a "combination plan" because this method of compensation provides a balance between incentive and security. ⊚ ⊚

true false

72) A sales manager who wishes to supervise and control his salespeople's activities closely should pay them a straight salary instead of a straight commission. ⊚ ⊚

true false

73) A salesperson on a commission salary earns the same amount regardless of how he or she spends time. ⊚ ⊚

true false

74) Incentives that just focus on short-term sales objectives may not motivate sales reps to develop long-term, need-satisfying relationships with their customers. ⊚ ⊚

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true false

75)

A sales quota is the specific sales or profit objective a salesperson is expected to achieve. ⊚ ⊚

true false

76) Regarding sales force compensation, straight commission increases the firm's need for working capital. ⊚ ⊚

true false

77) Small companies that have limited working capital or uncertain markets often prefer to use straight salary compensation plans. ⊚ ⊚

78) reps.

Using sales reps who are paid a straight commission is similar to using manufacturers' ⊚ ⊚

79)

true false

Prospecting involves following all the "leads" in the target market. ⊚ ⊚

true false

80) Prospecting involves following all the leads in the target market to identify potential customers. ⊚ ⊚

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true false

81)

Prospect lists or a CRM database can help salespeople do a better job with prospecting. ⊚ ⊚

82)

true false

A salesperson's request for an order during a sales presentation is called a "close." ⊚ ⊚

true false

83) A customer's effort to keep a salesperson from completing a sales presentation is called a "close." ⊚ ⊚

true false

84) The main advantage of the prepared sales presentation approach is that it tends to work equally well with different types of customers. ⊚ ⊚

85)

true false

A weakness of the canned approach is that it treats all potential customers differently. ⊚ ⊚

true false

86) The prepared sales presentation involves developing a good understanding of the individual customer's needs before trying to close the sale. ⊚ ⊚

true false

87) The most suitable sales presentation for prospective customers whose needs are very different is the "consultative selling approach."

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88)

true false

The consultative selling sales presentation is fast and requires little skill. ⊚ ⊚

true false

89) The selling formula approach to sales presentations assumes that something is known about the target customer's needs and attitudes. ⊚ ⊚

90)

true false

The selling formula approach starts with a prepared presentation outline. ⊚ ⊚

true false

91) The selling formula approach to making a sales presentation is really a combination of the prepared sales presentation approach and the consultative selling approach. ⊚ ⊚

92)

true false

The AIDA sequence can help a sales manager evaluate a possible sales presentation. ⊚ ⊚

true false

93) Each sales manager and salesperson needs to think about the AIDA sequence in deciding what sales approach to use and in evaluating a possible presentation. ⊚ ⊚

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true false

94)

In general, most sales presentations follow the sequence of stages in the AIDA model. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 95) Marketing managers should make specific strategy decisions about A) how many and what kind of salespeople are needed. B) how salespeople should be compensated and motivated. C) what kind of sales presentation should be used. D) how salespeople should be selected and trained. E) All of the answers are correct.

96)

For many firms, the largest single operating expense is A) publicity. B) personal selling. C) administrative overhead. D) product management. E) research and development.

97)

Personal selling

A) is important to business firms, but only about 1 percent of the U.S. labor force does personal selling work. B) is often a company's largest single operating expense. C) requires only that the sales rep have an engaging smile, a big expense account, and the ability to get along well with people. D) uses the same techniques around the globe with little variation. E) is the least profitable business decision for any company.

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98)

Which of the following statements about personal selling is false?

A) Good salespeople present both the advantages and the disadvantages of their products. B) Helping to buy is good selling. C) Personal selling is often a company's smallest single operating expense. D) A salesperson is often a representative of the whole company.

99)

At least ________ percent of the total U.S. labor force performs sales work. A) 20 B) 10 C) 30 D) 50 E) 40

100) Sales jobs are a major part of the U.S. economy. About what percentage of employed workers in the United Statesare in some type of sales job? A) 2 percent B) 5 percent C) 10 percent D) 15 percent E) 20 percent

101)

Good marketing managers know that

Version 1

A) most salespeople are "bags of wind." B) good salespeople try to help customers buy. C) the role of the salesperson has been down-graded in business marketing. D) organizational buyers have little use for salespeople. E) the salesperson's job is to "get rid of the product."

102)

Good salespeople A) help customers buy. B) are never the only link between the firm and its customers. C) are not part of the marketing information function for the firm. D) are not expected to be marketing managers in their own territories. E) help customers avoid buying.

103)

A professional salesperson A) may negotiate prices or diagnose technical problems when a product doesn't work

well. B) doesn't try to "sell" customers, but rather tries to help them satisfy their needs. C) is a representative of the whole company. D) is responsible for feeding back information about customers and competitors. E) All of the answers are correct.

104)

Salespeople are likely to be responsible for A) providing market information to the firm. B) providing technical support. C) attaining sales goals. D) maintaining customer relations. E) All of the answers are correct.

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105)

A professional salesperson A) is only expected to "get rid of the product." B) has only one basic job: to communicate the company's story to customers. C) may be given a title such as field manager or market specialist. D) is expected to overcome the customer's objection—whatever it may be. E) does not represent the company.

106) Fine Art Salon and Spa recently hired Natalie as a receptionist. Her job mainly involves greeting customers, booking appointments, and connecting customer calls to the appropriate department. One of the walk-in customers asked Natalie to recommend a natural treatment to reduce the dryness on his skin. Natalie replied that he would have to wait to meet the spa manager, as this was not her job. How should the manager at the Spa react to Natalie's response? A) The manager should be happy that Natalie is not deviating from the job description. B) The manager should promote Natalie to the position of a customer service rep. C) The manager should demote Natalie to a much lower position. D) The manager should ask Natalie not to interact with walk-in customers in any situation. E) The manager should train her so that she knows about the spa's products and how to sell them.

107)

Which of the following statements about a salesperson's role is true?

A) The salesperson rarely serves as a link between the firm and its customers. B) The salesperson represents the customers’ interests inside the selling firm. C) The salesperson also holds titles such as management specialist and chief engineer. D) The salesperson only aims to sell the customer. E) A salesperson is seldom responsible for negotiating prices or diagnosing technical problems.

108) Some salespeople are expected to act as marketing managers in their own geographic territories and decide

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A) how they will allocate their promotion money and their own time. B) which customers they will target. C) which intermediaries they will rely on or help. D) which products in the company's line they will push aggressively. E) All of the answers are correct.

109)

A salesperson may have to make choices about A) which particular products in the whole line to push most aggressively. B) what specific target customers to aim at. C) how to adjust prices. D) which intermediaries to rely on or help. E) All of the answers are correct.

110)

A salesperson may have choices about all of the following except A) what target customers to aim at. B) which particular products to emphasize. C) which intermediaries to rely on or help. D) what to manufacture. E) how to adjust prices.

111)

Which of the following is not one of the basic sales tasks? A) order-taking B) supporting C) sales-promoting D) order-getting

112) A salesperson for an athletic shoe company is assigned the functions of order-getting, order-taking, and sales support. Is this a mistake by his company? Version 1

A) No, because order-getters tend to be less well trained than order-takers. B) No, because sales support activities can require a great deal of technical knowledge. C) Yes, because order-takers are often required to develop sales presentations. D) No, because one employee may fulfill all three types of roles for some businesses. E) Yes, because supporting salespeople should always be involved in order-getting as well.

113)

The three basic sales tasks are A) order-closing, order-opening, and sales-promoting. B) order-taking, missionary selling, and order-getting. C) order-taking, order-managing, and order-getting. D) order-taking, supporting, and order-getting. E) order-closing, supporting, and order-promoting.

114)

Which of the following descriptions of the three basic sales tasks is correct?

A) order-taking: various activities aimed at getting sales in the long run B) supporting: routine completion of sales made regularly to target customers C) order-getting: seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea D) None of these descriptions is correct.

115) A salesperson who seeks possible buyers with a well-organized sales presentation designed to get new business is a(n) A) technical specialist. B) supporting salesperson. C) order getter. D) missionary salesperson. E) order taker.

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116) A salesperson who seeks possible buyers with a well-organized sales presentation designed to sell a good, service, or idea is called a(n) A) influencer. B) order getter. C) order taker. D) order generator. E) gatekeeper.

117)

Order getters

A) are concerned with establishing relationships with new customers and developing new business. B) sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers. C) usually handle all adjustments or complaints. D) routinely complete sales made regularly to target customers. E) are usually responsible for answering any final questions and completing the sale.

118)

A good order getter A) is likely to use a high level of personal persuasion. B) seeks to establish relationships and develop business from new customers. C) needs "know-how" to help solve customers' problems. D) uses a well-organized sales presentation designed to get new business. E) All of the answers are correct.

119)

Order-getting salespeople would be required for which one of the following jobs?

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A) helping a buyer plan and install a computer and software for use as a website server B) helping drug retailers figure out better ways to display and promote their products C) seeking orders from supermarket buyers for a new brand of high protein diet supplement that has been added to the company's line D) helping an indecisive consumer in a supermarket select the kind of meat she should buy for dinner E) handling a complaint from a furniture store about a shipment that is late

120)

Producers’ order getters are generally expected to A) know all the technical details of the product. B) understand a customer’s whole business. C) know the details of the customer firm's particular applications of the product. D) use a well-organized sales presentation to get business. E) All of the answers are correct.

121)

Order getters

A) may make a sale by helping a customer solve a business problem. B) are more likely to be used with homogeneous shopping products than heterogeneous shopping products. C) are used in business markets but not in consumer markets. D) generally rely on a routine, "canned" sales presentation. E) All of the answers are correct.

122) Byron Coffey is a sales rep for a producer of fiberglass roofing shingles. He tries to persuade building materials wholesalers to switch from competing producers. Byron is a(n)

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A) order taker. B) order getter. C) technical specialist. D) customer service rep. E) missionary salesperson.

123) Dimitri Kojak works for a producer of industrial elevators. He knows all the technical details of the many different ways they are used by business customers. He makes presentations to new prospects and eventually gets a share of their business. Dimitri is a A) member of the firm's major accounts sales force. B) missionary salesperson. C) technical specialist. D) producer's order getter. E) customer service rep.

124)

Manufacturers’ agents often do the job of A) merchandising. B) order-getting. C) order-taking. D) technical advising. E) supporting activities.

125) Skye West is a manufacturers' agent. Skye is most likely to have responsibilities like those of a A) wholesaler's order taker. B) producer's order taker. C) producer's supporting salesperson. D) retail order taker. E) producer's order getter.

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126) Kyra Hanover is an order getter for a modern wholesaler. Kyra is least likely to be involved with A) repairing products returned to retailers by customers. B) conducting demonstrations for retailers' salespeople and customers. C) checking stock to determine what retailers should order. D) helping to plan special promotions and advertising for retailers. E) serving as a marketing advisor to her retailers.

127)

Retail order getters are usually required for A) unsought products. B) homogeneous shopping products. C) impulse products. D) emergency products. E) None of these product types is a good answer.

128)

Retailers of heterogeneous shopping products usually have a need for A) order takers. B) technical specialists. C) merchandisers. D) order getters. E) supporting salespeople.

129) Paul Osborne is an agent for a major insurance company. He is responsible for building his own network of clients who purchase insurance policies and other financial services from him. He schedules appointments with prospective clients, makes sales presentations, and provides policy service after the sale. Paul is a(n)

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A) order taker. B) order getter. C) supporting salesperson. D) sales technician. E) sales manager.

130) Jan Alvarez works for a cable TV company in a large city. She makes telephone calls during the early evening and tries to sell cable services to nonsubscribers. Jan is a(n) A) technical specialist. B) sales promotion specialist. C) order taker. D) order getter. E) customer service rep.

131) Tamika White is a sales associate for a prestigious jewelry store. When she started with the store, she relied almost completely on serving customers who just happened to walk into the store and who knew exactly what they wanted—all she had to do was ring up the sale. With experience, she began to gather information about her customers and use them as a source of referrals. She now maintains a large database of her current customers, regularly communicates with them to keep track of their needs, and actively solicits referrals to new customers. When she gets a new referral, Tamika sends the prospective client an invitation to visit the store so that she can work with them personally. As a result, her sales are almost all from current customers and referrals, with almost no sales from casual, walk-in customers. Tamika started out as a(n) ________ but has now become a(n) ________. A) order getter; supporting salesperson B) order taker; supporting salesperson C) supporting salesperson; order taker D) order taker; order getter E) order getter; order taker

132)

Which of the following descriptions of salespeople is correct?

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A) order takers: sell to the regular or established customers B) supporting salespeople: routine completion of sales made regularly to target customers C) order getters: help the order-oriented salespeople D) missionary salespeople: supporting salespeople who provide technical assistance E) customer service reps: work to close orders after other salespeople have started them

133)

Routine completion of sales made regularly to target customers is done by a(n) A) order taker. B) merchandiser. C) detailer. D) order getter. E) supporting salesperson.

134)

A good sales manager knows that A) order takers usually do very little aggressive selling. B) order takers can be used by wholesalers—but not by producers. C) order getters complete almost all sales in our country. D) whenever possible, order takers should be replaced by order getters. E) All of the answers are correct.

135)

Order takers A) are not necessary if the firm has good order getters. B) are the routine contact people in the sales force. C) usually don't call on customers. D) do not require any specialized training. E) All of the answers are correct.

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136)

Order takers are concerned with

A) establishing relationships with new customers and developing new business. B) selling to regular customers, completing most sales transactions, and maintaining relationships with their established customers. C) seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. D) selling unsought and heterogeneous shopping products. E) working with customers to resolve problems that arise with a purchase, usually after the purchase has been made.

137)

Order-taking involves

A) establishing relationships with new customers and developing new business. B) selling to new customers. C) seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. D) enhancing the relationship with the customer and getting sales in the long run. E) routinely completing sales made regularly to target customers.

138)

Regarding personal selling, good sales managers know that A) many orders are lost simply because the salesperson didn't ask for the order. B) salespeople should spend the same amount of time with each prospect. C) the sales rep has very little influence on a prospect's response. D) good salespeople are born—not taught. E) None of these alternatives is correct.

139)

An order-taking sales rep would be most appropriate for a producer of

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A) cleaning materials for maintenance—calling on regular customers. B) designer clothing—calling on possible new retailers. C) laptop computers—selling to manufacturers who don't yet have any computers. D) airplanes—calling on possible corporate jet customers. E) a new brand of DVD system—calling on wholesalers.

140)

A producer's order taker

A) usually has little opportunity to increase sales in a territory. B) is expected to help customers when something goes wrong with the marketing mix. C) doesn't have to make sales presentations—order getters do this task. D) doesn't have to keep customers informed about new developments—order getters do this task. E) None of the answers arecorrect.

141)

An established merchant wholesaler of business supplies would rely mainly on A) merchandisers. B) order takers. C) order getters. D) supporting salespeople. E) missionary salespeople.

142) Mark Johnson's business card says he is a "Customer Service Representative" for OceanView Metal Industries—a wholesaler of standardized steel components used in construction. Mark answers customer questions about the firm's products and arranges for routine orders to be sent to the customer's construction site. It appears that Mark is primarily a(n)

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A) missionary salesperson. B) technical specialist. C) order taker. D) order getter. E) customer.

143) When an auto repair shop calls an auto parts wholesaler to order the parts to fix a wrecked vehicle, the person who answers the repair shop's questions is a A) missionary salesperson. B) technical specialist. C) wholesaler's order getter. D) supporting salesperson. E) wholesaler's order taker.

144) When a customer calls the 800 toll-free number at L.L. Bean in Freeport, Maine, to order a new chamois shirt, the person who answers the customer's questions is a A) retailer's order taker. B) missionary salesperson. C) supporting salesperson. D) retailer's order getter. E) technical specialist.

145)

A Wendy's fast-food restaurant needs ________ to serve its customers. A) merchandisers B) order takers C) order getters D) hucksters E) supporting salespeople

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146)

People who help order-oriented salespeople but don't try for orders themselves are A) technical specialists. B) missionary salespeople. C) supporting salespeople. D) All of the answers fit the description.

147)

________ would be LEAST likely to use supporting salespeople. A) Supermarkets B) Producers of prescription drugs C) Producers of business accessories D) Producers of consumer staples E) Merchant wholesalers of installations

148)

Missionary salespeople

A) work with customers to resolve problems that arise at the time of purchase. B) work for producers, calling on their intermediaries and their customers. C) provide technical assistance to order-oriented salespeople. D) work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. E) provide information about products, explain company policies, and even negotiate prices or diagnose technical problems.

149)

Missionary salespeople are sometimes called

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A) customer service reps. B) technical specialists. C) detailers. D) order takers. E) account managers.

150) Which of the following salespeople try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries? A) order takers B) customer service reps C) missionary salespeople D) technical specialists E) account representatives

151) A salesperson works for a producer, calls on intermediaries and their customers, tries to develop goodwill while stimulating demand, but doesn't take any orders for the producer's products. This salesperson is a(n) A) order getter. B) technical specialist. C) missionary salesperson. D) order taker. E) sales manager.

152)

Missionary sales reps A) are order takers. B) are sales reps in training. C) are customer service reps who resolve problems after purchases have been made. D) help train intermediaries' salespeople and set up retail displays. E) do a lot of aggressive selling.

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153) The sales manager for a producer of consumer convenience products should recognize that the company may need A) order getters to sell its established line to regular wholesaler customers. B) missionary salespeople to support its wholesalers. C) order takers to open up new territories. D) technical specialists to sell to purchasing agents. E) All of the answers are correct.

154) A large producer of snack foods feels that retailers do not promote its products aggressively enough because they also sell competitors' products. The producer should use some A) missionary sales reps. B) more aggressive sales reps. C) order takers. D) order getters. E) manufacturers' agents.

155) A salesperson for cold remedy products visits pharmacists during the cold season and encourages them to use a special end-of-aisle display for his firm's cough syrup and then helps set up the display. The salesperson is a(n) A) customer service representative. B) order taker. C) technical specialist. D) missionary salesperson. E) order getter.

156) Gloria Highnote works for CD Wholesale. She helps CD's retailer-customers set up their cooperative advertising, helps train the retailer's salespeople, and gives CD feedback on how sales promotion ideas are working. Gloria is a(n)

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A) technical specialist. B) customer service rep. C) order getter. D) order taker. E) missionary salesperson.

157) Ali Mulhammed has been working for a producer of video games that sell through toy wholesalers to retailers. He knows all about the games sold by his company and by competitors. He goes into his wholesalers' territories and tries to get local retailer customers interested in the company's line and even trains retailers to demonstrate the games. When a retailer is ready to buy, Ali turns the business over to the wholesaler's sales rep. Ali is a A) member of the firm's major accounts sales force. B) missionary salesperson. C) technical specialist. D) manufacturers' agent. E) None of the answers are correct.

158) CeCe Springer works for a large cosmetics company. She calls on retailers to tell them about her firm's new products, to train the retailers' salespeople, and to set up promotion displays. Her boss actually handles the order-related activities. CeCe is a(n) A) order getter. B) manufacturers' agent. C) technical specialist. D) order taker. E) missionary sales rep.

159) A company that sells a new type of meat grinder to big supermarket chains needs someone to train workers in the stores' meat departments to use the machine properly and efficiently. What type of salesperson is this?

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A) order getter B) missionary salesperson C) new-account salesperson D) order taker E) consultative salesperson

160)

Missionary selling is A) another name for major accounts selling. B) the performance of personal selling activities for a nonprofit organization. C) the same as prospecting. D) a first step on a career path to order-oriented jobs in some companies. E) typically only used with a firm's largest or most important customers.

161) Which of the following is most likely to be the order of roles that a sales person might hold as he or she continues to work for a company? A) customer service rep, sales clerk B) missionary salesperson, order getter C) technical specialist, order taker D) missionary salesperson, technical specialist E) order getter, missionary salesperson

162) Which salespeople are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product? A) customer service reps B) order takers C) technical specialists D) missionary salespeople E) systems engineers

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163)

Technical specialists A) are usually paid a straight commission on sales. B) help explain technical details as needed. C) usually work with business purchasing agents. D) usually install emergency products. E) are technical order getters.

164)

A technical specialist

A) often has a background in product applications rather than sales. B) is often a science or engineering graduate. C) may work in conjunction with an order getter to persuade new clients. D) is usually the person who explains technical details of the firm's product to prospective customers. E) All of the answers are correct.

165) HP's customers often need help installing its mini-computer systems, so HP should support the efforts of its order getters with A) sales promotion specialists. B) selling aids. C) missionary salespeople. D) technical specialists. E) order takers.

166)

Dell sells custom-made computer systems. Besides order getters, Dell probably uses

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A) order takers. B) missionary salespeople. C) merchandisers. D) manufacturers' agents. E) technical specialists.

167) Jim Meadowmont works for Sony. He doesn't take orders from customers, but he is extremely knowledgeable about the entire Sony product line and about how its specifications compare to the competition's products. He helps a regular Sony salesperson by providing details about how Sony's products work, and he knows the customer applications for which the products are best suited. Jim is a(n) A) order getter. B) technical specialist. C) missionary salesperson. D) order taker. E) sales manager.

168) Sarah Manchester works for a cable TV company in a large city. She consults with architects and builders who want advice about planning for a home theater set-up before a home is built and wired. The cable company created Sarah's position when it learned that a local satellite TV service provider was signing up a larger share of new home owners in luxury subdivisions. Sarah is a(n) A) technical specialist. B) sales promotion specialist. C) order taker. D) order getter. E) customer service rep.

169) Dow Chemical hires science and engineering graduates to explain the advantages of its products—and how to dispose of them in an environmentally friendly manner—to prospective customers. What type of salesperson is this?

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A) order getter B) new-account salesperson C) order taker D) consultative salesperson E) technical specialist

170)

Customer service reps A) are order getters who sell service products. B) usually work with missionary salespeople. C) resolve problems after a purchase has been made. D) usually install technical products for customers. E) hire professional services personnel.

171)

Customer service reps

A) work with customers to resolve problems that arise at the time of purchase. B) work for producers calling on their intermediaries and their customers. C) provide technical assistance to order-oriented salespeople. D) work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. E) are invaluable in working with business customers, but not with final consumers.

172)

Customer service reps help A) customers buy. B) the company win customers. C) when a customer has technical questions that an order taker can't answer. D) the company keep customers. E) All of the answers are correct.

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173)

A customer service rep's main job is to

A) take orders. B) find a remedy when something goes wrong with a firm's marketing mix after a purchase. C) get new orders. D) set up retail displays for retail customers. E) listen to customer complaints.

174)

A customer service rep's job could include

A) understanding a customer's complaints. B) finding a remedy when something goes wrong with a firm's marketing mix after a purchase. C) resolving a billing problem. D) handling an exchange of a defective product. E) All of the answers are correct.

175)

Customer service is part of A) Product. B) Place. C) Promotion. D) Price. E) None of the answers are correct.

176) Which of the following posits that acquiring new customers, retaining current customers, and enhancing the purchases from current customers are the three paths for which a business can grow?

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A) customer equity approach B) basic sales proposal C) prepared sales presentation D) consultative selling approach E) selling formula approach

177) Jana purchased new tile from Tile Express and used their installation service to install the new tile around her bathtub. Much to her dismay, within a few weeks, some of the tiles began to show cracks. She called Tile Express and they sent a team the next day to replace the tile. They also followed up a month later to make sure that everything was still satisfactory. Jana was so happy with the tile and Tile Express’s customer service that she posted pictures of her new tub enclosure on Facebook and recommended Tile Express to her friends, some of whom decided to use Tile Express for their own tiling needs. Which of the following does this best exemplify? A) positive word-of-mouth B) good customer service C) the power of social media D) customer endorsement E) All of the answers are correct

178)

Which of the following is true of proactive customer service?

A) It requires companies to wait for customers to complain before responding. B) Companies adopting this approach to customer service view unhappy customers as unprofitable. C) Use of social media to track customer complaints reduces a firm's efforts toward proactive customer service. D) It can be achieved by monitoring customer activity on the Internet and using big data analytics. E) Companies using proactive customer service wait for a significant number of customers to call in complaints so they can analyze if a problem requires attention.

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179) Fevor Inc. and Linvar Inc. are firms operating within the same industry. Fevor responds to customer complaints after its customers communicate their problems. However, Linvar does not wait for its customers to complain. Instead, the company monitors customers' online activity, collecting big data from social media, learning what problems exist, and resolving them before complaints come in. Which of the following can be best concluded from this scenario? A) Fevor Inc. follows a proactive approach, while Linvar Inc. follows a reactive approach to customer service. B) Fevor Inc. focuses on retaining existing customers, while Linvar Inc. focuses on damage control. C) Linvar Inc. focuses on retaining existing customers, while Fevor Inc. focuses on damage control. D) Fevor Inc. follows a reactive approach, while Linvar Inc. follows a proactive approach to customer service. E) Both companies utilize a proactive approach to customer retention.

180) Monitoring the web and using big data analytics from Facebook, Twitter, blogs, and discussion forums helps companies A) reduce their customer equity. B) replace existing customers with new customers. C) build a positive reputation. D) avoid taking a proactive approach to customer service. E) generate customer complaints.

181) Garoc Corp. has developed a reputation for poor customer service over the past couple of decades. Which of the following practices will help the company turn its reputation around? A) taking a reactive approach to customer service over a proactive approach B) replacing existing customers with new customers C) limiting customer service reps' role in personal selling D) limiting the sales function to only the salespeople in the company E) monitoring customers' complaints by accessing big data from social media and the Internet

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182)

Which of the following statements about customer service is true?

A) A customer service rep may have to deal with a customer problem that is due to a customer error, not just an error by the company. B) Customer service is the service part of the benefit that a customer gets when purchasing a physical good. C) Customer service costs are likely to decrease a firm's customer equity. D) Customer service is more important for winning customers than for keeping customers. E) From a firm's perspective, customer service is a necessary evil but isn't likely to cost the firm anything.

183)

Customer service reps A) are advocates for the customer. B) solve problems after a purchase. C) are advocates for the company. D) promote the customer's next purchase. E) All of the answers are correct.

184)

A breakdown in any element of the marketing mix can result in a requirement for A) customer service. B) additional sales promotion. C) reimbursement. D) replacing the salesperson. E) technical specialists.

185) Hannah Spiritway works for a cable TV company in a large city. She handles telephone calls from customers who are having problems with their cable service. Hannah is a(n)

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A) technical specialist. B) sales promotion specialist. C) order taker. D) order getter. E) customer service rep.

186)

A good marketing manager organizing a new sales force knows that

A) new sales reps should start out on the major accounts sales force so that they can learn the business from the bottom up. B) the most profitable approach is to start with a small number of salespeople and then quickly add more if they can't do the job. C) it may be necessary to rely on team selling and have more than one rep call on a single customer if different skills are needed. D) a major accounts sales force is used to sell to small retailers who are not covered by wholesalers in the channel. E) None of the answers are correct.

187) Rothbart Inc. has a quality control manager, order-taking salesperson, and financial manager as part of the personnel involved in helping to improve a customer relationship. Which of the following approaches is Rothbart using? A) telemarketing B) order getting C) team selling D) order-taking E) merchandising

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188) Jonquil, Inc., located in Walla Walla, Washington, is a major manufacturer of class rings for colleges. It is one of two ring companies trying to become the solely authorized class ring distributor for Carter Glass University in Virginia—a large university of over 25,000 students. When invited to make a sales presentation to the buying group at Carter Glass University, Jonquil sent the national vice-president of marketing, the national customer service director, the national design director, the regional sales manager, and the local sales representative in Virginia. During the sales presentation, each person discussed what role they would have in serving the Carter Glass University account. Jonquil, Inc. seems to be doing A) joint problem solving. B) team selling. C) sales promotion. D) order-taking. E) missionary selling.

189) Jeffrey O'Donnell works for a producer of dairy products and knows all about these products. He is responsible for only two very large chain customers. Other sales reps, like Jeffrey, call on other large chains for this producer. They regularly call on the central offices of these big retail chains and encourage them to buy the company's full line. Jeffrey is a A) missionary salesperson. B) retail order taker. C) technical specialist. D) manufacturers' agent. E) member of his company's major accounts sales force.

190) Edward Seaton owns a firm that manufactures custom-made carpets. He has a regular sales force to call on smaller customers and an elite force to call on larger accounts. The elite sales force is called

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A) customer service reps. B) a major accounts sales force. C) technical specialists. D) supporting salespeople. E) missionary salespeople.

191) true?

Which of the following statements about telephone selling by an inside sales group is

A) It saves time and money for the producer. B) It provides a way for the producer to get direct feedback from customers. C) It extends the personal selling effort to new target markets. D) It provides a way for the producer to find solutions to potential problems. E) All of the answers are correct.

192)

Which of the following statements about telemarketing is false?

A) Customer response to telemarketing is the same in both business markets and final consumer markets. B) Telemarketing can extend personal selling efforts to new target markets. C) Telemarketing can save time and money for the seller. D) Telemarketing can increase the frequency of contact with current customers. E) Telemarketing can provide needed support for customers in e-commerce situations.

193) A group of salespeople that meets with customers in a manner that is not face-to-face is known as a(n) ________ sales force. A) inside B) major accounts C) team selling D) territorial E) specialized

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194) For which type of customer would a company be most likely to utilize an inside sales force? A) hard-to-reach customers B) very large customers C) technology customers D) customers with complex needs E) customers in small geographic areas

195) An AFLAC insurance agent calls a competitor's small-business customers to try to convince them to switch insurance companies. What type of sales activity is this? A) missionary calling B) technical prospecting C) telemarketing D) order-taking E) supporting

196)

Carefully set sales territories A) can reduce travel time but increase costs. B) can reduce confusion about who has responsibility for a set of sales tasks. C) always include at least one metropolitan area. D) always reduce the cost of sales calls. E) can increase travel time while reducing costs.

197) Allied Corp. has found that an effective salesperson should call on each account about six times a year and spend about two hours per sales call. Every salesperson works a 40-hour week and takes off two weeks for vacation each year. A salesperson must spend half of the time on travel and administration. Approximately how many salespeople does Allied need to service 1,000 accounts?

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A) 12 B) 30 C) 2 D) 6 E) 24

198) DrainClear Plumbing Supply has found that an effective salesperson should call on each account about four times a year and spend about three hours per sales call. Every salesperson at DrainClear works a 40-hour week and takes off two weeks for vacation each year. A salesperson must spend one-quarter of the time on travel and administration. Approximately how many salespeople does DrainClear need to service 1,000 accounts? A) 8 B) 12 C) 2 D) 6 E) 24

199) Splash World Pool Supplies wants its salespeople to call on pool wholesalers five times per year and to spend two hours on each sales call. Every salesperson works a 40-hour week and takes off two weeks for vacation each year. A salesperson must spend half of the time on travel and administration. Approximately how many salespeople does Splash World need to service 1,000 accounts? A) 10 B) 20 C) 8 D) 2 E) 24

200) Emphasis on standardized e-commerce is appropriate for a business selling situation that requires

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A) high relationship building and a high degree of standardized information exchange. B) low relationship building and a low degree of consumer product awareness. C) low relationship building and a high degree of standardized information exchange. D) high relationship building and high consumer technology understanding. E) low relationship building and a low degree of standardized information exchange.

201)

Digital self-service would be appropriate in a case where A) relationship building and standardized information needs are low. B) relationship building and standardized information needs are high. C) standardized information needs are high and relationship-building needs are low. D) standardized information needs are low and relationship-building needs are high. E) there are no standardized information or relationship-building needs.

202) Charles Brothers Bakery's sales efforts to local schools emphasizes personal selling without any e-commerce support. If Charles Brothers Bakery is doing things right, we would expect that the situation of selling to schools requires A) high relationship building and a low degree of standardized information exchange. B) low relationship building and a low degree of consumer product awareness. C) low relationship building and a high degree of standardized information exchange. D) high relationship building and high consumer technology understanding. E) low relationship building and a low degree of standardized information exchange.

203) It is usually the ________ job, perhaps with help from specialists in technology, to decide what types of sales technology tools are needed and how they will be used. A) sales manager's B) procurement manager's C) marketing executive's D) purchasing manager's E) product manager's

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204) A sales rep might use new software for to gain a competitive advantage in which of the following? A) sales forecasting B) shelf-space management C) customer contact management D) time management E) Software that aids in any of these could help provide a competitive advantage.

205) A sales rep might use new software for which of the following to gain a competitive advantage? A) sales forecasting B) spreadsheet analysis C) electronic presentations D) customer contacts E) Software that aids in any of these could help provide a competitive advantage.

206)

New hardware and software available to salespeople

A) change the basic sales tasks that must be performed, but don't change how well the tasks are done. B) involve no costs to the firm except the purchase of the hardware and software. C) do not provide any new ways to meet customer needs. D) may provide a real competitive advantage to a firm if they are used properly. E) make their jobs a lot more complicated.

207) Which of the following is an example of a company using artificial intelligence to interact with customers?

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A) A clothing retailer uses a chatbot to help customers build an outfit with a piece of clothing already in their closet. B) A car parts manufacturer lists FAQs on their website in order to provide low-cost customer service. C) A software company sets up an online community where customers can help each other with problems. D) A bank places an ATM machine at a concert venue that only takes cash. E) An industrial supplies wholesaler invests in a CRM database for the purpose of improving customer relations.

208)

Selecting good, well-qualified salespeople can be aided by A) multiple interviews with company executives. B) systematic selection procedures. C) good job descriptions. D) background checks. E) All of the answers are correct.

209)

________ is a written statement of what a salesperson is expected to do. A) A covering letter B) A job description C) The terms of employment D) The conditions of service E) A disclaimer

210)

A job description for a sales position

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A) should be detailed enough that it lists the specific tasks to be performed. B) should be in writing but should be quite general, so that it doesn't reduce the sales manager's flexibility in assigning jobs. C) should look pretty much the same from one company to another. D) is not very useful, since the job is always changing. E) is a verbal job agreement.

211)

A good job description for a salesperson A) should be somewhat vague in order to give salespeople some flexibility. B) has nothing to do with the selection of new salespeople. C) lists the specific tasks that salespeople are expected to do. D) should not be used as a basis for performance evaluation. E) takes a personal commission for every sale made.

212)

A good job description will help a new sales manager see A) the kind of training needed. B) the kind of salespeople to be selected. C) what selling tasks are needed. D) how salespeople should be paid. E) All of the answers are correct.

213)

A good job description does not A) provide a basis for how salespeople should be paid. B) list routine prospecting and sales report writing tasks. C) provide clear guidelines about what selling tasks the job involves. D) list general tasks to be performed without getting specific. E) provide a basis for seeing how salespeople should be trained.

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214)

Which of the following statements by a sales manager suggests a problem?

A) "Taking a successful sales rep out of a territory for sales training is like spending money to teach a fish to swim." B) "I was a sales rep before becoming manager, so I don't need a job description to help me look for new salespeople." C) "I select new salespeople all by myself, because I am the one responsible for the performance of the sales force." D) Each of these statements indicates a problem.

215)

A firm's sales training should cover A) professional selling skills. B) building relationships with customers. C) company policies and practices. D) product information. E) All of the answers are correct.

216) A company's sales training program should typically cover all the following areas except A) company policies and practices. B) product information. C) building relationships with customer firms. D) professional selling skills. E) personnel attitudes and prospective client profiles.

217)

Which of the following statements is true?

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A) Good salespeople are born with inherent selling traits and need little training. B) All salespeople need training. C) Selling skills are best learned with interactive web training programs. D) New salespeople should be immediately sent out on the road to get acquainted with the firm's best customers. E) Training should include on-the-job observation, but classroom and web-based learning is rarely needed.

218)

Regarding the training of salespeople,

A) a good salesperson does not need training. B) experienced salespeople do not need training. C) most good salespeople are "born salespeople" and possess the necessary skills without training. D) time spent on classroom training of new salespeople is often wasted, because experience in dealing directly with customers is the best possible training. E) None of the answers are correct.

219)

Sales force training is needed for anyone A) with prior selling experience with the firm's type of products. B) with knowledge of the company's products—but no selling experience. C) with some selling experience, but no knowledge of the company or its products. D) who is new to sales and/or the company's products. E) All of the answers are correct.

220)

Which of the following is true regarding sales force training?

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A) It is rarely necessary to take a successful and experienced sales rep out of the field for a training program. B) Although selling skills cannot be learned, new prospects should still be trained on product information and company policy. C) Training programs should focus on company policies and product information, since sales presentation skills are best learned in the field. D) Selling skills are best learned with interactive web training programs. E) None of the answers are correct.

221)

Which of the following statements about sales training is true?

A) Sales training usually isn't necessary if a new salesperson has had similar selling experience calling on the same customers for a competing company. B) Sales training programs should focus on product and company information, since research shows that training is not effective in developing selling skills. C) Sales training is usually needed only for new salespeople. D) Sales training should include on-the-job observation, but classroom and web-based learning is rarely needed. E) Sales training should be modified based on the experience and skills of the group involved.

222)

Providing training in selling techniques helps a salesperson in all of the following except A) winning new customers by disparaging competitors. B) listening carefully to identify a customer's real objections. C) closing the sale. D) working with customers in difficult customer service situations. E) how to be more effective in cold calls on new prospects.

223)

When setting salespeople's compensation level,

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A) a company should pay everyone at least the going market wage for order getters. B) salespeople should be the highest-paid employees in the company. C) order takers should be paid more than order getters. D) the first step is to write job descriptions. E) a clause on bargaining must be included.

224)

Which of the following is likely to have the lowest total personal selling expenses? A) a company with salespeople on a combination plan and low sales volume B) a company with salespeople on straight salary and low sales volume C) a company with straight commission salespeople and high sales volume D) a company with salespeople on straight salary and high sales volume E) a company with straight commission salespeople and low sales volume

225) The total personal selling expense of a business is likely to be most stable under which of the following scenarios? A) All the company's salespeople receive straight salary compensation. B) All the company's salespeople receive straight commission compensation. C) All the company's salespeople receive combination plan compensation. D) The company pays straight commission only to its high-volume salespeople. E) The company pays straight salary only to its low volume salespeople.

226) A telecommunications company offers its salespeople a traditional straight commission compensation plan based on a percentage of dollar sales. The company will incur the highest total personal selling expenses when A) total customer service costs are minimized. B) total marketing costs are at their lowest. C) total sales revenue is at its highest. D) total units sold are at their highest. E) total units returned are at their lowest.

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227)

To recruit, motivate, and keep good salespeople, a firm has to A) provide encouragement by giving trophies and certificates. B) give public recognition. C) develop an effective compensation plan. D) offer promotions. E) reinvent its marketing strategies.

228) The two basic decisions to be made in developing a compensation plan are the method of payment and A) designation of the salesperson. B) level of compensation. C) number of years of service. D) number of client commendations received. E) career advancement.

229)

A firm's sales compensation plan should consider A) the pay for other jobs in the firm. B) the amount of direct control desired by the firm. C) the amount of selling versus nonselling time. D) what competitors pay salespeople. E) All of these should be considered.

230)

Which of the following payment methods offers the most security for the salesperson?

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A) straight salary B) combination plan C) straight commission D) profit-sharing E) tax deductions

231)

All of the following are payment methods for personal selling except A) straight salary. B) combination plan. C) straight commission. D) profit-sharing. E) tax deductions.

232)

The most popular sales force payment method is A) a combination plan. B) the consultative selling method. C) straight salary. D) straight commission.

233)

Which of the following is true regarding sales force compensation methods? A) Combination plans provide some security and some incentive. B) Straight commission avoids the need to consider a sales quota. C) Straight salary provides the most incentive. D) Sales quotas play no role in any of the methods. E) None of the answers are correct.

234)

A straight salary

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A) offers the most security for the salesperson. B) includes some salary and some commission. C) offers the most incentive. D) is tied to results actually achieved. E) is based on the specific sales or profit objective a salesperson is expected to achieve.

235)

A sales manager's control over his salespeople A) is strongest with order getters who are paid on straight commission. B) cannot be obtained with combination plans. C) can be the strongest with a straight salary plan. D) is small; it's the responsibility of the marketing manager. E) is not too important if the salespeople regularly meet their sales quotas.

236) A salesperson on ________ earns the same amount regardless of how he or she spends time. A) a bonus plan B) commission pay C) a straight salary D) a combination plan E) an incentive plan

237) A salesperson who earns the same gross pay each month is in what type of compensation program? A) selling formula plan B) straight salary C) combination plan D) sales quota E) straight commission

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238)

The ________ compensation plan increases the amount of sales supervision needed. A) straight salary B) commission pay C) bonus plan D) combination plan E) profit-sharing plan

239)

Regarding sales force compensation, the commission method is based on A) a percentage of dollar sales. B) the number of new accounts. C) customer satisfaction ratings. D) customer service problems resolved. E) Any of these choices could be used with the commission method.

240) Even though commissions are often based on a percentage of dollar sales, they can instead be based on A) number of new accounts. B) customer satisfaction ratings. C) customer service problems resolved in some time period. D) All of the answers are correct.

241) The ________ method of payment uses a percentage of dollar sales in calculating compensation.

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A) bonus B) commission C) straight salary D) combination E) employee discount

242) A salesperson in a large furniture outlet who earns 5 percent of the dollar sales she completes each month is on what type of compensation program? A) straight salary B) sales quota C) combination plan D) straight commission E) selling formula plan

243)

The commission method of payment A) includes some salary and some commission. B) offers the most security for the salesperson. C) offers the most incentive for the salesperson. D) is tied to results projected in the sales plan. E) increases the amount of sales supervision needed.

244) A merchant wholesaler who wants to provide the most incentive in his sales force payment plan should use A) salary plus commission. B) straight commission. C) the same level of pay for all salespeople. D) salary plus bonus. E) straight salary.

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245)

With the ________ method of payment, some salary and some commission are included. A) commission B) bonus C) combination D) straight salary E) stock

246) A producer wants to increase the amount of time its sales reps spend on supporting activities. It also wishes to keep its sales reps motivated and aggressive, without completely removing income security. Which payment plan should the firm use? A) straight salary B) combination plan C) straight commission D) bonus plan

247) A producer wants to reduce sales force turnover and obtain a more aggressive sales effort for its accessories. Which of the following sales force payment methods should it use? A) straight salary B) selling formula plan C) combination plan D) straight commission

248) Liz Edwards is a sales associate for a major retailer of high-quality cooking supplies, housewares, and furniture. She is paid an hourly wage, plus she gets an additional sum of money that is a percentage of the dollar sales of all the sales associates combined during the hours that she works. Liz is working under a(n) ________ compensation plan.

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A) straight salary B) combination C) straight commission D) incentive E) bonuses

249) Once the compensation level for a producer's salespeople has been set, the particular method of payment depends on the A) need for incentive. B) setting of sales quotas. C) desire for simplicity. D) need for control. E) All of the answers are correct.

250)

Which of the following is true regarding sales force payment methods?

A) It is common to sacrifice some simplicity to gain more flexibility, incentive, or control. B) Combination plans offer some degree of security, incentive, and control. C) Straight commission offers the most incentive. D) Straight salary provides the most security and control. E) All of the answers are correct.

251)

Which of the following statements about salesperson compensation is true? A) Commissions reduce the need for working capital. B) Incentives must be carefully aligned with the firm's objectives. C) Compensation plans should be clear. D) Sales managers must plan, implement, and control. E) All of the answers are correct.

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252)

A sales compensation plan should A) be easy for salespeople to understand. B) use the same commission rates on all products, if commissions are used at all. C) be based on salary or commission, but not a combination of the two. D) use a percentage of dollar sales in calculating compensation—if commissions are

used. E) None of the answers are correct.

253)

Which of the following sales force payment methods is best for simplicity's sake? A) salary plus bonus plan B) value plan C) combination plan D) straight salary E) All of the choices are equally appropriate for simplicity's sake.

254)

The specific sales or profit objective a salesperson is expected to achieve is known as a A) sales quota. B) sales range. C) sales standard. D) sales return. E) sales maximum.

255) The ________ is the specific sales or profit objective a salesperson is expected to achieve.

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A) sales quota B) sales target C) sales prospecting D) sales presentation E) sales percentage

256) Jim Craig, a salesperson, is expected to sell a certain number of units of a product line each month. This represents what type of incentive to Jim? A) straight commission B) combination plan C) straight salary D) selling formula plan E) sales quota

257)

Which of the following statements relating to sales quotas is false?

A) Sales potential usually differs from one sales territory to another. B) A salesperson's sales quota is the specific level of sales he or she achieved in the previous sales period. C) Unless the pay plan allows for territory differences, some sales reps may be overworked and others may be underworked. D) Unless the pay plan allows for territory differences, some sales reps may be underpaid for the same amount of effort.

258)

Personal selling techniques include all of the following except A) searching for prospects. B) making sales presentations. C) planning sales presentations. D) preparing job descriptions. E) following up after the sale.

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259) For an order getter, which of the following steps in the personal selling process usually occurs first? A) follow-up after purchase B) preplan sales call C) make sales presentation D) close sale E) select target customer

260) For a successful sales presentation, which of the following steps in the personal selling process most likely occurs last? A) preplan sales presentation B) follow-up after purchase C) select target customer D) make sales presentation E) close sale

261) Which of the following steps in the personal selling process typically occurs before the target customer is selected? A) follow-up after sales call B) preplan sales call C) make sales presentation D) set effort priorities E) close sale

262)

Which of the following sales approaches is most suitable for simple order-taking?

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A) prepared sales presentation B) missionary sales approach C) consultative selling approach D) selling formula approach E) merchandising presentation

263) The key steps of the personal selling process consist of the following: Prospect for new customers; select target customer; preplan sales call and presentation; make sales presentation; ________; and follow-up after the sales call. A) create interest B) open sale C) overcome objections D) close sale E) contact buyer

264) ________ involves following all the leads in the target market to identify potential customers. A) Sales presentation B) Prospecting C) Closing D) Sales quota E) Marketing

265)

Prospecting

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A) involves following a few leads in the target market. B) should require a sales rep to spend the same amount of time with each prospect. C) refers to selection of the firm's target market. D) should use a system for allocating time to potential customers based on their potential. E) None of the answers are correct.

266)

Which of the following statements about prospecting is true? A) Prospecting focuses on identifying new customers. B) A sales rep needs to set priorities for all prospects—both old and new. C) A sales rep must qualify potential customers. D) CRM systems help with the process of prospecting. E) All of the statements are true.

267) Robert Jackson sells luxury automobiles at a dealership in an upscale section of a major city. When he started out as a salesperson, he identified potential customers by visiting office buildings near the dealership and examining the directories in the buildings' lobbies. He discovered that there were several large law firms within a mile or two of the dealership. He would copy down the names of the law firms and their attorneys from the building directory. Then he would mail engraved invitations to each of the attorneys, inviting them to the dealership to test drive a new car. Deciding to focus on attorneys exclusively, he purchased a directory of attorneys in the area and started expanding his potential customer base. Robert is engaged in A) the consultative selling approach. B) prospecting. C) the selling formula approach. D) closing. E) follow-up after the sale.

268) text?

Which of the following is not one of the sales presentation approaches discussed in the

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A) prepared sales presentation B) selling formula approach C) consultative selling approach D) target market approach

269)

A ________ is the salesperson's request for an order. A) close B) prospect C) sales quota D) job description E) proposal

270) With the ________ approach, the salesperson uses a memorized presentation that is not adapted to each individual customer. A) prepared sales presentation B) consultative selling C) selling formula D) fixed sales E) differentiated value

271) With the ________ approach, the salesperson assumes that a customer faced with a particular stimulus will say yes to his request for an order. A) selling formula B) consultative selling C) prepared sales presentation D) fixed sales E) differentiated value

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272)

Which of the following statements about the prepared sales presentation is false? A) It may contain several attempts to close a sale. B) It is not adapted to an individual customer's needs. C) It makes sense for experienced salespeople to use it. D) The salesperson does most of the talking. E) It is not considered a good approach for complicated selling situations.

273)

A prepared sales presentation

A) is the best approach for most selling situations because the company can control what the sales rep says. B) usually involves many questions, to be sure each customer's needs are fully understood. C) is common with high-value items, to be sure the customer learns about all of the technical details. D) is best when a lot of time is available for a sales presentation. E) None of the answers are correct.

274) A sales presentation in which the sales rep does most of the talking, using a "canned" presentation to obtain a "yes" answer to a "trial close," is a A) prepared sales presentation. B) target market presentation. C) consultative selling presentation. D) selling formula presentation. E) None of the answers are correct.

275)

Which sales presentation would be best for convenience (food) store clerks?

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A) selling formula approach B) prepared sales presentation C) target market presentation D) consultative selling approach E) motivation approach

276) A lawn care firm selling by phone to people listed in the telephone directory should use which of the following sales presentations? A) consultative selling approach B) selling formula approach C) prepared sales presentation D) target market presentation E) None of the answers are is correct.

277) Elise Noble works as a telephone salesperson for the Catalog Division of JC Penney. Her primary job is to call customers with Penney charge accounts to inform them about sale items and ask if they would like to order the sale items. Which of the following kinds of sales presentations would be best for Elise to use? A) prepared sales presentation B) customer service approach C) consultative selling approach D) selling formula approach E) target market presentation

278) The ________ involves developing a good understanding of the individual customer's needs before trying to close the sale.

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A) selling formula approach B) consultative selling approach C) prepared sales presentation D) fixed sales presentation E) differentiated value approach

279) With the ________ approach, the sales rep begins by making some general benefit statements to get the customer's attention and interest. A) prepared sales B) fixed sales C) selling formula D) consultative selling E) differentiated value

280) With the ________ approach, the customer and the salesperson work together to satisfy the customer's needs and solve the problem. A) prepared sales B) fixed sales C) selling formula D) consultative selling E) differentiated value

281) Some sales reps try to get a prospect to do most of the talking at first—to help pinpoint the potential customer's needs. After the sales rep feels that he understands the customer's needs, he begins to enter more into the discussion, helping the customer understand his own needs, showing how his product satisfies the customer's needs, and then trying to close the sale. This type of sales presentation uses the

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A) selling formula approach. B) target market presentation. C) consultative selling approach. D) prepared sales presentation. E) motivational marketing.

282)

A sales rep for installations should probably use a ________ sales presentation. A) consultative selling approach B) target market C) prepared D) selling formula approach E) All of the sales presentations would be equally appropriate.

283) A sales representative for Xerox always begins her sales presentation by conducting an interview with the potential customer. She asks several multiple-choice questions that are designed to pinpoint the needs of the customer for various features of a new copying machine. At the end of the interview, the salesperson takes a moment to summarize the results in a profile of the customer and his/her needs. She then matches the needs to a specific model in the Xerox line of copiers, and shows how the Xerox model compares to other competing models. This sales representative is engaged in a A) consultative selling approach. B) prepared sales presentation. C) selling formula approach. D) telemarketing approach. E) prospecting approach.

284) Tyler Young sells a diverse line of conveyor systems to small manufacturers. He has found that he is most successful when he uses the sales call to help the customer solve some problem using one of his products. Tyler probably relies on the

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A) missionary approach. B) prepared presentation approach. C) selling formula approach. D) consultative selling approach. E) All of these are equally likely.

285) Betti Hallmark sells women's clothing and gets most of her business from regular customers who have bought from her before. Betti never tries to sell anything before first trying to determine each customer's specific needs. Once she understands the customer's needs, Betti helps the customer understand her own needs and then shows how some product will fill those needs. Betti's sales presentation uses the A) "canned" approach. B) target market presentation. C) selling formula approach. D) consultative selling approach. E) None of the answers are correct.

286)

The selling formula approach

A) makes some general benefit statements to get the customer's attention and interest. B) starts with a prepared presentation outline approach and leads the customer through some logical steps to a final close. C) involves developing a good understanding of the individual customer's needs before trying to close the sale. D) uses a memorized presentation that is not adapted to each individual customer. E) is a problem-solving approach in which the customer and salesperson work together to satisfy the customer's needs.

287)

The selling formula approach

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A) starts out much like the consultative selling approach. B) makes some general benefit statements to get the customer's attention and interest. C) follows a series of logical steps based on some knowledge of the target customer. D) becomes identical to the prepared sales presentation as the salesperson approaches an opportunity to close the sale. E) All of the answers are correct.

288)

The selling formula approach

A) starts with a prepared presentation outline, discovers each customer's specific needs, and then leads the customer through some logical steps to a final close. B) uses the same sales presentation with every potential customer. C) usually requires a more skilled salesperson than the consultative selling approach. D) is a problem-solving approach in which the customer and salesperson work together to satisfy the customer's needs. E) None of the answers are correct.

289) Producers who know something about their target customers' needs and attitudes often supply their relatively untrained salespeople with a sales presentation in which (1) the salesperson does most of the talking at the beginning, (2) the salesperson then brings the customer into the discussion to clarify the customer's needs, and (3) the salesperson tries to close the sale. They are using a A) consultative selling approach. B) quota system. C) prepared sales presentation. D) selling formula approach. E) target market presentation.

290) San Oxana Insurance Company uses relatively untrained people to sell its life insurance. The sales reps learn prepared sales presentations, which help them describe the firm's policies to potential customers, discover each customer's specific needs, and then lead them through some logical steps to a final close. They are using a

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A) selling formula approach. B) customer service approach. C) target market presentation. D) consultative selling approach. E) prepared sales presentation.

291) Simon Juarez sells life insurance for a large New Mexico firm. He locates customers by selecting names out of a telephone directory and calling to arrange an appointment. He begins each presentation by explaining the basic features and merits of his product, eventually bringing the customer into the conversation to clarify the customer's insurance needs. Then he tells how his insurance policy would satisfy the customer's needs and attempts to close the sale. Simon's sales presentation is based on the A) consultative selling approach. B) selling formula approach. C) canned presentation approach. D) target market approach. E) customer service approach.

292)

Most sales presentations follow the AIDA sequence. AIDA stands for A) Attention, Interest, Desire, Action. B) Attention, Interest, Develop, Appeal. C) Attention, Involvement, Desire, Action. D) Attention, Involvement, Desire, Appeal. E) Attention, Interaction, Development, Action.

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293) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson's main sales task is supporting?

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A) Wilson Alvaro B) Melissa Tran C) Emily Winters D) Ben Peterson

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294) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson's primary task is order-taking?

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A) Emily Winters B) Melissa Tran C) Amy Bowden D) Wilson Alvaro E) Charlie Riggs

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295) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which of the following is true about Melissa Tran's sales position?

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A) Recruiting for this job would not require a job description. B) It involves major account management. C) The job would not require product training—only sales training. D) It involves missionary sales. E) None of the answers are correct.

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296) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Wilson Alvaro's sales position involves

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A) providing customer service. B) team selling. C) major account management. D) All of the answers are correct.

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297) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson has a job where compensation is likely to be straight salary?

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A) Ben Peterson B) Amy Bowden C) Melissa Tran D) Emily Winters E) Charlie Riggs

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298) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. What type of compensation plan should Ben Peterson have?

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A) straight salary B) straight commission C) a combination of salary and commission D) a salary that is paid only if a certain sales quota is achieved E) All of these are equally appropriate for Ben's job.

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299) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson probably does the most prospecting?

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A) Amy Bowden B) Wilson Alvaro C) Melissa Tran D) Charlie Riggs

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300) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. What sales presentation approach does Charlie Riggs use?

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A) missionary presentation B) prepared sales presentation C) consultative selling approach D) selling formula approach E) No sales presentation approach is used, because he just calls people and says what he learned during training.

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301) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. What type of sales presentation approach does Ben Peterson use?

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A) consultative selling approach B) prepared sales presentation C) missionary selling D) selling formula approach E) sales quota approach

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302) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson does the most customer service?

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A) Charlie Riggs B) Melissa Tran C) Emily Winters D) Ben Peterson E) Amy Bowden

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303) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Which salesperson has a job that requires no training in sales?

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A) Charlie Riggs B) Melissa Tran C) Emily Winters D) Ben Peterson E) All of the jobs require some training in sales.

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304) Use this information for questions that refer to the "Salespeople" case. Wilson Alvaro graduated with a marketing degree almost a year ago. Like many of his friends, he took a job in sales and he really enjoys it. A description of Wilson's job and those of some of his friends follows. Wilson Alvaro loves biking and has his dream job. He works for a wholesale company that sells mountain bikes for a manufacturer. He works with a small group of people who call on the buying offices for two large retail chains, Walmart and Dick’s Sporting Goods. The group includes a finance person and a production person, and they all work together to meet the specific needs of these two big accounts. For example, sometimes they recommend a model of bike that will be available from only that retailer's stores. However, Wilson's main job focuses on building relationships and solving customer problems. Only occasionally is he expected to try to persuade the retailers to buy more bikes. Amy Bowden sells life insurance. She calls on new parents and persuades them to buy insurance products. It is difficult for a manager to control Amy's work, but she has incentive to work hard because her job security and income depend on getting sales. She is a confident selfstarter, so she likes it that way. Ben Peterson works for a fashionable men's clothing store. He enjoys spending time with customers who come in, learning about their fashion needs, and helping them pick clothes that really work for them. While the store manager can easily observe and direct Ben's activities, the manager wants Ben to have the incentive to increase customer purchases and satisfaction. Emily Winters handles inside sales for a major industrial distributor. She deals with a regular set of established customers, most of whom know what they want. Emily talks to them on the phone and answers questions about products, delivery time, and pricing. She sometimes works with outside sales reps who visit customers and help introduce new products. Emily is the first person her customers call when there's a problem with a purchase, so she spends a lot of time dealing with customer problems. As an inside salesperson, Emily's work is easily supervised by a sales manager, and Emily has little influence on how much her customers buy. Melissa Tran works for a company that sells paper products (like napkins, paper towels, and paper plates) primarily through small independent grocers. Most of the grocers are regular customers, but sometimes Melissamakes cold calls to new grocery stores. Melissa's job is to develop goodwill and try to increase sales. For example, she often sets up special promotional displays in stores. Her compensation plan gives her income security, but shecan also receive a bonus for sales growth in her territory. Charlie Riggs is a telemarketer for an Internet service provider. He calls people on a list provided by his firm and tries to sign them up for Internet service. Charlie relies heavily on a presentation he learned during his training. Charlie is very good at what he does and loves that the more success he has, the more he earns. Melissa Tran's company wants to have enough salespeople to serve 1,000 accounts. An effective salesperson can call on each account 12 times a year and should average about two hours per sales call. Each salesperson works 40 hours a week and takes off two weeks for

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vacation each year. Salespeople spend half their time on travel and administration. How many salespeople does Melissa's company need? A) 6 B) 12 C) 24 D) 40 E) There is not enough information to determine the answer.

