Marketing Management 3rd Edition Marshall Test Bank by Ace Test Banks

Marketing Management 3rd Edition Marshall Test Bank

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Marketing Management, 3e (Marshall) Chapter 1 Marketing in Today's Business Milieu 1) A commonly held misconception about marketing is that it is all about advertising and selling. 2) Marketing is relevant only to people in the organization who work directly in the marketing department. 3) The American Marketing Association defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." 4) Peter Drucker stated that since it is the customer who defines value, the business enterprise has only two business functions: marketing and innovation. 5) Sustainability refers to business practices that meet humanity's needs without harming future generations. 6) Firms that are stuck in a production orientation mentality likely will have great difficulty competing successfully for customers. 7) When Henry Ford said, "People can have the Model T in any color—so long that it's black," he was reflecting a sales orientation. 8) Don Peppers and Martha Rogers popularized the term one-to-one marketing. Some firms come close to one-to-one marketing by combining flexible manufacturing with flexible marketing to enhance customer choices. 9) Fred Wiersema's book The New Market Leaders states that marketers will continue to have more power than customers in both B2B and B2C markets. 10) In the current business environment, firms have learned to be open about products and services with consumers who have endless sources of information, including blogs, chat rooms, and independent websites. 11) Customer orientation, a component of market orientation, places the customer at the core of all aspects of the enterprise. 12) Direct-to-consumer marketing by pharmaceutical companies and the vast amount of health information available to patients on websites has consumers ready to self-diagnose and selfprescribe. 13) GenY consumers tend to value relationships with marketers like State Farm Insurance in exactly the same way as the prior generations. 14) In contrast to Marketing (Big M), marketing (little m) serves the firm and its stakeholders at a functional or operational level. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

15) Marketing (Big M) refers to the strategic, long-term, firm-level commitment to investing in marketing. 16) For successful Marketing (Big M), firms need to align all internal organizational processes and systems around the customer. 17) Strategic marketing refers to the idea that firms should direct energy and resources into establishing a learning relationship with each customer and connect the learned knowledge with the firm's production and service capabilities. 18) Practicing marketers tend to pitch marketing internally as an investment, not an expense, in the future success of the organization. 19) If aspects of marketing can't be measured, they can still be managed. 20) Of all the business fields, ________ is generally the most visible to people outside the organization. A) financial management B) accounting C) marketing D) information technology E) operations management 21) Marketing often doesn't get the "respect" it deserves as a professional field of study, primarily because A) compared to other business functions, it has had few useful metrics to measure its performance impact. B) people generally don't understand what marketing is or what it does. C) marketing is all about the emotion and less about facts. D) marketing positions tend to pay less than other business functions. E) it fails to impact the bottom line of the company and isn't factored into executive decisions. 22) Which of the following statements is TRUE of marketing? A) Unlike most other key areas of business, marketing as a field is not visible by nature. B) Marketing departments "own" an organization's marketing initiative. C) Most aspects of marketing take place behind the curtain of an organization, out of the public's sight. D) Marketing is all about advertising and selling. E) Marketing is no more inherently unethical than other business areas.

23) Which of the following areas of business is highly public and readily visible outside the confines of the internal business operation? A) marketing B) finance C) manufacturing D) operations management E) human resource management 24) A misconception about marketing is that it is ________. A) relevant to everyone B) no more inherently unethical than other business areas C) all about selling D) highly visible by nature E) highly public 25) Which of the following is NOT a facet of marketing? A) research B) advertising C) brand development D) public relations E) recruiting 26) Peter Drucker, the father of modern management, stated that the only purpose of an organization is to ________. A) create products B) make products affordable and accessible to the majority of the public C) improve the quality of life for all people D) create a customer E) respect the environment 27) Peter Drucker, the father of modern management, believed that marketing ________. A) should be a separate function within the business B) is the business as seen from an internal point of view C) is the whole business as seen from the customer's point of view D) is not the central dimension of the entire business E) should be considered just as a "department" in an organization 28) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. A) Accounting B) Marketing C) Manufacturing D) Finance E) Economics

29) Purpose marketing, or pro-social marketing, as practiced by the well-known Tom's shoe company, ________. A) is a least preferred marketing strategy B) is a for-profit part of the business C) focuses primarily on increasing productivity D) engages consumers in a meaningful way E) has no impact on consumers who care about social issues 30) From a customer's perspective, what is defined as a ratio of the bundle of benefits a customer receives from an offering, compared to the costs incurred by the customer in acquiring that bundle of benefits? A) Exchange B) Strategy C) Sustainability D) Value E) Power 31) ________ is a central tenet of marketing in which a person gives up something of value to them for something else they desire to have. A) Power B) Sustainability C) Sales orientation D) Customization E) Exchange 32) A medieval knight could not go to the armor maker and pick out a size 44 long suit of armor to protect him in battle. Nor could a person living in the middle ages go to the cobbler and get a pair of shoes in a few minutes. This period before the advent of marketing is known as the ________. A) Industrial Revolution B) mass production era C) Dark Ages D) pre–industrial revolution E) sales orientation era 33) The AMA's definition of marketing reflects the view toward marketing activities as focused on ________. A) producing innovative products B) increasing productivity C) maintaining relationships with suppliers D) creating and delivering offerings that have value E) advertising and selling

34) After a recent 140-day strike, the union members in California went back to work at area grocery stores. The union negotiated raises, better health care benefits, and a one-tier pay scale. The union may best be described as a(n) ________. A) governmental body B) stakeholder C) vendor D) internal customer E) management group 35) Companies that promote sustainability practices like Starbucks, which has a stringent recycling program, or General Electric, which makes environmentally sensitive products, are practicing ________ marketing. A) green B) predictive C) affiliate D) shotgun E) one-to-one 36) Bryan gets reduced fees for his daughter's piano lessons by maintaining her teacher's website. Bryan is practicing the central tenet of marketing called ________. A) value B) exchange C) growth D) sustainability E) power 37) Which of the following are two core marketing concepts? A) supply and demand B) money and time C) skill and expertise D) quality and quantity E) value and exchange 38) Henry Ford is well known to business students for creating the assembly line that enabled mass production of the Model T. This is an example of the ________ orientation. A) production B) selling C) marketing D) customer E) relationship

39) The stereotypical automobile dealership uses tactics like high pressure and bargaining to get customers to buy. This is an example of the ________ orientation. A) production B) sales C) marketing D) customer E) relationship 40) Which of the following is a reason why production capacity utilization began to decline around the end of World War I? A) Firms that had dominated their respective industries before the war maintained their positions due to lack of competition. B) High entry barriers prevented new companies from entering into the market place. C) Financial markets placed more pressure on firms to continually increase sales volume and profits. D) Financial markets were becoming less sophisticated. E) Capacity had been decreased greatly for the war. 41) Companies that conduct a great deal of research to learn how they can successfully put the marketing concept into practice most likely have a ________ orientation. A) production B) selling C) marketing D) research E) differentiation 42) The marketing concept was introduced ________. A) after the Civil War B) after World War I C) during the Great Depression D) in the 1980s E) in the 1950s 43) The marketing concept was first articulated in the Annual Report of ________. A) Ford Motor Company B) AT&T C) RCA D) General Motors E) General Electric 44) Making a change in any one of the marketing mix elements will ________. A) leave the other elements unchanged B) have a negative effect on a similar element C) have a domino effect on the other elements D) require the firm to introduce new products E) require an increase in promotion 6 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

45) After World War II, business began to change in many long-lasting ways. Which of the following is least likely to have caused this shift? A) Advent of readily available mainframe computing capability B) Opening up of production capacity dominated for years by war production C) Pent-up demand for consumer goods and services after the war D) Desperate need to regain a normalcy of day-to-day life after years of war E) Focus on sales orientation with the objective of achieving short-term profits 46) The Clean-O company makes a cleanser for the hospital and nursing home market that is guaranteed to kill 99 percent of Staphylococcus germs, a major concern for medical facilities. Unlike other companies, Clean-O is not interested in pursuing the consumer market. In this case, Clean-O has adopted a ________ orientation. A) market B) mass customization C) differentiation D) relationship E) product 47) Satern Brothers provides accounting services to small businesses. Before and after tax season, the partners meet with each client company. They send a monthly newsletter to update clients with tax changes. The firm's business practices mainly focus on keeping profitable current customers rather than gaining new customers. Satern Brothers has adopted a ________ orientation approach. A) market B) mass customization C) differentiation D) relationship E) product 48) To significantly enhance customer choices, Levi combines flexible manufacturing with flexible marketing. Customers may visit the Levi's clothing website or some company-owned stores and order a pair of jeans that will be made especially for them. Levi's has adopted a ________ orientation approach. A) market B) mass customization C) differentiation D) product E) relationship 49) The concept of engaging in a learning relationship with customers and directing the firm's resources to making each product or service as customized as possible is known as ________. A) market orientation B) pro-social marketing C) differentiation orientation D) one-to-one marketing E) relationship orientation 7 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