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Answer Key Test name: Chap 14_17e 1) FALSE Personal selling techniques vary from one country to another. 2) TRUE While dealing with any customer, the salesperson must adjust for cultural influences and other factors that might affect communication. 3) TRUE Personal selling is often a company's largest single operating expense, which makes it a very important form of marketing. 4) TRUE In the United States, one person out of every ten in the total labor force is involved in sales work. 5) FALSE In the United States, one person out of every ten in the total labor force is involved in sales work. That's about 20 times more people than are employed in advertising. 6) TRUE In the United States, one person out of every ten in the total labor force is involved in sales work. That's about 20 times more people than are employed in advertising. 7) TRUE Good salespeople don't just try to sell the customer. Rather, they try to help the customer buy—by understanding the customer's needs and presenting the advantages and disadvantages of their products. Version 1

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8) FALSE Good salespeople don't just try to sell the customer. Rather, they try to help the customer buy—by understanding the customer's needs and presenting the advantages and disadvantages of their products. 9) TRUE The salesperson is often a representative of the whole company and is responsible for explaining its total effort to customers rather than just pushing products. The salesperson also represents the customer back inside the selling firm. 10) TRUE The salesperson is often a representative of the whole company and is responsible for explaining its total effort to customers rather than just pushing products. The salesperson also represents the customer back inside the selling firm. 11) FALSE Everyone who works with a company can represent that company's products and services in a favorable light—i.e., sell. 12) TRUE Salespeople can be strategy planners too. Some salespeople are expected to be marketing managers in their own territories. 13) TRUE The three basic sales tasks are order-getting, order-taking, and supporting. 14) FALSE The three basic sales tasks are order-getting, order-taking, and supporting. 15) TRUE Version 1

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The three basic sales tasks are order-getting, order-taking, and supporting. 16) TRUE The three basic sales tasks are order-getting, order-taking, and supporting; but a salesperson may do more than one task at a time. 17) FALSE Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. 18) TRUE Order getters are concerned with establishing relationships with new customers and developing new business. 19) TRUE Producers of all kinds of products, especially business products, have a great need for order getters. They use order getters to locate new prospects, open new accounts, see new opportunities, and help establish and build channel relationships. 20) FALSE Producers of all kinds of products, especially business products, have a great need for order getters. They use order getters to locate new prospects, open new accounts, see new opportunities, and help establish and build channel relationships. 21) TRUE Good order getters should help the customer identify ways to solve problems by selling concepts and ideas, not just physical products. The goods and services they supply are merely the means of achieving the customer's end. 22) TRUE Version 1

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Salespeople for agent wholesalers are often order getters—particularly the more aggressive manufacturers' agents and brokers. They face the same tasks as producers' order getters. 23) TRUE Once the order-getting is done by the wholesaler's order getter, and the customers become established and loyal, producers may try to eliminate them and save money with their own order takers. 24) TRUE Without order getters, many common unsought products ranging from mutual funds to air conditioners might have died in the market introduction stage. They are also useful for selling heterogeneous shopping products. 25) FALSE Order getters are more helpful for selling heterogeneous shopping products. Consumers shop for many of these items on the basis of suitability and value, where product information is required. 26) FALSE Order takers complete most sales transactions. 27) TRUE Order takers sell to regular or established customers and maintain relationships with their customers. Order-taking is the routine completion of sales made regularly to target customers. 28) TRUE Order takers sell to regular or established customers and maintain relationships with their customers. 29) TRUE

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The producer's order taker explains details, makes adjustments, handles complaints, explains new terms or prices, and keeps customers informed of new developments. 30) FALSE Missionary salespeople are supporting salespeople who work for producers—calling on intermediaries and their customers. 31) TRUE Missionary salespeople are supporting salespeople who work for producers—calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 32) TRUE Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. They are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. 33) FALSE Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. 34) TRUE Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. Effective customer service is especially critical in keeping customers. 35) TRUE

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Customer service is different from the service that is part of the product that a customer buys, because it usually involves a breakdown in some aspect of the marketing mix. What the customer expected from the seller is not what the customer got. 36) TRUE Customer service reps usually work to rectify what went wrong with the good or service sold to a customer. 37) FALSE Repairing a negative experience is fundamentally different from providing a positive experience in the first place. No matter how effective the customer service solution, the problem is an inconvenience or involves other types of costs to the customer. 38) TRUE Firms should view customer service reps as a key part of personal selling, as they are not just fixing the customer's problem, but rather are fixing the company's problem—which is the risk of losing customers due to negative experiences. 39) TRUE The customer equity approach suggests three paths for a business to grow: (1) acquiring new customers, (2) retaining current customers, and (3) enhancing the purchases from current customers. Good customer service helps marketing managers with all three. 40) FALSE The customer equity approach suggests three paths for a business to grow: (1) acquiring new customers, (2) retaining current customers, and (3) enhancing the purchases from current customers. 41) TRUE Version 1

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Customer service reps are advocates not only for their firm but also for its customers. As that implies, the rest of the company needs to be organized to provide the support their reps need to fix problems. 42) TRUE Team selling is when different people work together on a specific account, where different specialists handle different parts of the job. 43) TRUE Team selling is when different people work together on a specific account, where different specialists handle different parts of the job. 44) TRUE Very large customers often require special sales efforts, and relationships with them are treated differently. A major accounts sales force sells directly to large accounts. 45) TRUE Very large customers often require special sales efforts, and relationships with them are treated differently. A major accounts sales force sells directly to large accounts. 46) FALSE The National Do Not Call Registry in the United States and similar laws in other countries have largely eliminated telemarketing to consumers. 47) FALSE Telephone selling in business markets is still very popular and can supplement a good website. 48) TRUE

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An inside sales force is a sales force that meets with customers in a manner that is not face-to-face. Inside salespeople are often used with small or hard-to-reach customers a firm might otherwise promote to with mass selling or just ignore. 49) TRUE A sales territory is the geographic area that is the responsibility of one salesperson or several working together. 50) FALSE Size of sales force depends on the workload. A sales manager must estimate how much work can be done by one person in a given time period. The sales manager can then figure out how many customers need attention and how many salespeople are required. 51) TRUE When companies sell different products that require very different knowledge or skills, they can have salespeople specialize by product line. 52) TRUE Some sales tasks that have traditionally been handled by a person can now be handled effectively and at lower cost by an e-commerce system or other technology. However, in important selling situations, a salesperson is needed to create and build relationships. 53) FALSE Emphasis on standardized e-commerce is particularly effective when the customer needs routine information on a recurring basis. 54) FALSE Digital self-service lowers cost. 55) TRUE Version 1

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Digital self-service lowers cost. This is the role of ATMs for banks. If the customer needs money at an airport in the middle of the night, the ATM provides better support than the customer could get with a real person at the bank. 56) TRUE It is usually the sales manager's job, perhaps with help from specialists in technology, to decide what types of tools are needed and how they will be used. 57) FALSE It is usually the sales manager's job, perhaps with help from specialists in technology, to decide what types of tools are needed and how they will be used. 58) TRUE Sales reps employ an array of software and hardware—such as software for CRM, spreadsheet sales analysis, digital presentations, time management, sales forecasting, customer contact, and shelf-space management—to gain a competitive advantage. 59) FALSE Use of new information technology is not a matter best left to the sales reps. These tools change how well the job is done and may be necessary to compete effectively. 60) FALSE Information technology gives sales reps new ways to meet customers' needs while achieving the objectives of their jobs. 61) TRUE

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Information technology gives sales reps new ways to meet customers' needs while achieving the objectives of their jobs. On the other hand, these tools have costs. There are obvious expenses to buying the technology and to training everyone on how to use it. 62) FALSE Scheduling candidates for multiple interviews with various executives and doing thorough background checks don't guarantee success. A systematic approach based on several different inputs results in a better sales force. 63) TRUE A job description is a written statement of what a salesperson is expected to do. It might list specific tasks as well as routine prospecting and sales report writing. 64) FALSE A job description is a written statement of what a salesperson is expected to do. It might list specific tasks as well as routine prospecting and sales report writing. 65) TRUE A job description is critical to determine the kind of salespeople who should be selected. Later, it provides a basis for seeing how they should be trained, how well they are performing, and how they should be paid. 66) TRUE Many salespeople do a poor job because they haven't had good training. Firms often hire new salespeople and immediately send them out with no grounding in the basic selling steps and no information about the product or the customer. 67) TRUE Version 1

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A company's sales training program should cover at least the following areas: (1) company policies and practices, (2) product information, (3) how to build relationships with customer firms, and (4) professional selling skills. 68) FALSE Normally, salespeople earn more than the office or production force but less than top management. 69) TRUE Normally, salespeople earn more than the office or production force but less than top management. 70) TRUE A straight salary offers the most security for the salesperson. Commission pay, in contrast, offers the most incentive and is tied to results actually achieved. 71) TRUE The most popular method is a combination plan that includes some salary and some commission. Bonuses, profit-sharing, pensions, stock plans, insurance, and other fringe benefits may be included too. 72) TRUE Straight salary or a large salary element in the compensation plan increases the amount of sales supervision needed. 73) FALSE The salary of a salesperson on a commission salary is tied to the amount of sales the salesperson generates. It may also be a financial incentive based on other outcomes—such as the number of new accounts, customer satisfaction ratings, etc. 74) TRUE Version 1

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Incentives that focus only on short-term sales objectives may not motivate sales reps to develop long-term, need-satisfying relationships with their customers. 75) TRUE A sales quota is the specific sales or profit objective a salesperson is expected to achieve. 76) FALSE Commissions reduce the need for working capital, especially for small companies that have limited working capital or uncertain markets. 77) FALSE Small companies that have limited working capital or uncertain markets often prefer straight commission or combination plans with a large commission element. 78) TRUE Using sales reps who are paid a straight commission is similar to using manufacturers' agents, who get paid only if they deliver sales. 79) TRUE Prospecting involves following all the leads in the target market to identify potential customers. 80) TRUE Prospecting involves following all the leads in the target market to identify potential customers. 81) TRUE Some companies provide prospect lists or a customer relationship management (CRM) database to make this part of the selling job easier. 82) TRUE Version 1

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A salesperson's request for an order is called a close. 83) FALSE A salesperson's request for an order is called a close. 84) FALSE The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. 85) FALSE A weakness of the canned approach is that it treats all potential customers alike. 86) FALSE The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. 87) TRUE The consultative selling approach involves developing a good understanding of the individual customer's needs before trying to close the sale. 88) FALSE The consultative selling approach takes skill and time. The salesperson must be able to analyze what motivates a particular customer and show how the company's offering would help the customer satisfy those needs. 89) TRUE The selling formula approach starts with a prepared presentation outline and leads the customer through some logical steps to a final close. The prepared steps are logical because we assume that we know something about the target customer's needs and attitudes.

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90) TRUE The selling formula approach starts with a prepared presentation outline and leads the customer through some logical steps to a final close. 91) TRUE The selling formula approach is a combination of the prepared sales presentation approach and the consultative selling approach. 92) TRUE Most sales presentations follow the AIDA sequence. It can determine the amount of time spent by a sales rep on Attention, Interest, Desire, and Action. 93) TRUE Most sales presentations follow the AIDA sequence. The time a sales rep spends on each step in the AIDA sequence varies depending on the situation and the selling approach being used. 94) TRUE Most sales presentations follow the AIDA sequence. It can determine the amount of time spent by a sales rep on Attention, Interest, Desire, and Action. 95) E Regarding salespeople, a marketing manager should make specific strategy decisions on how many are required, kind of presentations, selection, training, motivation, and compensation.See Exhibit 14–1. 96) B Personal selling is often a company's largest single operating expense. 97) B Personal selling is often a company's largest single operating expense, which makes it important to understand sales management decisions. Version 1

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98) C Personal selling is often a company's largest single operating expense, which makes it important to understand sales management decisions. 99) B In the United States, one person out of every ten in the total labor force is involved in sales work. 100) C In the United States, one person out of every ten in the total labor force is involved in sales work. 101) B Good salespeople don't just try to sell the customer; they try to help the customer buy—by understanding the customer's needs and presenting the advantages and disadvantages of their products. 102) A Good salespeople don't just try to sell the customer; they try to help the customer buy—by understanding the customer's needs and presenting the advantages and disadvantages of their products. 103) E Good salespeople don't just try to sell the customer. Rather, they try to help the customer buy—by understanding the customer’s needs. They are often sources of information to the company and its customers, and they help build long-term relationships by solving technical problems. 104) E

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Good salespeople don't just try to sell the customer. Rather, they try to help the customer buy—by understanding the customer’s needs. They are often sources of information to the company and its customers; they help build long-term relationships by solving technical problems; and they must attain sales goals to stay employed. 105) C Some companies give their salespeople such titles as account representative, field manager, sales consultant, market specialist, or sales engineer. 106) E Smart companies make sure that everyone in the organization who talks to customers knows at least something about selling. Selling may be done by almost anyone in the organization. Everyone who works with a company can represent that company's products and services in a favorable light—i.e., sell. 107) B The salesperson also represents the customers’ interests inside the selling firm. 108) E Some salespeople are expected to be marketing managers in their own territories. They have to make choices about (1) what target customers to aim at, (2) which particular products to emphasize, (3) which intermediaries to rely on or help, (4) what message to communicate and how to use promotion money, and (5) how to adjust prices. 109) E

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Salespeople are expected to make choices about (1) what target customers to aim at, (2) which particular products to emphasize, (3) which intermediaries to rely on or help, (4) what message to communicate and how to use promotion money, and (5) how to adjust prices. 110) D Salespeople are expected to make choices about (1) what target customers to aim at, (2) which particular products to emphasize, (3) which intermediaries to rely on or help, (4) what message to communicate and how to use promotion money, and (5) how to adjust prices. They do not make choices about what to manufacture. 111) C The three basic sales tasks are order-getting, order-taking, and supporting. 112) D The three basic sales tasks are order-getting, order-taking, and supporting. One person may do all three tasks in some situations. 113) D The three basic sales tasks are order-getting, order-taking, and supporting. 114) C Order-taking is the routine completion of sales made regularly to target customers; supporting salespeople help the order-oriented salespeople, but they don't try to get orders themselves. The description given for "order-getting" is correct. 115) C

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Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. 116) B Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. 117) A Order getters are concerned with establishing relationships with new customers and developing new business. 118) E Order getters are concerned with establishing relationships with new customers and developing new business. Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. All of these answers regarding good order getters are true. 119) C Order getters are concerned with establishing relationships with new customers and developing new business. Seeking orders from supermarket buyers for a new brand would be a job of an order getter. 120) E To be effective at "solutions selling," an order getter often needs to understand a customer's whole business as well as technical details about the product and its applications. All the given answers are correct for a producers’ order getters. 121) A An order getter can make a sale by helping a customer solve a business problem. They cater to consumers' needs by identifying ways to solve problems rather than just selling physical goods. Version 1

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122) B Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. Producers of all kinds of products, especially business products, have a great need for order getters. 123) D Order getters are concerned with establishing relationships with new customers and developing new business. Order-getting means seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea. 124) B A manufacturer's agent does the job of order-getting. Order getters are concerned with establishing relationships with new customers and finding and developing new business opportunities. Unfortunately, once the order-getting is done and customers become established and loyal, producers may try to eliminate the agents and save money with their own order takers. 125) E Manufacturers' agents face the same tasks as producers' order getters. Order getters are concerned with establishing relationships with new customers and finding and developing new business opportunities. 126) A A wholesaler's order getter almost hands the product to the customer because of all the help they provide to retailers. This is all part of helping establish and build channel relationships. 127) A

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Retail order getters are essential for many unsought products. They must help customers see how a new product can satisfy needs now being filled by something else. 128) D Order getters are also helpful for selling heterogeneous shopping products. Consumers shop for many of these items on the basis of suitability and value, and the technical know-how that order getters possess is crucial. 129) B An order getter is not only responsible for establishing relationships with new customers and developing new business, but also providing technical information and support after the sale. 130) D Order getters are concerned with establishing relationships with new customers and developing new business. 131) D Order takers sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers, while order getters are concerned with establishing relationships with new customers and developing new business. 132) A Order takers sell to the regular or established customers. 133) A Order-taking is the routine completion of sales made regularly to target customers. It usually requires ongoing follow-up to make certain that the customer is totally satisfied. 134) A Version 1

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Order takers usually do very little aggressive selling. Their main job is to maintain close contact with customers, place orders, and check to be sure that the company fills orders promptly. 135) B Order-taking is the routine completion of sales made regularly to target customers. It usually requires ongoing follow-up to make certain that the customer is totally satisfied. 136) B Order takers sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers. 137) E Order-taking is the routine completion of sales made regularly to target customers. 138) A Some firms lose sales just because no one ever asks for the order. Order takers who are alert to order-getting possibilities can make a big difference in generating new sales. 139) A Order takers sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers. 140) B Order-taking is the routine completion of sales made regularly to target customers. It usually requires ongoing follow-up to make certain that the customer is totally satisfied. 141) B

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While producers' order takers usually handle relatively few items, wholesalers' order takers often sell thousands of items. So an established merchant wholesaler of business supplies would rely mainly on order takers. 142) C Order takers sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers. Order-taking is the routine completion of sales made regularly to target customers. 143) E Wholesalers' order takers often sell thousands of items. Their main job is to maintain close contact with customers, place orders, and check to be sure the company fills the orders promptly. 144) A Order-taking may be almost mechanical at the retail level. But order takers play a vital role in a retailer's marketing mix. Customers expect prompt and friendly service. 145) B Though order-taking may be almost mechanical at the retail level, order takers play a vital role in a retailer's marketing mix. Customers expect prompt and friendly service. 146) D All of these are part of the supporting sales force. They are orderoriented but don't try for orders themselves. 147) A

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Supermarkets need retail order takers but are less likely to need supporting salespeople. In contrast, producers and wholesalers have a regular need for supporting salespeople. 148) B Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. 149) C Missionary salespeople are sometimes called merchandisers or detailers. 150) C Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 151) C Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 152) D Missionary salespeople try to develop goodwill and stimulate demand, help intermediaries train their salespeople, set up displays, and often take orders for delivery by intermediaries. 153) B

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Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. Wholesalers and producers benefit from the increase in sales that missionary salespeople help spur. 154) A Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 155) D Missionary salespeople try to develop goodwill and stimulate demand, help intermediaries train their salespeople, set up displays and often take orders for delivery by intermediaries. 156) E Missionary salespeople try to develop goodwill and stimulate demand, help intermediaries train their salespeople, set up displays, and often take orders for delivery by intermediaries. 157) B Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 158) E

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Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 159) B Missionary salespeople try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 160) D An imaginative missionary salesperson can double or triple sales for a company. Missionary sales jobs are a route to order-oriented jobs in some companies. 161) B An imaginative missionary salesperson can double or triple sales for a company. Naturally, this doesn't go unnoticed. In some companies, a missionary sales job is a first step on a career path to order-oriented jobs. 162) C Technical specialists are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. They are usually more skilled in showing the technical details of their product than in trying to persuade customers to buy it. 163) B Technical specialists are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages and show the technical details of the company's product. 164) E Version 1

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Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. They are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. They work in conjunction with an order getter who gets the sale. 165) D Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. They are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. 166) E Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. They are often science or engineering graduates with the know-how to understand the customer's applications and explain the advantages of the company's product. 167) B Technical specialists are often science or engineering graduates with the know-how to understand the customer's applications, explain the advantages of the company's product, and provide technical assistance. They are usually more skilled in showing the technical details of their product than in trying to persuade customers to buy it. 168) A Technical specialists are supporting salespeople who provide technical assistance to order-oriented salespeople. Technical specialists have the know-how to understand the customer's applications and explain the advantages of the company's product. 169) E

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Technical specialists have the know-how to understand customer's applications, explain the advantages of the company's product, and provide technical assistance. They are more skilled in showing the technical details of their product than in trying to persuade customers to buy it. 170) C Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. 171) D Customer service reps work with customers to resolve problems that arise with a purchase, usually after the purchase has been made. 172) D Other types of personal selling help to win customers, but effective customer service is especially critical in keeping them. 173) B The job of a customer service rep is to provide that service that is required to solve a problem that a customer encounters with a purchase. It also involves taking steps to remedy what went wrong. 174) E The job of a customer service rep is to provide that service that is required to solve a problem that a customer encounters with a purchase. All of the given tasks could be the job of a customer service rep. 175) C Customer service reps are a key part of personal selling. They are not just fixing the customer's problem, but also fixing the company's problem, which is the risk of losing customers. Personal selling is part of Promotion. Version 1

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176) A The customer equity approach suggests three paths for a business to grow: (1) acquiring new customers, (2) retaining current customers, and (3) enhancing the purchases from current customers. Good customer service helps marketing managers with all three! 177) A Customer service is an opportunity for a company to turn a customer problem into positive word-of-mouth—which leads to acquiring new customers. 178) D When using proactive customer service, companies monitor customers' online activity and reach out even before customers complain. These companies try to get to customers before their frustration boils over. 179) D In the context of customer service, Fevor Inc. follows a reactive approach, while Linvar Inc. follows a proactive approach. There are companies that try to solve customers' problems even when the customers don't ask for help. They are monitoring the web and using big data analytics to provide proactive customer service. 180) C There are companies that try to solve customers' problems even when the customers don't ask for help. They are monitoring the web and using big data analytics to provide proactive customer service and repair damaged reputation. 181) E

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Monitoring customers' complaints by accessing big data from social media and discussion forums will help the company to turn its reputation around. There are companies that try to solve customers' problems even when the customers don't ask for help. They are monitoring the web and using big data analytics to provide proactive customer service and repair damaged reputation. 182) A Sometimes the marketing mix is fine, but the customer makes a purchase that is a mistake. Or customers may simply change their minds. Either way, customers usually expect sellers to help fix purchasing errors. Customer service reps have to find a way to deal with such customers and not alienate them. 183) E Customer service reps are required to solve a problem that a customer encounters with a purchase. All the given answers are correct regarding customer service reps. 184) A A breakdown in any element of the marketing mix can result in a requirement for customer service. Ideally, a firm should deliver what it promises; but a marketing mix, being a human process, can have errors. 185) E Customer service reps are required to solve a problem that a customer encounters with a purchase. 186) C Firms often rely on team selling—when different people work together on a specific account. Different specialists handle different parts of the job, but the whole team coordinates its efforts to achieve the desired result. Version 1

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187) C If different people handle different sales tasks, firms often rely on team selling—when different people work together on a specific account. Sometimes members of a sales team are not from the sales department at all. If improving the relationship with the customer calls for input from the quality control manager, then that person becomes a part of the team, at least temporarily. 188) B Firms often rely on team selling—when different people work together on a specific account. Different specialists handle different parts of the job but the whole team coordinates its efforts to achieve the desired result. 189) E A major accounts sales force sells directly to large accounts. 190) B The elite sales force is called a major accounts sales force. A major accounts sales force sells directly to large accounts. 191) E Telephone selling in business markets is often used to extend personal selling efforts to new target markets or increase the frequency of contact with current customers. An advantage of telephone selling by an inside sales group is that it saves time and money for the seller, and it gives customers a fast and easy way to solve a purchasing problem. 192) A

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In business markets, an inside sales force can often build profitable relationships with small or hard-to-reach customers. In final consumer markets, telemarketing has a bad name. The National Do Not Call Registry in the United States (and similar laws in other countries) has largely eliminated telemarketing to consumers. 193) A An inside sales force is a sales force that meets with customers in a manner that is not face-to-face. 194) A Inside salespeople are often used with small or hard-to-reach customers a firm might otherwise promote to with mass selling or just ignore altogether. 195) C Telemarketing is using the telephone to call on customers or prospects. 196) B Carefully set territories can reduce travel time and the cost of sales calls. Assigning territories can also help reduce confusion about who has responsibility for a set of sales tasks. 197) A This question assumes that students were responsible for the Marketing Analytics in Action questions in this chapter. The size of the sales force depends on the workload. The company needs to service 1,000 customers × 6 sales calls per year × 2 hours per sales call—so it needs 12,000 hours of "selling time." One salesperson works 40 hours/week × 50 weeks = 2,000 hours per year, but only half that time is selling—so each sells 1,000 hours per year. The company would need to hire 12 salespeople to get the 12,000 hours of selling time needed.

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198) A This question assumes that students were responsible for the Marketing Analytics in Action questions in this chapter. The size of the sales force depends on the workload. The company needs to service 1,000 customers × 4 sales calls per year × 3 hours per sales call—so it needs 12,000 hours of "selling time." One salesperson works 40 hours/week × 50 weeks = 2,000 hours per year, but only three-quarters of that time is selling—so each "sells" 1,500 hours per year. The company would need to hire 8 salespeople to get the 12,000 hours of selling time needed. 199) A This question assumes that students were responsible for the Marketing Analytics in Action questions in this chapter. The size of the sales force depends on the workload. The company needs to service 1,000 customers × 5 sales calls per year × 2 hours per sales call—so it needs 10,000 hours of "selling time." One salesperson works 40 hours/week × 50 weeks = 2,000 hours per year, but only half of that time is selling—so each sells 1,000 hours per year. The company would need to hire 10 salespeople to get the 10,000 hours of selling time needed. 200) C Emphasis on standardized e-commerce is appropriate for selling situations where relationship-building requirements are low and standardized information exchange requirements are high. 201) A Digital self-service works when relationship building and standardized information needs are low. 202) A

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Emphasis on personal selling is appropriate for selling situations where relationship-building requirements are high but there is a low need for standardized information to be exchanged on a recurring basis. 203) A It is usually the sales manager's job, perhaps with help from specialists in technology, to decide what types of tools are needed and how they will be used. 204) E Software for CRM, spreadsheet sales analysis, digital presentations, time management, sales forecasting, customer contact, and shelf-space management will help a firm gain competitive advantage. 205) E Software for CRM, spreadsheet sales analysis, digital presentations, time management, sales forecasting, customer contact, and shelf-space management will help a firm gain competitive advantage. 206) D The sales rep today relies on support from an array of software and hardware that wasn't available a decade ago to gain competitive advantage. 207) A Artificial intelligence and chatbots are used by some firms to deliver anytime, anywhere communication with customers. Chatbots can answer customer questions quickly and accurately, which is why most customer come to customer service in the first place. 208) E

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Multiple interviews, systematic selection procedures, good job descriptions, and thorough background checks can help a company select a good salesperson. 209) B A job description is a written statement of what a salesperson is expected to do. It should list specific tasks as well as routine prospecting and sales report writing. 210) A A job description is a written statement of what a salesperson is expected to do. It should list specific tasks as well as routine prospecting and sales report writing. 211) C A job description is a written statement of what a salesperson is expected to do. It should list specific tasks as well as routine prospecting and sales report writing. 212) E A job description determines the type of salespeople to be selected and it provides a basis for seeing how they should be trained, how well they are performing, and how they should be paid. 213) D A job description determines the type of salespeople to be selected and it provides a basis for seeing how they should be trained, how well they are performing, and how they should be paid. It should list specific tasks, not general ones. 214) D

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Though there is some truth to the statement that good salespeople are born and not made, all salespeople require some amount of training. Even successful sales reps will require training. Selling skills can be taught. It is usually better to have multiple rounds of interviews before hiring a salesperson. 215) E A company's sales training program should cover at least the following areas: (1) company policies and practices, (2) product information, (3) how to build relationships with customer firms, and (4) professional selling skills. 216) E A company's sales training program should cover at least the following areas: (1) company policies and practices, (2) product information, (3) how to build relationships with customer firms, and (4) professional selling skills. Personnel attitudes and client profiles are not areas covered in sales training. 217) B Though there is some truth to the statement that good salespeople are born and not made, all salespeople require some amount of training. 218) E Though there is some truth to the statement that good salespeople are born and not made, all salespeople require some amount of training. Even successful sales reps will require training. Training consists of classroom lectures, case studies, and streamed video of trial presentations, and demonstrations. 219) E

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A salesperson needs to be taught about the company and its products, about giving effective sales presentations, and about building relationships with customers. 220) E Even successful sales reps will require training. A salesperson needs to be taught about the company and its products, about giving effective sales presentations, and about building relationships with customers. 221) E Sales training should be modified based on the experience and skills of the group involved. 222) A Training in selling techniques does not deal in disparaging competitors. It focuses on listening carefully to identify a customer's real objections, in closing the sale, and in working with customers in difficult customer service situations. It also deals with being more effective in cold calls. 223) D A job description is a written statement of what a salesperson is expected to do. It might list 10 to 20 specific tasks as well as routine prospecting and sales report writing. This step is crucial in determining how a salesperson should be paid. 224) E Total personal selling expenses are likely to be lowest for companies that pay straight commission to salespeople who sell in low sales volume. 225) A

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The total personal selling expense of a business is likely to be most stable if all of the company's salespeople receive straight salary compensation. Under this scenario, the total selling expense would be fixed for a period of time. 226) C For companies who offer a straight commission compensation plan based on a percentage of dollar sales, total selling expenses increase as total sales revenue increases. Salespeople earn more pay as a percentage of the increased dollar sales. 227) C To recruit, motivate, and keep good salespeople, a firm has to develop an effective compensation plan. 228) B Two basic decisions must be made in developing a compensation plan: (1) the level of compensation and (2) the method of payment. 229) E A company must pay at least the going market wage for different kinds of salespeople. If it requires extensive travel, aggressive order-getting, or customer service contacts with troublesome customers, the pay may have to be higher. The salesperson's compensation level should roughly compare with the pay scale of the rest of the firm. The amount of control desired by a firm also decides the pay system: (1) straight salary, (2) straight commission (incentive), or (3) a combination plan. 230) A There are three basic methods of payment: (1) straight salary, (2) straight commission (incentive), or (3) a combination plan. Bonuses, profit-sharing, pensions, stock plans, insurance, and other fringe benefits may be included. Tax deductions are not a payment method. Version 1

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231) E There are three basic methods of payment: (1) straight salary, (2) straight commission (incentive), or (3) a combination plan. Bonuses, profit-sharing, pensions, stock plans, insurance, and other fringe benefits may be included. Tax deductions are not a payment method. 232) A Most salespeople want some security, and most companies want salespeople to have some incentive to work harder and smarter, so the most popular method is a combination plan that includes some salary and some commission. 233) A Most salespeople want some security, and most companies want salespeople to have some incentive to do better work, so the most popular method is a combination plan that includes some salary and some commission. 234) A A straight salary offers the most security for the salesperson, as it is not tied to results actually achieved. 235) C A salesperson on straight salary earns the same amount regardless of how he or she spends time. So the salaried salesperson is expected to do what the sales manager asks. 236) C A salesperson on a straight salary earns the same amount regardless of how he or she spends time. So the salaried salesperson is expected to do what the sales manager asks. 237) B Version 1

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A salesperson on a straight salary earns the same amount regardless of how he or she spends time. 238) A A salesperson on a straight salary earns the same amount regardless of how he or she spends time. So the salaried salesperson is expected to do what the sales manager asks. 239) E Commission pay offers the most incentive and is tied to results actually achieved. It is often based on a percentage of dollar sales, but it may be a financial incentive based on other outcomes such as number of new accounts, customer satisfaction ratings, or customer service problems resolved in some time period. 240) D Commissions are often based on a percentage of dollar sales, but it may be a financial incentive based on other outcomes such as number of new accounts, customer satisfaction ratings, or customer service problems resolved in some time period. 241) B Commission pay offers the most incentive and is tied to results actually achieved. A commission is often based on a percentage of dollar sales. 242) D Commission pay offers the most incentive and is tied to results actually achieved. A commission is often based on a percentage of dollar sales. 243) C Commission pay offers the most incentive and is tied to results actually achieved. 244) B Version 1

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Commission pay offers the most incentive and is tied to results actually achieved. 245) C Most salespeople want some security, and most companies want salespeople to have some incentive to do better work, so the most popular method is a combination plan that includes some salary and some commission. 246) B Most salespeople want some security, and most companies want salespeople to have some incentive to do better work, so the most popular method is a combination plan that includes salary and commission. 247) C A combination plan gives salespeople some security and the incentive to do well. 248) B A combination plan includes a salary as well as some commission, which is tied to actual performance. 249) E Payment methods depend on the level of compensation. A straight salary gives the firm more control, while a commission-based payment system gives the salesperson more incentive and the firm less control. Simplicity is best achieved with a straight salary plan. 250) E

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Payment methods depend on the level of compensation. A straight salary gives the firm more control, but a commission-based payment system gives the salesperson more incentive, and the firm less control. Simplicity is best achieved with straight salary. Combination plans offer some degree of security, incentive, and control. 251) E The commission system offered by a firm should be clear, and must be in line with the firm's policies. Managers must carefully plan, and implement them. A commission system reduces the need for working capital. 252) A Compensation plan that includes different commissions for different products or types of customers can become quite complicated. The sales compensation plan must be easy for the salespeople to understand. 253) D Simplicity is best achieved with straight salary. Different commissions for different types of products can become very complicated. 254) A Sales quota refers to the specific sales or profit objective a salesperson is expected to achieve. 255) A Sales quota refers to the specific sales or profit objective a salesperson is expected to achieve. 256) E Sales quota refers to the specific sales or profit objective a salesperson is expected to achieve. 257) B Version 1

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Sales quota refers to the specific sales or profit objective a salesperson is expected to achieve. 258) D Personal selling techniques include prospecting and selecting target customers, planning sales presentations, making sales presentations, and following up after the sale. Preparing job descriptions is necessary, but it is not a personal selling technique. 259) E The main steps in the personal selling process usually occur in the following order: select target customer, preplan sales call and presentation(s), make sales presentation, close sale. 260) B The main steps in the personal selling process usually occur in the following order: select target customer, preplan sales call and presentation(s), make sales presentation, close sale. Following up after the purchase happens after the sale is closed. 261) D The main steps in the personal selling process usually occur in the following order: select target customer, preplan sales call and presentation(s), make sales presentation, close sale. Setting effort priorities occurs as a first step, before the target customer is selected. 262) A A prepared approach may be suitable for simple order-taking—but it is no longer considered good selling for complicated situations. 263) D As stated in Exhibit 14–5, Key Steps in the Personal Selling Process, making sales presentation is followed by closing the sale. Version 1

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264) B Prospecting involves following all the leads in the target market to identify potential customers. 265) D Prospecting, with the help of communication tools, helps allocate time to potential customers. A sales rep must qualify customers to see if they deserve more effort. 266) E A sales rep must qualify customers to see if they deserve more effort. The salesperson usually makes these decisions by weighing the potential sales volume as well as the likelihood of a sale. A sales rep may need to set priorities, both for new prospects and existing customers. CRM systems help with this process. 267) B Prospecting involves following all the leads in the target market to identify potential customers. 268) D The target market approach is not a sales presentation approach. 269) A A close is a salesperson's request for an order. 270) A The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. This approach says that a customer faced with a particular stimulus will give the desired response. 271) C

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The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. This approach says that a customer faced with a particular stimulus will give the desired response—in this case, a yes answer to the salesperson's prepared statement, which includes a close. 272) C Firms rely on the prepared sales presentation approach when only a short presentation is practical. It's also sensible when salespeople aren't very skilled. 273) E The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. Although the firm has control over what the salesperson says, it's not always the best approach. The salesperson does most of the talking and it's useful for simple ordertaking, but not for complicated selling situations. 274) A In the prepared sales presentation approach, the salesperson does most of the talking using a canned presentation. The approach states that a customer faced with a particular stimulus will give the desired response—in this case, a yes answer to the salesperson's prepared statement, which includes a close. 275) B The prepared sales presentation approach would be the best option for convenience store clerks. The clerk does most of the talking using a short, canned presentation. 276) C The prepared sales presentation would work best for the lawn care firm selling by phone, since it requires a short, memorized presentation. Version 1

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277) A The prepared sales presentation approach uses a memorized presentation that is not adapted to each individual customer. 278) B The consultative selling approach involves developing a good understanding of the individual customer's needs before trying to close the sale. 279) D With the consultative selling approach, the sales rep begins by making some general benefit statements to get the customer's attention and interest. 280) D The consultative selling approach is a problem-solving approach in which the customer and salesperson work together to satisfy the customer's needs. 281) C In the consultative selling approach, the sales rep makes some general benefit statements to get the customer's attention and interest. Then the salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs and to close the sale. 282) A The consultative selling approach involves developing a good understanding of the individual customer's needs. A sales rep for installations should use a consultative selling approach. 283) A

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The consultative selling approach involves developing a good understanding of the individual customer's needs. The salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs. 284) D The consultative selling approach involves developing a good understanding of the individual customer's needs. The salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs. 285) D Consultative selling approach involves developing a good understanding of the individual customer's needs. The salesperson asks questions and listens carefully to understand the customer's needs. Once they agree on needs, the seller tries to show the customer how the product fills those needs. 286) B The selling formula approach starts with a prepared presentation outline much like the prepared approach and leads the customer through some logical steps to a final close. 287) C The selling formula approach starts with a prepared presentation outline much like the prepared approach and leads the customer through some logical steps to a final close. 288) A

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The selling formula approach starts with a prepared presentation outline much like the prepared approach and leads the customer through some logical steps to a final close. 289) D In the selling formula approach, the salesperson does most of the talking at the beginning of the presentation. As the presentation moves along, the salesperson brings the customer into the discussion to help clarify their needs. The salesperson then comes back to show how the product satisfies this need and closes the sale. 290) A In the selling formula approach, the salesperson does most of the talking at the beginning of the presentation. As the presentation moves along, the salesperson brings the customer into the discussion to help clarify their needs. The salesperson then comes back to show how the product satisfies this need and closes the sale. 291) B In the selling formula approach, the salesperson does most of the talking at the beginning of the presentation. As the presentation moves along, the salesperson brings the customer into the discussion to help clarify the customer's needs. The salesperson then comes back to show how the product satisfies this need and closes the sale. 292) A The AIDA sequence consists of Attention, Interest, Desire, and Action. 293) B

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Supporting salespeople help the order-oriented salespeople, but they don't try to get orders themselves. Their activities are aimed at enhancing the relationship with the customer and getting sales in the long run. In the short run they are ambassadors of goodwill who may provide specialized services and information. 294) A Order takers sell to the regular or established customers, complete most sales transactions, and maintain relationships with their customers. 295) D Missionary salespeople are supporting salespeople who work for producers, calling on intermediaries and their customers. They try to develop goodwill and stimulate demand, help intermediaries train their salespeople, and often take orders for delivery by intermediaries. 296) D Wilson's sales position involves providing team selling, major account management, and providing customer service. 297) D Since Emily's work is easily supervised by a sales manager and she has little influence over how much consumers buy, her compensation is most likely a straight salary. 298) C Since Ben's manager has control over his activities and at the same time wants him to have the incentive to increase customer purchases and satisfaction, his compensation is most likely a combination of salary and commission. 299) D

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Charlie relies on a list of potential customers he can call and sell his Internet service to. He is involved in prospecting. 300) B Charlie uses a prepared sales presentation when he calls a list of potential customers. 301) A Ben Peterson spends time assessing customers' needs and then helps them pick the best clothes. He is using the consultative selling approach. 302) C Customer service is required to solve a problem that a customer encounters with a purchase. Emily is the first point of contact whenever there is a problem with a purchase. 303) E Though there is some truth to the statement that good salespeople are born and not made, all salespeople require some amount of training. 304) C The size of the sales force depends on the workload.

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CHAPTER 15 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) It's a common belief that half the money spent on advertising and sales promotion is wasted. ⊚ ⊚

true false

2) The basic strategy planning decisions for advertising, publicity, and sales promotion are the same regardless of where in the world the target market is located. ⊚ ⊚

true false

Advertising expenditures in the United States are more than $200 billion. ⊚ ⊚

true false

4) During the last decade, the rate of advertising spending has increased in the United States, but it has decreased in the rest of the world. ⊚ ⊚

true false

5) The main problem with advertising is that it costs so much—on average about one third of sales dollars for U.S. companies. ⊚ ⊚

true false

On average, U.S. corporations spend only about 2.5 percent of their sales on advertising. ⊚ ⊚

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true false

7) Producers of business products generally spend a larger percentage on advertising than do producers of consumer products. ⊚ ⊚

true false

8) Games and toys producers spend a higher percentage of their sales on advertising than do footwear producers. ⊚ ⊚

true false

9) Motor vehicles producers spend a higher percentage of their sales on advertising than do perfumes and cosmetics producers. ⊚ ⊚

true false

10) Furniture stores spend a higher percentage of their sales on advertising than do grocery stores. ⊚ ⊚

true false

11) Eating places spend a higher percentage of their sales on advertising than do department stores. ⊚ ⊚

true false

12) Although advertising expenditures in the United States are more than $200 billion, the major expense was for media time and space—not the payroll expense of people who worked in the advertising industry.

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true false

13) One of the big problems with using an advertising agency is that the advertiser must stick with the agency for a long time—at least two years—even if the agency's work is not satisfactory. ⊚ ⊚

14)

true false

Sales promoters are specialists who plan and handle mass-selling details for advertisers. ⊚ ⊚

true false

15) It is always more economical for a company to have their own advertising department plan specific advertising campaigns and carry out the details. ⊚ ⊚

true false

16) Advertising allowances are price reductions given to firms further along in the channel to encourage them to advertise or promote a producer's products locally. ⊚ ⊚

17)

true false

Cooperative advertising involves intermediaries and producers sharing in the cost of ads. ⊚ ⊚

true false

18) Cooperative advertising is not very economical, because media rate structures usually require local firms to pay more for local advertising than the same ad would cost a national advertiser.

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⊚ ⊚

true false

19) A cooperative advertising program can help a producer achieve coordination and integration of ad messages in the channel of distribution. ⊚ ⊚

true false

20) Product advertising tries to sell a specific product, while institutional advertising tries to promote an organization rather than a specific product. ⊚ ⊚

true false

21) The basic job of pioneering advertising is to develop specific demand for a specific brand. ⊚ ⊚

true false

22) Competitive advertising is typically used in the market introduction stage of the product life cycle—to develop primary demand. ⊚ ⊚

23)

true false

Competitive advertising tries to develop selective demand for a specific brand. ⊚ ⊚

true false

24) When a firm's advertising says "Our motorcycles will outperform any other brand," it is using competitive advertising to develop selective demand.

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25)

true false

The direct type of competitive advertising tries to obtain immediate buying action. ⊚ ⊚

true false

26) Indirect competitive advertising aims for immediate buying action, while direct competitive advertising aims for future buying action. ⊚ ⊚

true false

27) When a retailer advertises a "special 24-hour sale on GE brand air conditioners," direct competitive advertising is being used. ⊚ ⊚

28)

Comparative advertising tries to keep the product's name before the public. ⊚ ⊚

29)

true false

Comparative advertising makes specific brand comparisons using actual product names. ⊚ ⊚

true false

30) Comparative advertising has been banned by the Federal Trade Commission because it is considered very effective in winning sales from competing products named in ads. ⊚ ⊚

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true false

31)

Many countries forbid comparative advertising, but it is legal in the United States. ⊚ ⊚

true false

32) Reminder advertising is most likely to be useful in the market maturity or sales decline stages of the product life cycle—especially when the product has achieved brand insistence or brand preference. ⊚ ⊚

true false

33) Reminder advertising is likely to be most useful in the market growth stage of the product life cycle. ⊚ ⊚

true false

34) Institutional advertising may try to inform, persuade, or remind, but it usually focuses on the name and prestige of an organization or industry. ⊚ ⊚

true false

35) Institutional advertising emphasizes a particular product and plays down the name of the company. ⊚ ⊚

true false

36) Product advertising is aimed at final consumers; institutional advertising is aimed at intermediaries. ⊚ ⊚

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true false

37)

Institutional advertising is advertising aimed at business customers and intermediaries. ⊚ ⊚

true false

38) A chemical company might use institutional ads to highlight its concern for the environment. ⊚ ⊚

true false

39) An insurance company might use institutional ads to highlight its concern for safe driving. ⊚ ⊚

true false

40) By 2022, the largest share of total advertising expenditures in the United States will be spent on TV advertising. ⊚ ⊚

true false

41) The largest share of total advertising expenditures in the United States goes for newspaper advertising. ⊚ ⊚

true false

42) In general, advertising media are becoming more targeted, in that they aim for more narrowly defined market segments. ⊚ ⊚

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true false

43) The effectiveness of an advertising medium depends on how well it fits with the rest of a particular marketing strategy. ⊚ ⊚

true false

44) The best advertising medium is television, but some advertisers must use other media because they do not have enough money for TV. ⊚ ⊚

true false

45) When "action" and a sale are important, then TV advertising is the right advertising choice. ⊚ ⊚

true false

46) To guarantee good media selection, the advertiser must specify its target market and then choose media that will reach these target customers. ⊚ ⊚

true false

47) To guarantee good media selection, the advertiser first must clearly specify its target market. ⊚ ⊚

true false

48) One advantage of the major mass media is that the advertiser does not have to pay for the whole audience to whom the media deliver, but instead just pays based on the number of potential customers in the audience.

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⊚ ⊚

true false

49) Through the use of big data, cable television has the ability to deliver specific ads to each household instead of advertising to everyone watching a particular show. ⊚ ⊚

true false

50) On average, Americans spend more time online and on mobile devices than they do watching television. ⊚ ⊚

true false

51) “Influencers” are trusted or well-known figures who leverage social media to become advertisers. ⊚ ⊚

true false

52) Pay-per-click advertising means advertisers pay only if the customer clicks on the ad and links to the advertiser's website. ⊚ ⊚

53)

true false

On some websites, Internet ads are free if the ads don't get results. ⊚ ⊚

true false

54) Pay-per-click allows firms the ability to directly track the cost of advertising and the resulting sales.

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true false

55) Pay-per-click is based on the number of people who click on an ad divided by the number of people to whom the ad is presented. ⊚ ⊚

56)

true false

Cookies give customers information about advertisers. ⊚ ⊚

true false

57) Because of cookies, some advertisers already know where customers have been on the web and what they did there. ⊚ ⊚

58)

true false

Cookies are a cost-effective way for advertisers to target ads and boost online sales. ⊚ ⊚

true false

59) Mobile devices track customers' whereabouts through GPS, and the segmenting dimension of physical location at a specific time can be added to target marketing. ⊚ ⊚

true false

60) Considering that only a small percentage of cell phone users in many developed countries have smartphones, advertisers are wary about the effectiveness of delivering online ads on smartphones.

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61)

Most online advertisers seek a delayed response. ⊚ ⊚

62)

true false

Copy thrust refers to the choice of media to deliver a message to the target audience. ⊚ ⊚

64)

true false

Copy thrust is what the words and illustrations of an advertisement should communicate. ⊚ ⊚

63)

true false

The AIDA model can help plan messages for advertisements. ⊚ ⊚

true false

65) Advertising can be useful in a marketing strategy for getting attention, holding interest, arousing desire, and obtaining action. ⊚ ⊚

66)

true false

Getting attention to a particular advertisement is always easy. ⊚ ⊚

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true false

67) Advertising effectiveness is usually very difficult to measure because sales result from the total marketing mix, not just from advertising. ⊚ ⊚

true false

68) The success of an advertising campaign can be easily measured by looking at the sales result. ⊚ ⊚

true false

69) Looking at sales volume is usually the easiest and best method of determining the degree of success for an advertising campaign. ⊚ ⊚

true false

70) The effectiveness of advertising is best measured by relying on the judgment of creative people and advertising experts. ⊚ ⊚

true false

71) To evaluate the effectiveness of advertising, it's better to rely on the judgment of the creative people in ad agencies than to rely on the results of advertising research. ⊚ ⊚

true false

72) The United States is one of only a few countries in the world where the government takes an active role in deciding what kinds of advertising are allowable, fair, or appropriate. ⊚ ⊚

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true false

73) Though it is common in the United States to use cartoon characters in advertising to children, both Japan and France limit that practice, and Canada bans any advertising targeted directly at children. ⊚ ⊚

true false

74) Because of different advertising rules in different countries, it's best for a marketing manager to get help from local advertising experts. ⊚ ⊚

true false

75) In the United States, the regulation of "deceptive" and "unfair" advertising is the responsibility of the Federal Trade Commission. ⊚ ⊚

true false

76) The Federal Trade Commission can require firms to use "corrective advertising" or "affirmative disclosures" if it decides a particular advertisement is unfair or deceptive. ⊚ ⊚

77)

Corrective advertising corrects deceptive advertising. ⊚ ⊚

78)

true false

In general, sales promotion tries to spark immediate interest, trial, or purchase. ⊚ ⊚

79)

true false

Sales promotion is generally used instead of other promotion methods.

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⊚ ⊚

80)

Sales promotions can usually get sales results sooner than advertising. ⊚ ⊚

81)

true false

Advertising can usually get sales results sooner than sales promotion. ⊚ ⊚

82)

true false

Spending on sales promotion exceeds spending on advertising. ⊚ ⊚

true false

83) Because consumers are becoming less and less price-sensitive, the use of sales promotion is increasing. ⊚ ⊚

84)

true false

In total, advertising costs less than sales promotion. ⊚ ⊚

true false

85) Producers of consumer-packaged goods typically stop using sales promotion when their product-markets mature. ⊚ ⊚

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true false

86) Much of the sales promotion aimed at final consumers or users tries to increase demand, perhaps temporarily, or speed up the time of purchase. ⊚ ⊚

true false

87) When the promotion objective is focused primarily on producing a short-term increase in sales, the marketing manager should evaluate the cost of the promotion relative to the extra sales expected. ⊚ ⊚

88)

It is against the law for industrial buyers to accept promotion items from suppliers. ⊚ ⊚

89)

true false

Trade promotion refers to sales promotion aimed at intermediaries. ⊚ ⊚

90)

true false

Sales promotion aimed at company's own sales force is called trade promotion. ⊚ ⊚

true false

91) Contests, bonuses on sales or number of new accounts, or holding sales meetings at fancy resorts are ways that companies use sales promotion to encourage sales reps to meet specified goals. ⊚ ⊚

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true false

92) Sales promotion problems are likely to be greater when an advertising or sales manager, instead of a sales promotion manager, has responsibility for sales promotion. ⊚ ⊚

true false

93) Because sales promotion is cheap and easy to implement, it can be effectively and economically undertaken by any firm. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 94) When a firm spends its resources on advertising and sales promotion, which of the following is likely to occur? A) The results actually achieved through these activities are easy to measure. B) Half the money spent on these activities is wasted. C) The results achieved are even, but highly unpredictable. D) It motivates only the channel members and not the final consumers. E) It rarely fails to achieve objectives.

95)

Planning for mass selling involves strategy decisions about A) what is to be said to the target customers. B) how target customers are to be reached. C) what are the desired objectives D) what kind of advertising is to be used. E) All of the answers are correct.

96)

Which of the following is not an advertising decision?

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A) who the target audience is B) what kind of advertising to use C) what the message should be D) which media to use E) what types of coupons will be used

97)

Advertising spending in the United States is over ________ billion. A) $100 B) $200 C) $50 D) $350 E) $500

98)

Total advertising spending is A) about 15 percent of all firms' sales. B) greater in Europe than in the United States. C) greater in Asia than in the United States. D) more than $200 billion in the United States. E) under $25 billion in the United States.

99)

Which of the following is true about advertising spending in the United States?

A) Firms spend more money for advertising business products than consumer products. B) Advertising spending in the United States was $450 billion in 2015. C) Firms spend an average of only about 2.5 percent of their sales dollars on advertising. D) Advertising in the United States accounts for roughly 50 percent of worldwide advertising spending. E) The advertising spending as a percent of sales dollars remains same for all product categories.

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100)

Advertising expenditures by U.S. corporations

A) average only about 2.5 percent of sales. B) must be approved by an advertising agency that is registered with the Federal Trade Commission. C) are higher for newspaper advertising than television advertising. D) are lower than in other countries. E) are highest for business product companies (as a percent of sales).

101) Which of the following is most likely to spend less than 1 percent on advertising as a percentage of sales? A) a producer of games and toys that sells to retailers B) a company that sells plastics products to manufacturers C) a company that sells women's clothing to retail consumers D) a company that sells perfume and cosmetics to consumers E) a company that sells construction machinery and equipment

102) Which of the following products is related to the highest advertising spending as percent of sales? A) malt beverages B) cable and other pay TV services C) motor vehicles and car bodies D) perfume and cosmetics E) computers and office equipment

103) Which of the following is most likely to spend approximately 2.5 percent on advertising as a percentage of sales?

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A) a producer of soft drinks B) a producer of motor vehicles C) a retail grocery store D) a producer of soap and detergent E) a retail jewelry store

104)

Advertising spending as a percent of sales dollars is largest for A) soap and detergent. B) perfumes and cosmetics. C) sporting and athletic goods. D) soft drinks and water. E) motor vehicles.

105)

Advertising spending as a percent of sales dollars is lowest for A) grocery stores. B) hotels and motels. C) furniture stores. D) jewelry stores. E) department stores.

106)

For producers, advertising spending as a percent of sales dollars is LOWEST for A) motor vehicles. B) soap and detergent. C) plastic products. D) soft drinks. E) perfume.

107)

Advertising spending as a percent of sales dollars is LOWEST for

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A) malt beverages. B) cars. C) cable TV. D) computers. E) games.

108)

Which of the following retailers spend more on advertising as a percent of sales? A) furniture stores B) eating places C) department stores D) grocery stores E) hotels and motels

109) Which of the following retailers spend the least amount on advertising as a percentage of sales? A) hotels and motels B) grocery stores C) furniture stores D) jewelry stores E) department stores

110) In the United States, grocery store retailers spend about ________ percent of their sales dollars on advertising. A) 1 B) 4 C) 7 D) 10 E) 13

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111) In the United States, producers of games and toys spend about ________ percent of their sales dollars on advertising. A) 1 B) 4 C) 7 D) 10 E) 14

112) In the United States, jewelry stores spend about ________ percent of their sales dollars on advertising. A) 1 B) 3 C) 6 D) 9 E) 12

113) In the United States, producers of sporting and athletic goods spend about ________ percent of their sales dollars on advertising. A) 1 B) 3 C) 6 D) 7 E) 14

114)

An advertising manager's job is to

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A) manage the firm's advertising effort. B) plan creative marketing strategies. C) develop the firm's marketing mix. D) develop the firm's promotion blend. E) All of these are included in an advertising manager's job.

115)

What is the focus of advertising agencies? A) They usually require advertisers to sign long-term contracts. B) They prefer to work with local advertisers rather than national advertisers. C) They compete against the national media for the business of big advertisers. D) They do little more than sell media time or space to advertisers. E) They are specialists in planning and handling mass-selling details.

116)

Which of the following statements about advertising agencies is true?

A) Advertising agencies are specialists in planning and handling mass-selling details. B) Advertising agencies can often do a job more economically than an in-house department. C) Advertising agencies bring experience to problem because they work for many other clients. D) Advertising agencies are independent of the advertiser and have an outside view. E) All of the answers are correct.

117)

Which of the following observations about advertising agencies is false?

A) They are specialists in planning and handling mass-selling details for advertisers. B) They are dependent on the advertiser and have a mixed viewpoint. C) They may be full-service agencies who handle any activities related to advertising, publicity, or sales promotion. D) They can be replaced if they are not doing a good job. E) They can often do the job more economically than a company's own department.

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118)

Which of the following is true regarding the functioning of advertising agencies? A) They can often do a job more economically than a company’s own department. B) They are not involved in planning and handling mass-selling details for advertisers. C) They are dependent on the advertisers and reflect only their viewpoint. D) They are independent of the advertiser and have an outside viewpoint. E) They are under contract with one client at a time.

119)

Which of the following is true of advertising agencies?

A) Advertising agencies can be helpful, but they are always more expensive than a firm doing its own advertising work. B) Advertising agencies must be selected very carefully, since most require long-term contracts. C) Advertising agencies employ relatively few people. D) Advertising agencies usually specialize in one particular type of work, such as sales promotion planning or website design. E) None of the answers are correct.

120)

Advertising objectives should

A) be specific, but not as specific as the objectives for the personal selling effort. B) be set by the specialists—the creative people at the advertising agency. C) be quite general so that ads will appeal to the largest possible audience. D) determine the kinds of advertising needed. E) be more specific for institutional advertising than for direct type competitive advertising.

121) Which of the following advertising objectives is the best example of a specific advertising objective?

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A) to increase a firm's market share by 20 percent this year B) to increase consumer awareness of the product C) to help attract new retailers on the West Coast D) to sell the company "image" to senior citizens E) to increase store traffic

122)

Which of the following is the best example of an advertising objective?

A) "We want 35 percent of our target customers to be aware of our new product within the next two months." B) "We want to generate enough interest in our product that intermediaries will be willing to stock it." C) "We want to make older consumers aware of our product—since they have the greatest need." D) "We want to increase profits—and that will require significantly expanding sales of our product." E) "We want to win an advertising industry artistic award for the creative effort on the ad."

123)

Which of the following is the LEAST appropriate advertising objective? A) to increase sales by 20 percent this year B) to improve consumer goodwill and help sell the product C) to increase target customers' brand awareness by 50 percent this year D) to increase a brand's market share by 10 percent E) to obtain 20 new accounts in the Oakland Bay area

124)

Which of the following is the LEAST appropriate advertising objective?

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A) "We want our ads to increase traffic in our retail outlets by 10 percent." B) "We want our TV ads to really promote the product." C) "We want the ad campaign to increase our market share by 3 percent." D) "We want distribution in 30 percent of the desirable retail outlets." E) "We want to increase customer awareness for our products."

125)

Which of the following is the worst example of an advertising objective?

A) "We want to increase awareness among the members of the target audience by 10 percent within three months after the start of our advertising campaign." B) "We want 50 percent of the television audience for the Super Bowl to recall having seen a commercial for our product during the game." C) "We want our advertising to create favorable word-of-mouth promotion for our product." D) "We want our banner ad on the Yahoo! homepage to generate 50,000 page views (hits) on our corporate website within the first week that it appears on the World Wide Web." E) "We want our infomercial running on cable television stations to generate 10,000 orders for the advertised product within one month after it starts."

126) Which of the following would be a type of advertising used in the awareness stage of the adoption process? A) Flash ads B) testimonials C) teaser campaigns D) point-of-purchase ads E) persuasive copy

127)

Teaser campaigns for a product work best in which stage of the adoption process?

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A) awareness B) interest C) evaluation and trial D) decision E) confirmation

128) The stage of adoption process benefitted by employing informative or descriptive ads is called A) interest. B) awareness. C) evaluation and trial. D) decision. E) confirmation.

129)

The stage of the adoption process in which persuading ads for a product work best is A) awareness. B) interest. C) evaluation and trial. D) decision. E) confirmation.

130)

Comparative ads for a product work best in which stage of the adoption process? A) awareness B) interest C) evaluation and trial D) decision E) confirmation

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131) Which of the following would be a type of advertising used in the evaluation and trial stage of the adoption process? A) competitive ads B) Flash ads C) informative "why" ads D) pioneering ads E) viral advertising

132)

Point-of-purchase ads for a product work best in which stage of the adoption process? A) awareness B) interest C) evaluation and trial D) decision E) confirmation

133)

Reminder ads for a product work best in which stage of the adoption process? A) awareness B) interest C) evaluation and trial D) decision E) confirmation

134)

Reminder ads come under which stage of the adoption process in advertising? A) awareness B) interest C) evaluation and trial D) confirmation E) decision

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135) Price reductions given to channel members to encourage them to advertise or otherwise promote a firm's products locally are A) quantity discounts. B) brokerage allowances. C) push money allowances. D) advertising allowances. E) trade incentives.

136) Which of the following types of advertising is most associated with the confirmation stage of the adoption process? A) reminder ads B) teaser campaigns C) persuasive copy D) competitive ads E) search ads

137) Which of the following types of advertising is most appropriate for the awareness stage of an advertising campaign? A) reminder ad B) competitive ad C) jingle D) direct-action retail ads E) price deal offers

138) When a firm offers advertising allowances to firms further along in a channel, what is the likely benefit it gets?

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A) They encourage advertising or promoting of the firm's products locally. B) They involve intermediaries and producers sharing in the cost of ads. C) They allow for coordination and integration of ad messages in the channel. D) They set the allowance amount as a percent of the retailer's actual purchases. E) They offer incentives that encourage retailers to stock up on a product.

139)

Cooperative advertising is

A) advertising by several producers of the same product type—to stimulate primary demand. B) encouraged by the Federal Trade Commission. C) the opposite of competitive advertising. D) a way for a producer to get more promotion for its advertising dollar. E) None of the answers are correct.

140)

Cooperative advertising involves producers

A) paying for intermediaries' total advertising costs. B) agreeing with competitors to limit advertising spending. C) doing some advertising and expecting their intermediaries to provide the rest of the promotion blend. D) sharing the cost of advertising placed in national media with intermediaries. E) sharing the cost of local advertising with intermediaries.

141) The approach in which producers and intermediaries share the cost of ads in local media is called ________ advertising. A) comparative B) cooperative C) pioneering D) campaign E) institutional

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142)

Producers do cooperative advertising with retailers because A) media rate structures give national firms lower rates than local firms. B) the FTC requires it. C) retailers create better ads than producers. D) retailers are more likely to follow through when they are paying a share of the cost.

143) A producer of country music CDs pays a share of local retailers' costs to get them promote its new releases. This is an example of ________ advertising. A) pioneering B) institutional C) comparative D) cooperative E) selective

144) A manufacturer of lawn mowers pays for and provides local dealers with professionallyproduced commercials for its products. A dealer can pay to have its name, address, and telephone number appear at the end of the commercial. The commercials are much higher-quality ads than most local lawn mower dealers could afford by themselves. These commercials provided by the manufacturer for local use are an example of A) advertising allowances. B) cooperative advertising. C) vertical communication. D) horizontal integration. E) None of the answers are correct.

145)

What is the objective of pioneering advertising?

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A) It develops goodwill toward a company. B) It develops primary demand for a product category. C) It keeps the product's name before the public. D) It maintains focus on the prestige of an organization. E) It builds demand for a specific brand.

146) Advertising that tries to develop primary demand for a product category rather than a specific brand is called ________ advertising. A) comparative B) institutional C) competitive D) pioneering E) persuading

147) ________ advertising tries to develop primary demand for a product category rather than demand for a specific brand. A) Reminder B) Institutional C) Pioneering D) Competitive E) Comparative

148) Pioneering advertising is often needed during the ________ stage of the product life cycle. A) sales decline B) turbulence C) market maturity D) market growth E) market introduction

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149)

Which of the following is true of pioneering advertising? A) It helps turn potential customers into adopters. B) It tries to develop selective demand for a specific brand. C) It points out product advantages to affect future buying decisions. D) It tries to keep the product's name before the public. E) It is used primarily to reinforce previous promotion.

150) Which of the following advertising headlines is most oriented toward stimulating primary demand? A) "See your Hewlett-Packard dealer to learn how an affordable portable printer can make business travel easier." B) "Panasonic is the value leader." C) "IBM printers set the quality standard." D) "Buy Quality. Buy from an authorized Epson dealer." E) "Canon portable computers are lighter to carry than any other brand."

151) The message "Get your daily dose of vitamin C with orange juice" is an example of which type of advertising? A) pioneering B) competitive C) indirect action D) reminder E) direct action

152) 3-D-T has developed a printer that will "print" t-shirts and other simple articles of clothing on demand. In order to let customers know about this product, an advertising campaign should emphasize

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A) pioneering advertising. B) institutional advertising. C) comparative advertising. D) reminder advertising. E) price-deal advertising.

153) A farmer's cooperative in California is sponsoring TV ads aimed at getting Americans to eat more garlic. The ads don't mention any brand names. This is an example of ________ advertising. A) competitive B) pioneering C) indirect competitive D) reminder E) comparative

154) Which of the following types of advertising would most likely be used by an oil company that wished to improve its reputation after an oil spill? A) direct competitive advertising B) indirect competitive advertising C) pioneering advertising D) institutional advertising E) cooperative advertising

155) Faced with a decline in red meat consumption, the American Beef Association is sponsoring an advertising campaign to increase consumption of beef by stressing new research results about beef's nutritional benefits. This is an example of

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A) competitive advertising. B) reminder advertising. C) comparative advertising. D) indirect action advertising. E) pioneering advertising.

156) Boomerang, Inc. has created a truly new product, and the firm's marketing manager is worried that consumers may not buy the product because it is such a different way of satisfying the basic need. The promotion blend for the new product should probably emphasize ________ during market introduction. A) comparative advertising B) institutional advertising C) reminder advertising D) pioneering advertising E) competitive advertising

157) When personal computers were in the market introduction stage of their product life cycle, advertising helped consumers understand the needs of owning a computer. Now that personal computers have wide acceptance among business and home users, the advertising is focused more on trying to get consumers to purchase a particular brand of computer. So personal computer advertising used to be ________ advertising in market introduction, but it is now ________ advertising in market maturity. A) comparative; pioneering B) pioneering; institutional C) competitive; pioneering D) pioneering; competitive E) comparative; reminder

158)

Using advertising to develop selective demand

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A) may become necessary as a firm's product moves through its product life cycle. B) should only be tried with selective distribution. C) is needed when consumers do not know a new product is available. D) is intended to produce immediate buying action. E) is needed when a firm has a monopoly.

159)

Competitive advertising tries to A) develop selective demand rather than primary demand. B) keep a product's name before the public. C) promote the competitive products of an industry rather than a particular firm. D) build demand for a product category. E) create goodwill for a firm.

160) Advertising that tries to develop selective demand for a specific brand rather than a product category is called ________ advertising. A) institutional B) competitive C) indirect reminder D) direct pioneering E) primary

161)

What is the objective of competitive advertising?

A) It tries to develop primary demand for a product category rather than demand for a specific brand. B) It tries to keep the product's name before the public. C) It is used to present the company in a favorable light, perhaps to overcome image problems. D) It may be useful when the product has achieved brand preference or insistence. E) It tries to develop selective demand for a specific brand.

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162)

Which of the following is true of competitive advertising? A) It informs potential customers about the new product and turns them into adopters. B) It means making specific brand comparisons using actual product names. C) It tries to develop selective demand for a specific brand. D) It tries to keep the product's name before the public. E) It is usually done in the early stages of the product life cycle.

163) An ad stressing the advantages of one brand of cookware as compared to similar (but unnamed) competitive products is an example of ________ advertising. A) institutional B) comparative C) pioneering D) primary E) competitive

164) Which kind of advertising should a manufacturer of paper towels (that are basically similar to competitive products) use if it wants to increase its market share? A) reminder B) competitive C) institutional D) primary demand E) pioneering

165)

Direct competitive advertising focuses on

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A) aiming for immediate buying action. B) developing primary demand. C) making specific brand comparisons. D) keeping the product's name before the public. E) promoting an organization's ideas.

166)

The ________ type of competitive advertising aims for immediate buying action. A) direct B) interactive C) indirect D) strategic E) identity

167) A supermarket manager should use ________ advertising to increase store traffic during the middle of the week. A) institutional B) indirect competitive C) pioneering D) reminder E) direct competitive

168) Glitter, Inc. advertises its "gold-tone" jewelry on TV, along with a toll-free number and the message "operators are standing by now to take your credit card order." This is an example of ________ advertising. A) direct competitive B) pioneering C) primary D) comparative E) indirect competitive

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169)

Indirect competitive advertising seeks

A) to develop primary demand. B) immediate buying action. C) to develop goodwill for a company so that target customers will eventually buy one or more of its products. D) to develop selective demand in order to affect future buying decisions. E) None of the answers are correct.