50) Which of the following is NOT part of the marketing mix? A) product B) place C) promotion D) price E) policy 51) In the context of the 4Ps of the marketing mix, high-tech media options like cell phones and the Internet have had a huge impact on ________. A) product B) promotion C) people D) position E) policy 52) A local landscaping company works hard to keep and cultivate profitable current customers instead of constantly investing in gaining new customers that come with unknown return on investment. This company has a ________ orientation. A) sales B) differentiation C) market D) production E) relationship 53) Relationship-oriented firms tend to ________. A) be driven by meeting a quarter's financial projections B) keep and cultivate their profitable current customers who are highly satisfied with the firm's offering C) constantly invest in new customers that come with unknown return on investment D) often lose great customers and scramble to replace the associated lost revenue E) focus primarily on increasing sales through catchy and entertaining advertisements 54) Customer relationship management (CRM) is designed primarily to ________. A) assess the personality characteristics of target customers B) identify profitable customers in new markets C) position products to serve very specific customer groups D) clearly distinguish a firm's products from those of competitors in the minds of customers E) facilitate higher levels of customer satisfaction 55) Today customers have limitless access to facts about companies, products, competitors, other customers, and even detailed elements of marketing plans and strategies. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift in information power from marketer to customer B) shift to demanding return on marketing investment C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to product glut and customer shortage 8 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

56) The Girl Scouts introduced a cookie finder app in 2013. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment 57) The Bazooka brand of candy revamped its package inserts by changing from comic strips to quizzes and brainteasers that direct kids to digital content. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift to product glut and customer shortage B) shift in information power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment 58) In the context of change drivers impacting the future of marketing, the way a firm looks at strategy and tactics is reflected in the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment 59) In the context of change drivers impacting the future of marketing, marketing tactics such as designing the elements of the marketing mix are reflected in the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment 60) The 4Ps of marketing refer to ________. A) product, price, place, and promotion B) policy, production, plan, and preference C) promotion, plan, place, and procedure D) price, policy, program, and position E) place, production, provision, and plan 61) An offering today is considered to be the ________ in the marketing mix. A) product B) price C) promotion D) place E) policy 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

62) The concept of supply chain management is considered to be part of the ________ of the marketing mix. A) product B) price C) promotion D) place E) plan 63) In the context of the marketing mix, ________ today is largely regarded in relationship to the concept of value. A) product B) price C) promotion D) place E) policy 64) Hannah's alterations business works around the needs of the customer by providing hours of operation that vary throughout the week, including some evening and weekend hours. It could be said that Hannah's business is ________. A) differentiated B) customer-centric C) market oriented D) product oriented E) socially responsible 65) What clearly distinguishes your product from those of the competition is ________. A) orientation B) differentiation C) organization D) relationships E) development 66) In Wiersema's book, The New Market Leaders, he identifies six new market realities. Which of the following is included in the list? A) competitors fade away B) few secrets are open secrets C) innovation is universal D) information appreciates E) hard times make easy growth 67) Which of these characteristics about millennials is NOT true? A) They favor content over authenticity. B) They are brand loyal. C) They are highly connected through technology. D) They wish to be part of a company's development process. E) They seek ethical companies to work for. 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

68) Millennials represent roughly ________ of the population, and ________ in annual buying power. A) 10 percent; $100 billion B) 25 percent; $200 billion C) 35 percent; $1 trillion D) 60 percent; $1 trillion E) 75 percent; $1 trillion 69) Claire and her mother are both in marketing positions. Claire's job is satisfying to her primarily because it gives her a flexible schedule and pays well so she can take vacations with her friends. Her mother chose a job that provides health benefits and structured work with regular hours. This demonstrates shifts in ________ that can influence work life versus family life. A) generational values and preferences B) information power from marketer to customer C) product glut and customer shortage D) buying power from customer to marketer E) competitive influences 70) Which of the following action elements is NOT desired for successful Marketing (Big M)? A) Ensuring that everyone in an organization, regardless of their position or title, understands the concept of customer orientation B) Aligning all internal organizational processes and systems around the customer C) Finding somebody at the top of the firm to consistently champion this Marketing (Big M) business philosophy D) Remembering the fact that the marketing department is where Marketing (Big M) takes place E) Creating market-driving, not just market-driven, strategies 71) Marketing (Big M) is also known as ________ marketing. A) pro-social B) tactical C) strategic D) green E) operational 72) In the context of change drivers impacting the future of marketing, marketing (little m) is also known as ________ marketing. A) pro-social B) tactical C) strategic D) predatory E) green marketing