170) The type of competitive advertising that points out product advantages in order to affect future buying decisions is A) direct. B) interactive. C) indirect. D) strategic. E) phonetic.

171) A manufacturer of computer printers has decided to add scanners to its line. Which kind of advertising should it stress if it wants to persuade consumers to buy its brand of more or less similar scanners? A) reminder B) cooperative C) pioneering D) institutional E) indirect competitive

172) Best Sound, Inc. placed a full-page color ad in Car Talk magazine, stressing the better sound available with its car stereo product as compared to similarly priced products, to try to affect its target market's future buying decisions. This is an example of ________ advertising.

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A) reminder B) pioneering C) direct competitive D) institutional E) indirect competitive

173) Sears advertises its "DieHard" auto batteries as "even better than your original battery." The ads tell possible customers to get a DieHard at their Sears auto center the next time they need one. This is an example of A) institutional advertising. B) the indirect type of competitive advertising. C) the direct type of competitive advertising. D) comparative advertising. E) reminder advertising.

174) Competitive advertising that makes specific brand comparisons—using actual names—is ________ advertising. A) direct competitive B) cooperative C) comparative D) pioneering E) institutional

175) Nissan advertises the performance of its new luxury sedan by showing it side-by-side with competing brands, like Lexus and BMW. What type of advertising does it adopt?

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A) primary advertising B) institutional advertising C) reminder advertising D) comparative advertising E) selective advertising

176) In its ads, Clorox touts the effectiveness of its Disinfecting Wipes by claiming that they disinfect better than those made by Windex, a competing brand. This is an example of A) reminder advertising. B) comparative advertising. C) selective advertising. D) institutional advertising. E) primary advertising.

177) In its ads, General Mills highlights the advantages of its Milk 'n Cereal breakfast bars over Kellogg's breakfast bars. This is an example of A) comparative advertising. B) primary advertising. C) selective advertising. D) reminder advertising. E) institutional advertising.

178) An ad for Toyota's lowest-priced truck claimed that it "is tougher, gives better mileage, and costs less than any other truck" and specifically named the directly competitive trucks. This is an example of

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A) institutional advertising. B) comparative advertising. C) cooperative advertising. D) direct competitive advertising. E) pioneering advertising.

179)

Comparative advertising A) is usually ignored by consumers. B) is illegal according to the FTC. C) should be supported by research evidence. D) must focus on major consumer benefits to be legal. E) None of the answers are correct.

180)

Although legal in the United States, ________ is forbidden in some countries. A) comparative advertising B) pioneering advertising C) competitive advertising D) reminder advertising E) institutional advertising

181)

One major difference between reminder advertising and pioneering advertising is that

A) reminder advertising focuses on selective demand, while pioneering advertising tries to develop primary demand. B) reminder advertising is less likely to use "soft sell" ads. C) reminder advertising is emphasized in the early stages of the product life cycle. D) pioneering advertising is emphasized in the later stages of the product life cycle. E) None of the answers are correct.

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182)

Reminder advertising

A) tries to develop primary demand for a product category rather than demand for a specific brand. B) tries to keep the product's name before the public. C) means making specific brand comparisons using actual product names. D) tries to develop selective demand for a specific brand. E) informs potential customers about the new product and helps turn them into adopters.

183) Which type of advertising is considered useful when the product of a firm has achieved brand preference or insistence and the firm needs to primarily reinforce its previous promotion? A) comparative advertising B) pioneering advertising C) competitive advertising D) reminder advertising E) institutional advertising

184) When a producer has won brand preference for its product but is entering the sales decline stage of its life cycle, it should probably use A) pioneering advertising. B) competitive advertising. C) primary advertising. D) reminder advertising. E) institutional advertising.

185) When a producer has won brand insistence in its target market and just wants to keep the product's name before the public, it can use

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A) reminder advertising. B) pioneering advertising. C) direct-action advertising. D) comparative advertising. E) institutional advertising.

186)

All of the following are product-based advertising types except A) institutional advertising. B) cooperative advertising. C) pioneering advertising. D) comparative advertising. E) competitive advertising.

187)

Institutional advertising A) tries to stimulate primary demand rather than selective demand. B) involves no media costs. C) tries to develop goodwill for a company or even an industry. D) tries to keep a product's name before the public. E) is always aimed at final consumers or users.

188)

All of the following are true of institutional advertising except that it A) focuses on the name and prestige of an organization or industry. B) seeks to inform, persuade, or remind. C) tries to keep the product's name before the public. D) develops goodwill or improves an organization's relations with various groups. E) advocates a specific cause or idea.

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189) Which of the following advertising types tries to develop goodwill or improve an organization's relations with various groups? A) primary demand B) selective demand C) institutional D) persuading E) pioneering

190) Focusing a company's advertising on its name and prestige is called ________ advertising. A) reminder B) primary C) institutional D) competitive E) pioneering

191)

Institutional advertising A) may try to improve a firm's image with shareholders. B) may seek to inform, persuade, or remind. C) may try to improve a firm's image with the general public. D) focuses on the name and prestige of a company or industry. E) All of the answers are correct.

192) When a firm's president appears in TV testimonial ads to assure customers, employees, and stockholders that the firm is making a fast recovery from some problem, it is an example of

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A) institutional advertising. B) reminder advertising. C) competitive advertising. D) comparative advertising. E) pioneering advertising.

193)

Which of the following is the best example of institutional advertising? A) "I'd walk a mile for a Pepsi" B) "HP is the standard for personal computers" C) "Mobil gas makes your car perform better" D) "Promise her anything, but give her Obsession" E) "Better living through pharmaceutical research"

194) The National Cheese Association's ad theme "We are making better cheese for you" is an example of A) institutional advertising. B) cooperative advertising. C) pioneering advertising. D) competitive advertising. E) reminder advertising.

195) Archer Daniels Midland (ADM) is a producer of food ingredients, sweeteners, cocoa, flours, vegetable oils, and protein products that are used in the manufacture of processed foods. ADM does not make products that are typically sold to final consumers; it makes business-tobusiness products. However, ADM is a major advertiser on news and public affairs programs that appear on national television networks. The main objective of ADM's television commercials is to build goodwill for the company and to improve relations with current and prospective shareholders. ADM is engaged in

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A) product advertising. B) institutional advertising. C) pioneering advertising. D) competitive advertising. E) reminder advertising.

196)

Which of the following is a concern in selecting the advertising media to use? A) the advertising budget B) the nature of the media C) the target market D) the advertising objective E) All of the answers are correct.

197) Regarding the selection of good advertising media, which of the following is the best advice? A) "There is no such thing as a must buy." B) "Be sure the media match your target market." C) "Avoid the local media." D) "Make sure your first media choice reaches the whole target market." E) "Set very general promotion objectives to stay flexible."

198) A ski resort is considering a promotional campaign that emphasizes ads in national ski magazines. Which of the following disadvantages would most likely affect this campaign? A) inability to convey complex messages B) poor detail C) poor photo reproduction D) low reader involvement E) long lead times

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199)

Selecting the most effective advertising media depends on the A) nature of the media—i.e., reach, frequency, impact and cost. B) firm's target market. C) funds available for advertising. D) firm's promotion objectives. E) All of the answers are correct.

200)

To choose the best advertising medium, you have to A) decide what target market(s) should be reached. B) decide on promotion objectives. C) know the cost of alternative media. D) decide what must be said. E) All of the answers are correct.

201)

The effectiveness of an advertising medium depends on all of the following except A) the promotion objectives. B) the funds available for advertising. C) the nature of the product. D) the markets targeted. E) who the media reach.

202) By 2022, the largest share of total advertising expenditures in the United States will go for ________ advertising.

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A) Internet B) television C) magazine D) direct mail E) radio

203)

Of the following advertising media, which would be best for achieving the widest reach? A) newspaper B) direct mail C) television D) outdoor E) magazine

204) Which of the following advertising media has a wide reach and is good for getting attention and for demonstrations, but is expensive, has a lot of clutter, and has limited time? A) direct mail B) Yellow Pages C) television D) Internet E) outdoor

205) When considering the advertising medium of magazines, which of the following advantages and disadvantages apply?

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A) very targeted, good detail, some "pass along"; but inflexible and has long lead times B) flexible, timely, local market; but may be expensive, has a short life, and no "pass along" C) flexible, repeat exposure, inexpensive; but "mass market" and very short exposure D) selected audience, flexible, can be personalized; but relatively expensive per contact and hard to retain attention E) demonstrations, good attention, and wide reach; but expensive in total, has a lot of clutter, and not always selective audience

206) When considering the out-of-home advertising mediums, which of the following advantages and disadvantages apply? A) very targeted, good detail, good "pass along"; but inflexible and long lead times B) flexible, timely, local market; but may be expensive, has a short life, and no "pass along" C) selected audience, flexible, can be personalized; but relatively expensive per contact and hard to retain attention D) demonstrations, good attention, wide reach; but expensive in total, has a lot of clutter, and not always selective audience E) captive audience; but has very short exposure times and often primarily a young audience

207)

To ensure good media selection, the advertiser must first clearly specify its A) promotion objectives. B) target market. C) budget. D) advertising campaign.

208)

Regarding advertising media selection, which of the following is the best advice?

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A) "There is no such thing as a must buy." B) "Be sure the media match your target market." C) "Avoid the local media." D) "Make sure your first media choice reaches the whole target market." E) "Set very general promotion objectives to stay flexible."

209) Which of the following statements is not good advice for a marketing manager regarding media selection? A) "The advertising media should support the promotion objectives." B) "Choose media that reach the target market." C) "Remember that not all media are equally effective." D) "Target the mass market whenever possible." E) All of these are good advice.

210)

Good media buyers know that A) many magazines serve only special-interest groups. B) the most targeted medium is newspapers. C) media costs generally have little relation to audience size or circulation. D) television is superior to newspapers or radio. E) All of the answers are correct.

211) When an advertiser pays a fixed amount (e.g. 70 cents) each time a web surfer clicks on the advertiser's ad and links to the advertiser's website, the process is called A) copy thrust. B) pay-per-view. C) pioneering advertising. D) pay-per-click. E) advertising allowance.

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212) When an advertiser pays a fixed amount (e.g. 70 cents) each time a web surfer clicks on the advertiser's ad and links to the advertiser's website, the process is called a(n) A) copy thrust. B) pay-per-view model. C) pioneering ad. D) pay-per-click model. E) advertising allowance.

213) When an online ad is delivered to a person's computer based on previous websites that person has visited, it is called A) pay-per-click targeting. B) pioneering targeting. C) pay-per-view targeting. D) copy thrust targeting. E) behavioral retargeting.

214) The small file placed on the computer of a customer who visits a website that helps to track the customer and infer the customer's interests is called a(n) A) product. B) cookie. C) reminder. D) identity tag. E) target chip.

215) The form of digital advertising that works best for brand building and whose effectiveness can be measured by using good tracking tools is

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A) mobile advertising. B) banner ads. C) directories and classifieds. D) social network advertising. E) search advertising.

216) Sara Weinstein is looking to build her brand of high-end casual wear. Which of the following would be the LEAST effective way for her to build awareness of her brand? A) directories B) banner ads C) pop-up ads D) influencer endorsement

217) A trusted or well-known figure who can sway attitudes or purchase decisions among a particular target market for the purpose of promoting brand is best referred to as a(n) A) influencer. B) ad man. C) pioneer. D) retargeter. E) promoter.

218) Which of the following best describes the use of an "influencer" in a social media campaign?

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A) American Eagle recruits YouTube personalities that are popular among teens to wear and endorse their clothing. B) Breyer's ice cream has a contest so that customers can vote on a what their newest ice cream flavor should be. C) Macy's offers special discounts to customers who "Like" them on Facebook. D) Bath & Body Works provides online discount codes to customers that share their promotions on social media. E) The World Wildlife Federation hires a famous Hollywood celebrity to be its spokesperson for its newest advertising campaign.

219)

Which of the following is the best example of the use of an influencer in advertising?

A) A YouTube fitness star is paid by Nike to promote and wear their shoes and apparel in all of her videos. B) The office supply salesperson makes a sales call on the president of a university to see if she will weigh in on the university’s purchasing decisions. C) A sales promotion manager hands out company swag to industry leaders at a trade show. D) A company uses artificial intelligence to determine where a customer is and sends them coupons when they are close to the company’s physical location. E) All of the answers are correct.

220) Which of the following digital advertising does not work for brand building and is considered unsuitable for large firms? A) directories and classifieds B) social network advertising C) search advertising D) mobile advertising E) banner ads

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221) When a firm is interested in targeting customers during the information gathering stage of the buying process and wants to measure the return on investment in advertising, which of the following should it adopt for its digital advertising? A) directories and classifieds B) search advertising C) banner ads D) social network advertising E) mobile advertising

222) Which of the following types of digital advertising works best for high-involvement products and immediate purchases? A) pop-up ads B) search advertising C) social network advertising D) directories and classifieds E) mobile advertising

223)

What is the likely disadvantage of mobile advertising? A) It does not fit for large companies. B) It has technical limitations with bandwidth and data transfer. C) It is not useful for the brand building of a product. D) It has a costly bidding process for keywords. E) It leads to information overload for customers.

224) When a previous visitor to Amazon returns to the site, the online retailer will instantly have information about that visitor because of the ________ it placed on the visitor's computer during the first visit.

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A) institution B) reminder C) cooperative D) cookie E) allowance

225) When a previous visitor to Amazon returns to the site, the online retailer will instantly know whether that visitor made a previous purchase based on the ________ it placed on the visitor's computer during the first visit. A) institution B) reminder C) cooperative D) cookie E) allowance

226) The form of digital advertising that can stimulate viral promotion with its wide reach and can be narrowly targeted at relatively low cost is A) directories and classifieds. B) social media advertising. C) search advertising. D) mobile advertising. E) banner ads.

227) Which of the following refers to the number of people who click on an ad divided by the number of people to whom the ad is presented?

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A) click-through rate B) pay-per-click rate C) retargeting D) copy thrust E) advertising allowance

228) Which of the following would be the most likely reason a firm would use a pop-up or banner ad? A) The firm wants to build a brand. B) These types of ads have high click-through rates. C) Their customers know exactly what they want. D) Pop-up and banner ads are a unique way to reach potential customers. E) They are targeting customers that are ready to buy.

229)

If a company wants to increase its click-through rate it should A) include video in its ad. B) rely on text-only advertisements. C) avoid the use of banner or pop-up ads. D) use the pay-per-click advertising model. E) None of the answers are correct.

230)

Which of the following is used by advertisers for retargeting? A) artificial intelligence B) a customer's clickstream C) cookies D) the online behavior of a customer E) All of the answers are correct.

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231)

Which of the following refers to programmatic delivery?

A) the use of artificial intelligence to automate the placement of online advertising B) the number of people who click on an online advertisement based on a banner or pop-up ad C) placing advertising on social media sites that are relevant to the product or service being sold D) the use of sponsored ads on search engines E) the decision to advertise on all digital formats

232) One problem with digital advertising is ________, which is when a person or software program automatically clicks on an ad without having any interest in the ad's subject. A) click fraud B) pay-per-click C) click-through D) clickstreaming E) pioneering

233)

Which of the following is true of the role of smartphones and online advertising?

A) Advertisers are suspicious about the use of smartphones for advertising, as they offer limited access to the Internet. B) Ads appearing on smartphones are better trusted and accepted as a source for buying information when compared to online consumer opinions. C) Advertisers should have mobile-compatible versions of their ads, as this will help them access customers anytime and anywhere. D) Smartphones can be used as a medium to deliver ads based on cultural targeting in the near future. E) Smartphones are becoming increasingly ubiquitous in many less-developed countries, even though they are the last avenue to the Internet in developed countries.

234)

What is the role of GPS (Global Positioning System) in mobile advertising?

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A) It delivers ads to consumers based on the conversations and behaviors they exhibit on social media. B) It helps to add the segmenting dimension of physical location at a specific time to target marketing. C) It shows whether a web surfer has been to a company's website before and made a purchase on the last visit. D) It acts as a tool to measure the effectiveness of an ad based on an estimate of how many people receive the ad on their phones. E) It delivers buying information to business consumers based on ethnographic positioning.

235) Smartphones embedded with GPS (Global Positioning System) can be used as a medium to deliver ads based on customers' A) attitudes. B) behavioral positioning. C) geographic locations. D) ethnic identities. E) psychographics.

236)

Which of the following statements about advertising on the Internet is true?

A) When a website sets fees based on actual sales, it is setting fees in the same manner as traditional media. B) Most Internet ads seek a delayed response. C) As with traditional media, getting lots of exposure is all that matters. D) Most ads try to get advertisers to click through to the firm's website. E) None of the answers are correct.

237)

To what does the term copy thrust refer?

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A) It refers to competitors who make similar claims in their ads. B) It refers to an FTC challenge to the claims made by an advertiser. C) It refers to all the advertising copy prepared for a particular brand. D) It refers to what is to be communicated by the words and illustrations. E) It refers to how much the audience believes what the advertiser says.

238) ________ is the words and illustrations of an ad message that actually communicate information to the target customer. A) Copy text B) Copy thrust C) Copy edits D) Copy proof E) Copy objective

239)

What do the letters of the AIDA concept stand for? A) Attention, Interest, Desire, Action B) Alertness, Interest, Develop, Appeal C) Attention, Involvement, Desire, Action D) Alertness, Involvement, Desire, Appeal E) Action, Involvement, Desire, Attention

240)

What is the first job of an advertisement? A) getting action B) holding interest C) getting attention D) arousing desire E) creating awareness

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241)

Which of the following is true of the AIDA model of message planning?

A) Obtaining action is the first step in the process of message planning. B) Focusing on a unique selling proposition that aims an unsatisfied need is a way to arouse desire. C) Convincing customers that the product can meet their needs is a way to hold interest. D) Arousing desire is the final step in the process. E) Holding interest is the easiest step in message planning.

242) David Oreck advertises Oreck vacuum cleaners via commercials that run on national radio programs. He encourages consumers to "…try my 8-pound Oreck vacuum for free for 30 days," and to return it if they aren't satisfied. He then provides an easy-to-remember toll-free telephone number that consumers can use to place orders. Regarding the AIDA model, the freetrial period and availability of a toll-free number are devices used mainly to A) get attention. B) hold interest. C) arouse desire. D) obtain action. E) gain confirmation.

243)

Which of the following is true of native advertising?

A) The ads are designed to exactly look like traditional ads. B) The ads are considered a poor source of revenue and are not preferred by print publications. C) Consumers consider the ads less credible than traditional ads. D) The ads mimic the look and feel of the platform on which they appear. E) The ads carefully avoid phrases such as "sponsored by" or "posted by" that indicate the name of the "advertiser."

244) Regarding measuring advertising effectiveness, which of the following statements is false?

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A) Advertising effectiveness is easily measured by looking at the sales results. B) Managers probably should pretest advertising rather than relying only on the judgment of advertising "experts." C) If specific advertising objectives are set, then marketing research can help evaluate the effectiveness of ads. D) Some advertisers are now demanding laboratory or market tests to evaluate effectiveness. E) No single research technique has proven most effective.

245)

Which of the following is true about measuring the effectiveness of advertising? A) Advertising is solely responsible for the sales result. B) A/B testing involves an experiment to test an ad under a specific condition. C) Market tests are helpful in measuring the effectiveness of advertisements. D) The judgment of advertising experts is more useful than pretesting the advertising. E) A/B testing is not suitable for online and digital advertising.

246) Which of the following questions does not reflect the decisions that marketing managers must make when choosing what media outlet to use for their advertising? A) What type of advertising allowances are there? B) Do target customers see the media? C) How well does the media fit with their promotion objective? D) What is the cost of reaching customers? E) What type promotion objective do they have?

247) Which of the following statements is true regarding governments' role in regulating advertising?

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A) Canada bans any advertising targeted directly at children. B) Japan limits the use of cartoon characters in ads to children. C) Switzerland does not allow an actor to represent a consumer in an ad. D) New Zealand limits political ads on TV. E) All of the answers are correct.

248)

Which country bans any advertising targeted directly at children? A) United States B) Canada C) New Zealand D) Japan E) India

249)

Which of the following is true of advertising in Switzerland? A) Any advertisement targeted directly at children is banned. B) Political ads are limited on TV. C) Print ads must be identified so they are not confused with editorial matter. D) Competitive and comparative advertising is banned. E) An advertiser cannot use an actor to represent a consumer.

250)

In ________, print ads must be identified so they are not confused with editorial matter. A) the United States B) Canada C) New Zealand D) Japan E) Switzerland

251)

________ are countries that limit the use of cartoon characters in advertising to children.

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A) The United States and New Zealand B) Japan and the United States C) France and Japan D) New Zealand and France E) Switzerland and the United States

252)

Which country limits the use of political ads on TV? A) United States B) Canada C) New Zealand D) Japan E) Australia

253)

Regarding advertising, the Federal Trade Commission can A) require firms to run corrective ads. B) regulate deceptive advertising. C) require firms to support ad claims. D) require firms to provide affirmative disclosures. E) All of the answers are correct.

254) In the United States, which of the following has the power to control unfair or deceptive business practices, including deceptive advertising? A) CPSC B) FTC C) FDA D) OSHA E) USDA

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255) In the United States, the federal regulatory agency that has the power to control deceptive advertising and require corrective advertising is the A) Securities and Exchange Commission. B) Federal Trade Commission. C) Office of Consumer Affairs. D) Fair Trade Committee. E) Consumer Product Safety Commission.

256) Which of the following statements about regulation of social media “influencers” is not accurate? A) Influencers do not need to disclose their relationship with a brand so long as they don’t receive direct financial payment. B) Influencers shouldn’t talk or post about a product unless they have experience with it. C) If there is a “material connection” between the influencer and a brand it must be disclosed. D) Influencers can be liable for false statements that they make about a product. E) It is not always obvious that a social media post has been paid for, so the FTC has guidelines regulating influencers’ endorsements.

257) A firm has run a comparative ad, and a competitor immediately complains that the claims made by the ad are deceptive. In such a case, A) the ad agency that created the ad could share responsibility in any action brought by the FTC. B) the firm that sponsored the ad might need to provide research proof that its claims are accurate. C) the Federal Trade Commission has the power to require corrective advertising—if the ad is really deceptive. D) All of the answers are correct.

258)

Which of the following is true regarding sales promotion?

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A) Sales promotion is not likely to be used in the market maturity stage of the product life cycle. B) The objectives and situation influence what specific type of sales promotion is best. C) Sales promotion should not be needed if a firm has a good mass-selling program. D) Objectives should be developed after the other promotion decisions have been made, so that the manager knows how much is left in the budget. E) None of the answers are correct.

259)

Which of the following statements about sales promotion is true?

A) Sales promotion refers to the promotion activities that stimulate interest, trial, or purchase by final customers. B) A particular sales promotion activity usually lasts for an extended time period, without any limitation. C) Sales promotion is generally used to contrast the other promotion methods. D) Sales promotion objectives usually focus on prompting some long-term action. E) Sales promotion cannot be implemented quickly and gets sales results later than advertising.

260)

Which of the followingstatements about sales promotion activities is true? A) They usually have long-term effects. B) They are aimed at final consumers, but not business customers. C) They focus more on getting attention than on stimulating action by consumers. D) They may be aimed at a firm's own employees. E) They usually take longer to achieve sales results than does advertising.

261)

For an intermediary, a sales promotion would mean all of the following except

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A) deciding to stock a product. B) providing a special display space. C) expecting the promotion to go on forever. D) giving the product extra sales emphasis. E) assigning a larger budget to the product.

262)

Point-of-purchase materials is a sales promotion activity aimed at A) distributors. B) a company's own sales force. C) intermediaries. D) retailers. E) final consumers.

263) Which of the following sales promotion activities is aimed primarily at final users of a product? A) sales contests B) meetings C) coupons D) merchandising aids E) training materials

264)

Merchandising aids and promotional allowances are sales promotion activities aimed at A) final consumers. B) a company's own sales force. C) intermediaries (wholesalers and retailers). D) final users. E) buyers.

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265) Which of the following sales promotion activities is aimed primarily at wholesalers and retailers of a product? A) promotion allowances B) point-of-purchase materials C) coupons D) portfolios E) bonuses

266) Which of the following are sales promotion activities aimed at the company's own sales force? A) aisle displays B) bonuses C) point-of-purchase materials D) trade shows E) frequent buyer programs

267)

Which of the following is a possible outcome of a sales promotion?

A) Sales increase during the period of the promotion and then remain at a higher level than they were at the start of the promotion. B) Sales increase during the period of the promotion, decrease when the promotion ends, and then return at the original level where they were prior to the promotion. C) Sales increase during the period of the promotion but then immediately return to the original level that they were prior to the promotion. D) All of these are possible outcomes of a sales promotion.

268)

Which of the following statements about sales promotions is false?

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A) Sales promotions have increased because of competition in emerging markets. B) Sales promotions can be used as tools to overcome consumer price resistance. C) Changes in technology have made sales promotions more efficient. D) The availability of more ad agencies and specialists has spurred growth in sales promotions. E) An appropriate sales promotion depends on the situation and objectives.

269)

Sales promotion activities A) can usually be implemented quickly and get results sooner than advertising. B) may be aimed at final consumers, intermediaries, and/or a firm's own sales force. C) cost more than the total expenditures on advertising. D) are currently a weak spot in many firms' marketing strategies. E) All of the answers are correct.

270)

Which of the following is correct about sales promotion?

A) Sales promotion spending can be easily measured, as it involves unique activities. B) Large, powerful retail chains require less sales promotion support for their manufacturer brands. C) Sales promotion spending has grown in immature markets but not in mature markets. D) Spending on advertising usually exceeds the total spending on sales promotion. E) Sales promotion creates a downward cycle of pricing and promotion.

271)

Which of the following is the best example of a B2B sales promotion? A) a trade show exhibit B) employee bonuses C) training intermediary salespeople D) customer loyalty cards E) a sales meeting at a fancy resort

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272)

What is the purpose of B2B sales promotion? A) to generate leads B) to increase consumer demand C) to incentivize intermediaries D) to strengthen brand loyalty E) to change customer buying habits

273) In a scenario where the market is not showing any signs of growth, what is the likely role of sales promotion? A) It will encourage deal-prone customers to switch between brands. B) It will contribute to long-term profits. C) It will result in long-term brand loyalty toward the firm. D) It will provide a competitive advantage to the company. E) It will reduce the selling costs of firms.

274) Which of the following scenarios illustrates how sales promotion can erode brand loyalty? A) An insurance company has not been able to gain employee commitment or loyalty even after providing regular training to its sales force. B) A newspaper article on the side effects of deep-fried food causes most fast food chains to lose their customers. C) A firm airs a radio ad similar to a competitor's, which results in consumer brand confusion. D) A wholesaler switches between brands as he is attracted by price deals and promotion allowances of various competing brands during Christmas. E) A television ad of a specific brand increases the sales for the entire product category, thus benefiting the competitors as well.

275)

Which of the following is true about sales promotion?

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A) It's the promotion manager's responsibility to set sales promotion objectives and policies. B) It is not likely to be used in the market maturity stage of the product life cycle. C) Objectives of sales promotion should be developed after the other promotion decisions have been made. D) Inside specialists or outside consultants handle the sales promotion activities of firms. E) It decreases the prices that consumers pay by decreasing selling costs.

276) A company is planning sales promotion aimed at its consumers and distributors. What should the company do to effectively run its sales promotion? A) The company should hire a recent business graduate, with no work experience, to manage its sales promotion. B) The company should ask its sales or advertising managers to take the responsibility of sales promotion as well. C) The company should hire outside consultants who are specialists in sales promotion to manage the task. D) The company should set objectives and policies of the sales promotion independent of the entire marketing strategy. E) The company should target trade shows and price deals at its own sales force and training materials at its final consumers.

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277) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" In order to achieve its objective at a retailer called Computer Superstore, SGCA intends to repay the retailer for a share of what it spends to advertise SGCA's computers in local media. This is A) called cooperative advertising. B) likely to increase the income that SGCA's ad agency gets for buying media space. C) a bad idea because retail stores usually pay higher rates in local media than do national advertisers. D) All of the answers are correct.

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278) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" The copy thrust of the ad for the SuperEnhancer sound card is an example of what kind of advertising? A) pioneering advertising B) indirect competitive advertising C) direct competitive advertising D) reminder advertising E) institutional advertising

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279) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" About 10 years ago, most of SGCA's target customers did not even know what a sound card was or that computer audio could be upgraded. What type of advertising was needed at that time? A) institutional advertising B) reminder advertising C) cooperative advertising D) pioneering advertising E) direct competitive advertising

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280) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" All of SGCA's products are made from recycled material, and the company wants to promote its environmental practices. What kind of advertising would be most appropriate to do this? A) competitive advertising B) comparative advertising C) pioneering advertising D) direct competitive advertising E) institutional advertising

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281) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" In making her decisions about media, Jurgenson has to A) decide which target market(s) should be reached. B) know the costs of alternative media. C) decide on promotion objectives. D) decide what must be said. E) All of the answers are correct.

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282) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" If Jurgenson wanted to demonstrate the new SuperDuperComputer, which mediumwould be best? A) Yellow Pages B) television C) magazine D) radio E) All of these media would be equal in this regard.

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283) Use this information for questions that refer to the Super Gaming Company and Accessories (SGCA) case. Kayla Jurgenson, marketing manager for Super Gaming Computers and Accessories (SGCA), is reviewing her company's plans for the coming year. SGCA sells its products through retail computer dealers and some specialty gaming stores. Currently, SGCA is carried in 25 percent of all retail computer stores nationwide, but in California it is carried in only 10 percent of stores. Kayla has set an objective of being in 25 percentof all retail computer stores in California within one year. SGCA plans to introduce a new SuperDuperGamer model with special features that fits its target market of teen and young adult gamers. The SuperDuperGamer uses a new technology and is expected to be a breakthrough product, but it will be important to build awareness for it to succeed. The advertising objective is for 40 percentof SGCA's target market to be aware of the new SuperDuperGamer model within 3 months. SGCA also wants to help its retailers reduce their current stock of SuperGamer computers before the new model comes out in a month. The SuperGamer has been on the market for two years and has been a top seller in the category. SGCA's advertising objective for the SuperGamer computer is to reduce current dealer stock by 80 percentwithin the next month. SGCA is also introducing a SuperEnhancer sound card, which is designed to significantly enhance the game-playing experience with older computers. Research with gamers show that it is very well received, so the advertising objective for the SuperEnhancer sound card is to gain 40 percentmarket share among all gaming-specific sound cards in the next year. To help achieve that objective, Jurgenson is planning to use an ad that shows the sound card and a player being knocked off his chair by the sound. The headline on the ad reads, "9 Out of 10 Gamers Say that the SuperEnhancer Sound Beats All Others!" If Jurgenson turns to an advertising agency for help, SGCA A) will probably be required to sign a long-term contract. B) will likely find that most agencies would prefer to work with retailers, rather than producers of consumer products. C) can expect the agency to be a specialist in planning and handling mass-selling details. D) should not expect the agency to do much more than sell media time or space. E) should allow the experts at the agency to refine the advertising objectives so that they reflect the creativity of the ads.

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Answer Key Test name: Chap 15_17e 1) TRUE Unfortunately, the results that marketers actually achieve with advertising, publicity, and sales promotion are very uneven. It's often said that half of the money spent on these activities is wasted. 2) TRUE The basic strategy planning decisions for advertising, publicity, and sales promotion are the same regardless of where in the world the target market is located. However, the look and feel can vary a lot in different countries. 3) TRUE Spending on advertising is significant. In 1946, U.S. advertising spending was slightly more than $3 billion; now it is more than $200 billion. 4) FALSE Over the last decade, the rate of advertising spending has increased even more rapidly in other countries than in the United States. 5) FALSE While total spending on advertising seems high, U.S. corporations spend an average of only about 2.5 percent of their sales dollars on advertising. 6) TRUE While total spending on advertising seems high, U.S. corporations spend an average of only about 2.5 percent of their sales dollars on advertising. 7) FALSE Version 1

Producers of consumer products generally spend a larger percentage than firms that produce business products. 8) TRUE Producers of games and toys spend a higher percentage of their sales on advertising than producers of footwear do. Refer to Exhibit 15–2. 9) FALSE Producers of perfumes and cosmetics spend a higher percentage of their sales on advertising than producers of motor vehicles do. Refer to Exhibit 15–2. 10) TRUE Furniture stores spend a higher percentage of their sales on advertising than do grocery stores. Refer to Exhibit 15–2. 11) FALSE Department stores spend a higher percentage of their sales on advertising than do eating places. Refer to Exhibit 15–2. 12) TRUE While total advertising expenditures are large, the advertising industry itself employs relatively few people. The major expense is for media time and space. 13) FALSE If the advertising agency's work is not satisfactory, the client can select another. 14) FALSE Advertising agencies are specialists in planning and handling massselling details for advertisers for advertisers. 15) FALSE Version 1

Although some companies have their own advertising departments, others turn over much of the advertising work to specialists—the advertising agencies. Agencies bring an outside viewpoint and experience, and often can do the job more economically than a company’s own department. 16) TRUE Advertising allowances are price reductions offered to firms further along the channel to encourage them to advertise or otherwise promote the firm's products locally. 17) TRUE Cooperative advertising involves producers sharing in the cost of ads with wholesalers or retailers. 18) FALSE Cooperative advertising helps the producer get more promotion for its advertising dollars because media usually give local advertisers lower rates than national or international firms. 19) TRUE Sometimes advertising objectives can be accomplished more effectively or more economically by someone else in the channel. Firms should work closely with other channel members to coordinate advertising efforts to get the best results. 20) TRUE Product advertising tries to sell a product while institutional advertising promotes an organization's image, reputation, or ideas rather than a specific product. 21) FALSE

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Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. Competitive advertising tries to develop selective demand for a specific brand. 22) FALSE Competitive advertising tries to develop selective demand for a specific brand. A firm is forced into competitive advertising as the product life cycle moves along, to hold its own against competitors. 23) TRUE Competitive advertising tries to develop selective demand for a specific brand. 24) TRUE The firm is trying to build selective demand for its brand. 25) TRUE The direct type of competitive advertising aims for immediate buying action. 26) FALSE The direct type of competitive advertising aims for immediate buying action, while the indirect type points out product advantages to affect future buying decisions. 27) TRUE An attractive limited period sale would bring about immediate buying action. The retailer is using direct competitive advertising. 28) FALSE Comparative advertising involves making specific brand comparisons, using actual product names. 29) TRUE Version 1

Comparative advertising makes specific brand comparisons using actual product names. 30) FALSE In the United States, the Federal Trade Commission decided to encourage comparative ads because it thought they would increase competition and provide consumers with more useful information. 31) TRUE Many countries forbid comparative advertising. In the United States, however, the Federal Trade Commission encourages comparative ads and takes the view that they increase competition and provide consumers with more useful information. 32) TRUE Reminder advertising tries to keep the product's name before the public. It may be useful when the product has achieved brand preference or insistence, perhaps in the market maturity or sales decline stages. 33) FALSE Reminder advertising may be useful when the product has achieved brand preference or insistence, perhaps in the market maturity or sales decline stages. 34) TRUE Institutional advertising usually focuses on the name and prestige of an organization or industry. It may seek to inform, persuade, or remind. 35) FALSE Institutional advertising usually focuses on the name and prestige of an organization or industry. Some organizations rely on institutional advertising to present themselves in a favorable light, while others use it to advocate a specific cause or idea. Version 1

36) FALSE Product advertising focuses on getting consumers to know, like, and remember something about the product in order to sell it. Institutional advertising aims at developing goodwill or improving an organization's relations with customers, both current and prospective, channel members, suppliers, shareholders, employees, and the general public. 37) FALSE Institutional advertising aims at developing goodwill or improving an organization's relations with customers, both current and prospective, channel members, suppliers, shareholders, employees, and the general public. 38) TRUE Some organizations use institutional advertising to advocate a specific cause or idea. 39) TRUE Some organizations use institutional advertising to advocate a specific cause or idea. 40) FALSE Digital (mobile) advertising expenditures are expected to reach almost 50 percent by 2022. Ad spending on television is expected to fall below 25 percent by 2022. Refer to Exhibit 15–6 for an estimate of expenditures on advertising in various media. 41) FALSE The largest share of total advertising expenditures in the United States goes for mobile digital advertising followed by television advertising, which is in decline. Refer to Exhibit 15–6 for an estimate of expenditures on advertising in various media.

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42) TRUE Today, advertisers direct more attention to reaching smaller, more defined target markets. 43) TRUE The effectiveness of an advertising medium depends on how well the medium fits with the rest of a marketing strategy. 44) FALSE The effectiveness of an advertising medium depends on how well the medium fits with the rest of a marketing strategy. 45) FALSE If "action" and sale are important, then online search advertising might be right advertising choice. 46) TRUE To guarantee good media selection, the advertiser must first clearly specify its target market. Then the advertiser can choose media that reach those target customers. 47) TRUE To guarantee good media selection, the advertiser must first clearly specify its target market. The advertiser can then choose media that reach those target customers. 48) FALSE Advertisers pay for the whole audience to whom the media deliver, including those who aren't potential customers. 49) TRUE

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Addressable TV is a technology that allows cable television to deliver specific ads to each household instead of advertising to everyone watching a particular show. It uses big data from consumers' credit and loyalty cards, online activities, and other sources to build profiles of individual households. 50) TRUE Although it varies by age range, on average, Americans spend more time online and on mobile devices than they do watching television—and much more than reading newspapers and magazines. 51) TRUE Influencers are trusted or well-known figures who can sway attitudes or purchase decisions among a particular target market—to promote a brand. By passing along a brand’s message via their own social media channels, influencers leverage their following on social media to become advertisers. Some brands seek (and usually pay for) a social media endorsement and access to an influencer’s followers. 52) TRUE Most websites use a pay-per-click advertising model, where advertisers pay only when a customer clicks on the ad and links to the advertiser's website. 53) TRUE In the pay-per-click advertising model, advertisers pay only when a customer clicks on the ad and links to the advertiser's website. 54) TRUE Many firms appreciate the ability to directly track the cost of advertising and resulting sales, which allows a marketing manager to set a budget and track the return on investment.

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55) FALSE The click-through rate is based on the number of people who click on an ad divided by the number of people to whom the ad is presented. In payper-click advertising, advertisers pay media costs only when a customer clicks on the ad that links to the advertiser's website. 56) FALSE Cookies give an advertiser information about the consumer. 57) TRUE Cookies give an advertiser information about the consumer. Some websites place a small file called a cookie on the computers of people who visit their sites. The customers can then be tracked and monitored. 58) TRUE Placing cookies on websites has been a cost-effective way for advertisers to target ads and boost online sales. 59) TRUE Because mobile devices track customers' whereabouts (through GPS), the segmenting dimension of physical location at a specific time can be added to target marketing. Many businesses—bars, restaurants, and retail stores—find it useful to target customers based on this information. 60) FALSE Smartphones are increasingly ubiquitous in developed countries. In the United States, almost four out of every five adults own a smartphone. Because customers conduct searches and access social media from mobile devices, advertisers must have mobile-friendly versions of their ads. 61) FALSE Version 1

Most online advertisers seek a direct response. 62) TRUE Copy thrust is what the words and illustrations of an advertisement should communicate. 63) FALSE Once the advertiser decides how the messages will reach the target audience, it has to decide on the copy thrust. Copy thrust is what the words and illustrations should communicate. 64) TRUE Advertisers can use the AIDA concept as a guide to message planning. 65) TRUE The AIDA concept guides advertisers in getting Attention, holding Interest, arousing Desire, and obtaining Action. 66) FALSE Many readers leaf through magazines without paying attention to any of the ads; viewers may zip past the commercials on TV with the flick of a button; and online they may use pop-up blockers. Getting attention to a particular advertisement is not always easy. 67) TRUE Advertising success cannot usually be measured just by looking at sales. It is the total marketing mix and not just advertising that is responsible for the sales result. 68) FALSE Advertising success cannot usually be measured just by looking at sales. It is the total marketing mix and not just advertising that is responsible for the sales result.

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69) FALSE Looking at sales volume is not the best method for determining the degree of success of an advertising campaign because sales results are also affected by what competitors do and other changes in the external market environment. 70) FALSE The judgment of creative people or advertising experts may not be of much help in determining the effectiveness of advertising. 71) FALSE To evaluate the effectiveness of advertising, ideally, advertisers should pretest advertising before it runs rather than relying solely on their own guesses about how good an ad will be. The judgment of creative people or advertising experts may not help much. 72) FALSE In most countries, the government takes an active role in deciding what kinds of advertising are allowable, fair, and appropriate. 73) TRUE France and Japan limit the use of cartoon characters in advertising to children, and Canada bans any advertising targeted directly at children. 74) TRUE Differences in rules mean that a marketing manager may face very specific limits in different countries, and local experts may be required to ensure that a firm doesn't waste money developing ads that will never be shown or that consumers will think are deceptive. 75) TRUE

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In the United States, the Federal Trade Commission (FTC) has the power to control unfair or deceptive business practices, including deceptive advertising. 76) TRUE If the FTC decides that a particular practice is unfair or deceptive, it has the power to require affirmative disclosures or corrective advertising. 77) TRUE Corrective advertising means using new ads to correct previous deceptive ads. 78) TRUE Sales promotion refers to those promotion activities other than advertising, publicity, and personal selling that stimulate interest, trial, or purchase by final customers or others in the channel. 79) FALSE Sales promotion generally complements (not replaces) the other promotion methods. 80) TRUE Sales promotion can often be implemented quickly and get sales results sooner than advertising. 81) FALSE Sales promotion can often be implemented quickly and get sales results sooner than advertising. 82) TRUE Sales promotion involves so many different types of activities that it is difficult to estimate accurately how much is spent in total. There is consensus, however, that the total spending on sales promotion exceeds spending on advertising. Version 1

83) FALSE Because of stiff competition, many consumers have become more price sensitive. Sales promotion has been used as a tool to overcome consumer price resistance. 84) TRUE The total spending on sales promotion exceeds spending on advertising. 85) FALSE In mature markets, frequent sales promotions may be needed just to offset the effects of competitors' promotions. 86) TRUE Much of the sales promotion aimed at final consumers or users tries to increase demand, perhaps temporarily, or speed up the time of purchase. 87) TRUE When the objective of the promotion is focused primarily on producing a short-term increase in sales, it's sensible for the marketing manager to evaluate the cost of the promotion relative to the extra sales expected. 88) FALSE Some sellers give promotion items like pen sets, watches, or clothing with the firm's brand name on them to remind business customers of their products. This is common, but it can be a problem. Some companies do not allow buyers to accept any gifts. 89) TRUE Trade promotion refers to sales promotion aimed at intermediaries. 90) FALSE Trade promotion refers to sales promotion aimed at intermediaries. 91) TRUE Version 1

Sales promotion aimed at the company’s own sales force might try to encourage sales reps to provide better service, get new customers, sell a new product, or sell the company’s whole line. Depending on the promotion objectives, the tools might be contests, bonuses, on sales or number of new accounts, or holding sales meetings at fancy resorts. 92) TRUE Sales promotion mistakes are likely to be worse when a company has no sales promotion manager. 93) FALSE In the sales promotion area it is easy to make big, costly mistakes. Mistakes caused by lack of experience can be costly or hurt relationships with customers. Mistakes are likely to be worse when a company has no sales promotion manager. 94) B The results that marketers actually achieve with advertising and sales promotion are very uneven. It has been said that half the money spent on these activities is wasted, but most managers don't know which half. 95) E Planning for mass selling requires the determination of: (1) desired objectives, (2) kind of advertising, (3) which media to use to reach target customers, and (4) what to say (message). 96) E Planning for mass selling requires the determination of: (1) desired objectives, (2) kind of advertising, (3) which media to use to reach target customers, and (4) what to say (message). "What types of coupons to use" is a Price decision. 97) B Version 1

U.S. advertising spending is now over $200 billion—and projected to continue growing about 3 percent per year. 98) D In the U.S., total advertising spending is more than $200 billion. 99) C While total spending on advertising seems high, U.S. corporations spend an average of only about 2.5 percent of their sales dollars on advertising. 100) A U.S. corporations spend an average of only about 2.5 percent of their sales dollars on advertising. 101) E Advertising spending as a percent of sales dollars varies significantly across product categories. Companies like those that sell construction machinery and equipment, plastics and resins, and computer office equipment spend less than 1 percent of their sales on advertising.Refer to Exhibit 15–2. 102) D Perfume and cosmetics makers spend about 20.3 percent of sales on advertising. See Exhibit 15–2. 103) B A producer of motor vehicles is likely to spend approximately 2.5 percent on advertising as a percentage of sales. 104) B Advertising spending as a percent of sales dollars is largest for perfumes and cosmetics. Refer to Exhibit 15–2. 105) A Version 1

Advertising spending as a percent of sales dollars is lowest for grocery stores as compared to hotels and motels, eating places, department stores, jewelry stores, and furniture stores. Refer to Exhibit 15–2. 106) C Advertising spending as a percent of sales dollars is lowest for plastics as compared to motor vehicles, footwear, soft drinks, and perfumes. Refer to Exhibit 15–2. 107) D Advertising spending as a percent of sales dollars is lowest for computers as compared to malt beverages, cars, cable TV, and games. Refer to Exhibit 15–2. 108) A Furniture stores spend more on advertising as a percent of sales compared to the other retailers listed here. Refer to Exhibit 15–2. 109) B Grocery stores spend the least amount on advertising as a percentage of sales. Refer to Exhibit 15–2. 110) A In the U.S., grocery store retailers spend less than 1 percent (0.8) of their sales dollars on advertising. Refer to Exhibit 15–2. 111) C In the United States, producers of games and toys spend about 7 percent of their sales dollars on advertising. Refer to Exhibit 15–2. 112) C In the United States, jewelry stores spend about 6 percent of their sales dollars on advertising. Refer to Exhibit 15–2.

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113) D In the United States, producers of sporting and athletic goods spend about 7 percent of their sales dollars on advertising. Refer to Exhibit 15– 2. 114) A An advertising manager manages a company's advertising effort. 115) E Advertising agencies are specialists in planning and handling massselling details for advertisers. 116) E Advertising agencies are specialists in planning and handling massselling details for advertisers; they can often do a job more economically than an in-house advertising department; they bring experience to an individual client’s problems because they work for many other clients; and are independent of the advertiser and have an outside viewpoint. 117) B Advertising agencies are independent of the advertiser and have an outside viewpoint. 118) D Advertising agencies are independent of the advertiser and have an outside viewpoint. 119) C Although total advertising expenditures are large, the advertising industry itself employs relatively few people. 120) D Advertising objectives should determine the kinds of advertising needed. The specific objectives obviously affect what type of advertising is best. Version 1

121) A "To increase a firm's market share by 20 percent this year" would be the best example of a specific advertising objective. Advertising objectives must be specific. 122) A "We want 35 percent of our target customers to be aware of our new product within the next two months" would be the best example of a specific advertising objective. Advertising objectives must be specific. 123) B "To improve consumer goodwill and help sell the product" is the least specific advertising objective. Advertising objectives must be specific. 124) B "We want our TV ads to really promote the product" is the least specific advertising objective. Advertising objectives must be specific. 125) C "We want our advertising to create favorable word-of-mouth promotion for our product" is the worst example of an advertising objective. Advertising objectives must be specific. 126) C Teaser campaigns would be a type of advertising used in the awareness stage of the adoption process. Refer to Exhibit 15–3. 127) A Teaser campaigns for a product work best in the awareness stage of the adoption process. Refer to Exhibit 15–3. 128) A Informative or descriptive ads for a product work best in the interest stage of the adoption process. Refer to Exhibit 15–3. Version 1

129) C Persuading ads for a product work best in the evaluation and trial stage of the adoption process. Refer to Exhibit 15–3. 130) C Comparative ads for a product work best in the evaluation and trial stage of the adoption process. Refer to Exhibit 15–3. 131) A Competitive ads would be a type of advertising used in the evaluation and trial stage of the adoption process. Refer to Exhibit 15–3. 132) D Point-of-purchase ads for a product work best in the decision stage of the adoption process. Refer to Exhibit 15–3. 133) E Reminder ads for a product work best in the confirmation stage of the adoption process. Refer to Exhibit 15–3. 134) D Reminder ads come under the confirmation stage of the adoption process. Refer to Exhibit 15–3. 135) D Price reductions given to channel members to encourage them to advertise or otherwise promote a firm's products locally are advertising allowances. 136) A Reminder ads work best in the confirmation stage of the adoption process. See Exhibit 15–3. 137) C Version 1

A jingle would be most appropriate for the awareness stage of an advertising campaign. See Exhibit 15–3. 138) A Advertising allowances are price reductions to firms further along in the channel to encourage them to advertise or otherwise promote the firm's products locally. 139) D Cooperative advertising helps the producer get more promotion for its advertising dollars because media usually give local advertisers lower rates than national or international firms. 140) E Cooperative advertising involves producers sharing in the cost of ads with wholesalers or retailers. This helps the intermediaries compete in their local markets. In addition, a retailer or wholesaler who is paying a share of the cost is more likely to follow through. 141) B Cooperative advertising involves producers sharing in the cost of ads with wholesalers or retailers. 142) D Cooperative advertising helps the producer get more promotion for its advertising dollars because media usually give local advertisers lower rates than national or international firms. In addition, a retailer or wholesaler who is paying a share of the cost is more likely to follow through. 143) D

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A producer of country music CDs sharing the costs of promotion with local retailers is an example of cooperative advertising. Cooperative advertising involves producers sharing in the cost of ads with wholesalers or retailers. 144) B The commercials provided by the manufacturer for local use are an example of cooperative advertising. Cooperative advertising involves producers sharing in the cost of ads with wholesalers or retailers. 145) B Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. 146) D Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. 147) C Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. 148) E Pioneering advertising is often needed during the market introduction stage of the product life cycle. 149) A Pioneering advertising is usually done in the early stages of the product life cycle; it informs potential customers about the new product and helps turn them into adopters. 150) A

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"See your Hewlett-Packard dealer to learn how an affordable portable printer can make business travel easier" tries to stimulate primary demand for a product category (portable printers). 151) A This message tries to increase sales of the category (orange juice) and not a specific brand of orange juice. It is therefore an example of pioneering advertising. 152) A Pioneering advertising informs potential customers about the new product and helps turn them into adopters. 3-D-T's campaign should inform its potential customers about its new and revolutionary technology rather than about the 3-D-T brand. 153) B The ad campaign by the farmer's cooperative in California is trying to promote garlic just as a product itself, not a specific brand of garlic. It is therefore an example of pioneering advertising. 154) D Institutional advertising promotes an organization's image, reputation, or ideas rather than a specific product. 155) E The ad campaign by the American Beef Association is trying to promote beef consumption by informing its potential customers of beef's nutritional benefits. It is therefore an example of pioneering advertising. 156) D The promotion blend for the new product should probably emphasize pioneering advertising during market introduction. Pioneering advertising tries to develop primary demand for a product category. Version 1

157) D Pioneering advertising tries to develop primary demand for a product category rather than demand for a specific brand. It is usually done in the early stages of the product life cycle. Competitive advertising tries to develop selective demand for a specific brand and comes later in the product life cycle. 158) A A firm is forced into competitive advertising as the product life cycle moves along, to hold its own against competitors. 159) A Competitive advertising tries to develop selective demand for a specific brand. 160) B Advertising that tries to develop selective demand for a specific brand rather than a product category is called competitive advertising. 161) E Competitive advertising tries to develop selective demand for a specific brand. 162) C Competitive advertising tries to develop selective demand for a specific brand. 163) E An ad stressing the advantages of one brand of cookware over other available brands is trying to stimulate selective demand for its brand. It is an example of competitive advertising. 164) B

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A manufacturer of paper towels should use competitive advertising to stimulate selective demand and increase its market share. 165) A Direct competitive advertising aims for immediate buying action. 166) A The direct type of competitive advertising aims for immediate buying action. 167) E A supermarket manager should use direct competitive advertising to increase store traffic during the middle of the week, which aims for immediate buying action. 168) A The ad campaign by Glitter, Inc. for "gold-tone" jewelry on TV aims at immediate buying action. This is an example of direct competitive advertising. 169) D The indirect type of competitive advertising points out product advantages in order to affect future buying decisions. 170) C The indirect type of competitive advertising points out product advantages in order to affect future buying decisions. 171) E A manufacturer of computer printers should point out the advantages of its new line of scanners to its potential customers. This is indirect competitive advertising, which points out product advantages in order to affect future buying decisions.

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172) E Best Sound, Inc. is trying to stimulate selective demand for its car stereo in order to affect its target market's future buying decisions. This is an example of indirect competitive advertising, which points out product advantages in order to affect future buying decisions. 173) B The ad for DieHardauto batteries is aiming to influence its target market's future buying decisions. This is an example of indirect competitive advertising. 174) C Advertising that makes specific brand comparisons using actual names is comparative advertising. 175) D When Nissan advertises its new luxury sedan by showing it side-by-side with competing brands, it is using comparative advertising. Comparative advertising means making specific brand comparisons using actual product names. 176) B When Clorox touts the effectiveness of its disinfecting wipes claiming that they disinfect better than those made by Windex, it is using comparative advertising. Comparative advertising means making specific brand comparisons using actual product names. 177) A When General Mills advertises the advantages of its Milk 'n Cereal breakfast bars over Kellogg's breakfast bars, it is using comparative advertising. Comparative advertising means making specific brand comparisons using actual product names.

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178) B When Toyota advertises its trucks' advantages by directly comparing them with other specific brands, it is using comparative advertising. Comparative advertising means making specific brand comparisons using actual product names. 179) C Superiority claims in comparative advertising are supposed to be supported by research evidence. 180) A Some countries forbid comparative advertising. 181) A Reminder advertising tries to keep the product's name before the public and is used primarily to reinforce previous promotion. Reminder advertising focuses on selective demand, while pioneering advertising tries to develop primary demand. 182) B Reminder advertising tries to keep the product's name before the public. 183) D Reminder advertising may be useful when the product has achieved brand preference or insistence, perhaps in the market maturity or sales decline stages. It is used primarily to reinforce previous promotion. 184) D When a producer has won brand preference for its product but is entering the sales decline stage of its life cycle, it should probably use reminder advertising. 185) A

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When a producer has won brand insistence in its target market and just wants to keep the product's name before the public it can use reminder advertising. 186) A Institutional advertising usually focuses on the name and prestige of an organization or industry, not a specific product. 187) C Institutional advertising tries to develop goodwill for a company or even an industry. 188) C Reminder advertising (not institutional advertising) tries to keep the product's name before the public. 189) C The basic objective of institutional advertising is to develop goodwill or improve an organization's relations with various groups, not only customers but also current and prospective channel members, suppliers, shareholders, employees, and the general public. 190) C Institutional advertising usually focuses on the name and prestige of an organization or industry. 191) E Institutional advertising usually focuses on the name and prestige of an organization or industry. It may seek to inform, persuade, or remind. Its basic objective is to develop goodwill or improve an organization's relations with various groups, presenting the company in a favorable light. 192) A Version 1

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When a firm's president appears in TV testimonial ads to present the company in a favorable light and overcome image problems, it is institutional advertising. 193) E "Better living through pharmaceutical research" is celebrating the prescription drug industry and is an example of institutional advertising. 194) A The ad theme "We are making better cheese for you" from the National Cheese Association is an example of institutional advertising. Institutional advertising usually focuses on the name and prestige of an organization or industry. 195) B ADM's advertising with the objective of building goodwill and improving relations with shareholders shows that it is engaged in institutional advertising. 196) E Selecting the most effective advertising media depends on: (1) the promotion objectives, (2) what target markets are to be reached, (3) the funds available for advertising, and (4) the nature of the media. 197) B To guarantee good media selection, the advertiser first must clearly specify its target market. The advertiser can then choose media that reach those target customers. 198) E

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See Exhibit 15–5. The main disadvantages of magazine advertising are inflexibility, long lead times, and limited flexibility on the location of the ad within the magazine. Advantages include high reader involvement, very targeted, high-quality images, some “pass along,” and good detail. 199) E Selecting the most effective advertising media depends on: (1) the promotion objectives, (2) what target markets are to be reached, (3) the funds available for advertising, and (4) the nature of the media, including whom they reach, with what frequency, with what impact, and at what cost. 200) E To choose the best advertising medium, one has to decide what target market(s) are to be reached, the promotion objectives, cost involved, and what must be said. 201) C Selecting the most effective advertising media depends on: (1) the promotion objectives, (2) what target markets are to be reached, (3) the funds available for advertising, and (4) the nature of the media, including whom they reach, with what frequency, with what impact, and at what cost. 202) A By 2022, the largest share of total advertising expenditures in the United States will be on mobile digital advertising. Refer to Exhibit 15–6. 203) C As stated in Exhibit 15–5, the widest reach can be achieved by television advertising.

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204) C Refer to Exhibit 15–5. Television advertising has a wide reach and is good for getting attention and for demonstrations; but it is expensive, has a lot of clutter, has limited time (usually 30 seconds or less), and is often skipped by viewers. 205) A Magazine advertising is very targeted, with good detail and some "pass along," but it is inflexible and has long lead times. Refer to Exhibit 15– 5. 206) E Outdoor and cinema advertising has a captivate audience, but outdoor advertising is a “glance” medium and cinema has primarily a young audience. Refer to Exhibit 15–5. 207) B To ensure good media selection, the advertiser first must clearly specify its target market. 208) B To guarantee good media selection, the advertiser first must clearly specify its target market. Then the advertiser can choose media that reach those target customers. 209) D Today, advertisers direct more attention to reaching smaller, more defined target markets. 210) A Many magazines serve only special-interest groups. 211) D

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When an advertiser pays a fixed amount each time a web surfer clicks on the advertiser's ad and then links to the advertiser's website, the process is called pay-per-click. 212) D When an advertiser pays a fixed amount each time a web surfer clicks on the advertiser's ad and then links to the advertiser's website, the process is called pay-per-click. 213) E Behavioral retargeting delivers ads to consumers based on previous websites the customer has visited. 214) B Some websites place a small file called a cookie on the computer of people who visit their sites. The customer can then be tracked and monitored. Retargeting will display ads to customers who may have browsed on a website but not purchased. 215) B Refer to Exhibit 15–7. Banner ads have the following advantages: relatively low cost; work best for building a brand and image; good tracking tools that can measure effectiveness; and allow for targeted ads that can bring in customers. 216) A Directory and classified ads are not effective ways to generate awareness or build a brand. Although the click-through rates are low, banner and pop-up ads can be an effective way to build a brand; and influencers can pass along a brand’s message via their own social media channels. 217) A

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Some brands have begun to pay influencers, trusted or well-known figures who can sway attitudes or purchase decisions among a particular target market, to promote a brand. 218) A Influencers are opinion leaders who can pass along a brand's message via their own social media channels. Some influencers have very large followings, and brands sometimes seek (and usually pay for) a social media endorsement and access to their followers. 219) A An influencer is a trusted or well-known figure who can sway attitudes or purchase decisions among a particular target market, to promote a brand. Influencers are opinion leaders who can pass along a brand’s message via their own social media channels. Here, the YouTube “star,” is promoting Nike to her followers. 220) A Refer to Exhibit 15–7. Directories and classifieds do not work for brand building and are not a good fit for large companies. 221) B Refer to Exhibit 15–7. Search advertising has the following advantages: easy to set budget and control costs; targets users in the information gathering stage of the buying process; easy to measure the return on investment; highly targeted; and high credibility. 222) E Refer to Exhibit 15–7. Mobile advertising has the following advantages: a large and growing audience; works best for highinvolvement/utilitarian products; potential for location-based targeting; and works well for immediate purchase.

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223) B Refer to Exhibit 15–7. Mobile advertising has the following disadvantages: technical limitations (small screen, bandwidth, data transfer); not user friendly; not very interactive; and measurement tools still emerging. 224) D Some websites place a cookie on the computer of people who visit their sites. The online retailer will instantly have information about that visitor because of the cookie it placed on the visitor's computer during the first visit. 225) D The online retailer will instantly know whether that visitor made a previous purchase based on the cookie it placed on the visitor's computer during the first visit. 226) B Refer to Exhibit 15–7. Social media advertising has the following advantages: high knowledge of individuals; potentially wide reach; can stimulate viral; can be narrowly targeted; relatively low cost; "endorsements" from friends' "likes" can be powerful; and easy to set a budget. 227) A The click-through rate is the number of people who click on the ad divided by the number of people to whom the ad is presented. 228) A Although click-through rates are low, banner ads often have the goal of generating awareness and building a brand. 229) A Version 1

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Click-through rates for banner and pop-up advertisements are higher when video content is used in an ad. 230) E When customers shop online, their clickstream can be tracked. Retargeting displays ads to a web user based on site he or she has previously visited. Retargeting can occur because cookies can be placed on the computers of people who visit sites and artificial intelligence can help guide online advertising placement. 231) A Programmatic delivery refers to the use of software and artificial intelligence to automate placing online advertising on websites or in social media to target users. 232) A Click fraud occurs when a person or software program automatically clicks on an ad without having any interest in the ad's subject. The intent is to defraud the advertiser and make money for an unscrupulous website. 233) C Smartphones are increasingly ubiquitous in developed countries. Because customers are conducting searches and accessing social media from mobile devices, advertisers must have mobile-friendly versions of their ads. 234) B Because smartphones track customers' whereabouts (through GPS), the segmenting dimension of physical location at a specific time can be added to target marketing. Many businesses like bars, restaurants, and retail stores find it useful to target customers based on this information.