73) Which of the following action elements is required for successful Marketing (Big M)? A) Aligning all internal organizational processes and systems around the product B) Ensuring that everyone in an organization understands the concept of customer orientation C) Find somebody at the lower level of the firm to consistently champion this Marketing (Big M) business philosophy D) Remembering the fact that the marketing department is where Marketing (Big M) takes place E) Creating market-driven, not market-driving, strategies 74) Strategic marketing refers, in part, to ________. A) a firm's internal focus on production and customer satisfaction B) working with competitors, when appropriate, and with suppliers C) a long-term, firm-level commitment to investing in marketing D) making an unwavering commitment on which customers to serve E) studying promotion, distribution, delivery, and production 75) The core marketing concept characteristics of an organization-wide customer orientation and long-run profits are ________ in nature. A) objective B) strategic C) ethical D) operational E) subjective 76) ________ refers to approaches that drive the market toward fulfilling a whole new set of needs that customers did not realize was possible or feasible before. A) Green marketing B) Tactical marketing C) Market creation D) Market orientation E) Marketing mix 77) For successful Marketing (Big M), customer orientation must be understood by ________. A) an organization's competitors B) the top management only C) an organization's suppliers D) the existing customers E) everyone in the organization 78) For successful Marketing (Big M), all internal organizational practices should be aligned around ________. A) profits B) management C) manufacturing D) the customer E) information technology

79) In order for Marketing (Big M) to succeed, it must be championed by ________. A) the sales force B) top management C) middle management D) frontline personnel E) everyone in the organization 80) DeWanda's business spent a large amount of time determining its brand image and how it would deliver its message to its customers. These are elements of ________. A) Marketing (Big M) B) marketing (little m) C) strategic marketing D) the supply chain E) stakeholder relations 81) In order for Marketing (Big M) to succeed, firms should create ________ strategies. A) predatory pricing B) market-driving C) diversification D) vertical integration E) market-driven 82) In the context of change drivers impacting the future of marketing, marketing (little m) ________. A) is often thought of as strategic marketing B) almost always takes place at the top level of a firm C) serves as a core driver of business strategy D) need not be couched within the philosophy of a firm's Marketing (Big M) E) serves the firm and its stakeholders at a functional level 83) Microsoft's revolution of the information field and Disney's creation of the modern theme park industry are classic examples of ________. A) marketing mix B) marketing (little m) C) pro-social marketing D) green marketing E) market creation 84) Everything from brand image, to the message sales people and advertisements deliver, to customer service, to packaging and product features, to the chosen distribution channel exemplify ________. A) strategic marketing B) relationship orientation C) Marketing (Big M) D) sales orientation E) marketing (little m) 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

85) Appropriate and effective marketing metrics must be designed to identify, track, evaluate, and provide key benchmarks for improvement. In the context of change drivers affecting the future of marketing, this reflects the ________. A) shift to justifying the relevance and payback of the marketing investment B) shift to product glut and customer shortage C) shift to distinguishing Marketing ("Big M") from marketing ("little m") D) shift in generational values and preferences E) shift in information power from marketer to customer 86) Which of the following is LEAST likely to be true regarding marketing metrics? A) The topic of marketing metrics has been one of the highest priorities for most MSI member companies. B) Appropriate and effective marketing metrics help identify, track, evaluate, and provide key benchmarks for improvement. C) Although marketing carries a stigma as a cost center, metrics such as ROI cannot indicate marketing success. D) Effective management of the various aspects of marketing requires quantification of objectives and results. E) The marketing plan is one of the most important elements of a business plan and effective planning requires metrics. 87) Shari's manager asked her to identify, track, evaluate, and provide key benchmarks for improvement in her marketing department. To do this, Shari used ________. A) marketing metrics B) market research C) the marketing mix D) market creation E) strategic marketing 88) When the text states that marketers need to create tools for ongoing, meaningful measurement of marketing productivity, it is referring to the need for ________. A) accountability B) responsibility C) subjectivity D) visibility E) identification 89) Name three of the marketing misconceptions discussed in the text, and explain why these do not accurately describe the field of marketing. 90) Define the term marketing. How does the AMA definition compare with Drucker's definition? 91) Compare and contrast the production orientation, the sales orientation, the differentiation orientation, the market orientation, and the relationship orientation. 92) Describe how information power has shifted from the marketer to the customer. 14 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Marketing Management, 3e (Marshall) Chapter 1 Marketing in Today's Business Milieu 1) A commonly held misconception about marketing is that it is all about advertising and selling. Answer: TRUE Explanation: A commonly held misconception about marketing is that it is all about advertising and selling. Several important factors have contributed to the development of these misconceptions: marketing's inherent visibility and its tendency toward buzzwords and "spin." Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Marketing is relevant only to people in the organization who work directly in the marketing department. Answer: FALSE Explanation: Marketing's stakeholders include any person or entity inside or outside a firm with whom marketing interacts, impacts, and is impacted by. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) The American Marketing Association defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." Answer: TRUE Explanation: The American Marketing Association offers the following as its official definition of marketing: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4) Peter Drucker stated that since it is the customer who defines value, the business enterprise has only two business functions: marketing and innovation. Answer: TRUE Explanation: According to Peter Drucker, what the business thinks it produces is not of first importance—especially not to the future of the business and its success. What the customer thinks he is buying, what he considers "value" is decisive. Because it is the purpose of a business to create a customer, the business enterprise has two—and only two—business functions: marketing and innovation. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Sustainability refers to business practices that meet humanity's needs without harming future generations. Answer: TRUE Explanation: The concept of environmentally friendly marketing, or green marketing, has been a growing trend in socially responsible companies. Today the movement has evolved into a part of the philosophical and strategic core of many firms under the label sustainability, which refers to business practices that meet humanity's needs without harming future generations. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation