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235) C Because smartphones track customers' whereabouts (through GPS), the segmenting dimension of physical location at a specific time can be added to target marketing. Many businesses like bars, restaurants, and retail stores find it useful to target customers based on this information. 236) E Unlike traditional media, where firms pay for ads based on an estimate of how many people will see the ad, Internet advertisers pay only when a customer clicks on the ad. Most Internet ads seek a direct response. Most ads try to get potential customers to click through to the firm's website. 237) D Copy thrust refers to what the words and illustrations should communicate. 238) B Copy thrust is the words and illustrations of an ad message that actually communicate information to the target customer. 239) A AIDA stands for getting Attention, holding Interest, arousing Desire, and obtaining Action. 240) C Getting attention is an ad's first job. 241) B Arousing desire to buy a particular product is one of an ad's most difficult jobs. The ad must convince customers that the product can meet their needs. 242) D

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Direct-response ads can sometimes help promote action by encouraging interested consumers to do something even if they are not ready to make a purchase. 243) D Native advertising is advertising designed to not look like ads; it mimics the look and feel of the platform on which the ad appears. Consumers find these ads more believable than traditional advertising. 244) A Advertising success cannot usually be measured by just looking at sales. The total marketing mix is responsible for the sales result. 245) C The total marketing mix, not just advertising, is responsible for the sales result. Many progressive advertisers now demand laboratory or market tests to evaluate an ad's effectiveness. 246) A Marketing managers choose media outlets to ensure that advertising gets in front of target customers. In doing so, they make decisions about whether the target customers will see the media, what type of promotion objective they have, if the media fits with their promotion objective, and the cost of using the media to reach customers. Advertising allowances are not pertinent here; they are price reductions to firms in the channel to encourage them to advertise or otherwise promote the firm's products locally. 247) E Canada bans any advertising targeted directly at children; Japan limits the use of cartoon characters in advertising to children; in Switzerland, an advertiser cannot use an actor to represent a consumer; and New Zealand limits political ads on TV. Version 1

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248) B Canada bans any advertising targeted directly at children. 249) E In Switzerland, an advertiser cannot use an actor to represent a consumer. 250) A In the United States, print ads must be identified so they aren't confused with editorial matter. 251) C France and Japan limit the use of cartoon characters in advertising to children. 252) C New Zealand limits political ads on TV. 253) E In the United States, the Federal Trade Commission (FTC) has the power to control unfair or deceptive business practices, including deceptive advertising. If the FTC finds a particular practice to be unfair or deceptive, it has the power to require affirmative disclosures and corrective advertising. It also requires advertisers to support their ad claims. 254) B In the United States, the Federal Trade Commission (FTC) has the power to control unfair or deceptive business practices, including deceptive advertising. 255) B

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In the United States, the federal regulatory agency that has the power to control deceptive advertising and require corrective advertising is the Federal Trade Commission. 256) A While it is usually clear that a television or magazine advertisement is an advertisement, it is not always obvious that a social media post has been paid for. FTC guidelines now make celebrity endorsers liable for false statements about a product. They shouldn’t talk or post about a product unless they have experience with it. The FTC also requires disclosure when there is a “material connection” between the influencer and the brand. This includes their receiving free products as well as any financial payment. 257) D According to the FTC, advertising agencies as well as advertisers must share equal responsibility for false, misleading, or unfair ads; firms are required to support their ad claims with research proofs; and the firms are required to run corrective ads if their ads are proved to be deceptive. 258) B There are many different types of sales promotion, but what type is appropriate depends on the situation and objectives. 259) A Sales promotion refers to those Promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel. 260) D Sales promotion activities can be targeted at final customers, channel members, or even a firm's own employees.

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261) C Sales promotion objectives usually focus on prompting some short-term action. 262) E Point-of-purchase materials is a sales promotion activity aimed at final consumers or users. See Exhibit 15–8. 263) C Coupons are a sales promotion activity aimed at final consumers or users. See Exhibit 15–8. 264) C Merchandising aids and promotional allowances are sales promotion activities aimed at wholesalers or retailers. See Exhibit 15–8. 265) A Promotion allowances are sales promotion activities aimed at wholesalers or retailers. See Exhibit 15–8. 266) B Bonuses are sales promotion activities aimed at the company's own sales force. See Exhibit 15–8. 267) D Exhibit 15–9 illustrates some possible effects of a sales promotion on sales: sales temporarily increase, then decrease, then return to the regular level; sales temporarily increase and then return to the regular level; or sales increase and then remain at the higher level. 268) A Sales promotions have increased because of competition in mature markets.

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269) E Sales promotion can often be implemented quickly and get results sooner than advertising; sales promotions can be targeted at final customers, intermediaries, or a firm's own employees; total spending on sales promotion exceeds spending on advertising; and sales promotion is hard to manage. 270) E Sales promotion has been used as a tool to overcome consumer price resistance, creating a downward cycle of pricing and promotion. 271) A B2B promotions might use similar activities as consumer sales promotions; however, B2B sales promotion people might also set up and staff trade show exhibits to generate attention and interest for a firm and its products. Trade shows are big events that require significant planning. 272) A The purpose of B2B sales promotion is to move products or generate leads. 273) A When the market is not growing, sales promotion may just encourage "deal-prone" customers (and intermediaries) to switch back and forth among brands. Here, all the expense of the sales promotion simply contributes to lower profits. It also increases the prices that consumers pay because it increases selling costs. 274) D When the market is not growing, sales promotion may just encourage "deal-prone" customers (and intermediaries) to switch back and forth among brands. Sales promotion thus erodes brand loyalty. Version 1

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275) D Sales promotion includes such a wide variety of activities that it's difficult for the typical company to develop skill in managing all of them. Specialists in sales promotion have developed, both inside larger firms and as outside consultants. 276) C Making sales promotion work is a learned skill, not a sideline for amateurs. That's why specialists in sales promotion have developed, both inside larger firms and as outside consultants. 277) A The producer, SGCA, intends to repay the retailer called Computer Superstore a share of what it spends to advertise SGCA's computers in local media. Cooperative advertising involves producers sharing the costs of ads with wholesalers and retailers. 278) B The copy thrust of the ad for the SuperEnhancer sound card points out product advantages to affect future buying decisions. This is an example of indirect competitive advertising. 279) D Pioneering advertising is usually practiced in the early stages of the product life cycle; it informs potential customers about the new product and helps turn them into adopters. 280) E Institutional advertising would be most appropriate in advocating SGCA's environmental friendly practices. It will promote SGCA's image, reputation, and ideas, rather than a specific product. 281) E Version 1

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In making her decisions about media, Jurgenson has todecide on the promotion objectives, decide on what target markets to be reached, know the costs of alternative media, and decide what must be said. 282) B The medium should support the promotion objectives. If the objective requires demonstrating product benefits, TV or Internet with video may be the best option. 283) C Advertising agencies are specialists in planning and handling massselling details for advertisers. SGCA can expect the advertising agency to be a specialist in planning and handling mass-selling details.

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CHAPTER 16 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services. ⊚ ⊚

true false

Publicity works best when it is handled separately from the entire marketing mix. ⊚ ⊚

true false

3) Paid media refers to promotional messages generated by a brand, company, or nonprofit organization and communicated through a message channel that the brand directly controls. ⊚ ⊚

true false

4) When a brand generates messages and communicates them through a message channel it directly controls, it is called paid media. ⊚ ⊚

true false

5) Owned media include the YouTube channel, Facebook page, or Instagram postings of a company. ⊚ ⊚

true false

6) Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. ⊚ ⊚

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7) When Jane, a customer of KK Kids store, makes a purchase and shares valuable information about the products of the store through her Facebook posts, the type of publicity involved is earned media. ⊚ ⊚

true false

8) User-generated content refers to any type of communication created by customers for other customers. ⊚ ⊚

true false

9) When a customer posts a review on Amazon about the difficulties he faces while using his new hairdryer, it is considered an example of earned media. ⊚ ⊚

true false

10) A study of Internet users from 60 countries found that publicity is considered the most highly trusted source for buying information. ⊚ ⊚

true false

11) A recent study of Internet consumers from 60 countries found that 84 percent of people considered text ads on mobile phones as the most-trusted source of information. ⊚ ⊚

true false

12) A recent study of Internet consumers from 60 countries found that more people trusted ads on TV than ads on social networks.

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13)

true false

Paid media has very little message control and cannot attract a large audience. ⊚ ⊚

true false

14) Owned media can be maintained at relatively low cost and has versatility in message content and format. ⊚ ⊚

true false

15) Though earned media is not a trusted source of information, it can easily be measured and targeted. ⊚ ⊚

16)

true false

Owned media requires resources to manage and maintain. ⊚ ⊚

true false

17) As the influential message sources of earned media are outside the control of a marketing manager, the messages may be negative toward the brand. ⊚ ⊚

true false

18) Search engine optimization (SEO) is the process of designing a website so that it ranks high in a search engine's unpaid results. ⊚ ⊚

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true false

19) According to Jonah Berger's STEPPS to increase pass-along, Emotion occurs when the sharer looks good by sharing. ⊚ ⊚

true false

20) Jonah Berger's STEPPS to increase pass-along includes Social status, Tactics, Emotion, Planning, Practical value, and Strategy. ⊚ ⊚

true false

21) The right STEPPS taken by a marketing manager help a firm in making a message contagious. ⊚ ⊚

true false

22) Pass-along occurs when a customer makes a recommendation for a specific brand to another customer and may include advice or suggestions against a brand. ⊚ ⊚

true false

23) Any valued service provided by a brand that is directly connected to a core product offering is called a branded service. ⊚ ⊚

true false

24) Branded services are designed to share the message with customers that the brand cares about them by offering them some free service. ⊚ ⊚

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true false

25) A white paper is an authoritative report or guide that addresses important issues in an industry and offers solutions. ⊚ ⊚

true false

26) E-books and white papers are most successful when, in addition to describing and solving a problem of customers, they promote a particular company's products. ⊚ ⊚

true false

27) When a company publishes its success story about how it helped a customer solve a problem, it is called a case study. ⊚ ⊚

true false

28) A landing page is a customized web page that logically follows from clicking on an organic search result, online advertisement, or other link. ⊚ ⊚

true false

29) A company can use a blog to get their ideas out to interested target customers, but not to position itself as a thought leader on a particular topic. ⊚ ⊚

true false

30) Infographic refers to a visual image such as a chart or diagram used to represent information or data. ⊚ ⊚

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true false

31) Though an infographic may be well-designed, it captures less attention and gets passed along less readily than a text-heavy website. ⊚ ⊚

true false

32) When the function of a branded app is not tied closely to the core product, the branded app is always positive toward a brand. ⊚ ⊚

true false

33) A brand community is a group of customers joined around a particular brand or common set of shared interests. ⊚ ⊚

true false

34) The typical promotional objectives of email newsletters are maintaining relationships, reminding customers, and cross-selling. ⊚ ⊚

true false

35) As email newsletters target a potentially large audience, they cannot be tailored to specific customer interests. ⊚ ⊚

36)

true false

Customers often view independent bloggers as an objective source of information. ⊚ ⊚

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true false

37)

A firm must disclose when a blogger offers an endorsement or testimonial for a product. ⊚ ⊚

true false

38) For making purchase decisions, customers trust advertising more than recommendations from strangers. ⊚ ⊚

true false

39) Marketers do not value personal recommendations from opinion leaders, as they believe they are not reliable and feasible. ⊚ ⊚

true false

40) When customers are satisfied by their buying process and have a great experience, they are never reluctant to recommend the product to others. ⊚ ⊚

true false

41) A referral program offers a current customer an incentive for recommending a new customer to a business and usually requires the new customer to make a purchase. ⊚ ⊚

true false

42) Online companies prefer to use referral programs, as giving and receiving referrals over the Internet are considered cost-effective and simple. ⊚ ⊚

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true false

43) Readers view reviews as reports that do not share any first-hand knowledge; therefore, their purchase behavior is not influenced by reviews. ⊚ ⊚

44)

true false

Most social media is free as there is no direct media cost. ⊚ ⊚

true false

45) In advertising, a brand sends a message to many customers at once, and it is considered a one-to-many model of communication. ⊚ ⊚

true false

46) Although there are no direct media placement costs for most social media, the use of social media platforms for promotion is not totally free. ⊚ ⊚

47)

true false

Globally, Facebook dominates all other social media. ⊚ ⊚

true false

48) In the United States, Facebook is used by more online Americans than any other social media. ⊚ ⊚

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true false

49) Facebook has an algorithm that determines the content that is placed in the user's newsfeed. ⊚ ⊚

true false

50) Twitter is a social networking microblogging service that allows registered users to send out short messages called "tweets." ⊚ ⊚

true false

51) Twitter functions like a public message board, and most tweets are available for anyone to see. ⊚ ⊚

true false

52) As compared to Facebook, tweets tend to be less frequent and more personal among active users. ⊚ ⊚

53)

Ning is the popular free online photo and video-sharing service geared to mobile phones. ⊚ ⊚

54)

true false

Instagram's penetration is greatest among younger age groups. ⊚ ⊚

true false

55) Instagram works well for small businesses, as it is less time consuming to take pictures than to write stories or posts.

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⊚ ⊚

true false

56) Pinterest allows its registered users to organize ideas and images they find online into online bulletin boards called pinboards. ⊚ ⊚

57)

true false

About three-quarters of Pinterest users in the United States are male. ⊚ ⊚

true false

58) A firm that wants to target Gen Z should investigate how to promote its product on Snapchat. ⊚ ⊚

true false

59) Companies can develop a reputation as a trusted industry expert by posting news, white papers, and reports using LinkedIn. ⊚ ⊚

true false

60) Tumblr is a microblogging site that makes it easy for users to share all types of media from a browser, phone, desktop, or email. ⊚ ⊚

61)

true false

Tik Tok, Vimeo, and Flickr are used for video and photo-sharing. ⊚ ⊚

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true false

62) Qzone is a social media site in China that is used to write blogs, maintain diaries, share photos, watch videos, and listen to music. ⊚ ⊚

true false

63) The Facebook-like site VK is available in many languages but is especially popular among Chinese users. ⊚ ⊚

true false

64) When Microsoft's LinkedIn home page includes peeks behind-the-scenes at the company, blogs, and Q&A, the type of social media content involved is contests. ⊚ ⊚

true false

65) The short-term social media objectives of some firms have a huge impact on the company's bottom line and are not easy to measure. ⊚ ⊚

true false

66) Promotion objectives for social media usually focus on discouraging any brand familiarity among customers. ⊚ ⊚

true false

67) Hootsuite is software that helps in collecting and analyzing data from various social media. ⊚ ⊚

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true false

68) With the help of software and the lower costs of owned and social media, firms are able to more efficiently target smaller segments. ⊚ ⊚

true false

69) The white papers offered by Hootsuite arefree and can be downloaded by a customer without disclosing any identity information. ⊚ ⊚

true false

70) Marketing automation software is used to automatically place ads on Facebook after groups of target customers visit the site. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 71) The unpaid form of nonpersonal presentation of ideas, goods, or services is called A) profit. B) publicity. C) customization. D) personal selling. E) productivity.

72)

Which of the following is true about publicity in marketing?

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A) It refers to any paid form of personal presentation of ideas, goods, or services. B) An advertising manager must understand how the right promotion moves a customer through the buying process. C) It should be integrated into the entire marketing mix for best results. D) It develops primary demand for a product category rather than demand for a specific brand. E) It refers to price reductions to firms further along in the channel to encourage them to advertise the firm's products locally.

73) Which of the following statements accurately brings out the difference between advertising and publicity? A) For most promotion objectives, advertising offers a lower cost and a more effective approach than publicity. B) While the Federal Trade Commission (FTC) can regulate a firm's publicity efforts, it cannot regulate its advertising campaigns. C) Advertising utilizes paid media, whereas publicity relies on unpaid media. D) Advertising depends on owned media, whereas publicity depends on earned media. E) While advertising is primarily aimed at business customers, publicity is typically aimed at final consumers.

74)

Which of the following is an example of paid media? A) word-of-mouth praise about a company's product B) message communication through billboards C) Twitter tweets of a customer about a brand D) online customer reviews E) Facebook posts of a customer about a product

75)

Which of the following is true about paid media?

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A) The promotional messages are not directly generated by the company or brand. B) The organization doing the advertising is the source of the message. C) Paid media can be positive or negative. D) The brand communicates the promotional messages through a message channel it directly controls. E) Third parties such as journalists or customers generate the promotional messages.

76) A brand's product website, blog, and social media pages like Facebook or Instagram are examples of ________ media. A) earned B) indirect C) paid D) specific E) owned

77)

Which of the following is true of owned media?

A) It refers to promotional messages generated by a brand and communicated through a message channel that the brand directly controls. B) It includes television or radio news stories by independent journalists. C) It refers to promotional messages not directly generated by the company or brand. D) It refers to promotional messages generated by a brand and communicated through a message channel that the brand pays to access. E) It includes online customer reviews and Facebook posts by customers about a brand.

78)

Which of the following is an example of earned media?

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A) word-of-mouth buzz initiated by a group of satisfied customers of a hotel B) an artist's Pinterest page, where she shares her paintings C) an ad placed in a magazine D) a company's salesperson E) a company's website that is both informational and interactive

79) Daniel shares the details of a recent enjoyable trip to friends. The trip was arranged by a travel firm, and he recommends to his friends that they contact the same travel firm, noting the firm offers customized packages. Which type of media best represents Daniel's communication? A) owned media B) earned media C) direct media D) paid media E) indirect media

80) When an independent journalist writes a movie review for a magazine, the review represents ________ media. A) earned B) indirect C) owned D) defined E) paid

81)

Which of the following represents earned media? A) the selling company's social media B) advertising on television, in print, and on the radio C) branded websites and brochures D) television news, newspaper articles, and reviews E) advertising on mobile devices, on billboards, and online

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82) Promotional messages for a firm generated by independent journalists or other customers is called ________ media. A) paid B) earned C) traditional D) owned E) defined

83) In a study of over 30,000 Internet consumers from 60 countries, what percentage of respondents trusted recommendations from people they know? A) 42 percent B) 51 percent C) 58 percent D) 72 percent E) 83 percent

84)

The source of buying information trusted by the greatest percentage of consumers is A) paid magazine ads. B) brand websites. C) personal recommendations. D) online consumer opinions. E) paid television ads.

85) What percentage of customers trust online video ads as credible sources of buying information?

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A) 17 percent B) 48 percent C) 29 percent D) 57 percent E) 68 percent

86)

Which source of buying information is trusted by 36 percent of consumers? A) ads in magazines B) TV program product placements C) text ads on mobile phones D) branded websites E) ads on radio

87)

The source of buying information trusted by 56 percent of consumers is A) online consumer opinions. B) TV program product placements. C) online banner ads. D) brand sponsorships. E) billboards and other outdoor advertising.

88) Which of the following sources of buying information is trusted by 66 percent of consumers? A) ads on radio B) ads in magazines C) consumer opinions posted online D) branded websites E) ads on TV

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89) What percentage of customers trust ads served in search engine results as a reliable source of buying information? A) 25 percent B) 47 percent C) 80 percent D) 37 percent E) 65 percent

90)

The source of buying information trusted by the fewest consumers is A) online banner ads. B) brand sponsorships. C) text ads on mobile phones. D) ads on social networks. E) ads on radio.

91)

Which of the following is a characteristic of owned media? A) It is relatively more expensive when compared to earned media. B) It is typically characterized by high message control. C) It is considered a more trusted information source than earned media. D) It cannot be used to target niche audiences. E) It lacks versatility in message content and format.

92) When a firm depends on paid media for its mass selling, what would be one likely disadvantage?

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A) The advertising messages of the firm can be easily avoided by customers. B) The firm needs to attract customers to sites and create value to assure their return. C) The firm cannot target a large audience at once. D) The firm has very little message control. E) The firm cannot effectively measure the effectiveness of the advertisement.

93) SweetSpot Inc., a beverage producer, uses the promotional messages generated by its internal team and communicates through its website and Facebook page. What is the advantage SweetSpot derives by this approach? A) most-trusted information source B) more precise targeting C) manage and maintain without resources D) versatility in message content and format E) potentially large audience

94)

What is the disadvantage of owned media? A) It has no versatility in content and format. B) It requires resources to manage and maintain the channels. C) It has little message control. D) It can be easily avoided by customers. E) Measuring and targeting the audience is difficult.

95) When a brand communicates its own promotional messages through the message channel it pays to access, what is the likely disadvantage? A) It is difficult to attract potentially large audience. B) It can be negative toward the brand. C) It lacks precise targeting. D) It is more costly and has declining effectiveness. E) The promotional messages created are out of a marketing manager's control.

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96) Which of the following media types is seen as having high message control, more precise targeting, and the potential to target a large number of customers? A) owned media B) paid media C) defined media D) earned media E) indirect media

97)

How does earned media create challenges for a company or brand?

A) The promotional messages posted are not considered trusted information sources. B) The promotional messages created by customers are out of a marketing manager's control. C) Earned media does not help a firm attract a potentially large audience. D) Earned media lets customers easily avoid company-generated messages. E) Earned media attracts customers to websites.

98) Which media type is considered the most-trusted information source by customers for acting on the information but is difficult for a brand to create, measure, or target? A) owned media B) direct media C) earned media D) specified media E) paid media

99)

The growth of the Internet and social media most changed promotion by

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A) facilitating consumer search and pass-along behaviors. B) increasing the importance of salespeople as information providers. C) highlighting the need for consistent advertising across media. D) decreasing the need for earned or owned media. E) All of the answers are correct.

100) Which of the following is true about the practice of online searching for information by customers? A) Advertising managers should ensure the availability of useful online content to target customers who are searching. B) When conducting an online search, most users look past the 10 results on a typical first page of search. C) During an online search, 25 percent of customers who click on an organic search pick one of the top five search results. D) Most customers favor the organic search results rather than the paid ads at the side of the search. E) When conducting an online search, 90 percent of customers who click on an organic search choose the first or second result.

101) When a firm considers the keywords used by target customers in Internet searches and designs a website so that it ranks high in a search engine's unpaid results, it is called A) a search engine query. B) online search regularization. C) product optimization. D) process regularization. E) search engine optimization.

102) According to Jonah Berger's STEPPS for making an idea or message contagious, when the sharer looks good by sharing, ________ occurs.

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A) Triggering B) Practical value C) Social currency D) Practical value E) Emotion

103) Nicole, a customer of TT Fashions, notices a 50 percentdiscount in her bills after a purchase. After enquiring at the counter, she learns the offers are not advertised outside the store and are available only for the first 100 customers. Nicole informs her friend Taylor and looks good by sharing the information. Which characteristic of Jonah Berger's STEPPS is discussed in this scenario? A) Social currency B) Triggers C) Emotion D) Public E) Policy

104)

What is true of the term "Triggers" in Jonah Berger's STEPPS to increase pass-along?

A) Triggers represent all emotions people like to share. B) The term refers to the specific service used to develop selective demand for a specific brand. C) When a product's features act as Triggers, they spread more quickly. D) Triggers occur when the sharer looks good by sharing. E) Triggers make a topic easy to remember and encourage others to talk about it.

105) When a brand introduces a product with exciting new features in a market and draws huge attention among customers, which of the characteristics of Jonah Berger's STEPPS is represented?

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A) Social currency B) Triggers C) Emotion D) Public E) Practical value

106) When a customer makes a recommendation for (or against) a specific brand to another customer, it is called a(n) A) branded service. B) reminder. C) must-buy. D) informative transaction. E) pass-along.

107) An Apple customer tells a friend how much she likes her new iPhone. What type of consumer communication is this? A) must-buy B) reminder C) pass-along D) pioneering E) informative

108) When a company is able to get its customers to spread a message far and wide, it is referred to as A) viral promotion. B) search engine optimization. C) a high bounce rate D) a branded service. E) owned media.

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109) After noticing promotional offers of his favorite brand on its website, Ryan passes the link of the website to his friends via email. This results in the message spreading far and wide— especially after many of his friends forward it to others. In this scenario, which approach is involved in spreading the brand? A) branded service B) viral promotion C) case study D) white paper E) referral program

110)

What is the significance of a branded service? A) It is a recommendation for a specific brand, given by one customer to another. B) It is a service that can develop selective demand for a specific brand. C) It is a valued service of a brand not directly related to the core product offering. D) It is any high-cost service offered by a brand only to its premium customers. E) It is a service offered by a brand primarily to reinforce previous promotion.

111) If the promotion objective of a firm is to develop a desired positioning, which of the following types of publicity would work best? A) branded services B) direct-to-consumer press releases C) customer reviews D) case studies E) pass-alongs

112) Solar City wants to build awareness of its residential roof-top solar cells. It needs to explain to consumers how their product is installed, how it works, and how customers pay for it. Which of the following media types should it select to achieve these goals?

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A) educational web pages B) branded apps C) Instagram page D) email newsletters E) reminder advertising

113) Which type of owned media, used for the promotion objective of brand positioning, has the practical value of motivating customers to pass along information? A) brand communities B) educational web pages C) landing pages D) branded apps E) infographics

114) Which of the following is/are among the typical promotion objectives of white papers and case studies? A) to provide value for customers and maintain relationships B) to remind and cross-sell to customers C) to grab attention and start a relationship D) to generate leads and maintain interest E) to build a reputation as a thought leader and foster customer trust

115) Which of the following types of owned media is discovered by customers through passalong from friends' content on social media or through a customer's search for solutions to problems?

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A) landing page B) brand community C) branded app D) blog E) case study

116) SuperFast Logistics helps manufacturing companies with a variety of different solutions for transporting goods. It has placed "stories" and videos on its website that explain how SuperFast Logistics has helped specific customers solve transportation problem. SuperFast is using A) branded services. B) blog posts. C) indirect selling. D) case studies. E) microblogs.

117) Intuit, a tax and financial planning software company, creates a website where its QuickBooks customers can interact about problems faced by their small businesses. This is an example of a A) landing page. B) blog. C) brand community. D) case study. E) webinar.

118) An authoritative report or guide that addresses important issues in an industry and offers solutions is called a

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A) landing page. B) blog. C) white paper. D) case study. E) webinar.

119)

Which statement about the role of white papers in business solutions is true?

A) They help a customer solve a problem without promoting a particular company's products. B) They are regularly updated websites, written in an informal and conversational style. C) They have the promotional objectives of brand positioning. D) They directly address a customer's needs by minimizing click-away. E) They are very effective in building customers' trust when a subjective tone is used.

120)

Which of the following is true of white papers published by companies?

A) White papers address issues in an industry and offer solutions to customers. B) White papers specifically aim to promote a particular company's products to customers. C) White papers are considered extended versions of e-books. D) White papers are customized web pages that follow from clicking on an online advertisement. E) White papers are regularly updated websites usually managed by a small group within a firm.

121) QT Corp., a reputed courier service firm, publishes a success story about how it helped a needy customer in a flood-affected area by delivering his medicines parcel on time. The customer expressed his satisfaction with the timely service. Which type of owned media was adopted by QT Corp. in this scenario?

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A) landing page B) blog C) brand community D) case study E) branded app

122) A customized web page that logically follows from clicking on an organic search result, online advertisement, or other link is called a A) landing page. B) blog. C) leading page. D) case study. E) white paper.

123) The owned media type that focuses on moving a customer along in the purchase process by addressing the customer's needs and minimizing click-away is the A) case study. B) leading page. C) blog. D) landing page. E) white paper.

124)

One goal of a landing page is to A) minimize click-away. B) increase a website's bounce rate. C) foster customer trust. D) support brand positioning. E) cross-sell to customers.

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125) When a firm publishes success stories about how it helped another customer in addressing an issue, the type of owned media involved is called A) specific selling. B) a blog post. C) direct selling. D) a case study. E) a branded app.

126) Amy, a marketing executive, writes about her company products in an informal style on the company's website and updates the website by communicating with her customers and sharing their ideas. Amy is managing the company's A) white paper. B) blog. C) branded app. D) case study. E) webinar.

127)

A visual image such as a chart or diagram used to represent information or data is called A) heavy text. B) a symbolic pattern. C) a brand app. D) an image study. E) an infographic.

128) The sponsored software applications that benefit customers by providing entertainment, solving a problem, and/or saving time are called ________ apps.

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A) target B) promotion C) info D) branded E) product

129) A firm uses a sponsored software application to provide valued services, not directly connected to a core product offering, and helps customers solve a problem. The type of owned media the firm is using is known as a A) custom app. B) branded app. C) product app. D) target app. E) consumer app.

130) IKEA, a home furnishing retailer, has an app that helps customers arrange furniture, virtually, in their homes. This is an example of a(n) ________ app. A) branded B) landing page C) brand community D) infographic E) educational

131) ActiveLearner produces an educational software product that runs on the iPad and delivers active learning exercises for elementary school children. The company has created a large image with several charts and diagrams showing why active learning is important to elementary school kids—but the company name is only mentioned in small type on the bottom of the page. Many elementary school teachers share the image with colleagues. ActiveLearner is using which type of communication in its promotion blend?

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A) white paper B) blog C) infographic D) case study E) webinar

132) A group of customers joined around a particular brand or common set of shared interests is called A) paid media. B) a brand community. C) a case group. D) a local community. E) a web group.

133)

Which statement about the role of email newsletters in promotion activities is true?

A) Email newsletters help in building a firm's reputation as a thought leader. B) Email newsletters with useful content can build relationships that lead to increased purchases. C) Ethical companies do not allow customers to unsubscribe from email newsletters. D) Email newsletters provide a positive experience similar to using branded apps. E) Email newsletters target many customers at a time and cannot be tailored to specific customer interests.

134)

Which of the following is true about earned editorial coverage of companies?

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A) A firm always gains more attention from advertising than a published article. B) Articles featuring the newsworthy products of interest to people in a particular job gain less attention. C) Editorial coverage usually happens by luck or accident. D) Firms can earn editorial coverage with their goods and services but not for their good works. E) A firm's public relations people may write the basic copy of the published article.

135)

Which of the following is true about bloggers in promoting a firm's product? A) When a blogger offers an endorsement for a product, it must not be disclosed by a

firm. B) Bloggers are either directly or indirectly paid by firms for their writing. C) Identifying influential bloggers who have the attention of target customers can be helpful. D) Bloggers cannot give negative reviews about a firm's products. E) Bloggers collect promotion data and help firms in preparing their press releases.

136)

What is the most likely role of a public relations (PR) group in product promotion? A) A PR group can act as a member of a brand community. B) A PR group can design the product page of a firm. C) A PR group may target customers by using blogs of a firm. D) A PR group may design ads to drive customers to relevant landing pages. E) A PR group can develop promotional materials specifically designed for the media.

137)

Generally, the main purpose of a company's public relations effort is to

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A) get positive coverage by the press. B) educate customers about their product. C) establish itself as a "thought leader" in the field. D) encourage word-of-mouth pass-along. E) solve customer problems.

138) At the company's annual day of service, 500 employees fanned out throughout the town to pick up garbage. The press was invited and stories appeared in the local newspaper and on the 6:00 news. This is an example of A) earned media from public relations. B) earned media from customer advocacy. C) pass-along from trusted sources. D) publicity through owned media. E) viral promotion.

139) When a firm depends on customer advocacy for the promotion of its products, it faces which challenge? A) Customer advocacy always creates a weaker influence on buying decisions than advertising. B) It is difficult to control the promotional messages created by customers. C) Customer advocacy has declining effectiveness when compared with other means of publicity. D) Customers are not considered a trusted source of information by other customers. E) Customer advocacy is considered less effective for positive product reviews than negative reviews.

140) Ray Corp., a leading medical equipment manufacturer and seller for the past two decades, introduces cost-effective nebulizersto the market. The firm provides free demonstrations of the nebulizers for its customers at its outlets. What is the likely advantage it can gain from word-ofmouth publicity?

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A) It can acquire loyal customers with greater lifetime value. B) It can easily control the promotional messages generated by its customers. C) It can easily measure the success rate of the promotion media. D) It can avoid getting negative reviews about the new product. E) It can maintain versatility in its message format.

141) A customer who shares their views of a firm's product and gets attention from other customers who respect these views is referred as a(n) A) intermediary. B) product assessor. C) promotion advisor. D) opinion leader. E) market researcher.

142) Brandon, after using a newly-introduced shaving lotion, expresses his dissatisfaction with the product on his Facebook page. This gets attention from his friends, who now do not want to try the product. What is Brandon's role in this scenario? A) opinion leader B) blogger C) intermediary D) market researcher E) product tester

143)

Which of the following is true about the functioning of BzzAgent in marketing? A) It has about 50,000 agents in the United States, the United Kingdom, and Canada. B) Their agents are asked not to disclose their status as "BzzAgents" at any time. C) Their agents pass the word about the product they like. D) It discourages marketing managers from starting conversations about their products. E) It encourages its agents to talk more about negative experiences than positive ones.

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144)

Which of the following is an effective way for a company to encourage word-of-mouth? A) Offer a great product. B) Give customers a specific story to share. C) Ask customers for recommendations. D) Make website content easily shareable. E) All of the answers are correct.

145) Which of the following statements is true regarding the recommendation of a product by customers? A) Customers doubt a firm's credibility when it tries to ask for recommendations from them. B) When the content on a firm's social media site is easily shareable, satisfied customers recommend it more. C) Customers are never reluctant to recommend a product when they have had a great experience. D) Customers recommend when a company performs well, even when the performance is not consistent. E) The product offered by a firm need not be great but should make the customer believe it is great and long enough to recommend it.

146) When a firm is interested in earning word-of-mouth publicity from customers, which of the following approaches would help the firm? A) The firm has to discourage referral programs, as they do not always promote positive word-of-mouth. B) The firm should ask for recommendations from satisfied customers. C) The firm should show high performance, though it can be inconsistent. D) To maintain reliability, the firm should offer social media content that cannot be easily shared. E) The firm should make the customers believe that all of its products are great and should be recommended.

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147) PerfectSweatShirt Company makes and sells a high-end hoodie sweatshirt through an online website. After a recent order, Jane received a discount code she could give to a friend. She sent the code to her friend Amy, and when Amy used the discount code, Jane received a fivedollar credit on a future purchase. PerfectSweatShirt is using a(n) A) product promotion activity. B) owned media system. C) viral management technique. D) referral program. E) advertising allowance.

148) Which of the following accurately represents referral programs used by online companies? A) They are high-cost. B) They are simple to use. C) They cannot experiment with various compensation plans. D) They can offer compensation to the customer who recommends, but not to the new customer. E) They always easily target customers with price resistance.

149) Which of the following describes why a customer who had a great experience with a product or service would be reluctant to recommend it to a friend? A) There is worry that a recommendation may result in a dissatisfying experience for a friend. B) There are personal costs in making a recommendation. C) No one wants to be put on the spot to explain something. D) The recommendation does not make the customer look good. E) All of the answers are correct.

150) Which of the following is a form of social media, allowing users to create, share ideas, and interact in a social network? Version 1

A) Pinterest B) newspaper C) radio D) magazine E) television

151)

Which of the following represents traditional media that can help in advertising products? A) Facebook B) television C) LinkedIn D) Twitter E) Instagram

152)

Which of the following is true of social media?

A) Social media are completely free, as they have no direct media cost. B) Social media discourage the many-to-many model of communication and support the one-to-many model of communication. C) About 7 in 10 Americans are on at least one social media platform. D) Social media include television, magazines, and radio. E) Social media do not differ from traditional media in their mode of operation.

153)

Which of the following is the best example of owned media? A) A games and toys store contacts outside consultants for its promotion activities. B) A perfume manufacturer runs a sponsored message on Facebook. C) A grocery store provides discount coupons for its premium customers. D) A jewelry store creates a Facebook page for its products. E) A clothing store runs sponsored messages on television.

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154) Which of the following scenarios best represents the use of earned media for promotion activities? A) A customer tweets about a discount offer of a brand on Twitter. B) A selling company uses Twitter to introduce its novel products. C) A firm communicates its promotional messages to customers through online banner ads. D) A furniture store depends on text ads on mobile phones for its promotion. E) A kids' clothing store uses only billboards for its product promotion.

155)

Which of the following is true about the role of social media in promotion? A) Social media are considered a one-to-many model of communication. B) Social media have no direct media cost. C) Social media provide opportunities for owned and earned media, but not for paid

media. D) Social media involve a relatively long planning cycle—longer than advertising. E) Social media operate in the same way that advertising does.

156)

Unlike advertising, social media offer a(n) ________ model of communication. A) many-to-many B) one-to-one C) one-to-many D) all-for-one E) one-size-fits-all

157)

Which of the following is true regarding media placement costs on social media?

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A) There are no direct media costs, but the use of social media platforms is not free. B) The use of social media platforms is entirely without cost. C) The only expenses companies have to pay are the direct media costs. D) Social media platforms are among the most expensive on which to place media. E) Social media usage is free, but its effectiveness is uncertain.

158)

Which of the following is used by more online Americans than any other social media? A) YouTube B) Facebook C) Instagram D) Twitter E) Snapchat

159) Which of the following is a popular video-sharing website where users upload, view, rate, share, create playlists, and comment on videos? A) YouTube B) Qzone C) Snapchat D) Instagram E) Pinterest

160)

Which of the following statements about YouTube is false?

A) It is checked more frequently than most other social media. B) It is used by more online Americans than any other social media. C) It its often used by brands to stay engaged with customers. D) Many of its videos are preceded by a 30-second ad, which is often skippable after 5 seconds. E) The site is used by almost all ages, with a falloff only occurring among those 65 and older.

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161) Rack Solutions has a product that customers install on their garage ceilings that creates storage. Customers love the extra usable space that it provides, but have complained that it is somewhat difficult to install. Rack Solutions decides to put together a video for its customers on social media showing the benefits of its product and giving helpful hints for its installation. Which of the following sites would be the best social media site for Rack Solution’s video? A) YouTube B) Instagram C) Flickr D) LinkedIn E) Pinterest

162)

In the United States, ________ percent of the adult population uses Facebook. A) 35 B) 82 C) 75 D) 69 E) 58

163) Which social media platform has the highest global usage, as shown by research, among all online adults? A) Twitter B) Instagram C) LinkedIn D) Facebook E) Pinterest

164)

Which of the following statements is true about Facebook?

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A) It is especially effective among younger adults than older adults. B) It provides a free online photo and video-sharing service geared to mobile phones. C) It is growing faster than all other social media platforms. D) It allows registered users to send out short messages called tweets. E) It uses an algorithm to decide what content is placed in the user's newsfeed.

165) ________ is the social networking microblogging service that restricts the message length of its registered users to a certain number of characters. A) Bing B) Blab C) Instagram D) Flickr E) Twitter

166)

Which statement about the use of Twitter is correct? A) Twitter has more registered users than Facebook. B) Tweets among active users tend to be less frequent than Facebook posts. C) Twitter's average users tend be young. D) Tweets of active users are more personal than Facebook posts. E) Twitter makes tweets available only to registered users.

167)

What is significant about the service of Twitter?

A) Tweets among active users are more personal than Facebook posts. B) Unregistered users can view tweets, as they are available for anyone to see. C) It is growing faster than all other social media platforms. D) It operates in an entirely different way than other public message boards. E) Active users can send messages of more than 140 characters but less than 200 characters.

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168)

________ is the free online photo and video-sharing service geared to mobile phones. A) Pinterest B) LinkedIn C) Twitter D) Bing E) Instagram

169) A jewelry store wants to introduce its new collections to its loyal customers by using a free, mobile, online photo-sharing service to take pictures of the items and share them on Facebook, Tumblr, and Flickr. Which of the following options is most likely to suit the store's need? A) Ning B) Instagram C) LinkedIn D) hi5 E) Blab

170) Which major social media platform was least popular in the United States in 2016 among users older than 65 years? A) Instagram B) LinkedIn C) Pinterest D) Twitter E) Snapchat

171)

Which of the following statements is true about Instagram?

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A) It works well for large businesses only. B) It has more penetration among older age groups. C) It uses an algorithm to decide what content is placed in the user's newsfeed. D) It is easy to use, as it consumes minimal time to take and post pictures. E) It is considered the most dominant social media platform in the United States.

172) When a manufacturing firm takes videos of its new product using a smartphone app and shares them with its distributors using Facebook, which of the following options should be used for its free video-sharing service? A) Instagram B) Blab C) hi5 D) LinkedIn E) Ning

173) Which of the following is a website that allows registered users to share ideas and images they find online with fellow users and organize their ideas into pinboards? A) Reddit B) Quora C) hi5 D) Twitter E) Pinterest

174)

Which of the following statementsaboutPinterest is true? A) Users of the site in the United States are mostly female. B) It is frequently used only by younger people, with no appeal for older age groups. C) It is growing faster than all other social media platforms. D) It does not insist on registration for sharing ideas and images. E) About 55 percent of the U.S. population used it in 2016.

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175) Which of the following is a website that permits users to create pinboards of ideas and images around a wide range of topics for sharing with fellow users? A) Pinterest B) LinkedIn C) Reddit D) hi5 E) Ning

176) Jose, a salesperson for a pharmaceutical products distributor, creates a profile of his company on a business-oriented social networking website. He uploads his detailed business information to the network to get more business opportunities. Which of the following social media platforms is likely being used by Jose? A) Instagram B) Twitter C) Ning D) LinkedIn E) Pinterest

177)

What is the role of LinkedIn in promoting business activities? A) It allows users to share ideas and images they find online with fellow users. B) It supports the use of visual images, such as charts, to represent business information. C) It provides a free online photo and video-sharing service geared to mobile phones. D) It allows registered users to send out short messages called tweets. E) It serves as a place to network for jobs and sales opportunities.

178) The social media platform where customers can "Follow," "Tweet," "Retweet," and comment to demonstrate support is called

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A) Instagram. B) Twitter. C) Ning. D) LinkedIn. E) Pinterest.

179) Which social networking website is considered both a place to network for jobs by businesspeople and a communication platform by customers and salespeople? A) LinkedIn B) Twitter C) hi5 D) Reddit E) Quora

180) In the United States, which of the following social media platforms has the lowest percentage of users in the 18–24 age group? A) LinkedIn B) Facebook C) Twitter D) Pinterest E) Instagram

181) In 2016, which of the following major social media platforms was most popular in the U.S. among those 50 to 64 years of age? A) Instagram B) LinkedIn C) YouTube D) Twitter E) Facebook

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182)

Which of the following is true about social networks?

A) Tumblr is a microblogging site for sharing all types of media from browser, phone, desktop, or email. B) LinkedIn is most utilized by the younger demographic. C) Snapchat is used by Gen Z to write blogs and maintain diaries. D) Houzz is a combination of Twitter and Facebook. E) QZone is especially popular among Russian speakers.

183)

Social media could be used to deliver which of the following types of content? A) insider knowledge B) educational content C) humor D) customer service E) All of the answers are correct.

184) When a pizza store announces a huge reduction in the prize of pizza based on how many people tweeted in time for lunch, the type of social media content involved is A) product launches and updates. B) deals and discounts. C) humor. D) insider knowledge. E) customer service.

185) NewLine, a reputed clothing store, shows its latest collection for women on Twitter and attracts young customers. Which type of content is delivered by Twitter in this scenario?

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A) image and lifestyle B) insider knowledge C) contests D) product launches and updates E) customer service

186) When a reputed jewelry store maintains many different pinboardson Pinterest, with topics ranging from "precious stones" to "the art of jewelry making,"what type of social media content is involved? A) image and lifestyle B) insider knowledge C) product launches and updates D) deals and discounts E) useful ideas, information, and practices

187) When a music production house releases its new video album on Snapchat and targets young people, which type of social media content is the firm delivering? A) educational B) contests C) product launches and updates D) deals and discounts E) insider knowledge

188)

Which of the following statements is true about promotion objectives for social media? A) They aim for growing customer equity. B) They are always easy to measure. C) They do not have any great impact on a small company's bottom line. D) They create more brand awareness and encourage trial. E) They focus on discouraging any brand familiarity among customers.

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189) A mobile app and service for sharing photos, videos, and texts with other people that is popular among Gen Z is A) Snapchat. B) Pinterest. C) Twitter. D) WhatsApp. E) Facebook.

190) A 16-year-old took a picture of herself with her smartphone and used a filter make her head into a taco from Taco Bell and then shared it with her friends. Which of the following social media platforms did she most likely use? A) Snapchat B) Facebook C) Pinterest D) Tumblr E) Twitter

191) Which photo/video messaging app is still working on ways to make its service more friendly for marketers to reach its young users, 73 percent of whom are under age 25? A) Snapchat B) WhatsApp C) Facebook D) Google Hangouts E) Pinterest

192)

What should be the focus of a promotional effort that utilizes social media?

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A) increasing target customers' purchase likelihood B) getting target customers to follow a brand C) encouraging customers to try a product D) getting more young people interested in a product E) introducing a brand to potential new customers

193)

Promotional efforts using social media are most effective with which target market? A) those that are already customers B) those who do not already follow the brand C) those who are new customers D) those that do not usually consume social media E) those who are middle age and older

194) By using ________ software, a firm can track an individual customer's behavior and trigger actions in response to specific customer actions. A) sales target B) customized solution C) customer identification D) marketing automation E) global targeting

195)

Which of the following statements is true about Hootsuite?

A) It supports marketing managers' ability to submit messages to social media on a scheduled basis. B) It offers a free white paper without any link to other online readings. C) It is growing slower in the United States than in other countries. D) It offers a white paper that overly promotes Hootsuite. E) It discourages collecting customer information from social media.

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196) The social media management dashboard that allows marketing managers to submit messages to social media on a scheduled basis and also collect and analyze data from social media is called A) Tactical Y. B) Hootsuite. C) T-Strategic. D) Operate M. E) AnalyticK.

197)

Which of the following is not true about managing and measuring online media?

A) Different software packages must be used to manage each major social media platform. B) Marketing automation software tracks individual customers' behavior. C) When earned and owned media are online, results can be measured more quickly. D) Tracking online data allows marketing managers to adjust their marketing strategy. E) When earned and owned media are online, it is easier to measure results.

198) ________ track(s) individual customers' behavior and trigger(s) actions in response to specific customer actions. A) Marketing automation software B) Social media management C) Owned media managers D) Tracker programs E) Customer relationship management

199) While shopping on Zappos, a customer placed a few pairs of shoes in an online shopping cart but then logged out without purchasing anything. The next day, the customer received an email that there were items left in the online shopping cart and offered the customer free shipping for purchases over $50. This illustrates

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A) marketing automation software. B) a website's bounce rate. C) many-to-many communication. D) a referral program. E) pass-along.

200)

The percentage of visitors who only visit a single page on a website is referred to as A) the bounce rate. B) pay-per-click. C) click-through rate. D) retention rate. E) performance analysis.

201)

What does it mean if a company's website has a high bounce rate?

A) Potential customers who click on their ad are only visiting the company's home page. B) Potential customers are not clicking on their ad and are instead clicking on the ads of their competitors. C) Potential customers are clicking on their ad and the company's website is holding their interest enough for them to explore other page links. D) The company's website ranks high in a search engine's unpaid results. E) The company has successfully engaged customers to pass along information to other potential customers.

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Answer Key Test name: Chap 16_17e 1) TRUE Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services and includes earned, owned, and social media. 2) FALSE Publicity works best when it is integrated into the entire marketing mix. 3) FALSE Paid media refers to messages generated by a brand (or company or nonprofit organization) and communicated through a message channel that the brand pays to access. Owned media refers to promotional messages generated by a brand (or company or nonprofit organization) communicated through a message channel that the brand directly controls. 4) FALSE Paid media refers to messages generated by a brand (or company or nonprofit organization) and communicated through a message channel that the brand pays to access. 5) TRUE Owned media include the brochures and catalogs a company mails to target customers. A brand's product website, blog, and social media pages, YouTube channel, Facebook page, or Instagram are also examples of owned media. 6) TRUE

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Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. 7) TRUE Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. The company or brand is assumed to earn the attention of journalists or customers because there is an interesting story to tell or because others would value this information. 8) TRUE User-generated content refers to any type of communication created by customers for other customers. 9) TRUE A customer can post a review at Amazon describing what he likes (and doesn't like) about his new nonstick frying pan or new hairdryer. It is an example of earned media. 10) TRUE A study of 30,000 Internet consumers from 60 countries found the four most highly trusted sources for buying information are forms of publicity, not advertising. See Exhibit 16–3. 11) FALSE A recent study of 30,000 Internet consumers from 60 countries found that only 36 percent of people trusted text ads on mobile phones. See Exhibit 16–3. 12) TRUE

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A recent study of 30,000 Internet consumers from 60 countries found that 63 percent trusted ads on TV, while 46 percent trusted ads on social networks. See Exhibit 16–3. 13) FALSE Paid media has the following advantages: high message control, more precise targeting, and potentially large audience. 14) TRUE Owned media can be maintained at relatively low cost and has versatility in message content and format. 15) FALSE Earned media is the most-trusted information source, but is difficult to measure, create, and target. 16) TRUE Owned media requires resources to manage and maintain. See Exhibit 16–4. 17) TRUE Earned media creates challenges for a brand. The influential message sources are out of a marketing manager's control, and the messages can be negative toward the brand. 18) TRUE Search engine optimization (SEO) is the process of designing a website so that it ranks high in a search engine's unpaid results. 19) FALSE Jonah Berger suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. Social currency occurs when the sharer looks good by sharing.

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20) FALSE According to Jonah Berger, there are certain characteristics of an idea or message that make it contagious. He suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. 21) TRUE Going viral is not easy, but when a marketing manager takes the right STEPPS, they increase the chances that the message becomes contagious. 22) TRUE Pass-along occurs when one customer passes information on to one or more other customers. 23) FALSE Branded services are the valued services a brand provides that are not directly connected to a core product offering. 24) TRUE Branded services are usually free and offer target customers benefits that leave them with a positive perception that the company or brand cares about their welfare. 25) TRUE A white paper is an authoritative report or guide that addresses important issues in an industry and offers solutions. 26) FALSE E-books and white papers are most successful when, in addition to describing a problem, they help the customer solve it without promoting a particular company's products. 27) TRUE Version 1

Case studies are success stories about how a company helped another customer. 28) TRUE A landing page is a customized web page that logically follows from clicking on an organic search result, online advertisement, or other link. 29) FALSE A blog allows a company or individual to get their ideas out to interested target customers. Some firms use a blog to position a firm or individual as a thought leader on a particular topic. 30) TRUE Infographic refers to a visual image such as a chart or diagram used to represent information or data. 31) FALSE A well-designed infographic quickly conveys useful information and gets passed along more readily than a text-heavy website. 32) FALSE A branded app can be a positive reminder for the brand, especially when its function ties closely to the core product. 33) TRUE A brand community is a group of customers joined around a particular brand or common set of shared interests. 34) TRUE The typical promotional objectives of email newsletters are maintaining relationships, reminding customers, and cross-selling. See Exhibit 16–5. 35) FALSE

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Some companies develop different email newsletters tailored to specific customer interests—and a desired frequency of communication. 36) TRUE Independent bloggers often "publish" their own stories on topics of interest. Readers often view these citizen "journalists" as an objective source of information. 37) TRUE When a blogger offers an endorsement or testimonial for a product, it must be disclosed. 38) FALSE Customers trust and act on recommendations from friends, family, and colleagues. Even recommendations from strangers often have a stronger influence on buying decisions than advertising. 39) FALSE Marketers value personal recommendations from opinion leaders. 40) FALSE Most customers are reluctant to recommend products—even when they do have a great experience. 41) TRUE A referral program offers a current customer an incentive for recommending a new customer to a business. Usually referral programs require the new customer to make a purchase. 42) TRUE Referral programs are often used by online companies because of the simplicity and low cost of giving and receiving referrals over the Internet.

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43) FALSE Reviews can have a strong influence on purchase behavior because readers view reviews as objective reports that share first-hand knowledge. 44) FALSE Most social media has no direct media cost, but that doesn't mean social media is free. 45) TRUE Advertising is a one-to-many model of communication, as a brand sends a message to many customers at once. 46) TRUE Most social media have no direct media cost, but the use of social media platforms is not free. A company needs to hire staff or an agency to manage its presence on social media. 47) TRUE Globally, Facebook dominates social media. The site has more than 2.3 billion users globally; 69 percent of the U.S. adult population uses the platform. 48) FALSE While Facebook dominates social media globally, YouTube is used by more online Americans (73 percent of U.S. adults) than any other social media. 49) TRUE Facebook has an algorithm that determines the content placed in the user's newsfeed. 50) TRUE

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Twitter is a social networking microblogging service that allows registered users to send out short messages called "tweets." 51) TRUE Twitter operates like a public message board, with most tweets available for anyone to see. 52) FALSE Among active users, tweets tend to be more frequent and less personal as compared to Facebook. 53) FALSE Instagram is the free online photo- and video-sharing service geared to mobile phones. 54) TRUE Instagram's penetration is greatest among younger age groups. Seventyfive percent of online adults aged 18 to 24 use Instagram. 55) TRUE Instagram can work well for many small businesses, where an owner or part-time marketing manager may find it less time consuming to take pictures than to write stories or posts. 56) TRUE Pinterest is a website that allows registered users to share ideas and images they find online with fellow users. The ideas and images are organized into pinboards (a kind of online bulletin board). 57) FALSE Pinterest users are mostly female (42 percent of American women as compared to 15 percent of men). 58) TRUE Version 1

For firms targeting Gen Z, t Snapchat boasts more than 300 million monthly active users—73 percent under the age of 25. 59) TRUE Companies posting news, white papers, and reports using LinkedIn develop a reputation as trusted industry experts. 60) TRUE Tumblr is a microblogging site that makes it easy for users to share all types of media from a browser, phone, desktop, or email. 61) TRUE Video and photo-sharing services are among the fastest growing social networks, and include Tik Tok, Vimeo, and Flickr. 62) TRUE Chinese tech giant Tencent’s social media product Qzone has 500 million users who use the site to write blogs, maintain diaries, share photos, watch videos, and listen to music. 63) FALSE Although available in several languages, the Facebook-like site VK is popular among Russian speakers and has more than 500 million registered users. 64) FALSE When Microsoft's LinkedIn home page includes behind-the-scenes peeks at the company, blogs, and Q&A, the type of social media content involved is insider knowledge. See Exhibit 16–7. 65) FALSE Some companies make the mistake of focusing on short-term social media objectives. Although these objectives are easy to measure, they don't necessarily have any impact on the company's bottom line. Version 1

66) FALSE Promotion objectives for social media usually focus on (a) enhancing brand familiarity by growing the number of customers that prefer or insist on a brand or (b) growing customer equity by encouraging customers to increase their purchases. 67) TRUE Hootsuite is a dashboard that offers marketing managers the ability to submit messages to Facebook, Twitter, LinkedIn, and other social media on a scheduled basis. Hootsuite and other software can also collect and analyze data from various social media. 68) TRUE Segmentation remains important with online media, and the lower costs allow firms to efficiently target smaller segments. For firms that have earned, owned, and social media online, new software helps manage, measure, and automate these media. 69) FALSE The white papers offered by Hootsuite are not exactly free; before downloading, an interested customer must surrender some information valuable to Hootsuite, includingname, email address, company, job title, and phone number. 70) FALSE Marketing automation software tracks individual customers' behavior and triggers actions in response to specific customer actions. 71) B Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services and includes earned, owned, and social media. 72) C Version 1

Publicity works best when it is integrated into the entire marketing mix. A marketing manager must understand how the right promotion moves a customer through the buying process. 73) C Publicity refers to any unpaid form of nonpersonal presentation of ideas, goods, or services.Advertising uses paid media. 74) B Advertising on television, in print, online, and for mobile devices, billboards, radio, etc., are examples of paid media. See Exhibit 16–2. 75) B Paid media refers to messages generated by a brand (or company or nonprofit organization) and communicated through a message channel that the brand pays to access. The source of the message is the organization doing the advertising. 76) E A brand's product website, blog, and social media pages like a YouTube channel, Facebook page, or Instagram are examples of owned media. 77) A Owned media refers to promotional messages generated by a brand (or company or nonprofit organization) communicated through a message channel that the brand directly controls. 78) A Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. A company or brand can also earn word-of-mouth communication from customers. 79) B Version 1

User-generated content refers to any type of communication created by customers for other customers; and all types of user-generated content are examples of earned media. 80) A Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. Television or radio news stories, magazine or newspaper articles, and reviews are examples of earned media. 81) D Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties like journalists. Examples include television or radio news stories, magazine or newspaper articles, and reviews. See Exhibit 16–2. 82) B Earned media refers to promotional messages not directly generated by the company or brand, but rather by third parties such as journalists or customers. 83) E A study of 30,000 Internet users from 60 countries found that 83 percent of customers trust recommendations from people they know. See Exhibit 16–3. 84) C A study of 30,000 Internet users from 60 countries found that consumers trust information from publicity sources most, over advertising. In the category of earned media, 83 percent of respondents trust recommendations from people they know, 66 percent trust online consumer opinions (reviews), and 66 percent trust editorial comment such as newspaper articles. Version 1

85) B Online video ads are trusted by 48 percent of customers. See Exhibit 16– 3. 86) C Text ads on mobile phones are trusted by only 36 percent of customers. See Exhibit 16–3. 87) E Billboards and other outdoor advertising are trusted by 56 percent of customers. See Exhibit 16–3. 88) C Consumer opinions posted online are trusted by 66 percent of customers. See Exhibit 16–3. 89) B Ads served in search engine results are trusted by 47 percent of customers. See Exhibit 16–3. 90) C Text ads on mobile phones are trusted by only 36 percent of customers. See Exhibit 16–3. 91) B Refer to Exhibit 16–4. Owned media has the following benefits: high message control, relatively low cost, niche audiences, and versatility in message content and format. 92) A With paid media, customers can more easily avoid advertising messages. 93) D

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Owned media refers to promotional messages generated by a company and communicated through its message channel. A brand's product website and Facebook page are examples of owned media. Benefits include high message control, relatively low cost, niche audiences, and versatility in message content and format. 94) B Owned media requires resources to manage and maintain. The challenges for marketing managers include maintaining owned media and making sure customers find their information when it is needed in the buying process. 95) D Paid media refers to promotional messages generated by a brand and communicated through a message channel it pays to access. Paid media has the following disadvantages: not trusted; customers easily avoid; more costly, with declining effectiveness. See Exhibit 16–4. 96) B Paid media has the following advantages: high message control; more precise targeting; potentially large audience. See Exhibit 16–4. 97) B Earned media creates challenges for a brand. The influential message sources are out of a marketing manager's control. 98) C Earned media is the most-trusted information source, and customers are most likely to act on this information. It has the following disadvantages: difficult to measure; difficult to create; difficult to target; very little message control; can be negative toward brand. See Exhibit 16–4.

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99) A The Internet facilitates consumer search and pass-along behaviors that facilitate the use of earned, owned, and social media. 100) D Marketing managers need to make sure that when target customers search online, material useful to them is found. Most customers use a search engine such as Google, Bing, or Yahoo, and most favor the organic search results rather than the paid ads at the side (or top) of the search. 101) E Search engine optimization (SEO) is the process of designing a website so that it ranks high in a search engine's unpaid results. 102) C According to Jonah Berger, there are certain characteristics of an idea or message that make it contagious. He suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. Social currency occurs when the sharer looks good by sharing. 103) A According to Jonah Berger, there are certain characteristics of an idea or message that make it contagious. He suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. Social currency occurs when the sharer looks good by sharing. 104) E

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According to Jonah Berger, there are certain characteristics of an idea or message that make it contagious. He suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. Triggers make a topic easy to remember and encourage others to talk about it. 105) D Jonah Berger suggests six STEPPS—Social currency, Triggers, Emotion, Public, Practical value, and Stories—to increase pass-along. When a product's features are noticeably public, they spread more quickly. When Apple introduced the iPod, most other devices' headphones were black with black cords. Apple's white headphones stood out. 106) E Pass-along occurs when one customer passes information on to one or more other customers. 107) C Pass-along occurs when one customer passes information on to one or more other customers. 108) A When customers spread a message far and wide, it's called viral promotion, and it is the ultimate in pass-along. 109) B When customers quickly spread a message far and wide, it's called viral promotion. 110) C

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Branded services are valued services a brand provides that are not directly connected to a core product offering. Branded services are designed to share a message—typically that the brand cares about its customers by offering them some free service. This helps customers perceive a company or brand as caring about the customers’ welfare. 111) A Branded services are valued services a brand provides that are not directly connected to a core product offering. Branded services are designed to share a message—typically that the brand cares about its customers by offering them some free service. If the promotion objective is to develop a desired positioning, branded services would be the best type of publicity. 112) A Educational web pages are useful in building awareness, educating and informing customers, and fostering customer trust. See Exhibit 16–5. 113) D Branded apps support brand positioning. Their practical value is that theycan motivate pass-along. See Exhibit 16–5. 114) E White papers and case studies have the following typical promotion objectives: build awareness, educate and inform customers, build reputation as thought leader, and foster customer trust. See Exhibit 16–5. 115) D Customers typically discover blogs through pass-along from friends' content on social media, while searching for ideas, information, or solutions to problems, or by monitoring a blog that they previously found valuable. See Exhibit 16–5.

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116) D Case studies are success stories about how a company helped a customer in addressing an important issue. When a company includes "stories" and/or videos on its website of how it has helped individual customers solve an important problem, they are known as case studies. 117) C A brand community is a group of customers joined around a particular brand or common set of shared interests. Intuit's website is an example of an online community where business customers can interact and share ideas. 118) C A white paper is an authoritative report or guide that addresses important issues in an industry and offers solutions. 119) A E-books and white papers are most successful when, in addition to describing a problem, they help the customer solve the problem without promoting a particular company's products. An objective tone helps the provider build trust and credibility with potential customers. 120) A A white paper is an authoritative report or guide that addresses important issues in an industry and offers solutions. 121) D Case studies are success stories about how a company helped another customer. 122) A A landing page is a customized web page that logically follows from clicking on an organic search result, online advertisement, or other link. Version 1

123) D The goal of a landing page is to move customers along in the purchase process. Customers can easily click away from a web page. A landing page that directly addresses a customer's needs minimizes click-away. 124) A The goal of a landing page is to move customers along in the purchase process. Customers can easily click away from a web page. A landing page that directly addresses a customer's needs minimizes click-away. 125) D Case studies are success stories about how a company helped a customer in addressing an important issue. 126) B A blog is a regularly updated website, usually managed by one person or a small group and written in an informal, conversational style. Many companies use blogs as a way to regularly communicate with customers. A blog allows a company or individual to get their ideas out to interested target customers. 127) E Infographic refers toa visual image such as a chart or diagram used to represent information or data. 128) D Branded apps are sponsored software applications that benefit customers by providing entertainment, solving a problem, and/or saving time. 129) B Branded apps are sponsored software applications that benefit customers by providing entertainment, solving a problem, and/or saving time. 130) A Version 1

Branded apps are sponsored software applications that benefit customers by providing entertainment, solving a problem, and/or saving time. 131) C An infographic is a visual image such as a chart or diagram used to represent information or data. 132) B A brand community is a group of customers joined around a particular brand or common set of shared interests. 133) B Email newsletters with useful content can help companies build ongoing relationships that lead to increased purchases. Some companies even develop different email newsletters tailored to specific customer interests. Ethical companies ask customers for permission before sending e-mails and make it easy to unsubscribe from newsletters. 134) E Sometimes a firm's public relations people write the basic copy of an article and then try to convince magazine or newspaper editors to print it. 135) C Identifying influential bloggers that have the attention of target customers can be helpful. 136) E A PR group can develop a press kit, including promotional materials specifically designed for the media. 137) A

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Positive coverage in the press does not usually happen by luck or accident—a good public relations effort often lays the groundwork for companies that get positive attention in the press. 138) A Some companies earn editorial coverage with their goods and services or good works featured in articles, stories, and reviews in magazines, newspapers or on television. This kind of coverage doesn't usually happen by luck or accident—a good public relations effort often lays the groundwork for companies to get positive attention in the press. 139) B Although information from other customers is influential, it is much more difficult to control than the messages a marketing manager crafts for an advertisement, sales promotion, or owned media. 140) A Recommendations from strangers often have a stronger influence on buying decisions than advertising. Research has also found that customers acquired from word-of-mouth promotion are more loyal and have greater lifetime value than customers acquired by other means. 141) D Opinion leaders like to share their views; they also get attention from other customers who respect their views. Marketers value personal recommendations from opinion leaders. 142) A Opinion leaders like to share their views; they also get attention from other customers who respect their views. If early groups reject a product, it may never get off the ground. 143) C Version 1

To help motivate consumers to spread the word, a company called BzzAgent helps marketing managers start conversations. BzzAgent works with about 800,000 agents in the United States, Canada, and the United Kingdom. Agents who sign up to help with a particular campaign receive product samples and information. If they like the product, they are urged to pass the word. 144) E For customers to share their great experiences, they must see doing so as safe, fun, and worthwhile. To encourage word-of mouth companies should (1) offer a great product; (2) give customers a specific story to share; (3) ask customers for recommendations; and (4) make website content easily shareable. 145) B For customers to share their great experiences, some organizations offer easily shareable content on their social media sites and make it easy for customers to click and share information. Social media sharing "buttons" can be placed next to online content to facilitate pass-along. 146) B Companies shouldn't be afraid to ask for recommendations. It doesn't hurt to come out and ask satisfied customers to leave reviews or tell their friends. 147) D A referral program offers a current customer an incentive for recommending a new customer to a business. 148) B

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Referral programs are often used by online companies because of the simplicity and low cost of giving and receiving referrals over the Internet. It is also easy for a company to experiment with different levels of compensation and find the offers that work best. 149) E Most customers are reluctant to recommend products—even when they do have a great experience. All the given answers are reasons a customer may be reluctant. 150) A Social media refers to websites or software applications that allow users to create and share ideas, information, photos and videos, and interact in a social network. Examples of social media include Facebook, Twitter, Instagram, Pinterest, Snapchat, YouTube, and LinkedIn. 151) B Traditional media include television, magazines, radio, and so on. Examples of social media include Facebook, Twitter, Instagram, Pinterest, and LinkedIn. 152) C Examples of social media include Facebook, Twitter, Instagram, Pinterest, Snapchat, YouTube, and LinkedIn. About 7 in 10 Americans are on at least one social media platform. 153) D On Facebook, a seller can choose to run a "sponsored message" (paid media) on the site. The same seller might also create a Facebook page (owned media) that allows a brand's fans to “Like” the page and keep up with messages it sends out. When a customer clicks "Like" on a brand page or writes something on that brand's wall, the customer's friends see it (earned media). Version 1

154) A On Facebook, a seller can choose to run a "sponsored message" (paid media) on the site. The same seller might also create a Facebook page (owned media) that allows a brand's fans to “Like” the page and keep up with messages it sends out. When a customer clicks "Like" on a brand page or writes something on that brand's wall, the customer's friends see it (earned media). 155) B Most social media have no direct media cost, but that doesn’t mean use of the social media platforms is free. Social media offer a many-to-many model of communication. 156) A Advertising is a one-to-many model of communication: a brand sends a message to many customers at once. Social media operate in a different way, using a many-to-many model of communication. 157) A Most social media have no direct media costs, but that doesn't mean that the use of social media platforms is free. A company needs to hire staff or an agency to manage its presence on social media. 158) A YouTube is used by more online Americans (73 percent of U.S. adults) than any other social media. 159) A YouTube is a video-sharing website where users upload, view, rate, share, create playlists, and comment on videos. 160) A

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Although YouTube is used by more online Americans than any other social media, it is checked less frequently than most other social media—with 51 percent of users checking it at least daily. 161) A YouTube is video-sharing website that is often used to demonstrate products and keep customers informed. While the other social media platforms might be used for this purpose, YouTube would be the best choice. 162) D In the United States, 69 percent of the adult population uses Facebook. 163) D Facebook has the highest global usage of all the social media listed. See Exhibit 16–6. 164) E Facebook has an algorithm that decides what content is placed in the user's newsfeed. 165) E Twitter is a social networking microblogging service that allows registered users to send out short messages called "tweets." 166) C The demographics of the average Twitter user skew young, with 42 percent of the U.S. adult population aged 18 to 24 using Twitter but only 7 percent of those over 65 doing so. Tweets tend to be more frequent and less personal than Facebook posts. 167) B

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Twitter operates like a public message board, with most tweets available for anyone (even people not signed up for Twitter) to see. Among active users, tweets tend to be more frequent and less personal than Facebook posts. 168) E Instagram is a free online photo and video-sharing service geared to mobile phones. Photos and videos can be taken with the Instagram app and shared on other social networking sites including Facebook, Twitter, and Tumblr. 169) B Instagram is a free online photo- and video-sharing service geared to mobile phones. Photos and videos can be taken with the Instagram app and shared on other social networking sites including Facebook, Twitter, and Tumblr. 170) E See Exhibit 16–6. Among those aged 65 and above, just 3 percent used Snapchat. Users 65 and older are also less likely to use Twitter (7 percent) and Instagram (8 percent). 171) D Instagram works well for many small businesses, where an owner or part-time marketing manager may find it less time consuming to take and post pictures than write stories or posts. Instagram's users skew young. 172) A Instagram is a free online photo and video-sharing service geared to mobile phones. Photos and videos can be taken with the Instagram app and shared on other social networking sites including Facebook, Twitter, and Tumblr. Version 1

173) E Pinterest is a website that allows registered users to share ideas and images they find online with fellow users. The ideas and images are organized into pinboards (a kind of online bulletin board). 174) A In the United States, Pinterest users are mostly female (42 percent), white, and generally have a higher income. Although the site is most frequently used by younger people, it maintains appeal for some in older age groups. 175) A Pinterest is a website that allows registered users to share ideas and images they find online with fellow users. The ideas and images are organized into pinboards. Users create boards around a wide range of topics that work well with images, including art, fashion, travel, and home décor. 176) D LinkedIn is a social networking website for businesspeople who create personal or company profiles. 177) E Businesspeople used to think of LinkedIn as a place to network for jobs. Now many companies and salespeople use LinkedIn to communicate with customers. 178) B See Exhibit 16–6. In Twitter, customers can "Follow," "Tweet," "Retweet," and comment to demonstrate support. 179) A

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LinkedIn is a social networking website for businesspeople who create personal or company profiles. Businesspeople used to think of LinkedIn as a place to network for jobs. Now many companies and salespeople use LinkedIn as part of their marketing strategy. 180) A LinkedIn has 17 percent of users in the 18–24 age group. 181) C According to Exhibit 16–6, 70 percent of those aged 50–64 use YouTube, followed closely by Facebook at 68 percent. 182) A Tumblr is a microblogging site that makes it easy for users to share all types of media from browser, phone, desktop, or email. Very young (18– 24) and older (over 65) individuals are least likely to have a LinkedIn page. Snapchat is a photo/video-sharing app popular with Gen Z. Houzz is a site with more than six million photos of different home remodeling projects. Qzone is popular in China. 183) E See Exhibit 16–7, which lists examples of All of the types of content. 184) B See Exhibit 16–7. In the UK, when Domino's pizza reduced the price of pizza based on how many people tweeted in time for lunch, the type of content involved was deals and discounts. 185) D See Exhibit 16–7. "Product launches and updates" includes an example of a retailer showing it latest fashions on Twitter. This is the same type of content NewLine is delivering. 186) E Version 1

See Exhibit 16–7. Whole Foods has different boards with topics ranging from baking to gardening on Pinterest. This type of content is categorized as "useful ideas, information, and practices." 187) C See Exhibit 16–7. When Madonna launched a new song on Snapchat to target its younger user base, the type of content involved was "product launches and updates." 188) A Promotion objectives for social media usually focus on (a) enhancing brand familiarity by growing the number of customers that prefer or insist on a brand or (b) growing customer equity by encouraging customers to increase their purchases. 189) A Snapchat is a mobile app and service for sharing photos, videos, and texts with other people. The site clearly skews young with 73 percent of those 18–24 using it. 190) A Snapchat is an app designed for mobile users that is used for sharing photos, videos, and texts. Shared photos can be enhanced with visual effects, stickers, and filters that are sometimes brand sponsored. The site clearly skews young with 73 percent of those age 18–24 using it. 191) A While Snapchat started as a photo messaging service, it continues work on adding features to make its service more friendly to marketers. The site claims almost 300 million accounts worldwide—with 73 percent of its users under age 25. Snapchat continues to experiment with ways to reach these young users with commercial content.

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192) A Promotional efforts utilizing social media are best focused on increasing target customers' purchase likelihood. 193) A Social media work best when the target market is already a customer, because customers generally follow brands that they already know and like. 194) D Marketing automation software tracks individual customer's behavior and triggers actions in response to specific customer actions. 195) A Hootsuite is a dashboard that offers marketing managers the ability to submit messages to Facebook, Twitter, LinkedIn, and other social media on a scheduled basis. The posts can be scheduled weeks or months in advance. Hootsuite and other software can also collect and analyze data from various social media. 196) B Hootsuite is a dashboard that offers marketing managers the ability to submit messages to Facebook, Twitter, LinkedIn, and other social media on a scheduled basis. Hootsuite and other software can also collect and analyze data from various social media. 197) A Hootsuite and other software can also collect and analyze data from various social media. 198) A Marketing automation software track(s) individual customers' behavior and triggers actions in response to specific customer actions. Version 1

199) A Marketing automation software can detect that a customer has left items in an online cart and send them an email to remind them of the purchase. Sometimes the email may even include an offer for free shipping or a discount. 200) A A bounce rate is the percentage of visitors who only visit a single page on a website. 201) A The bounce rate is the percentage of visitors who only visit a single page on a website. A high bounce rate indicates customers are not interested enough to click on other page links.

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CHAPTER 17 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Pricing decisions affect both the number of sales a firm makes and how much money it earns. ⊚ ⊚

Price plays an indirect role in shaping customer value. ⊚ ⊚

true false

Defining price in real-life situations is easy because price reflects many dimensions. ⊚ ⊚

true false

4) Almost every business transaction in our modern economy involves an exchange of money. ⊚ ⊚

The price paid by students to colleges is called tuition. ⊚ ⊚

true false

A lawyer's advice does not have a price. ⊚ ⊚

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true false

7) Any business transaction can be thought of as an exchange of "something" of value for money—where money is the price. ⊚ ⊚

Pricing objectives and policies should flow from company-level objectives. ⊚ ⊚

true false

Pricing objectives need not be explicitly stated. ⊚ ⊚

true false

10) A target return pricing objective seeks to obtain a specific level of profit, which is often stated as a percentage of sales or return on investment. ⊚ ⊚

true false

11) A target return pricing objective has administrative advantages in a large company where there are many divisions to compare. ⊚ ⊚

12) zero.

true false

Many nonprofit organizations try to set a price level that will earn a target return figure of ⊚ ⊚

true false

13) The target return figure is zero for an organization that sets a price level that will just recover costs.

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⊚ ⊚

true false

14) The target return objective and profit maximization objective are both profit-oriented objectives. ⊚ ⊚

15)

A profit maximization pricing objective doesn’t always lead to high prices. ⊚ ⊚

16)

true false

Pricing to achieve profit maximization always leads to high prices. ⊚ ⊚

true false

17) Profit maximization objectives lead to high prices and monopolies and are generally not in the public interest. ⊚ ⊚

18)

true false

A benefit corporation makes all decisions based on the interests of its shareholders. ⊚ ⊚

true false

19) A firm with B Corporation status has been certified to meet a high standard of social and environmental performance. ⊚ ⊚

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true false

20)

Sales-oriented pricing objectives always refer to profit. ⊚ ⊚

true false

21) A sales-oriented pricing objective seeks some level of unit sales, dollar sales, or share of market—without referring to profit. ⊚ ⊚

true false

22) Sales-oriented pricing objectives are sensible because sales growth almost guarantees higher profits. ⊚ ⊚

23)

true false

A firm should not simply assume that its profits will grow if its sales grow. ⊚ ⊚

true false

24) A marketing manager who sets prices to achieve a given level of market share is using a profit-oriented pricing objective. ⊚ ⊚

true false

25) Sales-oriented pricing objectives—such as maintaining or increasing market share—are unpopular because it is so difficult to measure results. ⊚ ⊚

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true false

26) Managers satisfied with their current market share and profits are most likely to adopt sales-growth-oriented objectives. ⊚ ⊚

27)

true false

"Meeting competition" is a sales-oriented pricing objective. ⊚ ⊚

true false

28) Status quo pricing objectives might focus on meeting competition, avoiding competition, or stabilizing prices. ⊚ ⊚

29)

true false

Meeting competition and nonprice competition are both status quo objectives. ⊚ ⊚

true false

30) Status quo pricing objectives suggest avoiding Price competition but may lead to very aggressive competition with Promotion, Place, or Product. ⊚ ⊚

true false

31) Nonprice competition, a status quo pricing objective, is never part of an aggressive overall marketing strategy. ⊚ ⊚

32)

true false

Administered prices are prices agreed to by competing firms in a market.

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⊚ ⊚

true false

33) When a firm sells through intermediaries, there is little reason to try to administer the price intermediaries charge final consumers. ⊚ ⊚

true false

34) Most firms in the United States avoid using a one-price policy because it is so inconvenient to administer and leads to more negotiation and higher selling costs. ⊚ ⊚

35)

The majority of U.S. firms use a one-price policy. ⊚ ⊚

36)

true false

In less-developed economies, retail shopkeepers typically use a one-price policy. ⊚ ⊚

true false

37) Flexible-price policies are most common in the channels, in direct sales to business customers, and for expensive shopping products, because sales reps may need to make adjustments for market conditions. ⊚ ⊚

true false

38) Flexible pricing is most common in the channels, in direct sales of business products, and at retail for expensive shopping products.

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⊚ ⊚

true false

39) A flexible-price policy is most often used where products are not standardized and where bargaining is common. ⊚ ⊚

true false

40) The haggling that often occurs when a consumer buys a new car is a direct result of the flexible pricing most auto dealers use. ⊚ ⊚

41)

true false

Flexible-price policies are illegal in the United States. ⊚ ⊚

true false

42) A skimming price policy tries to sell to customers who are at the top of the demand curve first, before aiming for more price-sensitive customers. ⊚ ⊚

true false

43) In the market introduction stage of the product life cycle, if a firm has economies of scale and expects competitors to enter the market soon, it would be wise to adopt a skimming price policy. ⊚ ⊚

44)

true false

A skimming price policy often involves a slow reduction in price over time.

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⊚ ⊚

45)

true false

A skimming policy does not involve price reduction over time. ⊚ ⊚

true false

46) If a firm's demand curve is fairly elastic, a penetration pricing policy would be more suitable than a skimming price policy. ⊚ ⊚

47)

true false

A low penetration price discourages competitors from entering the market. ⊚ ⊚

true false

48) Penetration pricing may be wise if the firm expects strong competition very soon after introduction. ⊚ ⊚

true false

49) Introductory price dealing means setting a low "penetration" price early in the product life cycle to discourage competitors from entering the market. ⊚ ⊚

true false

50) In mature markets, there is downward pressure on both prices and profit margins. In this situation, retailers often have to set prices to meet the competition. ⊚ ⊚

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true false

51) In the sales decline stage, prices and costs tend to decline, so many firms back off on Promotion in order to maintain margins. ⊚ ⊚

52)

Basic list prices are the prices that final consumers or users are normally asked to pay. ⊚ ⊚

53)

true false

Quantity discounts encourage customers to buy in larger amounts. ⊚ ⊚

54)

true false

There are two kinds of quantity discounts: cumulative and accumulative. ⊚ ⊚

true false

55) Cumulative quantity discounts encourage repeat buying from the same seller, while noncumulative quantity discounts encourage large individual orders. ⊚ ⊚

true false

56) Noncumulative quantity discounts are intended to encourage customers to make more of their ongoing purchases from the same seller. ⊚ ⊚

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true false

57) A seasonal discount encourages buyers to stock products earlier than present demand requires. ⊚ ⊚

true false

58) Seasonal discounts tend to smooth out sales during the year and therefore permit yearround operation. ⊚ ⊚

true false

59) A discount of 2/10, net 30 means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days. ⊚ ⊚

true false

60) The term "3/10, net 30" means that 30 percent of the face value of the invoice is due immediately, and that the rest must be paid within 30 days. ⊚ ⊚

true false

61) The term "3/10, net 30" means that a 3 percent discount off the face value of the invoice is allowed if the invoice is paid within 10 days, and that otherwise the full face value is due within 30 days. ⊚ ⊚

true false

62) Not taking advantage of cash discounts may have the same effect as paying a fairly large "interest charge." ⊚ ⊚

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true false

63) Allowances are given to final consumers, business customers, or channel members for accepting more of something. ⊚ ⊚

true false

64) Many intermediaries seek advertising allowances from manufacturers to help them pay the cost of advertising the products they sell. ⊚ ⊚

65)

true false

Stocking allowances are given to an intermediary to get shelf space for a product. ⊚ ⊚

true false

66) Trade-in allowances, sometimes called PMs or spiffs, are given to retailers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items. ⊚ ⊚

true false

67) Push money allowances are intended to make the retailers' salespeople sell particular products very aggressively. ⊚ ⊚

68)

true false

An installment involves a single transaction. ⊚ ⊚

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true false

69)

A lease requires a consumer to pay a monthly fee over a specified time period. ⊚ ⊚

70)

Rebates are refunds paid to consumers after a purchase. ⊚ ⊚

71)

true false

By presenting a coupon to a retailer, the consumer is given a reduction to the list price. ⊚ ⊚

72)

true false

Mobile payments are more common in developing countries than in the United States. ⊚ ⊚

true false

73) Free shipping at certain purchase levels is often used by online retailers to encourage customers to buy more. ⊚ ⊚

74)

Value pricing involves developing a "bare-bones" marketing mix and a cheap price. ⊚ ⊚

75)

true false

There are more pricing options in pure competition than in monopolistic competition. ⊚ ⊚

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true false

76) Value pricing means setting a fair price level for a marketing mix that gives the target market superior customer value. ⊚ ⊚

77)

true false

Most firms operate in monopolistic competition instead of pure competition. ⊚ ⊚

true false

78) Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same. ⊚ ⊚

true false

79) A value pricer tries to offer a target market the same marketing mix as competitors but with a below-the-market price. ⊚ ⊚

80)

true false

Charging a lower price for a competing product may actually hinder sales of that product. ⊚ ⊚

true false

81) The unfair trade practices acts are intended to prevent intermediaries from using "outrageously" high markups that would cheat consumers. ⊚ ⊚

true false

82) Unfair trade practice acts put a higher limit on prices, especially at the wholesale and retail levels.

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⊚ ⊚

true false

83) In states that have unfair trade practice acts, wholesalers and retailers are usually required to mark up merchandise a certain minimum percentage above cost. ⊚ ⊚

true false

84) Pricing a product sold in a foreign market lower than the cost of producing it is called dumping. ⊚ ⊚

true false

85) Pricing a product sold in a foreign market higher than in its domestic market is referred to as dumping. ⊚ ⊚

true false

86) Unfortunately, no laws prevent a retailer from using a phony list price to make a consumer think that the price being charged offers a really big discount. ⊚ ⊚

87)

Price fixing is not illegal unless it hurts a competitor. ⊚ ⊚

88)

true false

Price fixing is illegal under all circumstances in the United States. ⊚ ⊚

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true false

89)

Price discrimination is illegal according to the provisions of the Robinson-Patman Act. ⊚ ⊚

true false

90) In the Borden case, the U.S. Supreme Court ruled that a well-known label alone makes a product different from a physically similar product with an unknown label. ⊚ ⊚

true false

91) It is always illegal to sell the same products to different buyers at different prices, even if the price differences are based on cost differences. ⊚ ⊚

true false

92) "Meeting competition in good faith" is allowed as a defense in price discrimination situations. ⊚ ⊚

true false

93) Under the Robinson-Patman Act, meeting a competitor's price is not permitted as a defense in price discrimination cases. ⊚ ⊚

true false

94) The Robinson-Patman Act permits promotion allowances only if they are made available to all customers on "proportionately equal" terms. ⊚ ⊚

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true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 95) Strategy planning for Price is concerned with A) to whom and when discounts and allowances will be given. B) how temporary price reductions, financing, and transportation costs influence customer behavior. C) how flexible prices will be. D) at what level prices will be set over the product life cycle. E) All of the answers are correct.

96) ________ is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix. A) Promotion B) Price C) Product D) Past E) Profit

97)

Almost any business transaction in a modern economy involves A) an exchange at a list price. B) "dumping." C) an exchange of money—the Price—for something of value. D) a loss of consumer surplus. E) an exchange in which price serves as a measure of quality.

98)

Which of the following is an example of a price?

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A) college tuition B) doctor's fee C) apartment rent D) interest on a loan E) All of the answers are correct.

99) Which of the following is not "something of value" that might be offered to final consumers in the price equation? A) stocking allowance B) service C) repair facilities D) psychic benefit E) packaging

100) Which of the following is "something of value" that might be offered to final consumers as part of the price equation? A) sufficient margin to allow for profit B) push money C) competitive advantage D) a warranty E) None of the answers are correct.

101) Which of the following is/are least likely to be in the "something of value" part of the price equation for channel members? A) service-repair facilities B) rebates C) price-level guarantees D) promotion aimed at end-user customers E) convenient packaging for handling

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102)

Why should pricing objectives be explicitly stated? A) They have a direct effect on pricing policies and the methods used to set the price. B) Explicitly stating these objectives provides direction for company-level objectives. C) Explicitly stating objectives provides legal protection for the firm. D) Most state laws require explicitly stating legal objectives. E) Firms should always choose profit-oriented pricing objectives.

103)

Pricing objectives should flow from, and fit in with, A) shareholder expectations and market practices. B) regulatory policies. C) industry standards. D) company-level and marketing objectives. E) market price leader actions.

104)

Pricing objectives should be explicitly stated because A) they have a direct effect on pricing policies as well as price-setting methods. B) they are signals given to competing firms. C) they form the basis of shareholder expectations about a firm's prospects. D) it is required by law. E) they are signals given to consumers.

105)

A marketing manager may choose a pricing objective that is A) sales-oriented. B) status quo–oriented. C) profit-oriented. D) any of these—depending on the situation.

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106) Focus on a target return and/or return on investment is characteristic of ________ pricing objectives. A) profit-oriented B) sales-oriented C) status quo–oriented D) purchase-oriented E) market share–oriented

107)

A pricing objective that seeks a specific level of profit is a A) profit maximization objective. B) value objective. C) sales-oriented objective. D) target return objective. E) status quo objective

108) Which of the following pricing objectives is a producer seeking when the producer tries to obtain some percent return on his investment? A) status quo B) meeting competition C) profit maximization D) target return E) growth in market share

109)

Which of the following is a profit-oriented pricing objective?

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A) meeting competition B) sales growth C) target return D) nonprice competition E) growth in market share

110) Fidelity Corp. earned a 6 percent return on investment last year and wants to increase it to 10 percent this year. Which of the following pricing objectives is Fidelity seeking? A) target return B) growth in sales C) growth in market share D) maximize profits E) nonprice competition

111)

Target return pricing objectives

A) are usually very high for firms facing heavy competition. B) aren't used by industry leaders because they can maximize profits. C) would never make sense for a nonprofit organization. D) may simplify the management of large producers with many divisions or departments. E) All of the answers are correct.

112)

What is the objective of a target return strategy? A) a specific share of the market B) a specific level of profit C) a specific sales volume D) a specific share of competitors' sales E) a specific mindshare of consumers

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113) KeyLine, Inc., engages primarily in the manufacture of touch-sensitive LCD monitors. The company prices its products so that it earns a 20 percent return on investment. Which pricing objective is the company following? A) meet competition B) unit sales growth C) nonprice competition D) target return E) share of market

114) A manufacturer spends a large amount of money on research and development, leading to the introduction of a product that is likely to present the firm with a breakthrough opportunity. The manufacturer prices the product with the goal of achieving a 20 percent return on its investment. Which of the following types of pricing objectives is the company using? A) target return B) profit maximization C) nonprice competition D) meeting competition E) dollar or unit sales growth

115)

A target return figure of zero implies A) setting negligible sales targets. B) setting a price level that will just recover costs. C) setting a price that helps attain previous year's high profitability. D) setting a price that would match the industry standard profit margin. E) setting a price at which competition will be zero.

116) A government agency charges motorists a toll for using a bridge. The toll is dropped when the cost of the bridge is paid. In other words, the government's target return figure was

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A) 20 percent. B) one. C) 10 percent. D) 100 percent. E) zero.

117) Some top managers seek only enough profits to convince stockholders that they are "doing a good job." The pricing objective of such managers is A) satisfactory profits. B) the status quo. C) nonprice competition. D) profit maximization. E) meeting competition.

118) Faced with the threat of antitrust action, stockholder demands, and public interest groups, some large corporations set a(n) ________ pricing objective. A) increasing target return B) "aggressive" competition C) profit maximization D) increasing market share E) satisfactory long-run target return

119)

An "all the traffic will bear" pricing objective is known as a ________ objective. A) target return B) profit maximization C) growth in market share D) meeting competition E) nonprice competition

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120)

Profit maximization pricing objectives A) almost always lead to high prices. B) are generally not in the public interest. C) seek to get as much profit as possible. D) may be stated as a desire to achieve rapid sales growth. E) All of the answers are correct.

121)

A profit maximization pricing objective A) is a sales-oriented pricing objective. B) does not always lead to high prices. C) can never be socially responsible. D) is often stated as percentage of market share. E) is a status quo–oriented pricing objective.

122) Genetech Corp. has invested heavily to develop a patented new product. Genetech wants to achieve a rapid return on its investment. It probably should set a ________ pricing objective. A) profit maximization B) target return C) sales-oriented D) status quo E) nonprice

123) ProEdge Tech, a leading technology firm, has bluntly stated its pricing objective as: "Charge all the traffic will bear." This is an example of a

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A) profit maximization objective. B) unit sales growth objective. C) growth in market share objective. D) target return objective. E) nonprice competition objective.

124) Which of the following refers to a legal corporate structure that allows for goals that may include positive impacts on society, employees, the community, and the environment? A) benefit corporation B) C-corporation C) nonprofit corporation D) S-corporation E) limited liability company

125)

In a benefit corporation, decisions A) may consider the interests of multiple stakeholders. B) are made solely in the shareholders’ interest. C) are always made with maximum profit in mind. D) are dictated by the government. E) may not be made with consideration of profit.

126)

A B Corp certification demonstrates that a company A) meets a high standard for social and environmental performance. B) focuses solely on shareholder interests. C) is nonprofit in nature. D) meets the industry standard for-profit margin. E) outperforms its rivals on the standard financial indices.

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127)

B Corps are ______ driven. A) mission B) profit C) publicity D) shareholder E) target return

128)

When a B Corp makes decisions, with whom does it have in mind? A) employees B) communities C) the environment D) customers E) All of these answers are correct.

129)

Which of the following best defines the goal of a sales-oriented pricing objective? A) increasing the target return on a product B) gaining the maximum profit on a product C) increasing the market share of a product D) stabilizing prices across different markets for a product E) gaining a greater return on the investment in a product

130)

Which of the following is a sales-oriented pricing objective? A) growth in market share B) target return C) nonprice competition D) satisfactory profits E) meeting competition

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131) A firm that is very concerned about increases in market share should adopt a ________ pricing objective. A) profit-oriented B) sales-oriented C) nonprice competition D) status quo E) target return

132)

Which of the following is a sales-oriented pricing objective? A) meet competition B) market share growth C) profit maximization D) target return E) nonprice competition

133)

A sales-oriented objective may seek all of the following except A) some level of unit sales. B) some level of dollar sales. C) target return profits. D) a share of the market. E) a percentage of the market.

134)

Sales-oriented pricing objectives include

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A) growth in unit sales, dollar sales, or share of market. B) meeting competition. C) a target return. D) profit maximization. E) None of the answers are correct.

135)

Sales-oriented pricing objectives A) may include market share targets as well as dollar or unit sales targets. B) might be achieved and still result in losses. C) are especially risky during times when a firm's costs are rising rapidly. D) can be used by nonprofit organizations as well as for-profit ones. E) All of the answers are correct.

136)

Sales-oriented objectives stated in market share terms A) make some sense when a market is growing rapidly. B) use market share targets instead of dollar or unit sales targets. C) might be achieved and still result in losses for the firm. D) may lead to greater economies of scale for the firm than for its competitors. E) All of the answers are correct.

137)

Some nonprofit organizations set prices to increase market share because A) it is a regulatory requirement. B) they would never do any business otherwise. C) they are trying improve their image. D) they wish to monopolize the market. E) they are not trying to earn a profit.

138)

Which of the following observations is true?

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A) Market share objectives and straight sales growth objectives have similar limitations. B) A larger market share, gained at whatever price, leads to sustainable competitive advantage. C) Market share objectives are not popular among modern managers. D) Sales growth essentially means bigger profits. E) A sales-oriented objective does not refer to profit.

139)

The problem with sales-oriented pricing objectives is that A) many managers are evaluated by their level of sales. B) larger sales don't necessarily lead to higher profits. C) the number of units sold does not consider possible growth in the market. D) sales growth usually leads to declining profits. E) None of the answers are correct.

140) Heritage Brick's marketing manager is setting her pricing policies to "increase market share to 8 percent." Her pricing objective seems to be A) status quo–oriented. B) sales-oriented. C) profit-oriented. D) target return–oriented. E) nonprice competition.

141) Organizations that intend to keep their prices fixed, as they are content with their market share and profits, will most likely adopt a ________ pricing objective. A) profit-oriented B) monetary gain–oriented C) sales-oriented D) target return-oriented E) status quo–oriented

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142)

Regarding pricing objectives, a good marketing manager knows that

A) sales-oriented objectives usually lead to high profits. B) target return objectives usually lead to a large profit. C) status quo pricing objectives can be part of an extremely aggressive marketing strategy. D) profit maximization objectives always lead to high prices. E) None of the answers are correct.

143)

Which of the following is a status quo pricing objective? A) growth in sales B) maximize profits C) growth in market share D) satisfactory profits E) meeting competition

144)

Which of the following is a status quo–oriented pricing objective? A) target return B) unit sales growth C) profit maximization D) growth in market share E) nonprice competition

145) Which of the following statements is most likely to be made by a manager with a status quo pricing objective?

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A) "A price of $10.00 will penetrate the market." B) "A price of $10.00 will not start a price war with our competitors." C) "A price of $10.00 should maximize profits." D) "A price of $10.00 will provide a 30 percent return on investment." E) "A price of $10.00 should result in a 9 percent increase in sales."

146) Managers satisfied with their current market share and profits sometimes adopt what can be thought of as "don't-rock-the-pricing-boat objectives." These are also referred to as A) market share maximization objectives. B) profit maximization objectives. C) status quo objectives. D) sales-oriented objectives. E) target return objectives.

147)

"Don't-rock-the-boat" thinking is most common when A) a product is in the introduction stage. B) the total market is not growing. C) there is threat of intense competition. D) a firm moves into international markets for the first time. E) a product is in the growth stage.

148)

Managers justify status quo objectives as an attempt to do all of the following except A) stabilize prices. B) meet competition. C) maximize profits. D) avoid competition. E) stabilize the market situation.

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149) At Travelocity's website, visitors are likely to find several airlines that have the identical same-day price for a flight from Atlanta to San Francisco. What pricing objective are these airlines pursuing? A) status quo B) price flexibility C) quantity discount D) introductory price deal E) bundling

150) Faced with many "me-too" competitors, Sonic Burgers, Inc. has set its price level to "meet competition" while emphasizing nonprice competition. Sonic Burgers' pricing objective seems to be a ________ objective. A) status quo B) sales-oriented C) profit-oriented D) satisfactory profits E) maintaining market share

151) Godiva, a maker of expensive European chocolates, does not mention price in its magazine advertising. Instead, the ad copy mentions the quality of the ingredients, the fine packaging, and the luxurious boutiques where Godiva chocolates are sold. Godiva seems to be pursuing a pricing objective of A) meeting competition. B) nonprice competition. C) target return. D) growth in market share. E) None of the answers are correct.

152) Mercedes, the European luxury car-maker, does not mention price in its magazine advertising. Instead, the ad copy focuses on the quality and performance of the Mercedes product line. What pricing objective is Mercedes pursuing? Version 1

A) sales-oriented B) price flexibility C) nonprice competition D) introductory price deal E) bundling

153)

Prices are called "administered" when A) they are determined through negotiations between buyers and sellers. B) they fall below the "suggested list price." C) a marketing manager has to change the strategy every time a customer asks about the

price. D) government intervenes to ensure that prices fluctuate freely in response to market forces. E) firms set their own prices for some period of time rather than letting daily market forces determine their prices.

154) When individual firms set their own prices—sometimes holding them steady for long periods of time—rather than letting daily market forces determine prices, such prices are called A) flexible prices. B) parallel prices. C) equilibrium prices. D) administered prices. E) fixed prices.

155)

With regard to price, managers should

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A) consider only a single price dimension. B) rarely have a choice in pricing. C) administer the price from intermediaries and the price final customers pay. D) simply mark up their costs to determine pricing. E) follow a price leader's strategy.

156)

A one-price policy means

A) offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. B) never using temporary sales or rebates. C) selling to different customers at different prices. D) setting a price at the "right" level from the start and never changing it. E) None of the answers are correct.

157)

A one-price policy means

A) offering the same price on all products irrespective of the manufacturing, designing, and marketing costs. B) offering the same price to all customers who purchase products under the same conditions and in the same quantities. C) offering the same price to customers, but the price depends on the store that is selling the product. D) offering the same price to distributors, retailers, and customers. E) equating price with the per-unit cost of production.

158) Offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities is a ________ policy.

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A) penetration pricing B) one-price C) value pricing D) flexible-price E) skimming price

159)

A one-price policy means offering the same price A) all four seasons of the year. B) for all types of merchandise. C) for individual consumers and organizational buyers. D) for store brands and national brands. E) to all customers.

160) A ________ policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. A) one-price B) flexible price C) skimming price D) differentiated E) penetration price

161)

The majority of U.S. firms use a one-price policy A) to broadcast a single price to competitors. B) for administrative convenience. C) to increase pricing flexibility. D) to undercut competition. E) to ward off competition from imports.

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162) The Bijou Classic Movie House changes ticket prices as demand for a movie increases or decreases. Prices can change every hour as ticket sales go up or down for particular shows. Bijou Classic Movie House appears to be using A) penetration pricing. B) dynamic pricing. C) cumulative discounting. D) seasonal discounts. E) status quo objectives.

163)

Which of the following is a disadvantage of flexible pricing?

A) It allows a salesperson to adjust the price in response to competition. B) It leaves opportunities for sales by not adjusting to customers. C) It allows a salesperson to adjust the price depending on his or her customer. D) It can cause discontent among customers who realize they have paid a higher price than others. E) It results in broadcasting a price that the competition can undercut.

164)

A flexible-price policy means offering A) different products and quantities to different customers at different prices. B) the same product and quantities to different customers at the same prices. C) different products and quantities to different customers at the same prices. D) the same product and quantities to different customers at different prices. E) the same product and different quantities to different customers at the same prices.

165) A business products producer that has given its salespeople the right to adjust prices when necessary to get new business is using a ________ policy.

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A) flexible-price B) target-return pricing C) penetration pricing D) one-price E) skimming price

166) The marketing manager for Aerial Photography, Inc. says his sales reps have gotten in the habit of setting prices that do not produce a profit. Aerial Photography is apparently using A) penetration pricing. B) introductory price dealing. C) administered pricing. D) flexible pricing. E) profit minimization pricing.

167) White Sands Heavy Equipment Co. produces industrial equipment that it sells through its national sales force. Its sales reps often must negotiate with customers to match the low prices of foreign competitors. Apparently, the firm has A) been engaging in unfair trade practices. B) been violating the Robinson-Patman Act. C) a skimming price policy. D) a status quo pricing objective. E) a flexible-price policy.

168)

A flexible-price policy is most likely to be set by a retailer selling A) milk. B) women's shoes. C) golf balls. D) t-shirts. E) cars.

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169)

Which of the following statements about a flexible-price policy is true?

A) Flexible pricing means offering the same price to all customers who purchase under essentially the same conditions and in the same quantities. B) The availability of computer pricing databases has had no effect on the popularity of flexible-price policies. C) Flexible pricing often involves price negotiations between the buyer and seller. D) Flexible pricing does not cause channel conflict. E) None of the answers are correct.

170) Which of the following would aid a firm in adjusting its price for certain segments of customers? A) big data B) loyalty cards C) predictive analytics D) knowledge of online shopping behaviors E) All of the answers are correct.

171) When looking for an Uber car during rush hour, a customer notices that the same ride that she took earlier in the afternoon is three times more expensive. What explains this? A) Uber's surge pricing model adjusts prices to better match supply and demand for its services. B) Uber uses predictive analytics to run real-time pricing experiments. C) Uber uses a pricing model that is based on a customer's ability or desire to pay for its services. D) Uber has a one-price policy, but rides in the afternoon and rides in the evening are not considered to be under the "same conditions." E) Uber needs to pay its drivers more in the evening due to overtime laws.

172) Trying to get the "cream" of a market (i.e., the top of a demand curve) at a high price before aiming at the more price-sensitive customers is consistent with a(n) Version 1

A) flexible-price policy. B) sales-oriented pricing policy. C) skimming price policy. D) introductory price dealing policy. E) penetration pricing policy

173) The sales analysis of a product revealed that profits were highest when it was initially introduced into the market with a high selling price. However, the price was gradually reduced as it started facing competition, as substitutes entered the market. This is an example of A) introductory price dealing. B) a temporary price cut policy. C) a skimming price policy. D) a penetration price policy. E) a one-price policy.

174) Which of the following pricing policies involves entering a market with a single low price and not significantly increasing the price even upon gaining a major market share? A) introductory price dealing B) temporary price cut policy C) skimming price policy D) penetration pricing policy E) zone pricing policy

175) An instant noodles brand, upon the release of its product, attracted customers by offering a 50 percent discount on the purchase of two family packs. Once the brand had gained attention, this discount was removed and the product was priced similar to the competing brands in the market. This pricing strategy is an example of

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A) introductory price dealing. B) status quopricing. C) a skimming price policy. D) a penetration pricing policy. E) negotiable price dealing.

176) Which of the following is the primary difference between introductory price dealing and use of a low penetration price policy? A) Introductory price dealing targets the top of the demand curve, while a low penetration price policy targets the bottom of the demand curve. B) A low penetration price policy targets the top of the demand curve, while introductory price dealing targets the bottom of the demand curve. C) In introductory price dealing, the price continuously moves down the demand curve, while the price is static with a low penetration price policy. D) With a low penetration price policy the price is fixed—as opposed to introductory price dealing, where the price varies according to the customer's ability to pay. E) In introductory price dealing, the price rises after the introductory offer, while it remains unchanged with a low penetration price policy.

177) If a producer's marketing manager doesn't know the shape of the demand curve for a new product, the initial price level policy should probably be a(n) ________ policy. A) flexible-pricing B) target-return pricing C) introductory pricing D) penetration price E) skimming price

178) Which pricing policy would probably be best for a profit-oriented producer introducing a really new product with a very inelastic demand curve?

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A) skimming price B) meeting competition pricing C) below-the-market pricing D) penetration pricing E) Introductory price dealing

179) A ________ price policy tries to sell the top of the demand curve at a high price before aiming at more price-sensitive customers. A) meet competition B) status quo C) penetration D) skimming E) panning

180) Skimming may maximize profits in the market introduction stage for an innovation, especially if A) there are few substitutes. B) all customers are price-sensitive. C) competition is intense. D) a price reduction will reduce goodwill. E) demand is perfectly elastic.

181) When Apple first introduced its iPhone in the U.S. market, it priced it at $600. Several months later, Apple reduced the price to $400. And several months after that, it reduced the price again to $200. What pricing policy was Apple using in its initial price strategy?

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A) introductory price B) skimming price C) cash discount price D) penetration price E) everyday low price

182) A leading hard-disk manufacturer introduces a new line of high-capacity disk drives. After selling to elite customers at a high price point, the company slowly reduces its prices over a period of time. The company is engaging in A) single pricing. B) introductory price dealing. C) price skimming. D) penetration pricing. E) predatory pricing.

183)

A skimming pricing policy A) should be used if a firm expects strong competition very soon. B) is most useful when demand is very elastic. C) is typically used during the sales decline stage of the product life cycle. D) often involves a slow reduction in price over time. E) means temporary price cuts to speed new products into a market.

184)

Over time, a skimming policy often involves A) price movement up the demand curve. B) price movement down the demand curve. C) profit minimization in the market introduction stage. D) efforts to target the top portion of the demand curve. E) declining sales and profits.

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185)

Trying to sell a firm's new product to a large market at one low price is known as A) a skimming price policy. B) introductory price dealing. C) nonprice competition. D) a penetration pricing policy. E) a flexible-pricing policy.

186)

A penetration pricing policy

A) is the same as a "meeting competition" price-level policy. B) is wise when demand is fairly inelastic-offering an "elite" market. C) involves temporary price cuts to speed new products into market. D) involves a series of step-by-step price reductions along an inelastic demand curve. E) may be wise if a firm expects strong competition very soon after its product introduction.

187)

A penetration pricing policy A) tries to sell the top of the demand curve, initially. B) tries to sell the whole market at one low price. C) tries to sell the top of a market. D) tries to target the elite market first. E) involves price movement down the demand curve over time.

188)

A penetration pricing policy

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A) tries to sell the whole market at one low price. B) tries to sell the top of the market at a high price. C) is used when demand for the product involved is inelastic. D) usually involves a slow reduction in price over time. E) is used when the firm does not expect strong competition soon after its product is introduced.

189)

A firm would likely pursue penetration pricing when A) it expects zero competition. B) economies of scale are nonexistent. C) the elite market is substantial. D) the whole demand curve is fairly elastic. E) supply is limited.

190) Which pricing policy is probably best for a profit-oriented, low-cost producer who is introducing a new product into a market with elastic demand and is expecting strong competition very soon after product introduction? A) skimming price B) introductory price dealing C) meeting competition pricing D) penetration pricing E) status quo pricing

191)

Using temporary price cuts to speed a producer's new product into a market is known as A) a skimming price policy. B) introductory price dealing. C) a flexible-price policy. D) a penetration pricing policy. E) a meeting competition pricing policy.

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192) The use of temporary price cuts to speed new products into a market and encourage trial by customers is A) a penetration pricing policy. B) introductory price dealing. C) pricing for dollar or unit sales growth. D) a skimming price policy. E) a flexible-price policy.

193)

Introductory price dealing

A) would not be used if other competitors already had competing products on the market at a price consumers found acceptable. B) is often viewed by competitors as a "stay out" price. C) usually sets off price wars. D) is different from penetration pricing. E) can apply only to final consumers, not channel members.

194) Some developers of apps for the Apple iPhone price their apps low at launch to encourage sales and get attention so they can move into the prestigious "Top 25" list. Then, they frequently raise prices to get a higher profit margin on later sales. The initial low price is a(n) A) noncumulative quantity discount. B) temporary sale. C) introductory price deal. D) skimming price. E) cumulative quantity discount.

195) Unilever is introducing a new brand of car-window cleaner in market maturity. To speed its entry into the market—without encouraging price competition—Unilever should use

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A) a flexible-price policy. B) a one-price policy. C) a penetration pricing policy. D) introductory price dealing. E) a skimming price policy.

196)

Which of the following observations concerning introductory price dealing is true? A) Established competitors usually choose to meet introductory price dealing. B) They are temporary price cuts to speed new products into a market. C) They have the same effect as price skimming. D) They are the same as low penetration prices. E) The plan is to sustain the price cut for an extended period of time.

197)

When setting a price-level policy, a good marketing manager knows that A) introductory price dealing usually does not increase sales. B) a penetration price makes the most sense when there is a large "elite" market. C) a "skimming" price may lead to low profits if demand is very elastic. D) it's easy to raise prices if the initial price is too low. E) None of the answers are correct.

198)

Which of the following observations is true of a mature market? A) There is downward pressure on prices. B) Profit margins are never under threat. C) Differentiating the value a firm offers is easy. D) Pricing choices are abundant. E) Price moves up the demand curve over time.

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199) Which of the following statements about price is most likely to occur during the market maturity stage? A) There may be no other real pricing choice than to “meet the competition.” B) New products begin replace the old and prices decline. C) Prices stabilize so pricing pressures ease. D) A skimming price policy is most effective. E) Firms should not succumb to pricing pressures by competitors yet.

200) buy.

Final customers or users are normally asked to pay ________ prices for products they

A) basic list B) phony list C) discounted D) wholesale list E) unchanging list

201)

________ are the prices final customers or users are normally asked to pay for products. A) Basic list prices B) Discounts C) Cost prices D) Net prices E) Payoffs

202) ________ are reductions from list price that are given by a seller to a buyer who either gives up some marketing function or provides the function himself.

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A) PMs B) Phony prices C) Spiffs D) Markups E) Discounts

203)

Quantity discounts are offered by sellers to A) reduce shipping or selling costs. B) encourage customers to purchase larger quantities. C) shift some of the storing function to buyers. D) encourage buyers to make additional purchases. E) All of the answers are correct.

204)

Quantity discounts are discounts offered to encourage A) customers to buy in larger amounts. B) buyers to pay their bills quickly. C) buyers to buy later than present demand requires. D) excellent customer service. E) customers to buy sooner.

205) American Airlines maintains a frequent flier loyalty program that allows members to accumulate 25,000 miles and then redeem these miles for a free round-trip ticket. This is a(n) A) introductory price deal. B) discount. C) cash discount. D) cumulative quantity discount. E) bundle price discount.

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206) If a producer wants to stabilize demand over time by encouraging repeat business, it should probably use A) uniform delivered pricing. B) phony list prices. C) a seasonal discount. D) a cash discount. E) a cumulative quantity discount.

207)

Offering a cumulative quantity discount is done to A) reduce the seller's shipping costs. B) eliminate some marketing function. C) shift some of the storing function to the buyer. D) encourage the buyer to make additional purchases. E) All of the answers are correct.

208) Cady ClayWorks offers its customers a 10 percent discount if they buy at least $200,000 worth of products during a year. The products may be bought in one order or spread out over several orders. Cady ClayWorks is offering a A) cumulative quantity discount. B) brokerage allowance. C) seasonal discount. D) noncumulative quantity discount. E) cash discount.

209) Ceramics Distributing Co. wants to keep its inventory low. Which of the following would be LEAST likely to encourage customers to take over more responsibility for the storage function?

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A) offering a cumulative quantity discount B) offering a stocking allowance C) offering a noncumulative quantity discount D) offering a seasonal discount

210)

Offering a noncumulative quantity discount is done to A) reduce the seller's shipping costs. B) encourage bigger orders. C) discourage small orders. D) shift some of the storing function to the buyer. E) All of the answers are correct.

211)

Noncumulative quantity discounts A) apply only to individual orders. B) are designed to primarily encourage repeat buying. C) reduce the customer's cost for additional purchases. D) tie a buyer to the seller after a single purchase. E) are never attractive to buyers.

212) Ceramics Distributing Co. wants to keep its inventory low. Which of the following is most likely to encourage customers to take over more responsibility for the storage function? A) setting a skimming price B) specifying invoice terms of 2/10, net 30 C) offering a noncumulative quantity discount D) using zone pricing E) using shipping-point pricing

Version 1

213) Calumet Pottery Supply allows a 10 percent reduction off its list price of Jepson clay whenever an intermediary orders more than 100 cases in one shipment. This is a A) cash discount. B) seasonal discount. C) cumulative quantity discount. D) PM. E) noncumulative quantity discount.

214) Insta-Mark Inc. makes custom-imprinted three-ring binders for business customers. Its prices are: $4.00 per binder for a single order of up to 50 binders; $3.50 per binder for a single order of 51 to 100 binders; and $3.00 per binder for a single order over 100 binders. Insta-Mark is using a A) seasonal discount. B) cash discount. C) cumulative quantity discount. D) noncumulative quantity discount. E) basic list price.

215) The Ivory Islands Resort offers a 40 percent discount on lodging from September through December every year, due the dramatic drop in the number of visitors during that period—largely because of unfavorable weather conditions. This type of price reduction is called a A) cumulative quantity discount. B) noncumulative quantity discount. C) seasonal discount. D) trade discount. E) functional discount.

216) Jake's Auto Repair receives an invoice for some equipment he purchased on credit. The full face value of the invoice is to be paid within 60 days. However, if it is paid within 10 days, Jake can take a 6 percent discount off the face value of the invoice. Which of the following notations accurately represents the conditions described above? Version 1

A) 24/7, net 6 B) 10/60, net 6 C) 6/10, net 60 D) 60/6, net 3 E) 10/6, net 60

217) The following terms appeared on an invoice dated May 20, sent by a manufacturer to a retail store: 2/10, net 30. The amount of the invoice was $2,000. Assuming the retailer paid the invoice on May 30 (10 days after the products were delivered), how much should it have paid? A) $1,900 B) $1,800 C) $2,000 D) $1,960 E) $2,040

218) pay

When a buyer receives an invoice for $100 with terms of "2/15 net 30" it can expect to

A) $100 if they pay anytime in the first 30 days. B) less than $100 if they pay during the first 15 days. C) $100 if they pay anytime during the first 15 days. D) more than $100 if they pay between day 15 and day 30. E) the full $100 if they wait more than 30 days to pay.

219) The cash discount terms for a purchase worth $1,000 made on August 1 are 3/10, net 30. How much will a buyer have to pay if he or she makes the payment on August 7?

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A) $930 B) $30 C) $1,030 D) $1,000 E) $970

220)

A cash discount of 3/15, net 30 means that the buyer

A) gets a 15 percent discount off the face value of the invoice if the invoice is paid within 3 days. B) gets a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days. C) makes a 3 percent down payment on the face value of the invoice within 15 days, with the remainder due in 30 days. D) gets a 3/15 (20 percent) discount if the invoice is paid within 30 days. E) None of the answers are correct.

221) A wholesaler has been offering his customers payment terms of 3/10, net 60. It wants to tighten its terms because interest rates have gone up. It could change its terms to A) 3/10, net 90. B) 3/20, net 60. C) 4/10, net 60. D) 3/10, net 30. E) None of these is a good answer.

222)

A marketing manager might offer a cash discount to channel members to

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A) increase sales during a slow period. B) encourage buyers to pay their bills quickly. C) reduce shipping or selling costs. D) encourage them to buy in larger quantities. E) All of the answers are correct.

223)

The cash discount terms "2/10, net 30" mean that

A) the invoice is dated February 10 and must be paid by February 30. B) the buyer will, in effect, be borrowing at a 36 percent annual interest rate if it takes 30 days to pay the invoice. C) the buyer must make a 2 percent down payment, with the balance due in 10 to 30 days. D) a 2 percent discount off the face value of the invoice is permitted if the bill is paid within 30 days. E) None of the answers are correct.

224) A firm has just received an invoice for $1,000 with the following terms: 3/10, net 30. In this case, the firm A) should not worry about earning the cash discount because the amount is small. B) can take a 10 percent discount if it pays within 3 days, and otherwise the full amount is due in 30 days. C) can take a 3 percent discount if it pays the invoice on the 30thday. D) will in effect be borrowing at an annual rate of 54 percent if it pays the invoice in 30 days. E) should pay $900 if it pays within 10 days.

225) Cash discount terms of 2/10, net 60 on an invoice would—in effect—amount to borrowing at an annual interest rate of about ________ percent if the buyer did not pay the invoice for 60 days.

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A) 22 B) 72 C) 14 D) 18 E) 36

226) Cash discount terms of 2/10, net 30 on an invoice would—in effect—amount to borrowing at an annual interest rate of about ________ percent if the buyer did not pay the invoice for 30 days. A) 10 B) 30 C) 18 D) 12 E) 36

227)

A trade discount is also called a A) cumulative quantity discount. B) noncumulative quantity discount. C) seasonal discount. D) stock discount. E) functional discount.

228) A discount that is offered to encourage buyers to stock earlier than present demand requires is A) a cash discount. B) a seasonal discount. C) a quantity discount. D) "push money." E) a credit discount.

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229) Sears reduces prices on gas grills between November and February, prior to spring and summer. This price reduction is a A) stocking allowance. B) seasonal discount. C) noncumulative quantity discount. D) cumulative quantity discount. E) cash discount.

230) A producer of plastic water bottles that can be attached to bikes gives retailers a 3 percent price reduction to advertise its products locally. This is an example of A) value pricing. B) push money. C) everyday low pricing. D) an advertising allowance. E) a cash discount.

231)

A reduction from list price given to retailers to get shelf space for a product is a A) shelf allocation. B) brokerage allowance. C) trade allowance. D) slotting allowance. E) push money allowance.

232)

A reduction from list price given to intermediaries to get shelf space for a product is a

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A) shelf allocation. B) brokerage allowance. C) trade allowance. D) stocking allowance. E) push money allowance.

233)

A retailer might expect a stocking allowance A) for paying the supplier's invoice before the product is delivered. B) to pass along to retail salesclerks who aggressively sell the product. C) to offset the handling costs for a new product. D) if the manufacturer can't fill an order by the promised delivery date. E) None of the answers are correct.

234) A producer offers a retailer free merchandise to stock a new item. The retailer is receiving a A) spiff. B) cash discount. C) seasonal discount. D) slotting allowance. E) cumulative quantity discount.

235) Jiffy Cake Mix Company developed a new brownie mix that is much improved over its standard brownie mix. When a sales representative for Jiffy contacted a buyer for a major supermarket chain, the buyer demanded that Jiffy give the supermarket chain a combination of cash and free cases of goods whose total value exceeded the entire marketing budget Jiffy planned to spend on the new brownie mix during its first year on the market. When the sales representative from Jiffy protested, the buyer said, "It is company policy to get ________ in order to secure shelf space for new brands."

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A) push money B) advertising allowances C) quantity discounts D) stocking allowances E) sale prices

236) Some manufacturers give ________ to retailers to pass on to the retailers' salesclerks, to encourage aggressive selling of specific items or lines. A) advertising allowances B) cash discounts C) slotting allowances D) "push money" E) quantity discounts

237) It is not uncommon for sales personnel at The Electronics Showroom to use aggressive sales tactics to encourage customers to buy Giant-Size brand televisions. Giant-Size has encouraged this behavior by using A) advertising allowances. B) push money allowances. C) stocking allowances. D) trade-in allowances. E) slotting allowances.

238)

Push money is most likely to be offered to A) cosmetics salespeople at a department store. B) salesclerks at a grocery store. C) component materials' sales reps. D) industrial supplies' sales reps. E) All of these are equally likely to receive push money.

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239)

Which of the following is true of a trade-in allowance? A) It is a price reduction to stimulate sales of newly introduced products. B) It allows managers to reduce the effective price without reducing the list price. C) It forces managers to reduce the list price. D) It is used to save old products from being removed from the market.

240) Which of the following would not be an effective Price tactic to motivate customers to action? A) interest rate increases B) temporary price reductions C) convenient financing D) free delivery E) coupons and rebates

241)

To get the sale price, customers A) buy when they have to buy. B) buy when the seller wants to sell. C) have to buy things that they never need. D) have to give up all consumer surplus. E) buy when they have a necessity.

242)

Everyday low pricing of consumer convenience products

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A) tends to reduce fluctuations in prices customers actually pay. B) has been used by many retailers even though no producers have adopted this approach. C) makes it easy to quickly compete on price—without changing basic strategy—when a competitor offers a particularly large discount for a short period of time. D) relies on frequent discounts and allowances from the producer. E) confuses customers and increases selling costs.

243) Which of the following give a producer a way to be certain that final consumers actually get the price reduction? A) rebates B) push money allowances C) spiffs D) trade-in allowances E) noncumulative quantity discounts

244)

By presenting a coupon to a retailer, the consumer is A) given a reduction to the list price. B) allowed to sample the product. C) offered the option of an installment payment. D) given the right to pretest the product. E) obligated to buy the product again in the future.

245)

A rebate is a A) temporary discount from the list price. B) reduction in price to encourage buyers to pay their bills quickly. C) temporary price cut to attract customers. D) refund paid to consumers after a purchase. E) document that details pricing changes.

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246)

Which of the following statements about rebates is true?

A) Rebates are refunds paid to consumers after a purchase. B) Rebates ensure that the final consumer gets a producer's price reduction. C) Rebates offer a quick way for a manufacturer to offer a shorter price reduction to stimulate sales. D) To claim a rebate, customers often must file some paperwork or apply online to make a claim. E) All of the statements are true.

247) ________ involves making small payments for a product over time—usually with interest payments built in. A) Installment B) Rebate C) Investment D) Quantity discount E) Stocking allowance

248) to as

Payments made at the point of purchase using a cell phone or tablet computer are referred

A) mobile payments. B) technological discounts. C) mobile allowances. D) push-money payments. E) target returns.

249)

Which of the following is not a form of mobile payment?

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A) debit card B) PayPal C) Venmo D) Apple Pay E) ChasePay

250) Jackson makes a contractual agreement with a car rental company to use a Chevy Silverado pickup truck for a specified period of time. He has to pay the company a monthly fee over the course of that period. At the end of the specified period, Jackson will have to return the vehicle to the company unless he decides to purchase it. Which of the following is the car rental company employing in this scenario? A) leasing B) everyday low pricing C) seasonal discount D) quantity discount E) installment

251)

In B2B transactions, who usually pays for transportation? A) It follows common industry practice. B) The seller always pays for transportation. C) The buyer always pays for transportation. D) The seller and the buyer split transportation costs. E) It follows government rate setting.

252) ________ means setting a fair price level for a marketing mix that really gives the target market superior customer value.

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A) Uniform pricing B) Target pricing C) Consumer surplus D) Value pricing E) Status quo pricing

253)

Which of the following do firms using value pricing tend to avoid? A) setting a high price only because consumers already know the brand name B) building a relationship with a customer which raises their expectations C) delivering unexpected services that haven't been stated to the customer D) establishing a price level that gives the target market superior customer value E) focusing on customer requirements and adopting a relevant marketing mix

254) Roberto, the marketing manager of Absola Foods Co., a food processing company, reduces the prices of the firm's line of breakfast cereals in an attempt to increase the number of products sold. However, contrary to Roberto's prediction, sales of the breakfast cereals drop, and upon further investigation, Roberto discovers that the company's target consumers are buying more expensive competitor brands instead of Absola food products. Which of the following could be a possible explanation for this? A) The consumers perceived the higher priced products as having better quality. B) Most of the consumers were repeat customers. C) Most of the customers were bargain seekers. D) The company didn't cut the prices low enough. E) Customers that went to the competition were price-sensitive.

255) Sharper Blade Knife Company produces different knives in a range of prices. The company tries to set a fair price level for each product and a marketing mix that gives each target market superior value. Sharper Blade Knife is using

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A) flexible pricing. B) value pricing. C) status quo pricing. D) a bad strategy. E) everyday low pricing.

256)

Which of the following statements concerning value pricing is false?

A) Value pricing tries to build customer loyalty. B) Companies using value pricing deliver on their promises. C) Value pricing involves setting a fair price level for a marketing mix that meets customers' needs. D) Value pricing means using "budget" or "cheap" prices. E) The focus of value pricing is on the customer's requirements—and the whole strategy.

257) Honda Motor Co. prices its whole line (from the $15,000 Honda Fit economy sedan to the $40,000 Pilot SUV) so that it offers high quality at reasonable prices. What pricing policy is Honda using? A) cumulative quantity discount B) value pricing C) bundle pricing D) introductory price deal E) skimming price

258) Wendy's was one of the first fast-food restaurants to offer a "dollar menu" on some of its food items. What pricing policy was Wendy's pursuing?

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A) skimming price B) quantity discount C) noncumulative quantity discount D) value pricing E) cumulative quantity discount

259)

Which of the following is true regarding price-level policies? A) Meeting competition is the only sensible policy in monopolistic competition. B) In an oligopoly situation, pricing "above the market" usually leads to an increase in

profit. C) A firm in pure competition may increase profit by pricing "below the market." D) Charging a lower price than seeming competitors may not mean that a firm is selling "below the market." E) None of the answers are correct.

260) When facing intense competition, which of the following would be the best advice to give a marketing manager? A) Focus on differentiation. B) Give up and price the same as competitors. C) Seek to achieve the benchmark price. D) Provide customers with allowances. E) Institute a one-price policy.

261)

A creative brand that differentiates its product in a competitive market A) can get a price premium for its product. B) sets the benchmark price. C) avoids nonprice competition. D) will achieve the basic list price for its product. E) can move toward a flexible pricing strategy.

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262)

Unfair trade practice legislation A) requires different types of retailers to charge different retail prices. B) makes price fixing illegal. C) has eliminated price competition on manufacturers' brands. D) prohibits intermediaries from taking excessive markups. E) puts a lower limit on prices, especially at the wholesale and retail levels.

263)

A main purpose of unfair trade practice legislation is to A) prevent manufacturers from taking high markups. B) eliminate price competition on manufacturers' brands. C) require some minimum percentage markup on cost. D) permit different types of retail outlets to charge different retail prices. E) guarantee retailers some profit.

264)

Unfair trade practices legislation A) prohibits very high markups at the retail level. B) allows manufacturers to set retail prices for branded products. C) prohibits price fixing among retailers. D) allows intermediaries to sell below cost. E) protects certain limited-line retailers from "ruinous" price competition.

265) When rice producers from China sold rice for a lower price in Japan than the price charged in China, it appeared the Chinese rice producers were engaging in

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A) price fixing. B) phony price lists. C) agricultural rebate. D) overstocking. E) dumping.

266) Which legislation prohibits price discrimination unless it is based on cost differences or the need to meet competition? A) Sherman Act B) Federal Trade Commission Act C) Robinson-Patman Act D) Magnuson-Moss Act E) Wheeler-Lea Act

267)

Antidumping laws

A) protect consumers from the high prices charged by monopolistic foreign producers. B) set the maximum price a foreign producer can charge. C) are used in an effort to control the minimum price of imported products. D) make it illegal for a foreign producer to sell a product at a price level lower than domestic producers. E) force foreign producers to sell below cost if they want to compete with a nation's domestic producers.

268) If a manufacturer in China offers a product in the U.S. market at a lower price than in China, this may be a violation of a(n)

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A) price-fixing law. B) price discrimination law. C) truth-in-advertising law. D) antidumping law. E) monopoly law.

269) World Imports/Exports, Inc., is pricing a product sold in a foreign market below the cost of producing it. It sells the same product at a higher price in its domestic market. The company is engaging in A) price dealing. B) skimming. C) dumping. D) fair trade. E) conscious parallel action.

270) Some customers encourage the use of ________ by paying more attention to supposed price discounts than to the actual prices (and values). A) unchanging list prices B) basic list prices C) phony list prices D) fair trade prices E) fix prices

271) A jewelry store advertises a one-carat diamond engagement ring as being discounted 50 percent off the original price of $10,000, for a sale price of $5,000. However, the ring was never put on sale at the original price, and its actual cost to the retailer was only $1,500. This jewelry store could be accused of using

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A) price fixing. B) phony list prices. C) dumping. D) price discrimination. E) unfair trade practices.

272)

The ________ bans "unfair or deceptive acts in commerce." A) Wheeler Lea Act B) Trade Name Amendment C) Excessive Bail Act D) Excessive Punishment Act E) Emblems Act

273)

Price fixing means

A) changing a price that was set at the wrong level by the financial manager. B) pricing a product that will be sold in a foreign market at a level below the cost of production. C) selling products of like grade and quality to different buyers at different prices. D) a firm consciously setting its prices. E) competitors getting together to raise, lower, or stabilize prices.

274)

Which of the following observations concerning price fixing is true? A) It is highly uncommon and relatively difficult to achieve. B) It is permitted in the United States, under certain circumstances. C) It is considered "conspiracy" under the Sherman Act. D) In the U.S, individual managers are not held responsible for price fixing. E) Price fixing laws across the globe are similar in nature.

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275) Recently, some executives for highway construction companies agreed to stop competing with each other on price and to meet every three months to decide their price for the next quarter. In this situation, A) the Sherman Act has been violated. B) the Robinson-Patman Act has been violated by price discrimination. C) the executives are exercising their right to free trade. D) the unfair trade practice acts have been violated. E) as long as prices don't increase, the executives have done nothing wrong.

276) The president of a major airline makes telephone calls to the top executives of several other airlines asking them to "hold the line" and refrain from offering discounts on fares for several key routes in order to improve profit margins. This practice could easily be considered A) dumping. B) price discrimination. C) price fixing. D) zone pricing. E) price grabbing.

277) Which of the following laws specifically makes illegal any price discrimination that injures competition? A) Magnuson-Moss Act B) Robinson-Patman Act C) Wheeler-Lea Act D) FTC Act E) Sherman Act

278)

Which of the following laws focuses specifically on price discrimination?

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A) Robinson-Patman Act B) Magnuson-Moss Act C) Sherman Act D) Wheeler-Lea Act E) Federal Trade Commission Act

279)

The Robinson-Patman Act says that to be legal, price differences must be based on A) a need to meet competition and cost differences. B) a reasonable profit margin as determined by the FTC. C) freight costs. D) transportation differences. E) None of the answers are correct.

280)

The Robinson-Patman Act does permit some price differences but they must be based on A) cost differences. B) the need to make profits. C) accounting practices. D) cartel requirements. E) conscious parallel action.

281) Charlie Ferragamo is a sales representative for the Season-All Spice Company and sells spices to large food service operations and restaurants. Charlie used to be able to justify selling his products for a higher price than the competition because he believed his spices were of higher quality. However, now the demand for individual brands of spices has become very elastic because buyers perceive few differences among the brands. One of Charlie's regular customers told Charlie that another spice company offered him a significantly lower price on spices, and he asked if Charlie could match the price. Charlie said, "I have to see a written price quote from the competitor. If I lower my price without seeing the price quote, I could be accused by my other customers of engaging in ________."

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A) dumping B) price discrimination C) price fixing D) zone pricing E) price grabbing

282) A large producer who offers no discounts and the same prices to all customers in the United States A) does not have pricing objectives. B) ignores the benefits of administered pricing. C) probably ignores nonprice competition too. D) may be "playing it safe" because of concern about the Robinson-Patman Act. E) is probably violating the antidumping laws.

283)

The court decisions in the Borden case clearly show that

A) products of “like grade and quality” must be offered to all buyers at the same price— even if sold under different labels. B) manufacturers who supply retailers with dealer brands cannot force the retailer to charge consumers the manufacturer's suggested list price. C) price fixing is always illegal. D) a manufacturer can charge different prices for different brands of physically identical products as long as the price differentials do not exceed the recognized consumer appeal of the higher-priced brands. E) manufacturers cannot charge different prices for dealer brands and manufacturer brands.

284) A manufacturer might try to defend itself against charges of illegal price discrimination by claiming that

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A) the price discrimination occurred as a defensive measure to "meet competition in good faith." B) the price differentials did not actually injure competition. C) the price differentials were justified on the basis of cost differences in production and/or distribution. D) its products were not of "like grade and quality." E) Any of these could make price discrimination legal.

285) A manufacturer could try to defend itself against charges of price discrimination under the Robinson-Patman Act by claiming that A) the products were not of "like grade and quality." B) any price differences were to "meet competition in good faith." C) the price differences did not injure competition. D) the price differences were justified on the basis of cost differences. E) All of these are possible defenses against price discrimination charges.

286)

Which of the following is true regarding price discrimination?

A) Price discrimination by firms selling to final consumers is illegal, but it is usually legal in selling to intermediaries. B) Price discrimination is not covered by Federal laws, but in some states it is illegal. C) Price discrimination is always illegal. D) Price discrimination may be legal if the firm can prove that different prices were set based on different costs. E) None of the answers are correct.

287) Jackson Motors, Inc. normally sells its electric motors to all buyers for $100. However, a competitor offered to sell similar motors to one of Jackson Motors' biggest customers for only $80 and Jackson Motors offered that customer—but not its other customers—a $80 selling price. According to the Robinson-Patman Act,

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A) Jackson Motors has not violated the law—it is just meeting competition. B) Jackson Motors is breaking the law, unless it offers to sell motors to all of its customers for $80. C) Jackson Motors cannot lower its $100 selling price. D) Jackson Motors cannot use the "meeting competition in good faith" defense unless it beats its competitor's $80 selling price. E) Jackson Motors and its competitor are both guilty of price fixing.

288)

The Robinson-Patman Act

A) states that selling the same product to different consumers at different prices is always illegal. B) makes it illegal for a firm to offer quantity discounts. C) requires that promotional allowances be made available to all of a firm's customers on "proportionately equal" terms. D) requires that advertising allowances be made available to all buyers in equal dollar amounts. E) None of the answers are correct.

289) Advertising allowances offered by producers can be illegal unless they are made available A) for products of "like grade and quality." B) to all customers on proportionately equal terms. C) to all buyers in equal dollar amounts. D) on all products sold by the producer. E) within an FTC approved agreement.

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290) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Bella Computers' pricing objective is best described as A) target return. B) status quo–oriented. C) profit-oriented. D) sales-oriented. E) None of these describes Bella Computers' pricing.

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291) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Ross Pharmaceuticals' pricing objective is A) sales-oriented. B) profit maximization. C) status quo–oriented. D) to meet competition. E) None of the answers are correct.

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292) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. What is Digital Imaging's pricing objective? A) status quo–oriented B) sales-oriented C) profit-oriented D) target return E) None of the answers are correct.

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293) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. What is Jack's One-Hour Cleaners' pricing objective? A) profit-oriented B) target return C) sales-oriented D) status quo–oriented E) None of the answers are correct.

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294) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Which company uses administered prices? A) Bella Computers B) Ross Pharmaceuticals C) Digital Imaging D) Jack's One-Hour Cleaners E) All the companies use administered prices.

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295) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. National Printing Equipment has A) been violating the Sherman Act. B) been violating the Robinson-Patman Act. C) a status quo pricing objective. D) a skimming price policy. E) a flexible-price policy.

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296) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Which pricing policy would be recommended for Ross Pharmaceuticals' new product? A) meeting competition pricing B) penetration pricing C) introductory pricing D) skimming pricing E) below-the-market pricing

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297) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. National Printing Equipment's new Gutenberg NP201 should probably use A) price fixing. B) skimming pricing. C) introductory pricing. D) penetration pricing. E) seasonal discounts.

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298) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Which business offers a cumulativequantity discount? A) Digital Imaging B) Jack's One-Hour Cleaners C) National Printing Equipment D) Ross Pharmaceuticals E) Bella Computers

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299) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. Which business offers a noncumulativequantity discount? A) Jack's One-Hour Cleaners B) Digital Imaging C) National Printing Equipment D) Ross Pharmaceuticals E) Bella Computers

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300) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. If one of Bella Computers' retail customers did not pay the invoice for 30 days, the customer would—in effect—be borrowing at what annual interest rate? A) 9 percent B) 18 percent C) 27 percent D) 36 percent E) 72 percent

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301) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. The 3 percentprice reduction Bella Computers gives its retailers is an example of A) push money. B) value pricing. C) an advertising allowance. D) everyday low pricing. E) a cash discount.

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302) Use this information for questions that refer to the Pricing 1 case. (WPI) case. As a project for her marketing class, Emily Washington is researching how five local businesses price their products. The following are brief sketches of what she has learned about each company: At Bella Computers, Emily has discovered that the company earned a 6 percent return on investment this year and wants to increase thisto 9 percent next year. To its retailer customers, Bella Computers gives cash discount terms of 2/10, net 30. It also gives retailers a 3 percentreduction on the invoice amount for advertising Bella products locally. Bella gives retailers' salespeople 2 percentof the sale price for each Bella Computer they sell. At Ross Pharmaceuticals, she learned that the company has invested heavily in developing a new product that recently received a patent. Because cash is tight, the company wants to achieve a rapid return on its investment. The new patented product is badly needed in the market, so a very inelastic demand curve is expected. Digital Imaging makes photographic prints for wedding photographers. It is very concerned about competitor reactions to its pricing, so it has selected prices that will not draw the attention of the competition and will not start a price war. Digital Imaging offers customers an 8 percentdiscount if their purchases exceed $20,000 a year. Jack's One-Hour Cleaners recently opened for business. The company invested a lot of money in new equipmentand feels that it has to quickly get "at least 10 percentmarket share to stay in the game." This need obviously influences the company's pricing decisions. Jack's also plans to offer customers 20 percentdiscounts on any order over $20. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product—the Gutenberg NP201—with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. The 2 percentBella Computers gives to retailers' salespeople is an example of A) value pricing. B) push money. C) everyday low pricing. D) an advertising allowance. E) a stocking fee.

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Answer Key Test name: Chap 17_17e 1) TRUE Price is one of the four major strategy decision variables that a marketing manager controls. Pricing decisions affect both the number of sales a firm makes and how much money it earns. Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix, so it plays a direct role in shaping customer value. 2) FALSE Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix, so it plays a direct role in shaping customer value. 3) FALSE It's not easy to define price in real-life situations because price reflects many dimensions. People who don't realize this can make big mistakes. 4) TRUE Almost every business transaction in our modern economy involves an exchange of money—the Price—for something. 5) TRUE

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Price is the amount of money that is charged for "something" of value. Of course, price may be called different things in different settings. Colleges charge tuition. Landlords collect rent. Motels post a room rate. Magazines have subscriptions. Country clubs get dues. Banks ask for interest when they loan money. Airlines have fares. Doctors set fees. Employees want a wage. People may call it different things, but almost every business transaction in our modern economy involves an exchange of money—the Price—for something. 6) FALSE Price is the amount of money that is charged for "something" of value. Of course, price may be called different things in different settings. Lawyers charge for their advice. 7) TRUE Almost every business transaction in our modern economy involves an exchange of money—the Price—for something. 8) TRUE Pricing objectives should flow from, and fit within, company-level and marketing objectives. 9) FALSE Pricing objectives should be explicitly stated because they have a direct effect on pricing policies as well as the methods used to set prices. 10) TRUE A target return objective sets a specific level of profit as an objective that is stated as a percentage of sales or of capital investment. 11) TRUE A target return objective has administrative advantages in a large company. Performance can be compared against the target. Version 1

12) TRUE Many private and public nonprofit organizations set a price level that will just recover costs, making the target return figure zero. 13) TRUE Many private and public nonprofit organizations set a price level that will just recover costs, making the target return figure zero. 14) TRUE A target return objective sets a specific level of profit as an objective, and a profit maximization objective seeks to get as much profit as possible. Both are profit-oriented objectives. 15) TRUE Pricing to achieve profit maximization doesn’t always lead to high prices. Low prices may expand the size of the market and result in greater sales and profits. 16) FALSE Profit maximization objectives can be socially responsible, and pricing to achieve profit maximization doesn't always lead to high prices. 17) FALSE Profit maximization objectives can be socially responsible, and pricing to achieve profit maximization doesn't always lead to high prices. 18) FALSE

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When a business is legally structured as a corporation, decisions are expected to be made in the shareholders’ interests. That has generally been interpreted to mean following the profit maximization objective. In recent years, some corporations have sought an alternative legal structure that allows for explicit consideration of other stakeholders’ interests. In most U.S. states, a firm can choose corporate bylaws that refer to the firm as abenefit corporation, a legal corporate structure that allows for goals that may include positive impacts on society, employees, the community, and the environment. 19) TRUE A B Corporation certification certifies that a firm meets a high standard for social and environmental performance.Many B Corps use the certification to formally signal to stakeholders, including customers, that the firm is mission driven and makes decisions with the best interests of employees, communities, and the environment—as well as customers— in mind. 20) FALSE A sales-oriented pricing objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 21) TRUE A sales-oriented pricing objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 22) FALSE Sales growth doesn't necessarily mean big profits. 23) TRUE Sales growth doesn't necessarily mean big profits. 24) FALSE Version 1

Some organizations set prices to increase market share using a salesoriented objective. 25) FALSE Some organizations set prices to increase market share using a salesoriented objective. 26) FALSE Managers satisfied with their current market share and profits sometimes adopt status quo objectives. 27) FALSE With status quo pricing objectives, managers want to stabilize prices, or meet the competition, or even avoid competition. 28) TRUE With status quo pricing objectives, managers want to stabilize prices, or meet the competition, or even avoid competition. 29) TRUE Status quo pricing objectives may include stabilizing prices, meeting competition, avoiding competition, and also nonprice competition. 30) TRUE A status quo pricing objective may be part of an aggressive overall marketing strategy focusing on nonprice competition, which is aggressive action on one or more of the Ps other than Price. 31) FALSE A status quo pricing objective may be part of an aggressive overall marketing strategy focusing on nonprice competition. 32) FALSE

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Instead of letting daily market forces (or auctions) decide their prices, most firms set their own prices, which are known as administered prices. 33) FALSE If a firm doesn't sell directly to final customers, it usually wants to administer both the price it receives from intermediaries and the price final customers pay, because the price final customers pay will ultimately affect the quantity it sells. 34) FALSE The majority of U.S. firms use a one-price policy mainly for administrative convenience and to maintain goodwill among customers. 35) TRUE The majority of U.S. firms use a one-price policy mainly for administrative convenience and to maintain goodwill among customers. 36) FALSE Retail shopkeepers in less-developed economies typically use flexible pricing. 37) TRUE Flexible pricing is most common in the channels, in direct sales of business products, and at retail for expensive shopping products, because sales reps may need to make adjustments for market conditions. 38) TRUE Flexible pricing is most common in the channels, in direct sales of business products, and at retail for expensive shopping products. 39) TRUE

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Flexible pricing is most often used with non-standardized products and where bargaining is common. The salesperson can adjust price considering prices charged by competitors, the relationship with the customer, and the customer's bargaining ability. 40) TRUE Most auto dealers use flexible pricing and bargain for what they can get. 41) FALSE Flexible pricing is most common in the channels, in direct sales of business products, and at retail for expensive shopping products 42) TRUE A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. 43) FALSE A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. In contrast, a penetration pricing policy tries to sell the whole market at one low price. 44) TRUE A skimming policy often involves a slow reduction in price over time. 45) FALSE A skimming policy often involves a slow reduction in price over time. 46) TRUE A penetration pricing policy tries to sell the whole market at one low price. This is wise when the whole demand curve is fairly elastic. 47) TRUE Version 1

Penetration pricing may be wise if the firm expects strong competition very soon after introduction. 48) TRUE Penetration pricing may be wise if the firm expects strong competition very soon after introduction. 49) FALSE Introductory price dealing involves using temporary price cuts to speed new products into a market and get customers to try them. 50) TRUE In a mature market, there is downward pressure on both prices and profit margins. Under such circumstances there may be no real pricing choice other than to "meet the competition." 51) FALSE In the sales decline stage, new products come in to replace the old. As brands compete in a shrinking market, unless a brand has strong differentiation, prices will likely decline. At the same time, costs may decline as well. Many firms back off on Promotion so margins might be maintained. 52) TRUE Basic list prices are the prices final customers or users are normally asked to pay for products. 53) TRUE Quantity discounts are discounts offered to encourage customers to buy in larger amounts. 54) FALSE There are two kinds of quantity discounts: cumulative and noncumulative. Version 1

55) TRUE Cumulative discounts encourage repeat buying by reducing the customer's cost for additional purchases. Noncumulative quantity discounts encourage larger individual orders but do not tie a buyer to the seller after that one purchase. 56) FALSE Noncumulative quantity discounts do not tie a buyer to the seller after one purchase. 57) TRUE Seasonal discounts are discounts offered to encourage buyers to buy earlier than present demand requires. 58) TRUE Seasonal discounts are discounts offered to encourage buyers to buy earlier than present demand requires. They even out sales over the year for producers, intermediaries, and service firms. 59) TRUE A discount of 2/10, net 30 means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days. If not taken, an interest charge will be added after the 30-day free-credit period. 60) FALSE The term "3/10, net 30" means the buyer can take a 3 percent discount off the face value of the invoice if the invoice is paid within 10 days. If not taken, an interest charge will be added after the 30-day free-credit period. 61) TRUE

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The term "3/10, net 30" means the buyer can take a 3 percent discount off the face value of the invoice if the invoice is paid within 10 days. If not taken, an interest charge will be added after the 30-day free-credit period. 62) TRUE A discount of 2/10, net 30 may not look like much at first. But the buyer earns a 2 percent discount for paying the invoice just 20 days sooner than it should be paid anyway. By not taking the discount, the company in effect is borrowing at an annual rate of 36 percent. That is, assuming a 360-day year and dividing by 20 days, there are 18 periods during which the company could earn 2 percent. 18× 2 = 36 percent a year. That's a fairly large interest charge to pay unnecessarily. 63) FALSE Allowances are given to final consumers, business customers, or channel members for doing something or accepting less of something. 64) TRUE Advertising allowances are price reductions given to firms in the channel to encourage them to advertise or otherwise promote the supplier's products locally. 65) TRUE Stocking allowances, sometimes called slotting allowances, are given to an intermediary to get shelf space for a product. 66) FALSE A trade-in allowance is a price reduction given for used products when similar new products are bought. 67) TRUE

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Push money (or prize money) allowances are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items. 68) FALSE Some firms help buyers who cannot afford to pay for their products all at once by offering some form of installment plan. Installment involves making small payments over time—usually with interest payments built in. 69) TRUE A lease requires a consumer to pay a monthly fee over a specified time period in exchange for regular payments. Customers do not take ownership of the product, they only pay to use it—in essence renting the product. 70) TRUE Rebates are refunds paid to consumers after a purchase. Sometimes the rebate is very large. 71) TRUE By presenting a coupon to a retailer, the consumer is given a reduction to the list price. The fastest-growing distribution approach is online— where consumers can search for coupons and print them out, send them to their cell phone, directly add them to their store loyalty card, or just ender the “discount code” to an online order. 72) TRUE Mobile paymentsare payments made at the point of purchase using a mobile device (usually a cell phone or tablet computer).In the United States and Europe, where credit cards are more widespread, the adoption of mobile payments has been slow. However, in China and many developing countries, mobile payment use is already common. Version 1

73) TRUE Many online retailers now offer some type of free shipping. In online retail, the norm has evolved that most firms offer free shipping for at least some purchase level (“free shipping on all orders over $50”). This type of offer also encourages customers to buy more. 74) FALSE Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 75) FALSE Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same, which means that there are more pricing options. 76) TRUE Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 77) TRUE Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same. 78) TRUE Most firms operate in monopolistic competition, where products and whole marketing mixes are not exactly the same. 79) FALSE

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In making price decisions and using value pricing, it is important to clearly define the relevant target market and competitors when making price comparisons. So, the value pricer defines who is in their target market and then differentiates their product and the value it offers. Generally, a discounter, for example, will be competing with other discounters and not with specialty shops. This means that even if the discounter is offering a price below what a specialty shop would offer, it is not offering the same product either (knowledgeable salespeople, for instance), so the discounter and the specialty shop are not even in the same market. 80) TRUE A lower price may lead consumers to believe the product is of lower quality, which can hinder sales. 81) FALSE Unfair trade practice acts put a lower limit on prices, especially at the wholesale and retail levels. 82) FALSE Unfair trade practice acts put a lower limit on prices, especially at the wholesale and retail levels. 83) TRUE Wholesalers and retailers are usually required to take a certain minimum percentage markup over their merchandise-plus-transportation costs in states that have unfair trade practice acts. 84) TRUE Dumping is pricing a product sold in a foreign market below the cost of producing it or at a price lower than in its domestic market. 85) FALSE Version 1

Dumping is pricing a product sold in a foreign market below the cost of producing it or at a price lower than in its domestic market. 86) FALSE The FTC uses the Wheeler Lea Act to ban phony list prices, which are the prices customers are shown to suggest that the price has been discounted from list. 87) FALSE Price fixing is when competitors get together to raise, lower, or stabilize prices. It is illegal under all circumstances in the United States, under the Sherman Act and the Federal Trade Commission Act. 88) TRUE Price fixing is when competitors get together to raise, lower, or stabilize prices. It is illegal under all circumstances in the United States. Under both the Sherman Act and the Federal Trade Commission Act it is considered “conspiracy.” 89) TRUE The Robinson-Patman Act (of 1936) makes illegal any price discrimination—selling the same products to different buyers at different prices—if it injures competition. 90) FALSE The U.S. Supreme Court ruling against the Borden Company upheld the FTC's view that a well-known label alone does not make a product different from one with an unknown label. 91) FALSE

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Price discrimination is selling the same products to different buyers at different prices and is illegal under the Robinson-Patman Act (of 1936) if it injures competition. The law permits some price differences but they must be based on (1) cost differences or (2) the need to meet competition. 92) TRUE Under the Robinson-Patman Act, meeting a competitor's price in good faith is permitted as a defense in price discrimination cases. 93) FALSE Under the Robinson-Patman Act, meeting a competitor's price in good faith is permitted as a defense in price discrimination cases. 94) TRUE The Robinson-Patman Act prohibits special allowances, unless they are made available to all customers on "proportionately equal" terms. 95) E Pricing objectives drive decisions about key pricing policies: (1) how flexible prices will be, (2) the level of prices over the product life cycle, (3) to whom and when discounts and allowances will be given, and (4) how temporary price reductions, financing, and transportation costs influence customer behavior. 96) B Price is what a customer must give up to get the benefits offered by the rest of a firm's marketing mix, so it plays a direct role in shaping customer value. 97) C

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Price is the amount of money that is charged for "something" of value. Almost every business transaction in our modern economy involves an exchange of money—the Price—for something. 98) E Price is the amount of money that is charged for "something" of value. 99) A As stated in Exhibit 17–2, a physical good, a service, repair facilities, packaging, an assurance of quality, a psychic benefit, and a warranty are all something of value—but a stocking allowance is not. 100) D As stated in Exhibit 17–2, a warranty is something of value offered to customers as part of the price equation. 101) B As stated in Exhibit 17–3, all the choices here except rebates are something of value offered to channel members as part of the price equation. 102) A Pricing objectives should be explicitly stated because they have a direct effect on pricing policies as well as the methods used to set prices. 103) D Pricing objectives should flow from, and fit within, company-level and marketing objectives. 104) A Pricing objectives should be explicitly stated because they have a direct effect on pricing policies as well as the methods used to set prices. 105) D Version 1

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As stated in Exhibit 17–4, a marketing manager may choose any of these pricing objectives, depending on the situation. 106) A A target return objective sets a specific level of profit as an objective. The profit also depends on the return on the invested amount. Hence, target return and the return on investment are characteristic of profitoriented pricing objectives. 107) D A target return objective sets a specific level of profit as an objective. 108) D A target return objective sets a specific level of profit. This amount can be stated as percentage of sales or percentage of capital investment. 109) C A target return objective is a profit-oriented pricing objective, since it sets a specific level of profit as its objective. 110) A Fidelity follows a target return objective that sets a specific level of profit as an objective. 111) D A target return objective has administrative advantages. Performance can be compared against the target. Some companies eliminate divisions, or drop products, that aren't yielding the target rate of return. 112) B A target return objective sets a specific level of profit as an objective. 113) D

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KeyLine follows a target return objective that sets a specific level of profit as an objective. 114) A A target return objective sets a specific level of profit as an objective. 115) B When organizations set a price level that will just recover costs, it is said that their target return figure is zero. 116) E When organizations set a price level that will just recover costs, it is said that their target return figure is zero. 117) A Managers who aim for only satisfactory returns just want returns that ensure the firm's survival and convince stockholders they're doing a good job. 118) E Firms that provide critical public services have to face public or government agencies that review and approve prices. These firms sometimes pursue only satisfactory long-run targets. 119) B A profit maximization objective seeks to get as much profit as possible. It might be stated as a desire to earn a rapid return on investment—or, more bluntly, to charge all the traffic will bear. 120) C A profit maximization objective seeks to get as much profit as possible. 121) B

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Pricing to achieve profit maximization doesn't always lead to high prices. 122) A A profit maximization objective is stated as a desire to earn a rapid return on investment—or, more bluntly, to charge all the traffic will bear. 123) A A profit maximization objective is stated as a desire to earn a rapid return on investment—or, more bluntly, to charge all the traffic will bear. 124) A In most U.S. states, a firm can choose corporate bylaws that refer to the firm as a benefit corporation, a legal corporate structure that allows for goals that may include positive impacts on society, employees, the community, and the environment. 125) A In most U.S. states, a firm can choose corporate bylaws that refer to the firm as a benefit corporation, a legal corporate structure that allows for goals that may include positive impacts on society, employees, the community, and the environment. 126) A A B Corporation (B Corp) certification is a private certification that a company meets a high standard for social and environmental performance. 127) A

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Many B Corps use the certification to formally signal to stakeholders, including customers, that the firm is mission driven and makes decisions with the best interests of employees, communities, and the environment—as well as customers—in mind. 128) E Many B Corps use the certification to formally signal to stakeholders, including customers, that the firm is mission driven and makes decisions with the best interests of employees, communities, and the environment—as well as customers—in mind. 129) C A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market—without referring to profit. 130) A A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 131) B A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 132) B A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 133) C A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 134) A A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. Version 1

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135) E A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 136) E A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 137) E Some nonprofit organizations set prices to increase market share precisely because they are not trying to earn a profit. 138) A Market share objectives have the same limitations as straight sales growth objectives. A larger market share, if gained at too low a price, may lead to profitless "success." 139) B In sales-oriented pricing objectives, sales growth doesn't necessarily mean big profits. 140) B A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 141) E Managers satisfied with their current market share and profits sometimes adopt status quo objectives—"don't-rock-the-pricing-boat" objectives. This don't-rock-the-boat thinking is most common when the total market is not growing. 142) C A status quo pricing objective may be part of an aggressive overall marketing strategy focusing on nonprice competition. Version 1

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143) E Managers that adopt status quo objectives may say that they want to stabilize prices, or meet competition, or even avoid competition. 144) E A status quo pricing objective may be part of an aggressive overall marketing strategy focusing on nonprice competition. 145) B Managers that adopt status quo objectives may say that they want to stabilize prices, or meet competition, or even avoid competition. 146) C Managers satisfied with their current market share and profits sometimes adopt status quo objectives—don't-rock-the-pricing-boat objectives. 147) B Don't-rock-the-pricing-boat thinking is most common when the total market is not growing. 148) C Managers that adopt status quo objectives may say that they want to stabilize prices, or meet competition, or even avoid competition. 149) A Managers that adopt status quo objectives may say that they want to stabilize prices, or meet competition, or even avoid competition. 150) A Managers that adopt status quo objectives may say that they want to stabilize prices, or meet competition, or even avoid competition while focusing on nonprice competition. 151) B Version 1

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Nonprice competition is an aggressive action on one or more of the Ps other than Price. 152) C Nonprice competition is an aggressive action on one or more of the Ps other than Price. 153) E Instead of letting daily market forces (or auctions) decide their prices, most firms consciously set their own prices, which are called administered prices. 154) D Instead of letting daily market forces (or auctions) decide their prices, most firms consciously set their own prices, which are called administered prices. 155) C Managers should administer both the price received from intermediaries and the price final consumers pay. After all, the price final consumers pay will ultimately affect the quantity sold. 156) A A one-price policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 157) B A one-price policy implies offering the same price to all customers who purchase products under the same conditions and in the same quantities. 158) B

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A one-price policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 159) E A one-price policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 160) A A one-price policy means offering the same price to all customers who purchase products under essentially the same conditions and in the same quantities. 161) B The majority of U.S. firms use a one-price policy mainly for administrative convenience and to maintain goodwill among customers. 162) B Dynamic pricing refers to pricing products at a particular customer's perceived ability to pay. 163) D A disadvantage of flexible pricing is that if buyers learn that negotiating is in their interest, the time needed for bargaining will increase. 164) D A flexible-price policy means offering the same product and quantities to different customers at different prices. 165) A With a flexible-pricing policy the salesperson can adjust the price, considering prices charged by competitors, the relationship with the customer, and the customer's bargaining ability. Version 1

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166) D With a flexible-pricing policy, too much price-cutting can erode profits. If sales reps let price-cutting become a habit, it can lead to a lower price level and lower profits. 167) E With a flexible-price policy, the salesperson can adjust the price, considering prices charged by competitors, the relationship with the customer, and the customer's bargaining ability. 168) E Most auto dealers use flexible pricing and bargain for what they can get. 169) C With a flexible-price policy, the salesperson can adjust the price, considering prices charged by competitors, the relationship with the customer, and the customer's bargaining ability. 170) E Firms have long adjusted pricing for segments of customers. Now many firms use big data from loyalty cards or online shopping and predictive analytics to deliver customers individual prices. Many sources of big data can be read in real-time, so pricing "experiments" can be run. 171) A Uber's "surge pricing" model adjusts prices to better match supply and demand for its service. When Uber sees demand for rides significantly exceeds supply, prices are increased in an effort to raise the supply of drivers and reduce the demand for riders. Prices will fall back to normal when supply and demand stabilize. 172) C

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A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. 173) C A skimming price policy tries to sell to the top of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. It is generally employed when a product has few substitutes as competition in the market. Such a policy usually involves a slow reduction in price over time, as producers seek to target new markets. 174) D A penetration pricing policy tries to sell the whole market at one low price. An important difference between penetration pricing and low introductory price dealing is that firms using introductory price dealing increase the price of their product once the offer period is over. 175) A Marketers use introductory price dealing—temporary price cuts—to speed new products into a market and get customers to try them, with the plan to raise prices as soon as the introductory offer is over. 176) E The difference between introductory price dealing and low penetration price policy is that in the first case the low price is introduced to gain customer attention and will be increased once the introductory offer period has ended. 177) E A skimming price policy is useful when you don't know very much about the shape of the demand curve. It's sometimes safer to start with a high price that can be reduced if customers balk.

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178) A Skimming may maximize profits in the market introduction stage for an innovation, especially if there are few substitutes or if some customers are not price-sensitive. 179) D A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. 180) A Skimming may maximize profits in the market introduction stage for an innovation, especially if there are few substitutes or if some customers are not price-sensitive. 181) B A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. A skimming policy usually involves a slow reduction in price over time. As price is reduced, new target markets are probably being sought. 182) C A skimming price policy tries to sell the top (skim the cream) of a market—the top of the demand curve—at a high price before aiming at more price-sensitive customers. A skimming policy usually involves a slow reduction in price over time. As price is reduced, new target markets emerge. 183) D A skimming policy often involves a slow reduction in price over time to aim at more price-sensitive customers.

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184) B A skimming policy often involves a slow reduction in price over time to aim at more price-sensitive customers. 185) D A penetration pricing policy tries to sell the whole market at one low price. 186) E A penetration pricing policy tries to sell the whole market at one low price. It may be wise if the firm expects strong competition very soon after introduction. 187) B A penetration pricing policy tries to sell the whole market at one low price. 188) A A penetration pricing policy tries to sell the whole market at one low price. 189) D A penetration pricing approach might be wise when the elite market— those willing to pay a high price—is small and when the whole demand curve is fairly elastic. 190) D A penetration pricing policy tries to sell the whole market at one low price when the whole demand curve is fairly elastic and the firm expects strong competition very soon after introduction. 191) B Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. Version 1

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192) B Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. 193) D Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. However, don't confuse these temporary price cuts with low penetration prices, as the plan here is to raise prices as soon as the introductory offer is over. 194) C Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. 195) D Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. 196) B Introductory price dealings are temporary price cuts to speed new products into a market and get customers to try them. 197) E Introductory price dealing usually increases sales; penetration pricing makes the most sense when there is a small elite market; skimming pricing may lead to high profits if demand is very elastic; and it's easier to lower prices if the initial price is too high. 198) A In a mature market, there is downward pressure on both prices and profit margins. 199) A

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Competition begins to impact pricing more in the market growth and market maturity stages. Especially in a mature market there is downward pressure on both prices and profit margins. Cutting prices may lead to similar reductions by competitors, which can cut into profits and lead to a decrease in total revenue for the industry and probably for each firm. In such circumstances there may be no real pricing choice other than to “meet the competition.” 200) A Basic list prices are the prices final customers or users are normally asked to pay for products. 201) A Basic list prices are the prices final customers or users are normally asked to pay for products. 202) E Discounts are reductions from list price given by a seller to buyers who either give up some marketing function or provide the function themselves. 203) E Quantity discounts are discounts offered to encourage customers to buy in larger amounts. This lets a seller get more of a buyer's business, or shifts some of the storing function to the buyer, or reduces shipping and selling costs—or all of these. 204) A Quantity discounts are discounts offered to encourage customers to buy in larger amounts. 205) D

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Cumulative quantity discounts apply to purchases over a given period, such as a year, and the discount usually increases as the amount purchased increases. They encourage repeat buying. 206) E Cumulative discounts encourage repeat buying by reducing the customer's cost for additional purchases. 207) D Cumulative discounts encourage repeat buying by reducing the customer's cost for additional purchases. 208) A Cumulative quantity discounts apply to purchases over a given period, such as a year, and the discount usually increases as the amount purchased increases. 209) A A cumulative quantity discount is often attractive to business customers who don't want to run up their inventory costs. They are rewarded for buying large quantities, even though individual orders may be smaller. This kind of discount discourages customers from taking over more responsibility for storage. 210) E Noncumulative quantity discounts encourage larger orders but do not tie a buyer to the seller after that one purchase. These discounts also shift some of the storing function to the buyer, and they reduce shipping and selling costs for the seller. 211) A

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Noncumulative quantity discounts apply only to individual orders. They encourage larger orders but do not tie a buyer to the seller after that one purchase. 212) C Noncumulative quantity discounts encourage larger individual orders but do not tie a buyer to the seller after that one purchase. They encourage customers to take over more responsibility for storage. 213) E Noncumulative quantity discounts apply only to individual orders that encourage larger orders but do not tie a buyer to the seller after that one purchase. 214) D Noncumulative quantity discounts apply only to individual orders that encourage larger orders but do not tie a buyer to the seller after that one purchase. 215) C Service firms such as resorts that face irregular demand or a drop in customers during a specific period make use of seasonal discounts to attract customers. 216) C The notation 6/10, net 60 implies that a buyer can take a 6 percent discount off the face value of the invoice if the invoice is paid within 10 days. Otherwise, the full face value is due within 60 days. 217) D

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The notation "2/10, net 30" means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 10 days. Otherwise, the full face value is due within 30 days. Hence, the amount to be paid on May 30 would be $1,960. 218) B The notation "2/15, net 30" means the buyer can take a 2 percent discount off the face value of the invoice if the invoice is paid within 15 days. That means they would pay $98. Otherwise, the full face value is due within 30 days. 219) E The notation "3/10, net 30" means the buyer can take a 3 percent discount off the face value of the invoice if the invoice is paid within 10 days. That means a buyer would pay $970. Otherwise, the full face value is due within 30 days. A 3 percent discount for $1,000 is $970. 220) B The notation "3/15, net 30" means the buyer can take a 3 percent discount off the face value of the invoice if the invoice is paid within 15 days. Otherwise, the full face value is due within 30 days. 221) D The notation "3/10, net 60" means the buyer can take a 3 percent discount off the face value of the invoice if the invoice is paid within 10 days. Otherwise, the full face value is due within 60 days. Reducing the discount period or the credit period would be advantageous for the wholesaler because it would give buyers less time to take the discount and less time to pay. Buyers would then hopefully pay earlier to get the best deal. 222) B

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Cash discounts are reductions in price to encourage buyers to pay their bills quickly. 223) B A discount of 2/10, net 30 means that the buyer earns a 2 percent discount for paying the invoice just 20 days sooner than it should be paid. By not taking the discount, the company in effect is borrowing at an annual rate of 36 percent: (360 days/20 days) = 18 periods; (18 periods × 2 percent) = 36 percent a year. 224) D A discount of 3/10, net 30 means that the buyer earns a 3 percent discount for paying the invoice just 20 days sooner than it should be paid. By not taking the discount, the company in effect is borrowing at an annual rate of 54 percent: (360 days/20 days) = 18 periods; (18 periods× 3 percent) = 54 percent a year. 225) C A discount of 2/10, net 60 means that the buyer earns a 2 percent discount for paying the invoice just 50 days sooner than it should be paid. By not taking the discount, the company in effect is borrowing at an annual rate of 14.4 percent: (360 days/50 days) = 7.2 periods; (7.2 periods× 2 percent) = 14.4 percent a year. 226) E A discount of 2/10, net 30 means that the buyer earns a 2 percent discount for paying the invoice just 20 days sooner than it should be paid. By not taking the discount, the company in effect is borrowing at an annual rate of 36 percent: (360 days/20 days) = 18 periods; (18 periods× 2 percent) = 36 percent a year. 227) E

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A trade discount, also called a functional discount, is a list price reduction given to channel members for the job they are going to do. 228) B Seasonal discounts are discounts offered to encourage buyers to buy earlier than present demand requires. 229) B Seasonal discounts are discounts offered to encourage buyers to buy earlier than present demand requires. 230) D Advertising allowances are price reductions given to firms in the channel to encourage them to advertise or otherwise promote the supplier's products locally. 231) D Stocking allowances, sometimes called slotting allowances, are given to an intermediary to get shelf space for a product. 232) D Stocking allowances, sometimes called slotting allowances, are given to an intermediary to get shelf space for a product. 233) C Supermarkets are more willing to give space to a new product if the supplier will offset their handling costs and risks by providing stocking allowances. 234) D Stocking allowances, sometimes called slotting allowances, are given to an intermediary to get shelf space for a product. They may come in the form of cash or free merchandise.

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235) D Stocking allowances, sometimes called slotting allowances, are given to an intermediary to get shelf space for a product. They may come in the form of cash or free merchandise. 236) D Push money (or prize money) allowances are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items. 237) B Push money (or prize money) allowances—sometimes called PMs or spiffs—are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items. 238) A Push money (or prize money) allowances are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items. They are often used for pushing furniture, clothing, consumer electronics, and cosmetics. 239) B A trade-in allowance is a price reduction given for used products when similar new products are bought. Trade-ins give the marketing manager an easy way to lower the effective price without reducing list price. 240) A Marketing managers often use different Price tactics to motive customers to action. This can be accomplished through temporary price reductions, adding convenient ways to finance or pay, and the way in which transportation costs are handled. 241) B Version 1

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To get the sale price, customers give up the convenience of buying when they want to buy and instead buy when the seller wants to sell. 242) A Everyday low pricing is setting a low list price rather than relying on frequent sales, discounts, or allowances. 243) A Rebates are refunds paid to consumers after a purchase and give producers a way to be certain that final consumers actually get the price reduction. 244) A By presenting a coupon to a retailer, the consumer is given a reduction to the list price. The fastest-growing distribution approach is online— where consumers can search for coupons and print them out, send them to their cell phone, or directly add them to their store loyalty card, or just enter the “discount code” to an online order. 245) D Rebates are refunds paid to a customer after the purchase. 246) E Rebates are refunds paid to consumers after a purchase and give producers a way to be certain that final consumers actually get the price reduction. Rebates offer a quick way for a manufacturer to offer a shorter price reduction to stimulate sales. To claim a rebate, customers often must file some paperwork or apply online to make a claim. 247) A

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For buyers who cannot afford the full outlay or who prefer to pay over time, some form of installment payment plan can be part of the price. Installment involves making small payments over time—usually with interest payments built in. 248) A Mobile payments are made at the point of purchase using a mobile devise (usually a cell phone or tablet computer). 249) A Mobile payments are made at the point of purchase using a mobile devise (usually a cell phone or tablet computer). The Starbucks app, ChasePay, PayPal, Venmo, and Apple Pay are among a growing number of companies offering mobile payment services. 250) A A lease involves the payment of a monthly fee over a specified time period in exchange for regular payments. Customers do not take ownership of the product; they only pay to use it. 251) A The answer to the “who pays” question often ends up following common industry practices. In most business-to-business transactions involving goods, there are industry norms about which party pays for transportation. 252) D Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 253) A

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Companies that use value pricing deliver on their promises but avoid unrealistic price levels—prices that are high only because consumers already know the brand name. 254) A Customers tend to associate higher prices with a higher-quality product. Marketing managers should be aware that charging lower prices than competitors might have a detrimental effect on how customers view relative product quality. 255) B Smart marketers look for the combination of Price decisions that result in value pricing. Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 256) D Value pricing doesn't necessarily mean cheap if cheap means bare-bones or low grade. It doesn't mean high prestige either, if the prestige is not accompanied by the right quality goods and services. Rather, the focus is on the customer's requirements and how the whole marketing mix meets those needs. 257) B Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 258) D Value pricing means setting a fair price level for a marketing mix that really gives the target market superior customer value. 259) D

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When discounters and mass-merchandisers promote their pricing policies with catchy slogans like "guaranteed lowest prices," it may appeal to frugal shoppers. But this does not mean that a firm is selling below the market. It's important to clearly define the relevant target market and competitors. For example, a discounter may offer lower prices but it also offers less expertise from the sales staff, etc., than a specialty shop, for example. The discounter may appeal to frugal shoppers who compare prices and value among different discounters (who are in the same market). But the specialty shop would appeal to different customers and may not even be a direct competitor, so the specialty shop is not even in the same market with the discounter. Therefore, the lower price by the discounter does not mean that it is selling "below the market." 260) A Even though price competition can be intense, many marketers give up too easily and price their product the same as a competitor. There often is a way to differentiate a product and charge a higher price to reflect the additional value customers place on the differentiation. 261) A In a competitive market, creative brands differentiate and charge a higher price to reflect the additional value customers place on the differentiation. The value customers perceive can be measured as price premium—the percentage by which a price exceeds (or falls short of) a benchmark price. 262) E Unfair trade practice acts put a lower limit on prices, especially at the wholesale and retail levels. 263) C Version 1

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Unfair trade practice acts put a lower limit on prices, especially at the wholesale and retail levels. Wholesalers and retailers are usually required to take a certain minimum percentage markup over their merchandise-plus-transportation costs. 264) E The practical effect of unfair trade practice acts is to protect certain limited-line food retailers—such as dairy stores—from the kind of "ruinous" competition supermarkets may offer if they sold milk as a leader, offering it below cost for a long time. 265) E Dumping is pricing a product sold in a foreign market at a price lower than in its domestic market. 266) C The Robinson-Patman Act (of 1936) makes illegal any price discrimination—selling the same products to different buyers at different prices—if it injures competition. The law does permit some price differences, but they must be based on cost differences or the need to meet competition. 267) C The United States and most other countries control the minimum price of imported products with antidumping laws. 268) D Dumping is pricing a product sold in a foreign market below the cost of producing it or at a price lower than in its domestic market and is illegal under antidumping laws. 269) C

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Dumping is pricing a product sold in a foreign market below the cost of producing it or at a price lower than in its domestic market. 270) C Phony list prices are prices customers are shown to suggest that the price has been discounted from list. 271) B Phony list prices are prices customers are shown to suggest that the price has been discounted from list. 272) A The Wheeler Lea Act bans "unfair or deceptive acts in commerce." 273) E Price fixing occurs when competitors get together to raise, lower, or stabilize prices but it is completely illegal in the United States. 274) C Price fixing occurs when competitors get together to raise, lower, or stabilize prices. It is considered "conspiracy" under the Sherman Act and the Federal Trade Commission Act. 275) A Price fixing occurs when competitors get together to raise, lower, or stabilize prices. It is considered "conspiracy" under the Sherman Act and the Federal Trade Commission Act. 276) C Price fixing occurs when competitors get together to raise, lower, or stabilize prices. 277) B

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The Robinson-Patman Act (of 1936) makes illegal any price discrimination—selling the same products to different buyers at different prices—if it injures competition. 278) A The Robinson-Patman Act (of 1936) makes illegal any price discrimination—selling the same products to different buyers at different prices—if it injures competition. 279) A The Robinson-Patman Act (of 1936) does permit some price differences but they must be based on (1) cost differences or (2) the need to meet competition. 280) A The Robinson-Patman Act (of 1936) does permit some price differences but they must be based on (1) cost differences or (2) the need to meet competition. 281) B Price discrimination is selling the same products to different buyers at different prices—if it injures competition. 282) D The Robinson-Patman Act (of 1936) makes illegal any price discrimination—selling the same products to different buyers at different prices—if it injures competition. 283) D

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The court decisions in the Borden case found no evidence of injury to competition. They also found that there could be no injury unless Borden's price differential exceeded the "recognized consumer appeal of the Borden label." This means that producers who want to sell brands at lower prices than their main brand probably should offer physical differences that are really useful. 284) E The law does permit some price differences—based on (1) cost differences or (2) the need to meet competition. It also allows a marketing manager to charge different prices for similar products if they are not of “like grade and quality.” 285) E The law does permit some price differences—based on (1) cost differences or (2) the need to meet competition.It also allows a marketing manager to charge different prices for similar products if they are not of “like grade and quality.” 286) D The law does permit some price differences—based on (1) cost differences or (2) the need to meet competition. 287) A Under the Robinson-Patman Act, meeting a competitor's price is permitted as a defense in price discrimination cases. 288) C Firms can violate the Robinson-Patman Act by providing push money, advertising allowances, and other promotion aids to some customers and not others unless they are made available to all customers on "proportionately equal" terms.

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289) B Firms can violate the Robinson-Patman Act by providing push money, advertising allowances, and other promotion aids to some customers and not others unless they are made available to all customers on "proportionately equal" terms. 290) A A target return objective sets a specific level of profit as an objective. Often the amount is stated as a percentage of sales or of capital investment. 291) B A profit maximization objective can be stated as a desire to earn a rapid return on investment—or more bluntly, to charge all the traffic will bear. 292) A In status quo objectives, managers may want to stabilize prices, or meet competition, or even avoid competition. This don't-rock-the-pricing-boat thinking is most common when the total market is not growing. 293) C A sales-oriented objective seeks some level of unit sales, dollar sales, or share of market without referring to profit. 294) E Instead of letting daily market forces (or auctions) decide their prices, most firms consciously set their own prices called administered prices. 295) E A flexible-price policy means offering the same product and quantities to different customers at different prices. 296) D

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Skimming may maximize profits in the market introduction stage for an innovation, especially if there are few substitutes or if some customers are not price-sensitive. 297) D A penetration pricing policy tries to sell the whole market at one low price and may be wise if the firm expects strong competition very soon after introduction. 298) A Cumulative quantity discounts apply to purchases over a given period, such as a year, and the discount usually increases as the amount purchased increases. 299) A Noncumulative quantity discounts encourage larger orders but do not tie a buyer to the seller after that one purchase. 300) D A discount of 2/10, net 30 means that the buyer earns a 2 percent discount for paying the invoice just 20 days sooner than it should be paid. By not taking the discount, the company in effect is borrowing at an annual rate of 36 percent: (360 days/20 days) = 18 periods; (18 periods× 2 percent) = 36 percent a year. 301) C Advertising allowances are price reductions given to firms in the channel to encourage them to advertise or otherwise promote the supplier's products locally. 302) B

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Push money (or prize money) allowances are given to retailers by manufacturers or wholesalers to pass on to the retailers' salesclerks for aggressively selling certain items.

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CHAPTER 18 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Cost-oriented approaches are the most common price setting approach. ⊚ ⊚

A markup is the dollar amount added to the cost of products to get the selling price. ⊚ ⊚

true false

By definition, a markup of $1 on a cost of $2 translates to a markup of 40 percent. ⊚ ⊚

true false

Markup (percent) means percentage of cost unless otherwise stated. ⊚ ⊚

true false

5) If a retailer adds a 25-cent markup to a product that costs the retailer $1.00, then according to the text the retailer's markup is 20 percent. ⊚ ⊚

true false

6) Most retailers and wholesalers set prices by using a different markup percent for each different product carried. ⊚ ⊚

true false

A markup chain can be used to calculate the price structure in a whole channel.

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8) A certain item has a production cost of $24. The manufacturer takes a 25 percent markup, the wholesaler takes a 20 percent markup, and the retailer takes a 50 percent markup. The item therefore has a retail selling price of $80. ⊚ ⊚

true false

High markups always mean big profits. ⊚ ⊚

true false

10) Retailers who earn high profits generally use higher markups than retailers who have low profits. ⊚ ⊚

true false

11) Firms with high markups and low turnover rates may earn lower profits than firms with low markups and high turnover rates. ⊚ ⊚

12)

true false

Items with lower markups may be more profitable if the stockturn rate is higher. ⊚ ⊚

true false

13) The stockturn rate is the number of times the average inventory must turn over to make a profit in a given year.

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14) A supermarket is bound to expect a higher stockturnrate for fresh fruits and vegetables than for soaps and detergents. ⊚ ⊚

true false

15) Average-cost pricing consists of adding a 20 percent markup to the average cost of an item. ⊚ ⊚

16)

Average-cost pricing means adding a reasonable markup to the total cost of a product. ⊚ ⊚

17)

true false

Average-cost pricing guarantees that the firm will earn enough to at least cover its costs. ⊚ ⊚

true false

18) A major problem with average-cost pricing is that it does not allow for cost variations at different levels of output. ⊚ ⊚

true false

19) A major advantage of average-cost pricing is that it assumes costs remain constant at different levels of output. ⊚ ⊚

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20)

Total fixed costs do not change when output increases. ⊚ ⊚

21)

At zero output, total variable cost is zero. ⊚ ⊚

22)

true false

A firm's total cost increases only when its variable cost increases. ⊚ ⊚

true false

23) Changes in total cost depend on variations in total variable cost, since total fixed cost stays the same. ⊚ ⊚

24)

A firm's average fixed cost increases as its output increases. ⊚ ⊚

25)

true false

Average fixed cost goes down as output decreases. ⊚ ⊚

26)

true false

Average fixed costs are lower when a large quantity is produced. ⊚ ⊚

Version 1

true false 4

27)

As output increases, a firm's average fixed cost will probably go down. ⊚ ⊚

true false

28) Even if a firm's average variable cost remains constant per unit, its average cost will increase as output increases. ⊚ ⊚

true false

29) A firm's average variable cost (per unit) is obtained by dividing the total fixed cost by the total variable cost. ⊚ ⊚

true false

30) If a firm's average variable cost is constant per unit, then the firm's average cost decreases continually as output increases because average fixed cost decreases continually. ⊚ ⊚

31)

true false

Ignoring demand is the major weakness of average-cost pricing. ⊚ ⊚

true false

32) If a manager sells more than was expected when average-cost pricing was used to set a price, the firm will lose money. ⊚ ⊚

Version 1

true false

33) Average-cost pricing works well if the firm actually sells the quantity that was used in setting the price, but losses may result if actual sales are much higher than were expected, due to higher total variable costs. ⊚ ⊚

true false

34) When setting prices, the marketing manager should consider the firm's demand curve, or else the price may not even cover the firm's total cost. ⊚ ⊚

35) lot.

Average-cost pricing works best in situations where demand conditions do not change a ⊚ ⊚

36)

true false

An advantage of average-cost pricing is that it considers competitors' costs and prices. ⊚ ⊚

true false

37) Cost-oriented selling price per unit is obtained by adding a firm's desired profit per unit to the average total cost. ⊚ ⊚

true false

38) Break-even analysis evaluates whether the firm will be able to cover all its costs with a particular price. ⊚ ⊚

Version 1

true false

39)

The break-even point is the intersection of the total cost curve and the total profit curve. ⊚ ⊚

true false

40) If the price per unit is $1.00 and the average variable cost per unit is 60 cents, the fixed cost contribution per unit is $1.40. ⊚ ⊚

41)

true false

Each possible price has its own break-even point. ⊚ ⊚

true false

42) If a company raises its price per unit but keeps total fixed cost and variable cost per unit the same, the break-even point will be lower. ⊚ ⊚

true false

43) Break-even analysis is particularly accurate because it recognizes that the demand curve is downward sloping. ⊚ ⊚

true false

44) Marginal analysis focuses on the changes in average fixed cost per unit and average variable cost from selling one more unit to find the most profitable price and quantity. ⊚ ⊚

true false

45) The price that maximizes profit is the one that results in the greatest difference between total revenue and total cost.

Version 1

⊚ ⊚

true false

46) There is only one price that will be profitable for firms with down-sloping demand curves. ⊚ ⊚

true false

47) Even if a manager's estimate of a demand curve is not exact, there is usually a profitable range around the price that would maximize profit. ⊚ ⊚

true false

48) An understanding of price sensitivity can help a manager better estimate the demand curve the firm faces. ⊚ ⊚

true false

49) When customers have to pay the bill themselves, they are likely to be more price sensitive. ⊚ ⊚

50)

true false

The greater the total expenditure, the less price sensitive customers are. ⊚ ⊚

true false

51) When the end benefit of a purchase is significant to the customer, the customer is likely to be less price sensitive.

Version 1

⊚ ⊚

true false

52) Switching costs refers to costs that a customer faces when buying a product that is different from what has been purchased or used in the past. ⊚ ⊚

53)

Business customers are sometimes less price sensitive if there are switching costs. ⊚ ⊚

54)

true false

Value in use pricing considers what a customer will save by buying a product. ⊚ ⊚

true false

55) Auctions have not proved very effective in determining how much potential customers will (or will not) pay for a product. ⊚ ⊚

true false

56) Online auctions (on the Internet) are becoming very popular as a way to determine how much customers are willing to pay for a product. ⊚ ⊚

57)

true false

The price most consumers expect to pay for a product is called the leader price. ⊚ ⊚

Version 1

true false

58)

All customers have the same reference price for the same basic type of purchase. ⊚ ⊚

59)

true false

The sole objective of leader pricing is to sell large quantities of the leader items. ⊚ ⊚

true false

60) Leader prices are the "specials" on certain products that are advertised regularly to give an image of low prices. ⊚ ⊚

true false

61) It makes sense for a manager to use leader pricing on a product only if consumers are unlikely to be aware of the normal price. ⊚ ⊚

true false

62) Leader pricing is normally used with products for which consumers do have a specific reference price. ⊚ ⊚

true false

63) One major difference between leader pricing and bait pricing is that bait pricing is criticized as unethical, while leader pricing is not. ⊚ ⊚

Version 1

true false

64) With the expectation that some customers will pay later, firms sometimes use "free" as a price. ⊚ ⊚

true false

65) Freemium pricing is done solely for the purpose of gaining customer goodwill; the company does not expect to profit from it. ⊚ ⊚

true false

66) The Federal Trade Commission encourages bait pricing because it reduces the prices that consumers pay for products. ⊚ ⊚

true false

67) Psychological pricing involves setting prices that end in certain numbers, while odd-even pricing is setting prices that have special appeal to target customers. ⊚ ⊚

true false

68) Walmart offers several models of clock radios at each $5 increment between $19.95 and $49.95. Walmart is apparently practicing odd-even pricing. ⊚ ⊚

true false

69) Subscription pricing is popular because it gives sellers a regular and predictable stream of revenue. ⊚ ⊚

Version 1

true false

70) The major disadvantage of price lining is that it is complicated for both clerks and customers. ⊚ ⊚

true false

71) Price lining tends to result in faster turnover, fewer markdowns, quicker sales, and simplified buying. ⊚ ⊚

true false

72) Demand-backward pricing is commonly used by producers of consumer products, especially shopping products such as women's clothing and appliances. ⊚ ⊚

true false

73) Demand-backward pricing involves a producer estimating an acceptable final consumer price and working backward to determine what the producer can charge in the channel. ⊚ ⊚

74)

true false

Prestige pricing is most common for luxury products such as furs, jewelry, and perfume. ⊚ ⊚

true false

75) Prestige pricing involves setting a rather high price because the product has a normal down-sloping demand curve. ⊚ ⊚

76)

true false

Full-line pricing is setting prices for a whole line of products.

Version 1

⊚ ⊚

true false

77) With complementary product pricing, different price levels are set on different products because the products are targeted at different market segments. ⊚ ⊚

true false

78) Product-bundle pricing may encourage customers to spend more and buy products that they would not buy otherwise. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 79) The two basic approaches to price setting are A) supply-oriented and demand-oriented. B) cost-oriented and demand-oriented. C) sales-oriented and profit-oriented. D) cost-oriented and profit-oriented. E) average-cost pricing and break-even analysis.

80)

Which of the following is an example of a cost-oriented price setting approach? A) negotiated prices B) price sensitivity C) value in use pricing D) markup pricing E) reference prices

81)

A ________ is a dollar amount added to the cost of products to get the selling price.

Version 1

A) markup B) rebate C) list price D) spiff E) deal

82)

Most firms in the business world set their prices using A) federal price guidelines. B) demand-oriented price setting. C) cost-oriented price setting. D) supply and demand analysis. E) marginal analysis.

83)

All of the following observations concerning markups are true except that A) they guide pricing by intermediaries. B) they are used by most retailers and wholesalers to set prices. C) they are a cost-oriented price setting approach. D) they are usually stated as dollar amounts. E) they are related to selling price for convenience.

84)

Markup refers to a percentage of the A) "mark-on." B) selling price added to the cost. C) fixed cost. D) delivered cost—unless otherwise stated. E) cost of sales.

85)

Markups

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A) should always be stated as a percentage of cost. B) are a percentage of selling price—unless otherwise stated. C) are never stated as a percentage of cost. D) should never be stated in dollar amounts. E) None of the answers are correct.

86)

The typical markup (percent) is the A) cost of an item divided by its selling price—times 100. B) selling price minus the cost of the item, divided by the cost of the item—times 100. C) selling price of an item, divided by its cost—times 100. D) selling price minus the cost of the item, divided by the selling price—times 100. E) selling price minus the cost of the item, divided by the average fixed cost—times

100.

87) A retailer buys a particular product for $4. To make a profit, the retailer adds $2 to cover operating expenses and provide a profit. The percentage markup on the $6 selling price is A) 50 percent. B) 33.33 percent. C) 100 percent. D) 20 percent. E) 25 percent.

88) Walgreens Drugstores buys a bottle of shampoo from a wholesaler for $3.25 and then places it on a shelf with a price tag of $4.64. What is Walgreens' markup on selling price (expressed as a percentage)?

Version 1

A) 20 percent B) 26 percent C) 30 percent D) 43 percent E) 48 percent

89) A retailer pays a wholesaler $24.00 for an item and then sells it with a 25 percent markup. The retailer's selling price is A) $32.00. B) $56.00. C) $48.00. D) $30.00. E) None of the answers are correct.

90) Sam's Club purchases a 24-pack of bottled water from a wholesaler for $3.85 and wants a markup of 25 percent. What is the price that Sam's Club charges its customers? A) $4.25 B) $4.75 C) $4.95 D) $5.13 E) $5.75

91) An item costs a retailer $140. If a 30 percent markup is desired, what should the retail selling price be? A) $191.00 B) $242.00 C) $182.00 D) $140.30 E) $200.00

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92) The Horizons Cycle Shop bought three motorcycles for $2,100 and sold each one for $1,000. The markup percentage was A) 33 1/3 percent. B) 30 percent. C) 142 percent. D) 50 percent. E) There is not enough information to determine the markup.

93) Michael Soles—owner of Soles Shoe Store—recently discovered that shoe stores in his trading area have an average markup of 40 percent. Upon investigation, Michael found that his average markup is $15 on shoes that he sells for $45. This suggests that A) Michael has higher-than-average costs. B) Michael is pricing his products higher than his competitors. C) Michael is taking a smaller average markup than his competitors. D) Michael has a relatively high stockturn rate. E) Michael's markups in dollar amounts are about the same as his competitors'.

94) Which of the following is true of the markup used by different firms in the same line of business? A) They are likely to use the same markup percentage, because they all want to have the same selling price. B) They are likely to use the same markup percentage, because this is a government requirement. C) They are likely to use the same markup percentage, because they are likely to have similar operating expenses. D) They are likely to use the same markup percentage, because this is what is acceptable to manufacturers. E) They are likely to use the same markup percentage only if they are in pure competition.

Version 1

95)

The sequence of markups firms use at different levels in a channel is referred to as a A) market sequence. B) markup chain. C) markup margin. D) standard markup. E) markup channel.

96)

A markup chain A) only applies to consumer products, not to business products. B) implies that a retailer must always apply a smaller markup than a wholesaler. C) causes lower prices in longer channel systems. D) determines the price structure in a channel of distribution. E) None of the answers are correct.

97) The production cost of an automobile component is $45. The producer takes a 10 percent markup and sells the product to the wholesaler. What is the wholesaler's cost? A) $45 B) $5 C) $10 D) $50 E) $60

98) A large supermarket chain purchases a box of cereal from a food wholesaler. If the supermarket chain uses a markup of 20 percent on its selling price of $2.85, what is the price the supermarket chain paid to the food wholesaler?

Version 1

A) $2.12 B) $2.28 C) $2.45 D) $2.55 E) $2.67

99) A producer sells an item to a wholesaler for $4.00, and the wholesaler uses a markup of 25 percent on its selling price. What will be the cost to the retailer? A) $4.75 B) $4.87 C) $5.03 D) $5.33 E) $5.45

100) A producer sells an item to a wholesaler for $4.00, and the wholesaler uses a markup of 25 percent on its selling price and the retailer uses a markup of 30 percent on its selling price. What will be the retailer's selling price to its customers? A) $7.61 B) $7.55 C) $7.36 D) $7.24 E) $7.12

101) Blue Ridge Weavers wants to set its selling price on an item so that the retail list price will be $50—taking into account the usual markups of 10 percent at wholesale and 30 percent at retail. At what price should Blue Ridge Weavers sell the item?

Version 1

A) $32.50 B) $31.50 C) $35.00 D) $34.00 E) $38.00

102) High Meadow Mfg. Co. sold its product through wholesalers and retailers—allowing the wholesalers a markup of 25 percent and retailers a markup of 40 percent. If the retail selling price is $100 and the manufacturer's cost is $30, what markup—in dollars—did High Meadow receive on the sale of this product? A) $5.00 B) $13.50 C) $15.00 D) $10.00 E) $20.00

103) TopKnotch Mfg. Co. has a production cost of $280. It sells its product to a wholesaler for $400. The wholesaler then sells the item to retailers for $500 and the retailers sell the item for $1,000. Which of the following is true about this markup chain? A) The wholesaler's markup is 25 percent. B) The manufacturer is taking a markup of 30 percent. C) The retailers' markup is 100 percent. D) None of the answers are correct.

104) Wilson sells a basketball to a wholesaler for $16, and the wholesaler applies a 20 percent markup. A retailer then applies a 33.3 percent markup. The final selling price is

Version 1

A) $24.53. B) $30.00. C) $25.59. D) $28.00. E) The final selling price cannot be determined from the information provided.

105) A producer makes an item for $32 and sells it with a 50 percent markup to a wholesaler. The wholesaler then applies a 20 percent markup. A retailer then uses a 60 percent markup. The final retail selling price is A) $200.00. B) $73.60. C) $64.00. D) $80.00. E) The final retail price cannot be determined without stockturn information.

106) It costs a producer $400 to manufacture a product that is distributed through wholesalers and retailers. The markups at the producer, wholesaler, and retailer levels are 20 percent, 20 percent, and 50 percent, respectively. The wholesaler's selling price for the product is ________, and the retailer's selling price is ________. A) $625; $1,250 B) $576; $864 C) $480; $576 D) $500; $625 E) The amounts cannot be determined from the information provided.

107)

Which of the following statements about markups is true?

Version 1

A) A firm can lose money even when using a high markup. B) Markup percentages are computed as a percentage of the cost of the product. C) It's easier for a producer to administer the prices consumers pay for products if the markup used varies from one intermediary to the next. D) The lower the markup, the lower the profit. E) None of these statements is true.

108)

An intermediary seeking high profits should A) use the lowest markup that will still cover selling expenses. B) use price lining. C) use high markups. D) choose the markup that maximizes turnover. E) try to find the markup level related to the most profitable price.

109)

High markups on a product could lead to low profits when A) competitors have higher markups. B) there are no substitutes. C) demand is inelastic. D) sales dip due to high prices. E) supply is inelastic.

110)

The stockturn rate is A) the firm's ability to meet its short-term financial obligations. B) the number of days that credit sales remains in receivables. C) the number of times the average inventory is sold in a year. D) the difference between net sales and cost of goods sold. E) the ratio of sales to inventory.

Version 1

111) A firm with a stockturn rate of 5 that sells products that cost it $150,000 per year is keeping an average of ________worth of inventory. A) $75,000 B) $150,000 C) $750,000 D) $4,000 E) $30,000

112)

Stockturn rate refers to A) the number of days required to sell a given output of products. B) the amount of time needed to sell every item in a retailer's inventory. C) the number of times the average inventory is sold in a year. D) the rate at which products enter and leave an intermediary's establishment. E) None of the answers are correct.

113)

The number of times an intermediary's average inventory is sold in a year is called the A) stockturn rate. B) asset factor. C) inventory ratio. D) markup ratio. E) ROI (return on inventory).

114)

Retailers of which of the following products would likely have the highest stockturn rate? A) furniture B) women's clothing C) hardware D) fresh seafood E) bowling balls

Version 1

115) Best Buy sets its prices below other electronics stores in its service area and generally attracts more customers than the others. Best Buy apparently hopes to earn a profit by A) achieving status quo pricing objectives. B) setting prices based on "value in use." C) relying on a high margin percentage. D) setting prices based on a cost-oriented approach. E) achieving a high stockturn rate.

116)

Which of the following is true regarding markups and turnover? A) High markups usually lead to high profits. B) Speeding turnover usually decreases profits. C) Items sold at low markups (e.g., 20 percent) cannot be profitable. D) Depending on the industry, a stockturn rate of 1 or 2 may be quite profitable. E) All of the answers are correct.

117) A regional manager for a chain of auto parts stores visits one of the stores in the chain. He looks in the store's warehouse and finds about 100 cases of motor oil that have been sitting in the warehouse for over one year. Upon inspection, he finds that in each case, one of the twelve cans of oil has leaked, thus soaking through the box and making the case unfit for sale. The regional manager instructs the store manager to unpack all the cases, discard the leaking cans, clean up the remaining cans, and contact the oil company for new boxes. He tells the store manager to repackage the remaining cans in the new boxes and to sell the cases to customers at the retailer's cost with no added markup. He explains to the store manager that moving this inventory will not result in immediate profit, but that it will benefit the store by improving the A) markup. B) markup rate. C) markup percentage. D) stockturn rate. E) break-even point.

Version 1

118)

What is the first step in the markup chain? A) selecting the appropriate cost for the raw materials B) selecting the appropriate markup percentage C) identifying the appropriate wholesaler D) selecting the appropriate cost per unit E) calculating the stockturn rate

119)

Setting prices by adding a "reasonable" markup to a firm's average cost is called A) break-even pricing. B) add-on pricing. C) target-return pricing. D) average-cost pricing. E) marginal analysis.

120) Two hundred units of a good were produced at a total cost of $4,000. Given a total fixed cost equal to $1,800, the average total cost per unit will be equal to A) $29. B) $11. C) $20. D) $9. E) $36.

121)

One disadvantage of average-cost pricing is that

Version 1

A) average-cost pricing does not consider historical values. B) average-cost pricing is a highly complicated method. C) the average cost is rarely useful information in making pricing decisions. D) it is easy to lose money with average-cost pricing. E) average-cost pricing does not help understand how costs operate at different levels of output.

122) Mark is trying to determine his firm's average cost per unit of production. He finds that the cost for all labor and materials is $80,000, and fixed overhead expenses are $40,000. If the company produces 20,000 items in the time period, the average cost is A) $12. B) $2. C) $6. D) $4. E) $10.

123) A producer incurred costs of $54,000 for labor and materials and $26,000 for fixed overhead expenses in a year. The firm produced 20,000 units during the year. If the producer desires a profit of $1 per unit in the coming year, what should the producer's selling price be, using average-cost pricing? A) $3.70 B) $2.30 C) $5.00 D) $6.00 E) The amount cannot be determined from the information provided.

124)

Average-cost pricing

Version 1

A) may be very profitable if actual sales are higher than expected. B) may lose money for the firm if actual sales are less than expected. C) does not take demand into account in setting prices. D) is simple in theory but often fails in practice. E) All of the answers are correct.

125)

The basic problem with the average-cost approach is that it A) does not consider cost variations at different levels of output. B) does not consider historical values. C) does not add a reasonable markup to the average cost of a product. D) is not commonly used. E) is a complex method.

126) Average-cost pricing may lead to losses because there are a variety of costs, and each changes in a(n) A) similar fashion. B) different way as output changes. C) similar fashion with time. D) exponential manner. E) highly predictable and similar manner.

127)

Total fixed cost A) is the sum of all expenses that are closely related to output. B) is the sum of those costs that do not change in total no matter how much is produced. C) may vary in the short run but is more or less fixed in the long run. D) is the sum of all costs of manufacturing and distributing a product. E) would be zero if the quantity produced were zero.

Version 1

128) The sum of those costs that do not change in total—no matter how much is produced—is called the A) total fixed cost. B) total cost. C) total variable cost. D) total direct cost. E) None of the answers are correct.

129)

Total fixed cost A) is dependent on production volumes. B) stays the same even if production stops temporarily. C) includes wages and sales commissions. D) is the sum of average fixed costs and variable overheads. E) is dependent on minor changes in output volume.

130)

Which of the following is an example of a fixed cost? A) wages B) outgoing freight C) depreciation D) sales commissions E) packaging material expense

131)

Which of the following would not be included in a producer's total fixed cost? A) rent B) property taxes C) insurance D) depreciation E) component parts

Version 1

132)

The sum of those changing expenses that are closely related to output is called the A) total fixed cost. B) total cost. C) total overhead cost. D) total variable cost. E) None of the answers are correct.

133)

Total variable cost A) is zero when the quantity produced is zero. B) is the sum of those changing expenses that are closely related to output. C) may increase as the quantity produced is increased. D) All of the answers are correct.

134)

A sales rep is paid a commission on each product sold. The commission is A) part of the total fixed cost. B) part of the total variable cost. C) not included in figuring average cost. D) part of the total cost, but not specifically a fixed cost or a variable cost. E) None of the answers are correct.

135)

Which of the following would not be included in a firm's total variable cost? A) outgoing freight B) packaging materials C) depreciation on buildings D) expenses for parts E) sales commissions

Version 1

136)

Which of the following is an example of a variable cost for a producer? A) depreciation B) managers' salaries C) rent D) packaging materials E) property taxes

137) Henry has classified the following items as variable costs. Which item has he not classified correctly? A) expenses for parts B) wages C) outgoing freight D) property taxes E) packaging material expense

138)

At zero output, total variable cost is A) higher than total fixed cost. B) equal to total fixed cost. C) unity. D) zero. E) substantial.

139)

Total cost

Version 1

A) increases directly with increases in total variable cost. B) is zero at zero output. C) is fixed in total no matter how much is produced. D) increases directly with increases in total fixed cost. E) None of the answers are correct.

140)

Which of the following does not change with an increase in output? A) total variable cost B) total fixed cost C) total cost D) average total cost per unit E) average fixed cost per unit

141)

Which of the following statements about average cost-pricing is true? A) It can result in losses if actual sales are higher than expected. B) It is more profitable if actual sales are lower than expected. C) It does not take the demand curve into account when setting prices. D) It works better in practice than it does in theory. E) It can be used to set a price without an estimate of the quantity to be sold.

142)

Average cost is obtained by dividing A) total fixed cost by the related quantity. B) marginal cost by marginal revenue. C) total cost by the related quantity. D) average fixed cost and average variable cost by the quantity produced. E) total variable cost by the related quantity.

143)

Which of the following decrease(s) with increasing output?

Version 1

A) total variable cost B) total fixed cost C) total cost D) average fixed cost per unit E) sales commissions

144)

As output increases, average cost decreases continually because A) average variable cost per unit is increasing. B) average fixed cost per unit is decreasing. C) total variable cost is increasing. D) total variable cost is decreasing. E) total fixed cost is reducing.

145)

Average fixed costs A) increase as the quantity produced increases. B) decline for a while as output increases and then begin to rise again. C) decrease steadily as output increases. D) are less than average variable costs at all output levels. E) None of the answers are correct.

146)

When a firm's average variable cost is constant no matter how much is produced, A) the firm's average cost will increase as the quantity produced increases. B) the firm's fixed cost must be zero. C) the firm's average cost will also be constant. D) the firm's average fixed cost will also be constant. E) the firm's average cost will decrease as the quantity produced increases.

Version 1

147) A college "marketing club" printed 1,000 "We're Number 1" bumper stickers for sale at $3.00 each as a fund-raiser. Its fixed costs were $500, and the variable cost for each sticker was $0.50. The club's average cost per unit was A) $2.00. B) $2.50. C) $0.50. D) $1.00. E) Not enough information is provided to determine the cost per unit.

148) A cutlery manufacturer producer produces 200 units of output at a total cost of $1,500. If total variable costs are $500, the average variable cost (per unit) is A) $3.00. B) $7.50. C) $2.50. D) $1.00. E) $2.00.

149) A company that produces baseball caps has fixed costs of $100,000, and total variable costs of $40,000 for a production volume of 20,000 units. The average variable cost per unit is A) $5.00. B) $2.50. C) $0.20. D) $0.40. E) $2.00.

150) The total fixed costs are $10,000, and the average variable cost per unit is $3. For a production volume of 10,000 units, the average cost per unit is

Version 1

A) $3.00. B) $1.00. C) $4.00. D) $3.30. E) $10.00.

151)

The big problem with average-cost pricing is that A) fixed costs are hard to estimate. B) it ignores the firm's demand curve. C) it doesn't consider the effect of variable costs. D) there is no way to include a desired profit per unit. E) None of the answers are correct.

152)

Average-cost pricing A) will result in losses if actual sales are much higher than expected. B) might cause a firm to charge too high or too low a price—and reduce its profits. C) usually assumes the firm will sell a larger quantity than the year before. D) cannot be profitable, because it ignores demand. E) All of the answers are correct.

153)

The major weakness of average-cost pricing is that it A) ignores likely customer demand at different prices. B) usually leads to losses instead of profits. C) always results in a profit that is less than expected. D) is too hard for most managers to use. E) All of these are major weaknesses of average-cost pricing.

154)

Which of the following is a weakness of the average-cost approach?

Version 1

A) It ignores competitors' costs and prices. B) It does not consider historical values. C) It does not add a reasonable markup to the average cost of a product. D) It is not commonly used. E) It is a complex method.

155) Which of the following statements correctly reflects the relationships among quantity, cost, and price, based on the cost-oriented pricing model? A) The average total cost is usually obtained by adding the profit per unit to the quantity demanded at selling price. B) Cost-oriented selling price per unit is usually determined by adding the variable cost per unit with the estimated quantity to be sold. C) The estimated total number of units to be sold usually determines the average fixed cost per unit. D) The quantity demanded at selling price is the quantity used to compute the average cost.

156)

Which of the following statements about the break-even point (BEP) is true? A) The firm's total revenue will equal its variable costs. B) The firm's total sales will equal its total production. C) The firm's total cost will equal its total revenue. D) The firm's total profits will equal its total cost. E) The firm's total variable costs equal its total fixed cost.

157)

A firm's break-even point is that point at which

Version 1

A) maximum profit is earned. B) total variable cost just equals total revenue. C) total profit just equals total cost. D) total cost just equals total revenue. E) None of the answers are correct.

158)

The BEP, in units, can be found by dividing A) total fixed costs by the fixed-cost contribution per unit. B) total variable costs by the variable-cost contribution per unit. C) total variable costs by the fixed-cost contribution per unit. D) the assumed selling price per unit by the variable cost per unit. E) total variable costs by total fixed costs.

159)

In a typical break-even analysis, a firm's fixed-cost contribution per unit A) is the assumed selling price per unit minus the variable cost per unit. B) is the assumed selling price per unit minus the average fixed cost. C) usually decreases as the quantity produced increases. D) is total fixed cost divided by the quantity produced. E) usually increases as the quantity produced increases.

160) Spruce Pine Mfg. Co. has total fixed costs of $300,000 a year. The owner estimates that average variable costs for its product will be about $30 next year. The selling price to wholesalers will be $50. The break-even point is A) 6,000 units. B) 10,000 units. C) 12,000 units. D) 15,000 units. E) 20,000 units.

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161) You are considering opening a fast-food store. Your fixed costs for the required land, building, parking lot paving, kitchen equipment, and neon sign will be $1,000,000. The variable cost will be $1.89 for servings, which will sell for $2.89. How many servings must you sell to break even? A) 1,000,000 B) 1,200,000 C) 2,890,000 D) 189,000 E) This cannot be determined with the information provided.

162) If a firm's total fixed cost is $400,000 and its fixed-cost contribution per unit is $10, its break-even in units is A) 30,000. B) 40,000. C) 10,000. D) 20,000. E) This cannot be determined with the information provided.

163) A company has total fixed costs of $120,000. Its variable cost per unit is $2.00 and its price per unit is $3.50. The break-even point in units is A) 60,000. B) 80,000. C) 34,286. D) 21,818. E) This cannot be determined with the information provided.

164) Given the following data, what is the break-even point in units? Total fixed cost = $120,000 Variable cost per unit = $0.60 Selling price per unit = $1.10 Version 1

A) 100,000 B) 240,000 C) 200,000 D) 218,182 E) 50,000

165) Given the following data, what is the BEP in units? Selling price = $2.00 Variable cost = $0.75 Fixed cost = $250,000 A) 333,334 B) 200,000 C) 125,000 D) 400,000 E) This cannot be determined with the information provided.

166) The price per unit is $1.00. The average variable cost per unit is 60 cents. The total fixed cost is $20,000. What is the break-even point? A) 75,000 units B) 50,000 units C) 20,000 units D) 33,334 units E) 40,000 units

167) A producer with only one product has total fixed costs of $15,000 per month. In addition, it cost the producer $100 in variable costs to produce each unit of her product (raw materials and direct labor cost). The producer charges her wholesalers $125 per unit. How many units of the product does the producer have to sell each month in order to break even?

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A) 450 units B) 500 units C) 550 units D) 600 units E) 650 units

168) Given the following data, what is the BEP—in dollars? Selling price = $2.00 Variable cost = $1.00 Fixed cost = $150,000 A) $300,000 B) $400,000 C) $100,000 D) $200,000 E) $50,000

169) A company has total fixed costs of $400,000. Its fixed-cost contribution per unit is $10.00, and its price per unit is $5.00. What is the break-even point in sales dollars? A) $200,000 B) $2,000,000 C) $4,000,000 D) $800,000 E) This cannot be determined with the information provided.

170) A producer with only one product has total fixed costs of $15,000 per month. In addition, it cost the producer $100 in variable costs to produce each unit of his product (raw materials and direct labor cost). The producer charges his wholesalers $125 per unit. What is the sales amount to break even?

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A) $70,000 B) $75,000 C) $80,000 D) $85,000 E) $90,000

171)

Which of the following observations is true? A) The break-even point can also be figured in dollars. B) For a single price, multiple break-even points are possible. C) Beyond the break-even point, profits will grow continually. D) At the break-even point, a firm will cover only its variable costs. E) At the break-even point, a firm will cover only its fixed costs.

172)

Break-even analysis can be useful for A) estimating future sales. B) setting the most profitable price. C) comparing pricing alternatives. D) relating assumed prices to demand estimates. E) creating a pricing solution.

173)

Which of the following statements is true about break-even analysis?

A) It makes it appear that any quantity can be sold at the assumed price. B) It suggests that profits will decrease rapidly as sales volume increases beyond the break-even point. C) It is quite accurate in maximizing profit. D) It assumes a U-shaped average variable cost curve. E) It not helpful in evaluating alternatives.

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174)

What is one disadvantage of break-even analysis?

A) It cannot be used to determine the break-even point in dollars. B) It is not helpful for evaluating what might happen to profits in different market environments. C) It does not consider the effect of price on the quantity that consumers will want. D) It is not helpful for evaluating alternatives. E) It is an extremely complicated method.

175)

Which of the following statements is true about break-even analysis?

A) It assumes that the demand curve is perfectly horizontal at the selling price. B) It reveals the price that will earn the highest profit. C) It cannot be used for comparing several different alternatives (for example, assuming different prices). D) It considers the effect of price on the quantity that consumers will want. E) It helps to compute the break-even point in units alone.

176)

Regarding break-even analysis, a good marketing manager knows that

A) a high fixed-cost contribution per unit will lead to high profits. B) assuming a straight-line total revenue curve incorrectly suggests that any quantity can be sold at the assumed price. C) break-even analysis is useless for comparing pricing alternatives. D) the usual straight-line total cost curve applies only when economies of scale exist. E) a break-even chart is a complicated visual aid for computing the break-even point.

177)

Break-even charts usually assume that

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A) total cost and total revenue curves are straight lines. B) profits will grow continually beyond the break-even point. C) the break-even point is reached when total cost just equals total revenue. D) any quantity can be sold at the assumed price. E) All of the answers are correct.

178)

A typical break-even analysis assumes that A) the total revenue curve is a straight line. B) the demand curve faced by the firm is horizontal. C) the average variable cost is the same at different levels of output. D) profits will grow continually beyond the break-even point. E) All of the answers are correct.

179) Which of the following pricing tools combines both the cost-oriented price setting approach and the demand-oriented price setting approach? A) break-even analysis B) average-cost pricing C) markup pricing D) marginal analysis E) price sensitivity

180) A firm that is using marginal analysis to set prices finds that setting a price of $180 per unit would result in the sale of six units. The total variable cost of production is equal to $300 and total fixed cost is equal to $150. In this case, the firm's total revenue will be A) $900. B) $1,800. C) $1,980. D) $1,620. E) $1,080.

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181) What is the best pricing tool marketers have for looking at costs and revenue at the same time? A) break-even analysis B) markdown approach C) average-cost pricing method D) marginal analysis E) markup approach

182) The main advantage that marginal analysis has over most other popular pricing methods is that it A) considers both fixed and variable costs. B) takes into account the break-even point. C) allows managers to evaluate pricing alternatives. D) takes into account both costs and demand. E) incorporates the markup chain.

183)

Which of the following statements is true about marginal analysis? A) It assumes that the firm's total revenue curve is a straight line. B) It bases the analysis on the cost of the first few units sold. C) It explicitly considers demand when calculating price. D) It takes into account the break-even point. E) It focuses on the highest price per unit.

184)

A firm in monopolistic competition with a down-sloping demand curve

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A) does not have to worry about price competition, due to the nature of its demand curve. B) can use marginal analysis to help it maximize profits. C) will have to charge the market price, which is set by the intersection of industry supply and demand. D) could use marginal analysis to compare alternatives—but this would not help in pricing because this method focuses on selling one more unit and therefore ignores total profitability. E) could use average-cost pricing to consider a range of profitable prices.

185)

Marginal analysis

A) can be very useful if a firm's pricing objective is profit maximization. B) focuses on the last unit that will be sold. C) can be used to find the most profitable price and quantity. D) can help find the price that results in the greatest difference between total revenue and total cost. E) All of the answers are correct.

186)

The price that maximizes profit is the one that results in the greatest difference between A) total cost and total fixed cost. B) total revenue and total cost. C) average cost and average variable cost. D) total revenue and average variable cost. E) total revenue and average fixed cost.

187)

In marginal analysis, the most profitable price is the price at which

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A) profit is based on competitive pricing. B) total revenue and total cost are equal. C) the difference between total revenue and total cost is greatest. D) total profit and total cost are equal. E) None of the answers are correct.

188) A good marketing manager for a producer knows that the most profitable price and level of output is where A) the positive difference between the total revenue and total cost curves is the greatest. B) the firm's profit is the same as that of its competitors. C) total revenue equals total cost. D) total profit equals total cost. E) None of the answers are correct.

189) If a profit-oriented marketing manager doesn't know the exact shape of the firm's demand curve, marginal analysis A) is useless. B) may be useful anyway because a profitable region usually surrounds the best price. C) will suggest the same price as break-even analysis. D) suggests that the only sensible approach is to follow the market leader. E) None of the answers are correct.

190)

Which of the following statements is true about marginal analysis?

A) It reveals the range of prices that should be profitable. B) It can be used to set prices, but it does not give you any idea what quantity might be sold at that price. C) It does not need an estimate of the demand curve. D) It usually suggests the same price as break-even analysis. E) It focuses on the highest number of units to be sold.

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191) Price ______ refers to the degree to which customers’ purchase decisions are affected by price. A) sensitivity B) quality C) reactivity D) susceptibility E) sympathy

192) Understanding of which of the following would most help a manager estimate the demand curve that the firm faces? A) what influences price sensitivity B) how to full-line price C) when to use product bundling D) their competitors’ total cost E) the markup chain

193)

Consumers are more likely to be price sensitive when A) it is not easy to compare the prices of different goods. B) the marginal cost of production is zero. C) the price of the good is very low. D) they have many substitute ways of meeting a need. E) someone else pays the bill or shares the cost.

194) A publisher needed one of its best-selling authors to fly from his home in Richmond, Virginia, to Chicago, Illinois, in order to start a publicity campaign for the author's new book. The author could have taken a flight to Detroit, Michigan, changed planes, and then flew on to Chicago for about half the price of a non-stop flight from Richmond to Chicago. However, he chose the non-stop flight. He became less price sensitive because of

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A) the availability of substitutes. B) the fact that someone else was paying the bill. C) the significance of the end benefit. D) the size of the total expenditure. E) the sunken investment he had made.

195)

Customers tend to be more price sensitive A) the greater the total expenditure. B) when someone else pays the bill. C) when someone else shares the cost. D) the greater the significance of the end benefit of the purchase. E) the lower the total expenditure.

196)

Customers are likely to be less price sensitive A) the greater the total expenditure. B) the greater their share of the cost. C) the greater the significance of the end benefit. D) the more easily prices can be compared. E) the greater the availability of substitutes.

197) ________ are costs that a customer faces by buying a product that is different from what has been purchased or used in the past. A) Marginal costs B) First-mover costs C) Switching costs D) Pioneering costs E) Opportunity costs

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198)

Customers are likely to be more price sensitive when A) the total expenditure is great. B) they have to pay the bill themselves. C) the end benefit isn't very significant. D) they haven't yet spent any money related to the purchase. E) All of the answers are correct.

199)

The impact of substitutes on price sensitivity is greatest when A) customers can compare prices. B) someone else is paying the bill. C) expenditures are broken into smaller pieces. D) the outcome is less significant. E) the customer wants to switch brands.

200) The ad for a very expensive online course states, "You will become the person that you want to be." With regard to price sensitivity, the ad A) focuses on an emotional benefit to make customers less price sensitive. B) decreases the significance of the end benefit of the purchase to increase price sensitivity. C) presents the marketing manager with an ethical dilemma. D) makes people more price sensitive by promising great benefit. E) offers customers an incentive to cover switching costs.

201)

Which of the following applies to value in use pricing? A) How much profit will the firm make? B) How much will the customer save? C) What does a competitor offer? D) How much can the customer afford?

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202) A firm that sets prices such that consumers will save 15 percent of their fuel costs by buying its products is employing A) leader pricing. B) value in use pricing. C) odd-even pricing. D) price lining. E) product-bundle pricing.

203)

Value in use pricing

A) does not vary from one product to another. B) sets a price that will capture some of what customers will save by substituting the firm's product for the one currently being used. C) merely sets the price at what customers expect to pay. D) sets a rather high price to suggest high quality or high status. E) is determined by online auctions.

204) An automobile manufacturer charges a higher price for its hybrid car that runs on both electricity and gasoline than it charges for a car that runs on only gasoline. The manufacturer contends that the consumer will save money with the hybrid car in the long run because the money saved on gasoline will more than cover the price differential between the hybrid car and a regular car. This manufacturer is using A) price leadership. B) price lining. C) value in use pricing. D) psychological pricing. E) reference pricing.

205)

Which of the following observations concerning reference prices is true?

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A) The reference price is the company's cost to produce the product. B) Reference prices are set by regulators. C) Demand may increase if a firm's price is lower than a customer's reference price. D) All customers have the same reference prices for the same basic type of purchase.

206) Marci, a student, is used to paying $1.25 for a 12-ounce can of Diet Coke from various vending machines on campus, so she expects the new vending machine just installed outside her Chemistry classroom to charge her the same amount for her favorite beverage. For Marci, the $1.25 price is a A) reference price. B) gross price. C) bundle price. D) leader price. E) bait price.

207)

Which of the following statements concerning reference prices is false?

A) A reference price is the price consumers expect to pay for an item. B) Retailers sometimes want consumers to use the manufacturer's list price as the reference price even though their actual retail selling price is lower. C) Different customers may have different reference prices for the same type of purchase. D) Leader pricing is normally used with products for which consumers do not have a specific reference price.

208)

Which of the following describes a characteristic of leader pricing?

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A) It seeks a big profit on the leader items. B) It is usually used for a retailer's major product line, to give it a competitive advantage. C) It is different from bait pricing in that the marketing manager really expects to sell leader priced items. D) It assumes that some part of the demand curve is upward sloping to the right. E) It is banned in interstate commerce.

209) A retailer of men's suits who is advertising a popular brand of dress shirts at a reduced price to attract customers is using A) price lining. B) leader pricing. C) odd-even pricing. D) bait pricing. E) prestige pricing.

210) A CVS drugstore that is trying to attract customers by advertising a special bargain price on a popular brand of cold remedy during the cold season is using A) leader pricing. B) bait pricing. C) prestige pricing. D) odd-even pricing. E) price lining.

211) Walgreens Drugstores advertises that its Tylenol prices are "the lowest in town" in order to stimulate sales of other products along with Tylenol. This is an example of

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A) skimming. B) value in use pricing. C) bait pricing. D) price lining. E) leader pricing.

212) A supermarket runs an ad for a gallon of milk in the local newspaper at a price that many consumers will recognize as a low price. This is an example of A) reference pricing. B) price lining. C) bundle pricing. D) leader pricing. E) bait pricing.

213) Which of the following refers to a pricing strategy in which a company provides a product for no charge, while money is charged for additional features that enhance the product’s use? A) freemium B) markup C) leader pricing D) reference price E) bait pricing

214)

Which of the following is an example of a freemium pricing strategy?

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A) Customers can listen to some songs on Spotify for free but if they pay a monthly fee they can listen ad-free to any song they want. B) The grocery store advertises low prices on eggs and milk to get customers into the store to buy other products. C) The maker of robots figures out how much a company will save using its product to help guide its pricing strategy. D) The book store gives out books to children for free to promote literacy in its community. E) Everything in the tourist shop is less than $50 and ends in the number 5 or the number 9.

215) A retail store advertises an SLR digital camera for $350. Once bargain hunters come to the store, salespeople point out the disadvantages of the low-priced camera and try to convince them to trade up to a better, and more expensive, unit. This is an example of the use of A) price following. B) bait pricing. C) odd-even pricing. D) low pricing. E) everyday low pricing.

216) A computer store regularly advertises a very low price for a well-known brand of computer monitor. When the customers come in, however, the salespeople point out the disadvantages of this particular brand and try to persuade them to buy other computer monitors at much higher prices. This retailer is using A) bait pricing. B) odd-even pricing. C) psychological pricing. D) leader pricing. E) price lining.

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217) A retailer who advertises a low price on an item—with no intent to sell that item—but only to attract customers to try to sell more expensive products is using A) full-line pricing. B) leader pricing. C) odd-even pricing. D) psychological pricing. E) bait pricing.

218) A tire retailer is advertising a very low price on a popular size of tire. When a customer comes into the store, the clerk says the low-priced item is sold out and tries to convince the customer to buy the top-of-the-line model—claiming the low-priced model would not have been a very good buy even at the low price. This is an example of A) leader pricing. B) full-line pricing. C) value in use pricing. D) price lining. E) bait pricing.

219)

Which of the following is true regarding pricing?

A) The use of prestige and psychological pricing shows that most retailers do not consider demand when setting prices. B) Bait pricing tries to attract customers on the high end of a demand curve. C) The FTC considers bait pricing a deceptive act and has banned its use in interstate commerce. D) Leader-priced items are priced very low to get customers into the store, not to sell the items. E) All of the answers are correct.

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220) Some retailers feel that their potential customers find certain prices appealing but that prices within certain ranges are seen as roughly the same, and thus price cuts within a given range will not increase the quantity sold (i.e., the demand curve is vertical within these "same price" ranges). These retailers would probably use ________ if they want to maximize profit. A) average-cost pricing B) bait pricing C) leader pricing D) prestige pricing E) psychological pricing

221) Gabriella Sax believes that customers in her dress shop find certain prices very appealing. Between these price levels, all prices are seen as roughly the same and price cuts in these ranges generally do not increase the quantity sold (i.e., the demand curve tends to drop vertically within these price ranges). With this in mind, Gabriella prices her items as close as possible to the top of each such price range. This is A) bait pricing. B) prestige pricing. C) leader pricing. D) psychological pricing. E) odd-even pricing.

222) Some retailers commonly use prices that end in certain numbers. They seem to assume that their customers see prices with these numbers as substantially lower. This is A) odd-even pricing. B) demand-backward pricing. C) leader pricing. D) prestige pricing. E) psychological pricing.

223) Which of the following prices is most likely to be seen if a firm is using odd-even pricing? Version 1

A) $9.00 B) $2.03 C) $6.60 D) $99.95 E) $100.00

224) The form of pricing in which customers pay on a periodic basis for access to a product is referred to as A) subscription pricing. B) price lining. C) leader pricing. D) psychological pricing. E) bait pricing.

225)

Which of the following is an example of subscription pricing?

A) You can listen to unlimited music on Spotify for $9.99 a month. B) All the sweaters in your favorite store are priced at one of three prices—$50, $75, and $100. C) The price of products in your local department store that cost less than $50 all end in the numbers 5 or 9. D) The electronics store advertised a great deal on laptops, but the salesperson tried to convince you to purchase a better, more expensive laptop. E) You make a trip to the grocery store because you notice that they have really good deal on your favorite cereal.

226) Setting a few price levels for a product line and then marking all items at these price levels is

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A) leader pricing. B) price lining. C) product-bundle pricing. D) penetration pricing. E) odd-even pricing.

227) ________ is setting a few price levels for a product line and then marking all items at these prices. A) Price following B) Bait pricing C) Odd-even pricing D) Price lining E) Price leading

228)

What is the main advantage of price lining? A) It is quite similar to prestige pricing. B) It can simplify both buying and selling. C) It tends to reduce turnover rates. D) It results in larger inventories. E) It confuses customers.

229) Alex's Knot Shop prices its ties at $5 intervals from $10 to $25 because most customers find these prices appealing and easier to compare. This is A) prestige pricing. B) penetration pricing. C) price lining. D) odd-even pricing. E) value in use pricing.

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230) If Macy's department store prices its men's ties at $10 intervals between $38 and $68, it is an example of A) reference pricing. B) price lining. C) bundle pricing. D) leader pricing. E) bait pricing.

231)

Demand-backward pricing

A) starts with an acceptable final consumer price and works backward to what producers can charge. B) ignores demand estimates. C) is only sensible when the channel captain is a large retailer. D) is an average-cost pricing approach. E) None of the answers are correct.

232) Good Health Co. has set a suggested retail list price of $40 on its new vitamin tablets on the assumption that its target market will find the product attractive at this price. From this suggested retail list price, Good Health has subtracted its usual chain of markups for wholesalers and retailers to obtain its own selling price of $17. This is A) demand-backward pricing. B) full-line pricing. C) average-cost pricing. D) odd-even pricing. E) prestige pricing.

233) In a down economy, a local florist surveys her customers to determine the amount they feel comfortable spending for a bouquet of flowers. Then she displays bouquets costing that exact amount in her refrigerated case. This is an example of

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A) reference pricing. B) line pricing. C) bundle pricing. D) leader pricing. E) demand-backward pricing.

234)

Setting relatively high prices to suggest high quality or high status is called A) odd-even pricing. B) price lining. C) leader pricing. D) psychological pricing. E) prestige pricing.

235)

The idea that people will pay extra for "quality" and status is the idea behind A) price lining. B) average-cost approaches to pricing. C) penetration skimming. D) prestige pricing. E) psychological pricing.

236) Some consumers maintain a price–quality association, meaning that if a product has a high price, they assume the product must have high quality. This price–quality association is the basis for the use of A) odd-even pricing. B) prestige pricing. C) leader pricing. D) reference pricing. E) price lining.

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237) Which of the following pricing approaches should be used by a profit-oriented retailer if its demand curve is down-sloping to the right for a while but then actually bends back to the left at lower prices? A) psychological pricing B) prestige pricing C) average-cost pricing D) bait pricing E) penetration pricing

238)

Regarding full-line pricing, which of the following statements is true?

A) A good marketing manager usually tries to price products in a line so that the prices will seem logically related and make sense to target customers. B) The marketing manager should try to cover all costs on the whole product line. C) Most customers seem to feel that prices in a product line should be somewhat related to cost. D) Not all companies that make a line of products must use full-line pricing. E) All of the statements are true.

239) The Roulette Corporation, a video game manufacturer, sets a single price for a set of five video games, a video game console, and a pair of speakers. This pricing strategy is called A) full-line pricing. B) complementary product pricing. C) product-bundle pricing. D) bid pricing. E) psychological pricing.

240) When Nintendo sets a relatively low price on its game units to stimulate more demand for its game cartridges, it is using

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A) complementary product pricing. B) product-bundle pricing. C) price lining. D) bait pricing. E) cost-plus pricing.

241)

Which type of pricing involves setting one price for a set of products? A) price lining B) odd-even pricing C) product bundle pricing D) bait pricing E) price leading

242)

When Best Buy advertises one price for the cost of a computer and a monitor, it is using A) complementary product pricing. B) flexible pricing. C) product-bundle pricing. D) a one-price policy. E) bait pricing.

243) When consumers decide to purchase a book from Amazon, the company's website often suggests that consumers purchase an additional book by the same author for a combined price that is lower than the two books would sell for separately. Amazon is using A) product-bundle pricing. B) complementary product pricing. C) full-line pricing. D) bid pricing. E) demand-backward pricing.

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244) CenturyLink attracts residential customers by setting one monthly fee for high-speed Internet, cable TV, and long-distance phone services that is $40 less than the price of purchasing these three services separately. This is an example of A) reference pricing. B) price lining. C) bundling D) leader pricing E) demand-backward pricing

245) Fly-Right Travel Agency arranges vacation packages to Disney World in Florida. The price includes airfare, a rental car, deluxe accommodations, and tickets to Disney World and other attractions. Fly-Right is using A) product-bundle pricing. B) complementary product pricing. C) full-line pricing. D) bid pricing. E) demand-backward pricing.

246) In order to stand apart, the airline Fly High Air offers low airfares and heavy seasonal discounts. However, it charges its passengers for in-flight meals, water, and baggage service, while its competitors offer these services for free. Fly High Air is following a(n) ________ pricing strategy. A) odd-even B) unbundled C) negotiated D) bid E) markup

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247) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. What is the final selling price Robinson's Sporting Goods charges for anSPI basketball? A) $10.00 B) $15.00 C) $15.75 D) $20.80 E) None of the answers are correct.

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248) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. What is the final selling price Sports Depot charges for an SPI basketball? A) $10.00 B) $12.00 C) $12.50 D) $15.00 E) $18.00

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249) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. By pricing below other retailers, Sports Depot apparently A) hopes to achieve status quo pricing objectives. B) wants to set prices based on "value in use." C) relies on a high margin percentage. D) sees this as an oligopoly market. E) expects a high stockturn rate.

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250) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. SPI pays its salespeople a commission on each product they sell. The commission is A) part of the total cost—but not specifically a fixed or a variable cost. B) part of the total fixed cost. C) not included in figuring average cost. D) a variable cost. E) None of the answers are correct.

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251) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. Which of the following would not be one of SPI's fixed costs in the production of basketballs? A) rent on the building used to store its ball inventory B) rubber used to make the balls C) property taxes for the building used to make the balls D) depreciation on the equipment used to make the balls E) insurance on the building used to make the balls

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252) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. What is the service organization's average cost for the printed tennis balls it buys from Sports Depot? A) $0.50 B) $0.75 C) $0.95 D) $1.50 E) $2.00

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253) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. How many of the printed tennis balls must the service organization sell to cover the $500 fixed printing charge? A) 250 B) 400 C) 500 D) 1,000 E) 2,000

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254) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. If SPI produces tennis racquets, how many racquets must it sell at $40 to break even? A) 50,000 B) 60,000 C) 75,000 D) 100,000 E) None of the answers are correct.

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255) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. Randy Todd could use break-even analysis with his tennis racquet decision to A) reveal the combination of quantity and price that gives the highest profit. B) set the most profitable price. C) estimate future sales. D) compare the break-even quantity for different prices with the likely level of demand. E) determine Wholesale Supply's likely selling price.

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256) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. If SPI uses average-cost pricing, onebig problem will be that A) it ignores the demand curve for its products. B) fixed costs are too hard to estimate. C) the effects of variable costs are ignored. D) the desired profit cannot be included.

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257) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. Randy Todd wants to use marginal analysis to price the new tennis racquets, but he doesn't know the exact shape of the firm's demand curve. Under these circumstances, marginal analysis A) is useless. B) may be useful anyway, because a profitable region usually surrounds the best price. C) will suggest the same price as break-even analysis. D) suggests that the only sensible approach is to follow the market leader. E) None of the answers are correct.

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258) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. When Sports Depot temporarily lowers the price of basketballs, it is using A) bait pricing. B) leader pricing. C) value in use pricing. D) psychological pricing. E) prestige pricing.

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259) Use this information for questions that refer to the Sporting Products, Inc. (SPI) case. Randy Todd, marketing manager for Sporting Products, Inc. (SPI), is thinking about how changes taking place among retailers in his channel might impact his strategy. SPI sells the products it produces through wholesalers and retailers. For example, SPI sells basketballs to Wholesale Supply for $8.00. Wholesale Supply uses a 20 percent markup, and most of its "sport shop" retailer customers, like Robinson's Sporting Goods, use a 33 percent markup to arrive at the price they charge final consumers. However, one fast-growing retail chain, Sports Depot,uses onlya 20 percent markup for basketballs, even though it pays Wholesale Supply the same price as other retailers. Furthermore, Sports Depot occasionally lowers the price of basketballs and sells them at cost, to draw customers into its stores and stimulate sales of its pricey basketball shoes. Sports Depot is also using other pricing approaches that are different from the sports shops that usually handle SPI products. For example, Sports Depot prices all its baseball gloves at $20, $40, or $60—with no prices in between. There are three big bins, one for each price point. Randy is also curious about how Sports Depot's new strategy to increase sales of tennis balls will work out. The basic idea is to sell tennis balls in large quantities to nonprofit groups, who resell the balls to raise money. For example, a service organization at a local college bought 2,000 tennis balls printed with the college logo. Sports Depot charged $.50 each for the tennis balls, plus a $500 one-time charge for the stamp to print the logo. The service group plans to resell the tennis balls for $2.50 each and contribute the profits to a shelter for the homeless. Randy is not certain if Sports Depot's ideas will affect SPI's plans. For example, SPI is considering adding tennis racquets to the lines it produces. This would require a $500,000 addition to its factory, as well as the purchase of new equipment that costs $1,000,000. The variable cost to produce a tennis racquet would be $20, but Todd thinks that SPI could sell the racquet at a wholesale price of $40 each. That would allow most retailers to add their normal markup and make a profit. However, Sports Depot may sells the racquet at a lower than normal price. The pricing approach Sports Depot uses to price its baseball gloves is called A) odd-even pricing. B) value in use pricing. C) prestige pricing. D) bait pricing. E) price lining.

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Answer Key Test name: Chap 18_17e 1) TRUE Price setting has two basic approaches, cost-oriented and demandoriented. Cost-oriented approaches are the most common. 2) TRUE Markup is a dollar amount added to the cost of products to get the selling price. 3) FALSE Unless otherwise stated, markup (percent) means percentage of selling price. 4) FALSE Unless otherwise stated, markup (percent) means the percentage of selling price that is added to the cost to get the selling price. 5) TRUE Unless otherwise stated, markup (percent) means percentage of selling price that is added to the cost to get the selling price. 6) FALSE Many intermediaries (retailers and wholesalers) select a standard markup percent and then apply it to all their products. 7) TRUE A markup chain is the sequence of markups firms use at different levels in a channel and it determines the price structure in the whole channel. 8) TRUE

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A markup chain is the sequence of markups firms use at different levels in a channel and determines the price structure in the whole channel. The markup is figured on the selling price at each level of the channel. 9) FALSE High markups don't always mean big profits. 10) FALSE Some retailers try to speed turnover to increase profit, even if this means reducing their markups. The markup combines with the stockturn rate to determine what the product actually earns. 11) TRUE Some retailers try to speed turnover to increase profit, even if this means reducing their markups. The markup combines with the stockturn rate to determine what the product actually earns. 12) TRUE Retailers may be able to take a lower markup and still earn higher profits at the end of the period. The important idea here is the stockturn rate. 13) FALSE Stockturn rate is the number of times the average inventory is sold in a year. 14) TRUE A supermarket might expect 20 stockturns for soaps and 70 stockturns for fresh fruits and vegetables. 15) FALSE Average-cost pricing means adding a reasonable markup to the average cost of a product. 16) FALSE Version 1

Average-cost pricing means adding a reasonable markup to the average cost of a product. 17) FALSE Average-cost pricing does not make allowances for cost variations as output changes. As a result, it is easy to lose money with average-cost pricing. 18) TRUE The basic problem with the average-cost approach is that it doesn't consider cost variations at different levels of output. 19) FALSE The basic problem with the average-cost approach is that it doesn't consider cost variations at different levels of output. 20) TRUE Total fixed cost is the sum of those costs that are fixed in total, no matter how much is produced. 21) TRUE At zero output, total variable cost is zero. 22) TRUE Changes in total cost depend on variations in total variable cost, since total fixed cost stays the same. 23) TRUE Changes in total cost depend on variations in total variable cost, since total fixed cost stays the same. 24) FALSE Average fixed cost goes down steadily as the quantity increases. 25) FALSE Version 1

Average fixed cost goes down steadily as the quantity increases. 26) TRUE Average fixed cost goes down steadily as the quantity increases. 27) TRUE Average fixed cost goes down steadily as the quantity increases. 28) FALSE Although the average variable cost remains the same, average cost decreases continually. 29) FALSE Average variable cost (per unit) is obtained by dividing total variable cost by the related quantity. 30) TRUE Although the average variable cost remains the same, average cost decreases continually. This is because average fixed cost is decreasing. 31) TRUE Ignoring demand is the major weakness of average-cost pricing. 32) FALSE Average-cost pricing works well if the firm actually sells the quantity it used to set the average-cost price. If sales are much higher than expected, then profits may be very good. 33) FALSE Average-cost pricing works well if the firm actually sells the quantity it used to set the average-cost price. Losses may result, however, if actual sales are much lower than expected. 34) TRUE

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Unless the firm's demand curve is considered, the marketing manager may set a price that doesn't even cover a firm's total cost. 35) TRUE When demand conditions are changing, average-cost pricing is even more risky. 36) FALSE A danger of average-cost pricing is that it ignores competitors' costs and prices. 37) TRUE Refer to Exhibit 18–7. Cost-oriented pricing requires an estimate of the total number of units to be sold. That estimate determines the average fixed cost per unit and thus the average total cost. The firm then adds the desired profit per unit to the average total cost to get the cost-oriented selling price. 38) TRUE Break-even analysis evaluates whether the firm will be able to break even—that is, cover all its costs with a particular price. 39) FALSE The break-even point (BEP) is the quantity at which the firm's total cost will just equal its total revenue. 40) FALSE The fixed cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 41) TRUE Each possible price has its own break-even point. 42) TRUE Version 1

The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed cost (FC) contribution per unit. Remember that fixed cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. So, the higher the selling price per unit, the greater the fixed cost (FC) per unit because variable cost stays the same. Then, to get the BEP, divide the total fixed cost by a larger fixed cost (FC) contribution per unit. This will result in a lower BEP. 43) FALSE The break-even graph, with its straight-line total revenue curve, makes it seem that any quantity can be sold at the assumed price. This usually isn't the case, however. 44) FALSE Marginal analysis focuses on the changes in total revenue and total cost from selling one more unit to find the most profitable price and quantity. 45) TRUE The price that maximizes profit is the one that results in the greatest difference between total revenue and total cost. 46) FALSE Marginal analysis focuses on the price that earns the highest profit. There is usually a range of profitable prices. 47) TRUE Marginal analysis focuses on the price that earns the highest profit; but a slight miss doesn't mean failure, because demand estimates don't have to be exact. There is usually a range of profitable prices. 48) TRUE

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Price sensitivity refers to the degree to which customers’ purchase decisions are affected by the price. A manager who understands what influences price sensitivity can better estimate the demand curve the firm faces. 49) TRUE People tend to be less price sensitive when someone else pays the bill or shares the cost. 50) FALSE Customers tend to be more price sensitive when the total expenditure is greater. 51) TRUE Customers are less price sensitive when the significance of the end benefit of the purchase is greater. 52) TRUE Customers are sometimes less price sensitive if there are switching costs—costs that a customer faces when buying a product that is different from what has been purchased or used in the past. Switching costs can be quite high for some business customers. 53) TRUE Customers are sometimes less price sensitive if there are switching costs. 54) TRUE Value in use pricing means setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. 55) FALSE Auctions have always been a way to determine exactly what some group of potential customers would pay, or not pay, for a product. Version 1

56) TRUE Auctions have always been a way to determine exactly what some group of potential customers would pay, or not pay, for a product. Online auctions have dramatically broadened this approach for both consumer and business products. 57) FALSE The price most consumers expect to pay for a product is called the reference price. 58) FALSE Different customers may have different reference prices for the same basic type of purchase. 59) FALSE The idea behind leader pricing is not only to sell large quantities of the leader items but also to get customers into the store to buy other products. 60) TRUE Leader prices are the "specials" that are advertised regularly to give an image of low prices.. 61) FALSE Leader pricing is normally used with products for which consumers do have a specific reference price. That way, consumers know they are getting a bargain, and that's what attracts them. 62) TRUE Leader pricing is normally used with products for which consumers do have a specific reference price. That way, consumers know they are getting a bargain, and that's what attracts them. 63) TRUE Version 1

Extremely aggressive and sometimes dishonest bait-pricing advertising has given it a bad reputation. 64) TRUE Maybe the ultimate price from a consumer standpoint is "free." With the expectation that at least some customers will pay later, firms sometimes use "free" as a price. 65) FALSE Some companies use a strategy calledfreemium(a combination of free and premium), which refers to providing a product for no charge, while money is charged for additional features that enhance the product’s use. 66) FALSE The Federal Trade Commission considers bait pricing a deceptive act and has banned its use in interstate commerce. 67) FALSE Psychological pricing means setting prices that have special appeal to target customers, while odd-even pricing is setting prices that end in certain numbers. 68) FALSE Odd-even pricing is setting prices that end in certain numbers. 69) TRUE Subscription pricing, where customers pay on a periodic basis for access to a product, has become popular because it gives a seller a regular and predictable stream of revenue. 70) FALSE The main advantage of price lining is simplicity, for both salespeople and customers.

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71) TRUE Price lining has several advantages. Sales may increase because they can offer a bigger variety in each price class, and it's easier to get customers to make decisions within one price class. Stock planning is simpler because demand is larger at the relatively few prices. Price lining can also reduce costs because inventory needs are lower. 72) TRUE Demand-backward pricing is commonly used by producers of consumer products, especially shopping products such as women's clothing and appliances. 73) TRUE Demand-backward pricing is setting an acceptable final consumer price and working backward to what a producer can charge. 74) TRUE Prestige pricing is most common for luxury products such as furs, jewelry, and perfume. 75) FALSE Target customers who respond to prestige pricing give the marketing manager an unusual demand curve. Instead of a normal down-sloping curve, the curve goes down for a while and then bends back to the left again. 76) TRUE Full-line pricing is setting prices for a whole line of products. 77) FALSE

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Complementary product pricing is setting prices on several products as a group, which may lead to one product being priced very low in order to increase profits from another product—thus increasing the product group's total profits. 78) TRUE Product-bundle pricing is setting one price for a set of products. Firms that use product-bundle pricing usually set the overall price so that it's cheaper for the customer to buy the products at the same time than separately. 79) B Price setting can be reduced to two basic approaches, cost-oriented and demand-oriented. 80) D A markup is a dollar amount added to the cost of products to get the selling price and is therefore a cost-oriented approach to pricing. 81) A A markup is a dollar amount added to the cost of products to get the selling price. 82) C Cost-oriented approaches are the most common price setting approach. 83) D Markups usually are stated as percentages rather than dollar amounts. 84) B Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 85) B Version 1

Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 86) D Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 87) B Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 88) C Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 89) A Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 90) D Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 91) E Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 92) B Unless otherwise stated, markup (percent) means the percentage of the selling price that is added to the cost to get the selling price. 93) C

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Different companies in the same line of business often use the same markup percentage. Their operating expenses are usually similar, so they see a standard markup as acceptable as long as it's large enough to cover the firm's operating expenses and provide a reasonable profit. In this case, Michael is using a 33 1/3 percent markup, which is lower than the 40 percent of other stores. 94) C Different companies in the same line of business often use the same markup percentage because their operating expenses are usually similar. 95) B A markup chain is the sequence of markups firms use at different levels in a channel. 96) D A markup chain determines the price structure in the whole channel. 97) D A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 98) B A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 99) D

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A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 100) A A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 101) B A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 102) C A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 103) B A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 104) B

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A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. And this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 105) A A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. And this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 106) A A producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. And this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 107) A A high markup may result in a price that's too high—a price at which few customers will buy. So high markups may lead to low profits. 108) E A high markup may result in a price that's too high—a price at which few customers will buy. You can't earn much if you don't sell much, no matter how high your markup on a single item. So high markups may lead to low profits. Instead, try to find the markup level related to the most profitable price. 109) D A high markup may result in a price that's too high, a price at which few customers will buy. So high markups may lead to low profits. 110) C Version 1

The stockturn rate is the number of times the average inventory is sold in a year. 111) E The stockturn rate is the number of times the average inventory is sold in a year. A stockturn rate of 5 implies that the firm requires only $30,000 worth of inventory (150,000 ÷ 5). 112) C The stockturn rate is the number of times the average inventory is sold in a year. 113) A The stockturn rate is the number of times the average inventory is sold in a year. 114) D Whether a stockturn rate is high or low depends on the industry and the product involved. For example, a supermarket might expect 70 stockturns for fresh fruits and vegetables. Fresh seafood is a perishable item, so it would have the highest stockturn rate of the given choices. 115) E A low stockturn rate may be bad for profits. Whether a stockturn rate is high or low depends on the industry and the product involved. 116) D Lower markups can speed turnover and the stockturn rate. Whether a stockturn rate is high or low depends on the industry and the product involved. 117) D Whether a stockturn rate is high or low depends on the industry and the product involved. Version 1

118) D The first step in the markup chain is selecting the appropriate cost per unit to build on. 119) D Average-cost pricing means adding a reasonable markup to the average cost of a product. 120) C The average cost per unit is obtained by dividing total cost by total quantity. In this case, the total cost is $4,000. Dividing by the total quantity, $200, results in an average cost per unit of $20. 121) D Average-cost pricing does not make allowances for cost variations at different levels of output. 122) C A manager usually finds the average cost per unit by studying past records. Dividing the total cost for the last year by all the units produced and sold in that period gives an estimate of the average cost per unit for the next year. 123) C A manager usually finds the average cost per unit by studying past records. Dividing the total cost for the last year by all the units produced and sold in that period gives an estimate of the average cost per unit for the next year. To get the price, the producer decides how much profit per unit to add to the average cost per unit. 124) E Average-cost pricing means adding a reasonable markup to the average cost of a product. Version 1

125) A The basic problem with the average-cost approach is that it doesn't consider cost variations at different levels of output. 126) B The basic problem with the average-cost approach is that it doesn't consider cost variations at different levels of output. 127) B Total fixed cost is the sum of those costs that are fixed in total, no matter how much is produced. 128) A Total fixed cost is the sum of those costs that are fixed in total, no matter how much is produced. 129) B Total fixed costs stay the same even if production stops temporarily. 130) C Among the fixed costs are rent, depreciation, managers' salaries, property taxes, and insurance. 131) E Among the fixed costs are rent, depreciation, managers' salaries, property taxes, and insurance. 132) D Total variable cost is the sum of those changing expenses that are closely related to output. 133) D

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Total variable cost is zero when the quantity produced is zero; is the sum of those changing expenses closely related to output; and may increase as the quantity produced is increased. 134) B Total variable cost includes expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. 135) C Total variable cost includes expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. 136) D Total variable cost includes expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. 137) D Total variable cost includes expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. 138) D At zero output, total variable cost is zero. 139) A Changes in total cost depend on variations in total variable cost, since total fixed cost stays the same. 140) B Changes in total cost depend on variations in total variable cost, since total fixed cost stays the same. 141) C Average-cost pricing ignores the demand curve for the product. When demand conditions are changing, average-cost pricing is risky. Version 1

142) C Average cost (per unit) is obtained by dividing total cost by the related quantity. 143) D Average fixed cost goes down steadily as the quantity increases. 144) B Although the average variable cost remains the same, average cost decreases continually because average fixed cost is decreasing. 145) C Average fixed cost goes down steadily as the quantity increases. 146) E When the average variable cost remains the same, average cost decreases continually as the quantity produced increases. 147) D Average cost (per unit) is obtained by dividing total cost by the related quantity. 148) C Average variable cost (per unit) is obtained by dividing total variable cost by the related quantity: $500 ÷ $200 = $2.50. 149) E Average variable cost (per unit) is obtained by dividing total variable cost by the related quantity: $40,000 ÷ 20,000 = $2.00 per unit. 150) C Average cost (per unit) is obtained by dividing total cost by the related quantity. 151) B Version 1

Ignoring demand is the major weakness of average-cost pricing. 152) B Average-cost pricing works well if the firm actually sells the quantity it used to set the average-cost price. Losses may result, however, if actual sales are much lower than expected. If sales are much higher than expected, then profits may be very good. But this will only happen by luck, because the firm's demand is much larger than expected. 153) A Ignoring demand is the major weakness of average-cost pricing. 154) A One of the dangers of average-cost pricing is that it ignores competitors' costs and prices. 155) C Refer to Exhibit 18–7. Cost-oriented pricing requires an estimate of the total number of units to be sold. That estimate determines the average fixed cost per unit and thus the average total cost. 156) C The break-even point (BEP) is the quantity at which the firm's total cost will just equal its total revenue. 157) D The break-even point (BEP) is the quantity at which the firm's total cost will just equal its total revenue. 158) A The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. 159) A Version 1

The fixed cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 160) D The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 161) A The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 162) B The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. 163) B The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 164) B The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 165) B

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The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 166) B The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 167) D The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 168) A The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. The BEP can also be figured in dollars. The easiest way is to compute the BEP in units and then multiply by the assumed per-unit price. 169) A The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. The BEP can also be figured in dollars. The easiest way is to compute the BEP in units and then multiply by the assumed per-unit price. Version 1

170) B The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. The fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. The BEP can also be figured in dollars. The easiest way is to compute the BEP in units and then multiply by the assumed per-unit price. 171) A The BEP can also be figured in dollars. 172) C Break-even analysis is helpful for evaluating alternatives. It's a useful tool for analyzing costs and evaluating what might happen to profits in different market environments. 173) A The break-even graph, with its straight-line total revenue curve, makes it seem that any quantity can be sold at the assumed price. This usually isn't the case, however. 174) C Break-even analysis does not consider the effect of price on the quantity that consumers will want—that is, the demand curve. 175) A Break-even analysis assumes that the demand curve is perfectly horizontal at the selling price. In fact, most managers face down-sloping demand situations. 176) B

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The break-even graph, with its straight-line total revenue curve, makes it seem that any quantity can be sold at the assumed price. This usually isn't the case, however. 177) E Break-even charts usually assume that total cost and total revenue curves are straight lines; that profits grow continually beyond the break-even point; that the break-even point is reached when total cost just equals total revenue; and that any quantity can be sold at the assumed price. 178) E A typical break-even analysis assumes that the total revenue curve is a straight line; that the demand curve is horizontal; that average variable cost is the same at different levels of output; and that profits will grow continually beyond the break-even point. 179) D The best pricing tool marketers have for looking at costs and revenue (demand) at the same time is marginal analysis. 180) E Total revenue is equal to price multiplied by the number of units sold. In this case: $180× 6 = $1,080. 181) D The best pricing tool marketers have for looking at costs and revenue (demand) at the same time is marginal analysis. 182) D The best pricing tool marketers have for looking at costs and revenue (demand) at the same time is marginal analysis. 183) C

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Since the price determines what quantity will be sold, a manager needs an estimate of the demand curve to compute total revenue. In marginal analysis, demand estimates involve "if-then" thinking. 184) B Marginal analysis focuses on the price that earns the highest profit. 185) E Marginal analysis 1) can be useful if a firm's pricing objective is profit maximization; 2) focuses on the last unit that will be sold; 3) can be used to find the most profitable price and quantity; and 4) can help find the price that results in the greatest difference between total revenue and total cost. 186) B The price that maximizes profit is the one that results in the greatest difference between total revenue and total cost. 187) C The price that maximizes profit is the one that results in the greatest difference between total revenue and total cost. 188) A The price that maximizes profit is the one that results in the greatest difference between total revenue and total cost. 189) B Marginal analysis focuses on the price that earns the highest profit. But a slight miss doesn't mean failure, because demand estimates don't have to be exact; there is usually a range of profitable prices. 190) A

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Marginal analysis focuses on the price that earns the highest profit. But a slight miss doesn't mean failure, because demand estimates don't have to be exact; there is usually a range of profitable prices. 191) A Price sensitivity refers to the degree to which customers’ purchase decisions are affected by price. 192) A A marketing manager should know what factors influence target customers’ price sensitivity.Price sensitivityrefers to the degree to which customers’ purchase decisions are affected by the price. A manager who understands what influences price sensitivity can better estimate the demand curve the firm faces. 193) D When customers have substitute ways of meeting a need, they are likely to be more price sensitive. 194) B People tend to be less price sensitive when someone else pays the bill or shares the cost. 195) A Customers tend to be more price sensitive the greater the total expenditure. 196) C Customers are less price sensitive the greater the significance of the end benefit of the purchase. 197) C Switching costs are costs that a customer faces when buying a product that is different from what has been purchased or used in the past. Version 1

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198) E Customers are likely to be more price sensitive when 1) the total expenditure is great; 2) they have to pay the bill themselves; 3) the end benefit isn't very significant; and 4) they haven't yet spent any money related to the purchase. 199) A The impact of substitutes on price sensitivity is greatest when it is easy for customers to compare prices. 200) A The greater the significance of the end benefit of the purchase, the less price sensitive customer are, so positioning efforts often focus on the emotional benefits of a purchase to increase the end benefit's significance. 201) B Value in use pricing means setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. 202) B Value in use pricing means setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. 203) B Value in use pricing means setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. 204) C

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Value in use pricing means setting prices that will capture some of what customers will save by substituting the firm's product for the one currently being used. 205) C If a firm's price is lower than a customer's reference price, customers may view the product as a better value and demand may increase. 206) A Consumers often have a reference price—that is, the price they expect to pay—for many of the products they purchase. 207) D Leader pricing is normally used with products for which consumers do have a specific reference price. 208) C The idea is not only to sell large quantities of the leader items but also to get customers into the store to buy other products. Certain products are picked for their promotion value and priced low but above cost. 209) B Leader pricing means setting some very low prices—real bargains—to get customer into retail stores. 210) A Leader pricing means setting some very low prices—real bargains—to get customers into retail stores. 211) E Leader pricing means setting some very low prices—real bargains—to get customers into retail stores. 212) D Version 1

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Leader pricing means setting some very low prices—real bargains—to get customers into retail stores. 213) A Some companies use a strategy calledfreemium(a combination of free and premium), which refers to providing a product for no charge, while money is charged for additional features that enhance the product’s use. 214) A Some companies use a strategy calledfreemium(a combination of free and premium), which refers to providing a product for no charge, while money is charged for additional features that enhance the product’s use. 215) B Bait pricing is setting some very low prices to attract customers but then trying to sell more expensive models or brands once the customer is in the store. 216) A Bait pricing is setting some very low prices to attract customers but then trying to sell more expensive models or brands once the customer is in the store. 217) E Bait pricing is setting some very low prices to attract customers but then trying to sell products that are more expensive once the customer is in the store. 218) E Bait pricing is setting some very low prices to attract customers but then trying to sell more expensive models or brands once the customer is in the store. 219) C Version 1

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The Federal Trade Commission considers bait pricing a deceptive act and has banned its use in interstate commerce. 220) E Psychological pricing means setting prices that have special appeal to target customers. 221) D Psychological pricing means setting prices that have special appeal to target customers. 222) A Odd-even pricing is setting prices that end in certain numbers. 223) D Odd-even pricing is setting prices that end in certain numbers. 224) A Subscription pricing is a form of pricing in which customers pay on a periodic basis for access to a product. 225) A Subscription pricing is a form of pricing in whichcustomers pay on a periodic basis for access to a product. Subscription pricing is popular because it gives a seller a regular and predictable stream of revenue. This pricing model is used for streaming music services like Spotify. 226) B Price lining is setting a few price levels for a product line and then marking all items at these prices. 227) D Price lining is setting a few price levels for a product line and then marking all items at these prices. Version 1

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228) B The main advantage of price lining is simplicity, for both salespeople and customers. 229) C Price lining is setting a few price levels for a product line and then marking all items at these prices. This approach assumes that customers have a certain reference price in mind that they expect to pay for a product. 230) B Price lining is setting a few price levels for a product line and then marking all items at these prices. This approach assumes that customers have a certain reference price in mind that they expect to pay for a product. 231) A Demand-backward pricing is setting an acceptable final consumer price and working backward to what a producer can charge. 232) A Demand-backward pricing is setting an acceptable final consumer price and working backward to what a producer can charge. 233) E Demand-backward pricing is setting an acceptable final consumer price and working backward to what a producer can charge. 234) E Prestige pricing is setting a rather high price to suggest high quality or high status. 235) D

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Prestige pricing is setting a rather high price to suggest high quality or high status. 236) B Prestige pricing is setting a rather high price to suggest high quality or high status. 237) B Target customers who respond to prestige pricing give the marketing manager an unusual demand curve. Instead of a normal down-sloping curve, the curve goes down for a while and then bends back to the left again. 238) E Full-line pricing is setting prices for a whole line of products. 239) C Product-bundle pricing involves setting one price for a set of products. Firms that use product-bundle pricing usually set the overall price so that it's cheaper for the customer to buy the products at the same time than separately. 240) A Complementary product pricing is setting prices on several products as a group. This may lead to one product being priced very low in order to increase the profits from another product, thus increasing the product group's total profits. 241) C Product-bundle pricing is setting one price for a set of products. The overall price is usually set so that it's cheaper for the customer to buy the products at the same time than separately. 242) C Version 1

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Product-bundle pricing is setting one price for a set of products. 243) A Product-bundle pricing is setting one price for a set of products. 244) C Product-bundle pricing, or bundling, is setting one price for a set of products. 245) A Product-bundle pricing is setting one price for a set of products. 246) B Fly High Air is using an unbundled pricing strategy. It successfully differentiates its offering from other airlines by unbundling the services most airlines offer. Fly High Air sells deeply discounted airfares, and then charges customers for water, in-flight meals, and baggage service— all extras fliers usually receive for "free" on other airlines. 247) B Markup (percent) is the percentage of the selling price that is added to the cost to get the selling price. A markup chain is the sequence of markups firms use at different levels in a channel. For example, a producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 248) C

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Markup (percent) is the percentage of the selling price that is added to the cost to get the selling price. A markup chain is the sequence of markups firms use at different levels in a channel. For example, a producer's selling price becomes the cost the wholesaler pays. The wholesaler's selling price becomes the retailer's cost. Next, this cost plus a retail markup becomes the retail selling price. Each markup should cover the costs of running the business and leave a profit. 249) E Lower markups can speed turnover and the stockturn rate. 250) D Variable costs include expenses for parts, wages, packaging materials, outgoing freight, and sales commissions. 251) B Among the fixed costs are rent, depreciation, managers' salaries, property taxes, and insurance. 252) B Average cost (per unit) is obtained by dividing total cost by the related quantity, that is, the total quantity that causes the total cost. 253) A Break-even analysis evaluates whether the firm will be able to break even—that is, cover all its costs—with a particular price. The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. Remember that the fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 254) C

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110

Break-even analysis evaluates whether the firm will be able to break even—that is, cover all its costs—with a particular price. The BEP, in units, can be found by dividing total fixed costs (TFC) by the fixed-cost (FC) contribution per unit. Remember that the fixed-cost (FC) contribution per unit is the assumed selling price per unit minus the variable cost per unit. 255) D Break-even analysis is a useful tool for analyzing costs and evaluating what might happen to profits in different market environments. 256) A Ignoring demand is the major weakness of average-cost pricing. 257) B Marginal analysis focuses on the price that earns the highest profit. But a slight miss doesn't mean failure, because demand estimates don't have to be exact; there is usually a range of profitable prices. 258) B Leader pricing means setting some very low prices—real bargains—to get customers into retail stores. 259) E Price lining is setting a few price levels for a product line and then marking all items at these prices.

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111

CHAPTER 19 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) When evaluating marketing, it is best to evaluate micro-marketing and macro-marketing separately. ⊚ ⊚

true false

2) In the United States, the aim of the economic system has been to satisfy consumers' needs as they—the consumers—see them. ⊚ ⊚

true false

3) In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. ⊚ ⊚

true false

4) The American Customer Satisfaction Index makes it possible to track changes in consumer satisfaction measures over time and even allows comparison among countries. ⊚ ⊚

true false

5) Looking at the "average" satisfaction of a whole society does not provide a complete picture for evaluating macro-marketing effectiveness. ⊚ ⊚

true false

6) At the macro level, consumer satisfaction is difficult to measure and interpret, so any evaluation is in part subjective.

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⊚ ⊚

true false

7) At the macro level, consumer satisfaction can easily and objectively be measured using practical economic methods. ⊚ ⊚

Evaluating marketing effectiveness is impossible. ⊚ ⊚

true false

Evaluating marketing effectiveness of an individual firm is difficult, but not impossible. ⊚ ⊚

true false

10) Consumer satisfaction at the micro level cannot be measured because firms cannot determine how well their products satisfy customers. ⊚ ⊚

true false

11) According to the text, micro-marketing does not cost too much in the United States, but macro-marketing often does cost too much. ⊚ ⊚

true false

12) The fact that many firms are too production-oriented and inefficient is one reason so many new products fail. ⊚ ⊚

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true false

13) Micro-marketing often costs too much because many firms improperly blend the Four Ps and misunderstand both their customers and the market environment that affects their operation. ⊚ ⊚

true false

14) Making sure that the benefits a customer receives from a marketing mix exceed the customer's costs of obtaining those benefits is one way to gain a competitive advantage. ⊚ ⊚

true false

15) There are many reasons for business failures, including products that do not create value in the eyes of the customer, improperly identifying the target market, and lack of innovative thinking. ⊚ ⊚

true false

16) A firm that fails to offer a new marketing mix stands to bear the high cost of missed opportunities. ⊚ ⊚

17)

Thanks to much publicity, the marketing concept is now practiced by all firms. ⊚ ⊚

18)

true false

Micro-marketing efforts help the economy grow by stimulating innovation. ⊚ ⊚

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true false

19) Monopolistic competition may result in high costs, and therefore it does not do a good job of serving consumers the way they want to be served. ⊚ ⊚

20)

true false

Advertising is probably the most criticized of all micro-marketing activities. ⊚ ⊚

true false

21) Advertising can increase demand for a product, resulting in economies of scale in manufacturing, distribution, and sales. ⊚ ⊚

22)

true false

Firms can manipulate consumers to buy anything the company chooses to produce. ⊚ ⊚

true false

23) According to the text, the proper function of marketing is to persuade consumers to buy what firms want to sell. ⊚ ⊚

true false

24) A marketing manager who is willing to spend enough on persuasive promotion can usually get consumers to buy anything the company chooses to produce. ⊚ ⊚

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true false

25)

People have always been materialistic, even in the most primitive societies. ⊚ ⊚

true false

26) The text argues that the plight of the homeless is a result of the forces of market competition in our market-directed economies. ⊚ ⊚

true false

27) A firm usually has more different strategy possibilities than it can pursue, so it must use screening criteria to help eliminate those strategies not well-suited to the firm. ⊚ ⊚

true false

28) Careful analysis helps a manager focus on a strategy that takes advantages of the firm's opportunities and strengths while avoiding its weaknesses and threats to its success. ⊚ ⊚

true false

29) The job of integrating the Four Ps strategy decisions is the responsibility of the company controller, since the money to do so must be available. ⊚ ⊚

true false

30) The Four Ps must be creatively blended so that each decision works well with all the others to make a logical whole. ⊚ ⊚

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true false

31) A S.W.O.T. analysis identifies the "special weapons or tactics" used by the competitor in a product-market that has the most profitable marketing mix. ⊚ ⊚

true false

32) S.W.O.T. analysis is based on the idea that one of the best ways to develop a strategy is to identify and copy the marketing "strategies, weapons, outlook, and tactics" of the firm's most effective competitor. ⊚ ⊚

true false

33) The letters in "S.W.O.T. analysis" are an abbreviation for the first letters of the words "strengths, weaknesses, opportunities, and threats." ⊚ ⊚

true false

34) The letters in "S.W.O.T. analysis" are an abbreviation for the first letters of the words in "special weapons or tactics." ⊚ ⊚

true false

35) A marketing plan usually spells out the time schedule for a marketing strategy as well as the time-related details. ⊚ ⊚

true false

36) A marketing plan should contain specific information like costs and sales forecasts, but not background information about customers, competitors, or the company's resources. ⊚ ⊚

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true false

37) A good marketing plan will work well throughout the different stages of the product life cycle. ⊚ ⊚

38)

true false

A good business manager should adhere to the idea "if it ain't broke, don't fix it." ⊚ ⊚

true false

39) When a multinational gas and oil company promotes its itself as a “leader in the environmental movement,” it is an example of greenwashing. ⊚ ⊚

true false

40) Fostering a free press, science, and an open Internet are ways that the government can promote the free flow of accurate information, which helps consumers make more informed choices and leads to a more effective and efficient marketing system. ⊚ ⊚

41)

true false

Technology is making it harder to abuse consumers' rights to privacy. ⊚ ⊚

true false

42) One of the disadvantages of a market-directed economic system is that it does not operate automatically and requires careful government oversight. ⊚ ⊚

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true false

43) Consumers—as well as business firms—should behave in a more socially responsible manner to improve the performance of our macro-marketing system. ⊚ ⊚

44)

true false

Consumers have a responsibility to preserve an effective macro-marketing system. ⊚ ⊚

true false

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 45) Given the nature of marketing—and the kinds of criticism it typically gets—marketing should be evaluated A) at both the micro level and the macro level. B) mainly at the macro level. C) mainly at the micro level. D) None of the answers are correct.

46)

A market-directed economic system implies that

A) society lacks both political and economic freedom. B) people have political freedom, but economic objectives are determined by the government. C) political freedom and economic freedom go hand in hand. D) the needs of consumers are not part of marketing objectives. E) very little importance is attached to customer satisfaction.

47)

When evaluating the effectiveness of the macro-marketing systems of different countries,

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A) the evaluation should be limited to basic economic objectives, which are common across countries. B) the best approach is to see if firms are making a profit. C) it doesn't make sense to compare the effectiveness of systems for different nations that have different objectives. D) the evaluation should be based on how well each system satisfies consumers' needs as they—the consumers—see them. E) None of the answers are correct.

48)

The basic objective of the U.S. market-directed economic system is to A) minimize inflation. B) satisfy consumer needs as they—the consumers—see them. C) provide each person with an equal share of the economic output. D) achieve an annual growth rate of at least 10 percent. E) make the most efficient use of the country's resources.

49) to

In the United States, the basic objective of the market-directed economic system has been

A) ensure the survival of business firms. B) find a reasonable balance between consumer satisfaction and business profits. C) reduce the cost of marketing activities. D) satisfy consumer needs as the consumers themselves see them. E) satisfy consumer needs as seen by marketing managers.

50)

What is the basic objective of the U.S. market-directed economic system?

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A) providing everyday low prices B) immediate delivery of products C) offering easy financing D) consumer satisfaction E) making advertising memorable

51) Given the U.S. economy's basic objective, the best measure of the effectiveness of the U.S. macro-marketing system is A) GDP growth. B) the equality of income distribution. C) how efficiently resources are used. D) how many new products are introduced. E) the level of consumer satisfaction.

52) Given the American economy's basic objective of meeting consumers' needs as they—the consumers—see them, it is sensible to evaluate our macro-marketing system in terms of A) the level of consumer satisfaction. B) how efficiently our resources are used. C) the value of the inputs to the system. D) our standard of living, as measured by GNI. E) total business profits.

53) One measure of overall consumer satisfaction in the United States, created by researchers at the University Michigan and called the ________, is based on the results of regular interviews with thousands of customers.

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A) Index of Consumer Confidence B) United States Customer Satisfaction Index C) American Customer Satisfaction Index D) Survey of Consumer Sentiment E) Gallup Poll

54)

In measuring consumer satisfaction, marketing managers should remember that

A) customer satisfaction is a highly personal concept. B) consumer expectations and aspirations tend to remain the same over time. C) looking at the average level of satisfaction for a whole society provides a precise description of macro-marketing effectiveness. D) evaluations of macro-marketing effectiveness are purely objective, in that they are based on tabulated survey results. E) All of the answers are correct.

55)

Measuring consumer satisfaction at the macro level

A) is actually easy—just add up all the marketing mixes. B) is difficult because consumer satisfaction depends on the level of consumer aspiration. C) must be done quantitatively. D) uses MIS techniques. E) None of the answers are correct.

56) Alia was satisfied with the old television that she had owned for years. But after watching a few shows on her friend's big, flat-screen, HD television, she felt that she should buy a newer model for herself. Which of the following limitations of measuring macro-marketing effectiveness does this illustrate?

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A) Customer satisfaction is easy to measure by means of a survey or a poll. B) Customer satisfaction depends on and is relative to individual aspirations. C) Customer satisfaction remains unchanged even when levels of expectation rise. D) The American Customer Satisfaction Index provides an accurate measure of satisfaction. E) The average level of customer satisfaction provides a complete picture for evaluating macro-marketing effectiveness.

57)

In a market-directed system, A) the emphasis lies in optimizing the rate of production. B) the government decides what products should be produced to meet the people's

needs. C) firms do not rely on customer satisfaction, as it is impossible to measure. D) customer satisfaction has very little importance. E) it is up to each customer to decide how effectively individual firms satisfy his or her needs.

58)

Consumer satisfaction A) is a highly reliable standard for evaluating macro-marketing effectiveness. B) is easy to measure because it is a highly personal concept. C) is the objective of all macro-marketing systems. D) depends on consumers' level of expectation. E) None of the answers are correct.

59)

When evaluating macro-marketing,

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A) the evaluation is necessarily subjective. B) the best approach is to consider the profit generated by individual firms within the overall system. C) one must determine how efficiently the society's resources are used. D) one must consider each individual firm's role in the marketing system. E) All of the answers are correct.

60)

Macro-marketing A) is probably best evaluated by how individual consumer-citizens vote. B) can be evaluated with quantitative measures of consumer satisfaction. C) is concerned with how efficiently individual companies use their resources. D) is easier to evaluate than micro-marketing. E) None of the answers are correct.

61)

Micro-marketing effectiveness can be measured by assessing A) the profits of business firms. B) the opinions of intermediaries. C) unsolicited consumer responses. D) attitude research studies. E) All of these are good measurements for micro-marketing.

62) A national restaurant chain encourages its customers to use its website as a means of providing comments about their experiences at the chain's locations. This website is one way of measuring A) macro-marketing effectiveness. B) the effectiveness of competition. C) employee empowerment. D) micro-marketing effectiveness. E) All of the answers are correct.

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63) In the U.S. market-directed system, it is up to each ________ to decide how effectively individual firms satisfy the consumer's needs. A) market research consultant B) customer C) manufacturer D) advertising agency E) salesperson

64)

________ can be used as a rough measure of a firm's efficiency in satisfying customers. A) Production B) The marketing mix C) Profits D) Macro-marketing E) Returns

65)

Satisfaction with a firm's marketing efforts can be roughly measured by assessing A) its profits. B) the firm's impact on the macro-marketing system. C) the size of its target markets. D) its marketing mix. E) None of these are good measurements.

66)

According to the text, A) both micro-marketing and macro-marketing usually cost too much. B) neither micro-marketing nor macro-marketing costs too much. C) macro-marketing costs too much in the United States. D) micro-marketing frequently costs too much.

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67)

According to the text,

A) macro-marketing costs too much in the United States, given the current objective of the economy. B) marketing never costs too much. C) micro-marketing often costs too much. D) micro-marketing always costs too much. E) all macro-marketing systems cost too much.

68)

Comment cards are generally used to measure A) customer satisfaction. B) product perishability. C) employee productivity. D) advertisement TRPs.

69)

The authors of the text contend that A) both micro-marketing and macro-marketing cost too much. B) neither micro-marketing nor macro-marketing cost too much. C) micro-marketing often costs too much, but macro-marketing does not. D) micro-marketing does not cost too much, but macro-marketing does. E) None of the answers are correct.

70)

Which of the following statements about customer satisfaction is true?

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A) Research shows that many customers are not satisfied and feel that some companies do not deliver on their promises. B) Research shows that most customers are somewhat satisfied and feel that companies usually deliver on their promises. C) Research shows that most customers are satisfied and feel that companies deliver on their promises. D) None of the answers are correct.

71) A study revealed that when consumers are dissatisfied with a product or an individual business, A) most of their complaints are fully resolved—if they are just reported. B) a majority of their complaints are never reported. C) a marketing manager should just ignore most complaints because they are the result of dealing with consumers. D) All of the answers are correct.

72)

A marketing manager should

A) know that most consumer complaints do not require a response because the consumer's dissatisfaction is beyond the control of the firm. B) recognize that many consumers who complain are trouble makers and that not much can or should be done about their complaints. C) assume that most customers who are dissatisfied will complain, but that people who are satisfied will be silent. D) be concerned that many of the complaints that are reported are never resolved. E) recognize that a "complaint" box isn't needed if the firm is really market-oriented in the first place.

73)

Marketing inefficiencies are due to all of the following except

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A) lack of interest in the customer. B) improper blending of the Four Ps. C) lack of understanding of the market environment. D) listening too closely to the "voice of the customer." E) lack of understanding of consumers’ sometimes fickle nature.

74) Which of the following does not support the idea that "micro-marketing often does cost too much"? A) Many firms focus exclusively on their own internal problems. B) Distribution channels may be selected on the basis of personal preferences. C) Product planners frequently develop "me-too" products. D) Many managers adopt the easiest strategy rather than seeking new ways to satisfy customers. E) Many firms try to maximize profits.

75)

According to the text, micro-marketing may cost too much because too many managers

A) seize on whatever strategy seems easiest. B) are slow and bureaucratic. C) jump on the "what's new" bandwagon without a strategy that ensures customer satisfaction and company profits. D) have the mentality of "that's not the way we do things." E) All of the answers are correct.

76) Which of the following is not an explanation for why micro-marketing may cost too much in some firms?

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A) Some managers make decisions as if customers are eagerly awaiting any product they produce. B) Production managers focus on designing products that are easy to make. C) Financial managers reduce finished-product inventories and force "out of stock" situations. D) Marketing managers do target marketing. E) Some managers don't see a business as a "total system" focused on customers.

77) Which of the following does not support the idea that micro-marketing often does cost too much? A) Product planners frequently develop me-too products. B) Many firms focus exclusively on their own internal problems. C) Many firms try to maximize profits. D) Managers routinely seize on whatever strategy seems easiest.

78)

A firm faces the high cost of missed opportunities when A) it introduces a marketing mix that fails. B) it doesn't offer a new marketing mix. C) its products are rejected by a certain market segment. D) it has an ineffective positioning statement. E) the purchasing power of its target customers is low.

79)

The reason that micro-marketing costs too much in many firms is that A) the marketing concept has not been accepted and implemented. B) most new products are not necessary to meet competition. C) marketing is not really needed. D) advertising is usually ineffective. E) None of the answers are correct, because marketing never costs too much.

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80)

Micro-marketing will probably continue to cost too much as long as A) the marketing concept is not accepted. B) firms focus on identifying new opportunities. C) firms do not undertake "mass marketing." D) managers see marketing as a human enterprise. E) All of these are reasons micro-marketing will probably continue to cost too much.

81) Which of the following observations provides some hope that micro-marketing is becoming more efficient and effective? A) More firms are becoming sales-oriented. B) More firms are becoming production-oriented. C) Fewer firms are becoming customer-oriented. D) Firms are embracing new technologies and diversity. E) None of the answers are correct.

82)

The text argues that macro-marketing in the United States A) costs too much because many consumers are dissatisfied. B) is a growing concept. C) does not cost too much. D) tends to decrease consumer welfare. E) costs too much because satisfying consumers costs too much.

83) ________ is an economical way to inform large numbers of potential customers about a firm's products.

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A) Innovation B) Production C) Advertising D) Pricing E) Encirclement

84)

Advertising can A) manipulate customers into buying a product. B) raise the cost of producing a product. C) assure a product does not fail. D) prevent economies of scale in manufacturing. E) increase demand for the product.

85) Most critics of marketing who argue that marketing managers help create monopoly or monopolistic competition feel this leads to A) restriction of output. B) higher prices. C) reduction in the national income. D) more unemployment. E) All of the answers are correct.

86)

In conditions of monopolistic competition, marketing A) may lead to new investments. B) may contribute to higher levels of national income. C) may spur economic growth. D) may cut unemployment. E) All of the answers are correct.

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87)

To meet the new competition, prices of the older products usually A) drop. B) remain unchanged, but interest in the product is renewed with vigorous advertising. C) increase. D) are supplemented with coupons. E) increase while being offset with discounts and coupons.

88)

Higher profits A) promote even allocation of resources. B) encourage large-scale advertising. C) increase social responsibility. D) protect competitors from each other. E) attract competition.

89)

Which of the following statements about marketing's impact on the economy is false? A) Companies force consumers to buy products at exorbitant prices. B) When new products are introduced, the prices of older products often drop. C) Rising profits lead to increased investments and further economic growth. D) Increased profits attract competition. E) A rise in profits encourages innovation, which leads to new investments.

90)

________ is one of the most criticized of all marketing activities. A) Packaging B) Advertising C) Placement D) Pricing E) Production

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91)

Advertising A) always results in higher prices for products. B) is a waste of resources. C) costs so much that it reduces the chance to achieve economies of scale in production. D) guarantees a product's success. E) None of the answers are correct.

92)

Which of the following is true regarding our macro-marketing system?

A) Consumers would be better off if our macro-marketing system were in pure competition, rather than monopolistic competition. B) Marketing makes people buy things they don't need. C) Advertising can actually lower final consumer prices if it helps achieve economies of scale. D) Monopolistic competition leads to higher prices, restriction of output, a waste of resources, and greater consumer dissatisfaction. E) All of the answers are correct.

93)

Regarding our macro-marketing system, advertising

A) actually lowers prices to the consumer. B) informs large numbers of potential customers about a firm's products in an economical way. C) results in economies of scale in manufacturing, distribution, and sales. D) makes both the micro-marketing and macro-marketing processes work better. E) All of the answers are correct.

94)

According to the text, critics of advertising

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A) argue that it lowers consumer prices, and thus results in "less than satisfactory" profits for firms. B) often overrate the positive effect that monopolistic competition can have on the economy. C) simply don't know what they're talking about if theythink that a lot of advertising is annoying. D) claim that firms use clever ads to persuade consumers to buy whatever the firms want to sell. E) base their evaluation on fears that advertising increases economies of scale.

95) The Xtreme Football League (XFL) was launched in 2001 by Vince McMahon, chairman of World Wrestling Entertainment (WWE). It was designed to provide professional football to American sports fans in the months after the conclusion of the National Football League (NFL) season. In spite of heavy promotion, lots of advertising, and a national network television contract, the XFL was a classic product failure, largely because the quality of play was not good enough to satisfy most football fans. The league evaporated after one season. This type of failure refutes the frequent claim of critics that advertising A) makes people materialistic. B) elevates the wrong values. C) manipulates consumers to buy anything a company chooses to produce. D) leads to higher prices. E) All of the answers are correct.

96)

Which of the following is true regarding our macro-marketing system? A) Marketing makes people materialistic by creating "false values." B) Advertising generally raises prices and wastes resources. C) Marketing tries to satisfy "unwanted demand" rather than genuine wants. D) Satisfying consumer needs and wants is a dynamic, ongoing process. E) None of the answers are correct.

97)

Marketing

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A) creates materialistic values that did not exist before. B) turns consumers into puppets. C) reflects existing social values in the short run, while reinforcing these values in the long run. D) focuses on "learned wants" rather than genuine needs. E) None of the answers are correct.

98)

Which of the following statements regarding marketing's influence on values is false? A) Many companies refuse to use ads that would be offensive to their target customers. B) Marketing never elevates the wrong values. C) Many companies work hard to determine their customers' beliefs and values. D) Marketing tends to reflect social values in the short run. E) Marketing tends to reinforce and enhance social values in the long run.

99)

A market-directed economy A) ensures that voters and politicians agree on which problem has to be solved first. B) concentrates solely on profit generation. C) guarantees that government aid programs are effective. D) spreads income evenly among the population. E) makes efficient use of resources.

100)

Which of the following is true regarding marketing strategy planning?

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A) Managers usually know all they need to know about the needs and attitudes of their target markets. B) Competitors cannot force a firm to shift its marketing mix. C) Changes in the dimensions of the market environment have no effect on a firm's marketing mix. D) The lack of a complete understanding of the target market can make it difficult to combine the Four Ps into a suitable marketing mix. E) None of these alternatives is correct.

101)

Which component of the marketing mix involves advertising and hiring sales people? A) Price B) Product C) Place D) Promotion E) Production

102) Which component of the marketing mix involves the strategic decision areas of benefits, features, and packaging? A) Promotion B) Place C) Positioning D) Price E) Product

103) Which of the following strategic decision areas is a part of the Product component of the marketing mix?

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A) branding B) managing channels C) publicity D) discounts E) geographic terms

104) Which of the following is a strategic decision area that is a part of the Price component of the marketing mix? A) physical good B) level over product life cycle C) salespeople selection and training D) warranty E) product lines

105) Which of the following is a strategic decision area that is a part of the component of Place in the marketing mix? A) product lines B) quality level C) market exposure D) promotion blend E) allowances

106)

Offering a marketing mix that is like what is available from competitors usually A) doesn't provide superior value. B) reveals where customers are located. C) amounts to a feasible strategy. D) offers a competitive advantage. E) provides differentiation for the seller.

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107)

The marketing manager

A) must make independent decisions and assemble them into a marketing mix. B) must creatively blend the Four Ps so the firm develops the best mix for the target market. C) must integrate the ideas of specialists, such as the product manager, advertising manager, and sales manager. D) must make sure that each marketing mix decision works well with the others. E) All of the answers are correct.

108)

Which of the following is true regarding marketing strategy planning?

A) Trends in the external market environment may make a potential opportunity more or less attractive. B) Marketing managers implement marketing strategies—notmarketing plans. C) The market environment may force marketing managers to change target markets— but their marketing mixes are usually not affected. D) It is easier in large firms, because marketing managers can count on specialists to plan each of the Four Ps. E) All of the answers are correct.

109) Which of the Four Ps in the marketing mix is most directly related to the instructions that come with a new high-definition television set? A) Product B) Place C) Promotion D) Price

110) Which of the Four Ps in the marketing mix is most directly related to the warranty that comes with a new digital camera?

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A) Product B) Place C) Promotion D) Price

111) Which of the Four Ps in the marketing mix is most directly related to the branding strategy for Apple's iPad? A) Product B) Place C) Promotion D) Price

112) Which of the Four Ps in the marketing mix is most directly related to the recruiting of wholesalers and retailers for a new product introduction? A) Product B) Place C) Promotion D) Price

113) Which of the Four Ps in the marketing mix is most directly related to the selection and training of salespeople for a B2B product? A) Product B) Place C) Promotion D) Price

114) Which of the Four Ps in the marketing mix is most directly related to the publicity for a B2B campaign? Version 1

A) Product B) Place C) Promotion D) Price

115) Which of the Four Ps in the marketing mix is most directly related to discounts and allowances of purchased products in a B2B transaction? A) Product B) Place C) Promotion D) Price

116)

A Product strategy decision includes consideration of all the following except A) benefits. B) exposure. C) features. D) quality. E) warranty.

117)

Which of the following areas does not relate to Place in the Four Ps? A) market exposure B) managing channels C) kinds and locations of stores D) branding E) kinds of intermediaries

118)

Flexibility, geographic terms, and allowances are all related to

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A) Price. B) Product. C) Promotion. D) Place. E) Price and Product.

119) In the development of a marketing plan, blending the marketing mix would not generally involve A) predicting future behavior. B) product classes. C) the strategy planning process. D) the product life cycle. E) understanding the target market.

120)

A S.W.O.T. analysis

A) seeks to reduce the risk of competitive surprises by scanning the market for "signals, warnings, omens, and tips." B) focuses on what a firm plans to do to "satisfy wishes of a target" customer. C) summarizes a firm's "strategy, wishes (of its customers), outlook, and tactics." D) helps defend against potential competitors by developing a set of competitive "safeguards, weapons, offensives, and tactics." E) identifies a firm's "strengths, weaknesses, opportunities, and threats."

121) true?

Which of the following statements about putting together an innovative marketing plan is

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A) The marketing plan blends the elements of the marketing mix. B) The marketing plan forecasts the size of the target market and potential sales. C) The marketing plan includes implementation plans. D) The marketing plan spells out some time period. E) All of the answers are correct.

122)

A marketing plan A) is a combination of several marketing strategies. B) must cover a one-year period. C) consists of a target market and an appropriate marketing mix. D) includes the time-related details for implementing a marketing strategy. E) All of the answers are correct.

123)

Regarding timing, a marketing plan A) could cover as short a time period as a few months. B) is specific about time-related details. C) could cover as long a time period as several years. D) All of the answers are correct.

124) When developing a marketing plan for a new product that is about to enter the market introduction stage of its product life cycle, a marketing manager should A) plan to change the marketing strategy every six months. B) choose the best possible marketing strategy and stay with it throughout its product life cycle. C) plan to sell the product until its whole life cycle is over. D) plan to change the marketing strategy as the product moves through its life cycle. E) change the marketing strategy only when the market environment changes.

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125)

A marketing plan will A) explain what marketing mix the firm will use for its target market. B) include time-related details for the marketing strategy. C) change with the marketing strategy as the product moves through its life cycle. D) All of the answers are correct.

126)

Which of the following might be a section in a marketing plan? A) Competitor Analysis B) Customer Analysis C) Marketing Strategy D) Situation Analysis E) All of the answers are correct.

127) Which section of a formal marketing plan for a new product is most directly related to deciding which segmenting dimensions are most important in choosing a target market? A) Packaging B) Customer Analysis C) Price D) Implementation and Control E) Place

128) Which section of a formal marketing plan for a new product is most directly related to deciding how you want the target market to think about your product compared to competitive products?

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A) Packaging B) Customer Analysis C) Differentiation and Positioning D) Implementation and Control E) Place

129) Which section of a formal marketing plan for a new product is most directly related to deciding the markup chain in the channel of distribution for a new product? A) Packaging B) Customer Analysis C) Price D) Implementation and Control E) Place

130) While developing a new marketing plan, Taco Bell is analyzing whether a collaborator like Major League Baseball would be a good sponsor. This analysis should appear in the ________ section of the marketing plan. A) Company B) Competitor C) Channel D) Place E) Promotion

131) A marketing plan that included material on transportation requirements, inventory product-handling requirements, and facility requirements would include it in the ________ section.

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A) Promotion B) Price C) Place D) Product E) Personnel

132) In a marketing plan, which of the following would not be included in the Promotion area? A) advertising B) packaging C) personal selling D) sales promotion E) publicity

133)

As consumers shift their support to firms that prove to meet their needs, A) laggard businesses are forced to either improve or get out of the way. B) firms should focus on domestic markets and ignore international ones. C) firms must immediately adopt their competitors' strategies. D) firms should adhere to the idea that "if it ain't broke, don't fix it." E) firms should increase promotional expenditure.

134) Which of the following is a demographic pattern that affects marketing strategy planning? A) shrinking media budgets B) growth of interactive agencies C) slower real income growth in the United States D) major accounts specialization E) interactive bidding and proposal requests

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135)

Marketing creates a better world when buyers and sellers do all of the following except A) make buying decisions based solely on individual need. B) make healthier buying decisions. C) experience a better quality of life through their consumption choices. D) increase their quality of life through their choice not to consume. E) make decisions that have less adverse impacts on others.

136) Which of the following groups is leastrelevant to the development of effective marketing strategies that contribute to a better world? A) schools/teachers B) consumer-citizens C) business/marketing D) government/society

137) Which of the following is not one of the ways that businesses can help address global challenges? A) Enact protective legislation. B) Have a continuous improvement attitude. C) Be more honest with customers. D) Use technology responsibly. E) Seek “better world” opportunities.

138)

When a business enacts a “better world” strategy, it

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A) must be done to support its business objectives. B) ceases having profit as one of its objectives. C) begins to behave like a philanthropic nonprofit. D) adheres to an “if it ain’t broke, don’t fix it” mentality. E) needs to change its target market.

139) Making false claims that imply a company or its products do more for the environment, or other false claims about making the world a better place, is referred to as A) greenwashing. B) false data. C) environmental deception. D) organic deceit. E) green guiding.

140)

Which of the following is the best example of greenwashing?

A) A company that makes toxic chemicals promotes its use of recycled plastics in its packaging. B) A farmer commits to growing organic and non-GMO crops. C) Businesses join with consumers to call for more environmental regulations. D) A firm has its packaging tested to see if it is biodegradable. E) A company seeks profit in addition to environmentally sound production.

141) The Snapchat “streak” occurs when a user sends direct snaps back and forth with a friend for several consecutive days. The longer they go without breaking the chain of communication, the longer the streak is. Many teens invest an inordinate amount of time keeping streaks alive, and are devastated when they lose a streak. Which of the following better world issues does this implicate?

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A) the ethics of making addictive products B) greenwashing C) the role of government and social institutions D) the need for a vibrant and free press E) the requirement to respect consumer privacy

142)

When it comes to marketing for a better world, the role of government is to A) promote the free flow of information. B) discourage consumerism. C) deregulate. D) discredit the free market. E) require philanthropic acts by businesses.

143)

Regarding the challenges facing marketers, the text suggests that

A) government planners should play a major role in deciding what product choices consumers should have. B) continued growth of GDP is one favorable change in our macro-marketing system that a marketing manager can count on. C) there is likely to be much less regulation of marketing in the future, especially with regard to consumer privacy. D) marketers should look for ways to improve a strategy even before there's reason to believe that something needs to be fixed. E) All of the answers are correct.

144)

Which of the following statements about future trends in marketing is true?

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A) Marketers should seek better world opportunities. B) Marketers need to recognize what technologies are acceptable and which are not. C) Marketers need to be aware of their responsibilities and consumer's long-run satisfaction. D) Marketers must be sensitive to consumers' rights and privacy. E) All of the statements are true.

145) Many important changes are affecting marketing strategy planning. For example, the introduction and growing use of smart phones is illustrative of changes in the area of A) channels and logistics. B) personal selling. C) demographic patterns. D) marketing research. E) communication technologies.

146) Many important changes are affecting marketing strategy planning. For example, pointof-purchase promotion and increased trade promotion are illustrative of changes in the area of A) channels and logistics. B) personal selling. C) demographic patterns. D) sales promotion. E) communication technologies.

147)

Which of the following is a key trend affecting marketing strategy planning? A) decreasing size of senior and ethnic submarkets B) slower new-product development C) less use of technology in personal selling D) less international market development E) growth of marketing information systems

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148) Which of the following is not a current trend that is affecting marketing strategy planning? A) growth of JIT and EDI B) more international market development C) less attention to distribution service D) more attention to quality E) faster new-product development

149) Which of the following is not a current trend that is affecting marketing strategy planning? A) more attention to targeted media B) data warehouses and data mining C) slower real income growth in United States D) augmented reality E) smaller retail outlets

150)

Which of the following is not a trend that is affecting marketing strategy planning? A) brick-and-mortar retailing and wholesaling B) geographic shifts in population C) more attention to service technologies D) comparison shopping on the Internet E) increased trade promotion

151)

Which of the following is not a current trend affecting marketing strategy planning?

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A) integrated marketing communications B) shrinking media budgets C) use of artificial intelligence and intelligent agents D) declining use of interactive bidding and proposal requests E) aging of the Baby Boomers

152)

Which of the following is a not a key trend affecting marketing strategy planning? A) aging of the Baby Boomer population B) use of next-day and same-day delivery C) less use of integrated marketing communications D) use of value pricing E) more attention to quality

153)

Which of the following is not a current trend affecting marketing strategy planning? A) more attention to environmental issues B) growth of ethnic submarkets C) growth of customer loyalty programs D) growth of senior citizen submarket E) less attention to profitability and more to sales

154)

Which of the following is not a current trend affecting marketing strategy planning? A) slower new-product development B) growth of value pricing C) more multichannel shopping D) more attention to profitability, not just sales E) greater use of tariffs

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155) Which of the following is not a trend affecting marketing strategy planning in the area of demographic patterns? A) explosion in senior and ethnic submarkets B) higher real income growth in United States C) geographic shifts in population D) aging of the Baby Boomers E) population growth slowdown in United States

156) Which of the following is not a trend affecting marketing planning strategy in the area of business and organizational customers? A) web portals and Internet sourcing B) closer relationships and single sourcing C) interactive bidding and proposal requests D) less reliance on e-commerce and supply chain management E) more use of JIT and EDI

157) Which of the following is not a trend affecting marketing strategy planning in the Product area? A) more attention to quality B) less multichannel shopping C) more attention to service technologies D) research and development teams with market-driven focus E) more attention to sustainable design

158) Which of the following is not a trend affecting marketing strategy planning in the area of channels and logistics?

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A) growth of online retailing B) rise of logistics outsourcing C) less international market development D) more omnichannel strategies E) real-time inventory replenishment

159) Which of the following is not a trend affecting marketing strategy planning in the area of sales promotion? A) increased trade promotion B) more event sponsorships C) fewer customer loyalty programs D) customer acquisition cost analysis E) point-of-purchase promotion

160) Which of the following is not a trend affecting marketing strategy planning in the area of mass selling? A) consolidation of media companies B) decreasing emphasis on earned and owned media C) integrated marketing communications D) shrinking medial budgets E) more targeted media

161) Which of the following is not a trend affecting marketing strategy planning in the area of pricing? A) overuse of sales and deals B) increased use of dynamic pricing C) use of freemium pricing D) increased ease of comparison price shopping on the Internet E) decreasing use of value pricing

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162) Which of the following is not a trend affecting marketing strategy planning in the area of international marketing? A) tensions between "have" and "have-not" cultures B) greater use of tariffs C) global communication over the Internet D) decreasing income and population in emerging markets E) impact of "pop" cultures on traditional cultures

163)

Better performance of our market-directed macro-marketing system may require

A) newer and tougher laws, because the present laws don't do enough to protect competing firms from each other. B) more consumer responsibility. C) less emphasis on consumer privacy. D) less business responsibility—because consumers already determine whether a firm will succeed or fail. E) None of the answers are correct.

164) Many Internet sites, such as Autobytel.com and Edmunds.com, have extensive information about the prices of new and used vehicles that anyone can use for free. In light of the availability of this information, what is the responsibility of consumers to use it? A) Consumers shouldn't use it, because it gives them an unfair advantage over car dealers. B) Consumers have a responsibility to use the information and be smarter customers. C) Consumers can use it but should not feel a responsibility to do so. D) Consumers should not trust any information they receive from any source except the government. E) None of the answers are correct.

165)

Consumerism has encouraged

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A) nutritional labeling. B) truth-in-lending. C) unit pricing. D) plain-language contracts and warranties. E) All of the answers are correct.

166)

Regarding our macro-marketing system, the text suggests that

A) consumers' freedom of choice should be reduced—for the good of society. B) some changes may be necessary, but consumer-citizens should vote on these changes. C) marketing managers should limit consumers' freedom of choice. D) marketing managers should produce only what they feel is good for consumers. E) None of the answers are correct.

167) The best way to improve the operation of our macro-marketing system, given the current objectives of our society, is to A) encourage marketing managers to produce only what they feel is good for consumers. B) eliminate intermediaries. C) add value and better satisfy consumers' needs and preferences. D) spend more on advertising. E) move toward a command economy.

168) Which of the following is true regarding the roles of marketers and consumers in improving the macro-marketing system?

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A) Marketing managers should not be expected to improve and extend the range of goods and services they make available. B) The decisions that marketing managers make always increase the choices available to consumers. C) Consumer-citizens have the responsibility to vote for laws that place constraints on businesses if those businesses harm the ecological system or make excessive demands on scarce resources. D) Marketers and consumers should decide in advance what products will be produced so as not to waste scarce resources. E) None of these statements is true.

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Answer Key Test name: Chap 19_17e 1) TRUE When evaluating marketing, we must treat each of these levels (micromarketing and macro-marketing) separately. 2) TRUE In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. 3) TRUE In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. 4) TRUE The American Customer Satisfaction Index makes it possible to track changes in consumer satisfaction measures over time and even allows comparison among countries. 5) TRUE Looking at the "average" satisfaction of a whole society does not provide a complete picture for evaluating macro-marketing effectiveness. 6) TRUE Although efforts to measure satisfaction are useful, any evaluation of macro-marketing effectiveness has to be in part subjective. 7) FALSE Version 1

Although efforts to measure satisfaction are useful, any evaluation of macro-marketing effectiveness has to be in part subjective. 8) FALSE Measuring the marketing effectiveness of an individual firm is difficult, but not impossible. 9) TRUE Measuring the marketing effectiveness of an individual firm is difficult, but not impossible. 10) FALSE Individual businesses can and should try to measure how well their marketing mixes satisfy their customers (or why they fail). In fact, most large firms now have some type of ongoing effort to determine whether they're satisfying their target markets. 11) FALSE Micro-marketing frequently does cost too much but macro-marketing does not cost too much—given the present objective of the American economy, consumer satisfaction. 12) TRUE Many new products fail because too many firms are too productionoriented and not nearly as efficient as they could be. 13) TRUE Marketing inefficiencies are due to improper blending of the Four Ps— that is, a lack of understanding or adjustment to the customer or the market environment. 14) TRUE

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If the benefits a customer receives from a marketing mix exceed the customer's costs of obtaining those benefits, the firm can gain a competitive advantage. 15) TRUE Factors that lead to business failures are products that don't create value in the eyes of the customer, an inability of firms to identify new target markets, and a lack of innovative ideas. 16) TRUE A sign of failure is the inability of firms to identify new target markets and new opportunities. When a firm does not offer a new marketing mix, it stands to bear the high cost of missed opportunities. 17) FALSE Despite much publicity, the marketing concept is not applied in many places. 18) TRUE Innovative ideas lead to new investments, which contribute to economic growth and higher levels of national income and employment. 19) FALSE Monopolistic competition is sometimes accompanied by high prices for new products. But consumers have choices. They don't have to buy the new product unless they think it is a better value. The older products are still available, and their prices usually drop to meet the new competition. 20) TRUE Advertising is the most criticized of all micro-marketing activities. 21) TRUE Advertising can increase demand for a product, resulting in economies of scale in manufacturing, distribution, and sales. Version 1

22) FALSE The idea that firms can manipulate consumers to buy anything the company chooses to produce simply isn't true. 23) FALSE Marketing's job is not just to satisfy consumer wants as they exist at any particular point in time but also to keep looking for new and better ways to create value and serve consumers. 24) FALSE The idea that firms can manipulate consumers to buy anything the company chooses to produce simply isn't true. 25) TRUE Even in the most primitive societies, people want to accumulate possessions. 26) FALSE The forces of competition drive down prices, more people are able to afford more of what they need. And the matching of supply and demand stimulates economic growth, creates jobs, and spreads income among more people. A market-directed economy makes efficient use of resources. However, it can't guarantee that government aid programs are effective. 27) TRUE Developing a set of specific qualitative and quantitative screening criteria can help eliminate potential strategies that are not well suited to a firm. 28) TRUE

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Careful analysis helps the manager focus on a strategy that takes advantage of the firm's strengths and opportunities while avoiding its weaknesses and threats to its success. 29) FALSE The job of integrating the Four Ps strategy decisions is given to the marketing manager. 30) TRUE Marketing managers must creatively blend the Four Ps so that the firm can develop the best mix for its target market. Each decision must work well with all of the others to make a logical whole. 31) FALSE A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities and threats. Refer to Exhibit 19–4. 32) FALSE A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities and threats. Refer to Exhibit 19–4. 33) TRUE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. Refer to Exhibit 19–4. 34) FALSE The name S.W.O.T. is simply an abbreviation for the first letters in the words strengths, weaknesses, opportunities, and threats. Refer to Exhibit 19–4. 35) TRUE Some time schedule is implicit in any strategy. A marketing plan simply spells out this time period and the time-related details. Version 1

36) FALSE A marketing plan should provide information about marketing mix decisions, customers (including segmenting dimensions), competitors' strategies, other aspects of the market environment, and the company's objectives and resources. 37) FALSE When the market situation changes, the original reasons may no longer apply; therefore a marketing plan needs to be routinely checked and updated. 38) FALSE Marketing managers must constantly evaluate their strategies and not wait until a problem becomes completely obvious to do something about it. 39) TRUE Greenwashing is making false claims that imply a company or its products do more for the environment, or other false claims about making the world a better place. It’s good for firms to create a biodegradable package and promote it, but the cleaning product in the package shouldn’t contain chemicals that will be harmful once they’re in the sewer system. 40) TRUE The role of government is to promote the free flow of accurate information. Three institutions in society should be promoted and protected by the government to foster these goals: (1) a free press; (2) science; (3) an open Internet. 41) FALSE

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Marketing managers use technology to collect and analyze customer data, often without the customers’ knowledge. They must be sensitive to consumers’ rights and privacy. 42) FALSE One of the advantages of a market-directed economic system is that it operates automatically; but in the United States, consumer-citizens, by voting for political leaders, provide certain constraints (laws) that can be modified at any time. 43) TRUE Consumers as well as business firms share the responsibility for preserving an effective macro-marketing system. 44) TRUE Consumer-citizens share the responsibility for preserving an effective macro-marketing system. 45) A Marketing should be evaluated at both the micro level and the macro level, separately. 46) C In the United States, the basic objective of the market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. This objective implies that political freedom and economic freedom go hand in hand and that citizens in a free society have the right to live as they choose. 47) C Different nations have different social and economic objectives. Nations' objectives affect evaluation. 48) B Version 1

In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. 49) D In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. 50) D In the United States, the basic objective of our market-directed economic system has been to satisfy consumer needs as they, the consumers, see them. 51) E Since consumer satisfaction is the basic objective, marketing's effectiveness must be measured by how well it satisfies consumers. 52) A Since consumer satisfaction is the basic objective, marketing's effectiveness must be measured by how well it satisfies consumers. 53) C A team of researchers at the University of Michigan has created the American Customer Satisfaction Index, based on regular interviews with tens of thousands of customers of about 230 companies in 43 industries, to measure the overall consumer satisfaction. 54) A Consumer satisfaction is a highly personal concept. 55) B

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There are limits to interpreting any measure of consumer satisfaction when evaluating macro-marketing effectiveness, as satisfaction depends on and is relative to the level of aspiration or expectation. 56) B Satisfaction depends on and is relative to one's level of aspiration or expectation. Less prosperous consumers begin to expect more out of an economy as they see living standards around them rise. 57) E In a market-directed system, it is up to each customer to decide how effectively individual firms satisfy his or her needs. Usually, customers will buy more from firms with an offering that satisfies them—and they will do it again and again. 58) D Consumer satisfaction depends on and is relative to the level of aspiration or expectation. 59) A Although efforts to measure satisfaction are useful, any evaluation of macro-marketing effectiveness has to be in part subjective. 60) A The supreme test is whether the macro-marketing system satisfies enough individual consumer-citizens so that they vote to keep it running. 61) E Many firms measure customer satisfaction with attitude research studies. Other widely used methods include comment cards, e-mail response features on websites, unsolicited consumer responses (usually complaints), opinions of intermediaries and salespeople, market test results, and profits. Version 1

62) D Micro-marketing effectiveness can be measured by attitude research studies, comment cards, e-mail response features on websites, unsolicited consumer responses, opinions of intermediaries and salespeople, market test results, and profits. 63) B In the U.S. market-directed system, it's up to each customer to decide how effectively individual firms satisfy his or her needs. 64) C Because efficient marketing plans can increase profits, profits can be used as a rough measure of a firm's efficiency in satisfying customers. 65) A Because efficient marketing plans can increase profits, profits can be used as a rough measure of a firm's efficiency in satisfying customers. 66) D Micro-marketing frequently does cost too much, but macro-marketing does not cost too much—given the present objective of the American economy, consumer satisfaction. 67) C Micro-marketing frequently does cost too much, but macro-marketing does not cost too much—given the present objective of the American economy, consumer satisfaction. 68) A Comment cards, e-mail response features on websites, unsolicited consumer responses, opinions of intermediaries and salespeople, market test results, and profits are used to measure customer satisfaction. 69) C Version 1

Micro-marketing frequently does cost too much, but macro-marketing does not cost too much—given the present objective of the American economy, consumer satisfaction. 70) A Research shows that many consumers are not satisfied and some firms don't deliver on their promises. 71) B Research suggests that the majority of consumer complaints are never reported. Worse, many complaints that are reported never get fully resolved. 72) D Research suggests that the majority of consumer complaints are never reported. Worse, many complaints that are reported never get fully resolved. 73) D Marketing inefficiencies are due to one or more of these reasons: lack of interest in or understanding of the sometimes fickle consumer; improper blending of the Four Ps; and lack of understanding of or adjustment to the market environment. 74) E Micro-marketing may cost too much because firms fail to identify new target markets and new opportunities; and because too many managers seize on whatever strategy seems easiest rather than seeking really new ways to satisfy customers. However, "firms trying to maximize profits" does not support the idea that micro-marketing often does cost too much. 75) E

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Micro-marketing may cost too much because too many managers seize on strategies that seem easiest rather than seeking new ways; too many managers are too slow to react or bureaucratic; too many managers have the mentality "that's not the way we do things"; and too many managers jump on the "what's new" bandwagon without figuring out if it really satisfies the customer. 76) D Marketing managers doing target marketing is not an explanation for why micro-marketing may cost too much. 77) C The fact that many firms try to maximize profits does not explain why micro-marketing often costs too much. 78) B When a firm does not offer a new marketing mix, it stands to bear the high cost of missed opportunities. 79) A Despite much publicity, the marketing concept is not applied in many places. 80) A Micro-marketing will probably continue to cost too much as long as the marketing concept is not accepted. 81) D Many firms are embracing new technologies, comparing what they do with the best practices of firms in totally different industries, and teaming up with outside specialists who can bring a fresh perspective. 82) C Macro-marketing in the United States does not cost too much. Version 1

83) C Advertising is an economical way to inform large numbers of potential customers about a firm's products. Advertising can increase demand for the product—resulting in economies of scale in manufacturing, distribution, and sales. 84) E Advertising can increase demand for the product—resulting in economies of scale in manufacturing, distribution, and sales. Because these economies may more than offset advertising costs, advertising can actually lower prices to the consumer. 85) E Some critics feel that marketing helps create a monopoly or at least monopolistic competition. Further, they think this leads to higher prices, restricted output, and reduction in national income and employment. 86) E Over several years, the innovator's profits may rise leading to new investments, which contribute to economic growth and higher levels of national income and employment. 87) A To meet the new competition, prices of the older products usually drop. 88) E Increased profits also attract competition. 89) A Consumers do have a choice. They don't have to buy the new product unless they think it's a better value. 90) B Advertising is the most criticized of all micro-marketing activities. Version 1

91) E Advertising is an economical way to inform large numbers of potential customers about a firm's products. It can increase demand for the product, resulting in economies of scale in manufacturing, distribution, and sales. 92) C Advertising can increase demand for the product, resulting in economies of scale in manufacturing, distribution, and sales—all of which can offset advertising costs, leading to lower prices to the consumer. 93) E Advertising can make both the micro-marketing and macro-marketing processes work better. It is an economical way to inform large numbers of potential customers about a firm's products. It can increase demand for the product, resulting in economies of scale in manufacturing, distribution, and sales. It can actually lower prices to the consumer. 94) D Critics of advertising claim that firms can manipulate consumers to buy anything the company chooses to produce. This isn't true. Consumers are not puppets. 95) C Critics of advertising claim that firms can manipulate consumers to buy anything the company chooses to produce. This isn't true. Consumers are not puppets. 96) D Marketing's job is not just to satisfy consumer wants as they exist at any particular point in time, but also to keep looking for new and better ways to create value and serve consumers.

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97) C In the short run, marketing reflects social values, while in the long run it enhances and reinforces them. 98) B In the short run, marketing reflects social values, while in the long run it enhances and reinforces them. Many companies work hard to figure out their customers' beliefs and values and refuse to use ads that would be offensive to their target customers. 99) E A market-directed economy makes efficient use of resources. 100) D Narrowing down to a specific target market and marketing mix that represents a real opportunity requires a thorough understanding of the market. There are many possible ways to satisfy the needs of target customers. The Four Ps must be creatively blended so that the firm develops the best mix for its target market. Each decision must work well with all the others to make a logical whole. 101) D According to Exhibit 19–3, the Four Ps of the marketing mix are Product, Price, Promotion, and Place. Promotion involves salespeople, advertising, publicity, and sales promotion. 102) E The Four Ps of the marketing mix are Product, Price, Promotion, and Place. Product involves the strategic decision areas of benefits, features, and packaging. Refer to Exhibit 19–3. 103) A

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The Four Ps of the marketing mix are Product, Price, Promotion, and Place. Product involves the strategic decision areas of branding, features, packaging, etc. Refer to Exhibit 19–3. 104) B The Four Ps of the marketing mix are Product, Price, Promotion, and Place. Decisions involving the level over product life cycle are a part of deciding the Price. Refer to Exhibit 19–3. 105) C The Four Ps of the marketing mix are Product, Price, Promotion, and Place. Market exposure is a part of the component of Place in the marketing mix. Refer to Exhibit 19–3. 106) A Offering a marketing mix similar to the competition's usually doesn't provide any real basis for the firm to position or differentiate its marketing mix as offering superior customer value. 107) E The manager must make independent decisions and assemble the parts into a marketing mix; creatively blend the Four Ps so the firm develops the best mix for its target market; integrate the ideas of other specialists to improve the whole mix; and ensure each marketing mix decision works well with all of the others. 108) A A thorough understanding of the market requires careful analysis of customers' needs, current or prospective competitors, and the firm's own objectives and resources. Similarly, trends in the external market environment may make a potential opportunity more or less attractive. 109) A Version 1

As shown in Exhibit 19–3, instructions that come with a new highdefinition television set would come under Product. 110) A As shown in Exhibit 19–3, the warranty that comes with a new digital camera would come under Product. 111) A As shown in Exhibit 19–3, the branding strategy for Apple's iPad would come under Product. 112) B As shown in Exhibit 19–3, the recruiting of wholesalers and retailers for a new product introduction would come under Place. 113) C As shown in Exhibit 19–3, the selection and training of salespeople for a B2B product would come under Promotion. 114) C As shown in Exhibit 19–3, the publicity for a B2B campaign would come under Promotion. 115) D As shown in Exhibit 19–3, discounts and allowances of purchased products in a B2B transaction would come under Price. 116) B According to Exhibit 19–3, a Product strategy decision includes consideration of the physical good, service, features, benefits, quality level, accessories, installation, instructions, warranty, product lines, packaging, and branding. Exposure is an aspect of Place strategy decisions.

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117) D According to Exhibit 19–3, a Place strategy decision includes consideration of objectives, channel type, market exposure, kinds of intermediaries, kinds and locations of stores, how to handle transporting and storing, recruiting intermediaries, and managing channels. Branding comes under Product strategy decisions. 118) A According to Exhibit 19–3, a Price strategy decision includes consideration of objectives, flexibility, level over product life cycle, geographic terms, discounts, and allowances. 119) A The Four Ps (Product, Place, Promotion, and Price) must be creatively blended so that the firm develops the best mix for its target market. Once the manager has selected the target market, decided on the (integrated) marketing mix to meet the target market's needs, and developed estimates of the costs and revenues for that strategy, it's time to put it all together in the marketing plan. Predicting future behavior is not part of the process. 120) E A S.W.O.T. analysis identifies and lists the firm's strengths, weaknesses, opportunities and threats. Refer to Exhibit 19–4. 121) E The marketing plan blends the Four Ps of the marketing mix; forecasts the size of the target market and potential sales; includes implementation plans; and spells out some time period. 122) D A marketing plan simply spells out time period and the time-related details to implement a strategy. Version 1

123) D A marketing plan simply spells out time period and the time-related details implemented over a reasonable length of time. 124) D When the market situation changes, the original reasons may no longer apply; therefore a marketing plan needs to be routinely checked and updated. 125) D A marketing plan includes the time-related details; lays out the details of the target market and the marketing mix strategy decisions; and changes with the marketing strategy as the product moves through its life cycle. 126) E Situation Analysis, Customer Analysis, Competitor Analysis, and Marketing Strategy are just some of the different sections in a marketing plan. Refer to Exhibit 19–4. 127) B According to Exhibit 19–4, the possible segmenting dimensions (customer needs, other characteristics) would come under the Customer Analysis section of a marketing plan. 128) C According to Exhibit 19–4, "How will marketing mix be differentiated from the competition?" would come under the Differentiation and Positioning section of a marketing plan. 129) C According to Exhibit 19–4, the "markup chain in channel" would come under the Price section of a marketing plan. 130) A Version 1

Collaborators are evaluated in the Company section of the marketing plan. See Exhibit 19–4 for a complete outline of the marketing plan. 131) C According to Exhibit 19–4, transportation requirements, inventory product-handling requirements, and facilities requirements would come under the Place section of a marketing plan. 132) B According to Exhibit 19–4, advertising, personal selling, publicity, and sales promotion would all come under the Promotion section of a marketing plan. Packaging would come under the Product section. 133) A As consumers shift their support to firms that prove to meet their needs, laggard businesses are forced to either improve or get out of the way. 134) C According to Exhibit 19–5, slower real income growth in the United States is a demographic pattern that affects marketing strategy planning. Other demographic patterns include rapid growth in senior and ethnic submarkets and population growth slowdown in United States. 135) A Marketing creates a better world when: (1) buyers and sellers make better decisions, are healthier, and through their consumption choices (or decision not to consume) experience a better quality of life; (2) buyers and sellers make decisions that have less adverse impacts on others; and (3) marketing strategy decisions address some of the world’s most challenging problems—including hunger, poverty, and climate change. 136) A

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There are three broad groups that are relevant to a discussion of effective marketing strategies that contribute to a better world. There are opportunities for consumer-citizens, business/marketing, and government/society to work together, address global challenges, and contribute to helping marketing for a better world. 137) A Businesses can help address global challenges by having a continuous improvement attitude, being more honest with customers, using technology responsibly, and seeking “better world” opportunities. 138) A Better world marketing strategies can be profit maximizing and work for businesses targeting customers that they care about. Yet, like other strategy decisions, it should be done to support business objectives. 139) A When target customers factor sustainability into buying decision, firms must avoid the temptation of greenwashing, making false claims that imply a company or its products do more for the environment, or other false claims about making the world a better place. 140) A Greenwashing is making false claims that imply a company or its products do more for the environment, or other false claims about making the world a better place. It’s good for firms to create a biodegradable package and promote it, but the cleaning product in the package shouldn’t contain chemicals that will be harmful once they’re in the sewer system. 141) A

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Many firms create technology products with the goal of making their offerings as appealing to customers as possible. These companies, and others, want to keep customers on their site, device, or game longer and more often. Some critics suggest that this is leading to a form of addiction. 142) A The role of government is to promote the free flow of accurate information. Three institutions in society should be promoted and protected by the government to foster these goals: (1) a free press; (2) science; (3) an open Internet. 143) D Marketing managers must constantly evaluate their strategies and not wait until a problem becomes completely obvious to do something about it. 144) E Marketers need to seek better world opportunities; realize what technologies are acceptable and which are not; be aware of their responsibilities and consumer's long-run satisfaction; and be sensitive to consumers' rights and privacy. 145) E According to Exhibit 19–5, the growing use of smartphones is illustrative of changes in the area of communication technologies. 146) D According to Exhibit 19–5, database-directed point-of-purchase promotion and increased trade promotion are illustrative of changes in the area of sales promotion. 147) E Version 1

According to Exhibit 19–5, the growth of marketing information systems is one of the trends affecting marketing strategy planning. 148) C Based on Exhibit 19–5, "less attention to distribution service" is not a trend, but "more attention to distribution service" is. 149) B Based on Exhibit 19–5, "smaller retail outlets" is not a trend, but "larger, more powerful retail chains" is. 150) A Based on Exhibit 19–5, "brick-and-mortar retailing and wholesaling" is not a trend, but "online retailing and wholesaling" is. 151) D According to Exhibit 19–5, "declining use of interactive bidding and proposal requests" is not a trend, but increasing use of "interactive bidding and proposal requests" is. 152) C Based on Exhibit 19–5, "less use of integrated marketing communications" is not a trend, but more use of "integrated marketing communications" is. 153) E Based on Exhibit 19–5, "less attention to profitability and more to sales" is not a trend, but "more attention to profitability, not just sales" is. 154) A Based on Exhibit 19–5, "slower new-product development" is not a trend, but "faster new-product development" is. 155) B Version 1

Based on Exhibit 19–5, "higher real income growth in United States" is not a trend, but "slower real income growth in United States" is. 156) D Based on Exhibit 19-5, "less reliance on e-commerce and supply chain management" is not a trend, but more "e-commerce and supply chain management" is. 157) B Based on Exhibit 19–5, "less multichannel shopping" is not a trend, but "more multichannel shopping" is—in the area of channels and logistics. 158) C Based on Exhibit 19–5, "less international market development" is not a trend, but "more international market development" is—in the area of international marketing. 159) C According to Exhibit 19–5, "fewer customer loyalty programs" is not a trend, but more "customer loyalty programs" is. 160) B Based on Exhibit 19–5, "decreasing emphasis on earned and owned media" is not a trend, but "more emphasis on earned and owned media" is. 161) E Based on Exhibit 19–5, "decreasing use of value pricing" is not a trend, but increasing use value pricing is. 162) D Based on Exhibit 19–5, "decreasing income and population in emerging markets" is not a trend, but "growing income and population in emerging markets" is. Version 1

163) B Consumer-citizens, by voting for political leaders, provide certain constraints (laws), which can be modified at any time. 164) B A majority of consumers ignore most of the available information that could help them spend money more wisely. They have a responsibility to use the information and be smarter customers. 165) E Consumerism has encouraged nutritional labeling, unit pricing, truth-inlending, plain-language contracts and warranties, and so on. 166) B Some changes may be necessary—but consumer-citizens should vote on these changes. 167) C Marketing managers should be expected to improve and expand the range of goods and services they make available—always trying to add value and better satisfy consumers' needs and preferences. 168) C If pursuing objectives makes excessive demands on scarce resources or has an unacceptable ecological effect, then consumer-citizens have the responsibility to vote for laws restricting individual firms that are trying to satisfy consumers' needs.

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