6) Firms that are stuck in a production orientation mentality likely will have great difficulty competing successfully for customers. Answer: TRUE Explanation: A production orientation assumes that customers will beat a path to your door just because you have a great product that functions nicely; build a better mousetrap and they will come. You will learn throughout your study of marketing management that great products alone do not ensure success. Unfortunately, firms that are stuck in a production orientation mentality likely will have great difficulty competing successfully for customers. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 7) When Henry Ford said, "People can have the Model T in any color—so long that it's black," he was reflecting a sales orientation. Answer: FALSE Explanation: For the early part of the 20th century, the focus was on production orientation of improving products and production efficiency without much regard for what was going on in the marketplace. In fact, consumers snapped up this new pipeline of reasonably priced goods, even if the products didn't give much choice in style or function. Having a Ford Model T was great, but as Henry Ford himself said, "People can have the Model T in any color—so long that it's black." Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

8) Don Peppers and Martha Rogers popularized the term one-to-one marketing. Some firms come close to one-to-one marketing by combining flexible manufacturing with flexible marketing to enhance customer choices. Answer: TRUE Explanation: Don Peppers and Martha Rogers popularized the term one-to-one marketing, which advocates that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a manner as possible. Some firms come close to one-to-one marketing by employing mass customization, in which they combine flexible manufacturing with flexible marketing to greatly enhance customer choices. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Fred Wiersema's book The New Market Leaders states that marketers will continue to have more power than customers in both B2B and B2C markets. Answer: FALSE Explanation: Fred Wiersema, in his book The New Market Leaders, builds a powerful case that the balance of power is shifting between marketers and their customers, both in business-toconsumer (B2C/end user) markets and business-to-business (B2B) markets. Wiersema's central point is that not only is a customer orientation desirable, but also in today's market it is a necessity for survival. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) In the current business environment, firms have learned to be open about products and services with consumers who have endless sources of information, including blogs, chat rooms, and independent websites. Answer: TRUE Explanation: For competitive reasons, firms have no choice but to be more open about their businesses and products. Even if they wanted to, firms can't stop chat rooms, independent websites, web logs or blogs, and other customer-generated modes of communication from filling web page after web page with information, disinformation, and opinions about a company's products, services, and even company dirty laundry. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 11) Customer orientation, a component of market orientation, places the customer at the core of all aspects of the enterprise. Answer: TRUE Explanation: Think of market orientation as the implementation of the marketing concept. The notion of market orientation, one component of which is customer orientation—placing the customer at the core of all aspects of the enterprise—takes the guiding business philosophy of the marketing concept and works to more usefully define just how to implement it within a firm. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

12) Direct-to-consumer marketing by pharmaceutical companies and the vast amount of health information available to patients on websites has consumers ready to self-diagnose and selfprescribe. Answer: TRUE Explanation: Between open direct-to-consumer advertising by pharmaceutical companies and innumerable websites devoted to every medical malady, more and more patients arrive at the doctor's office self-diagnosed and ready to self-prescribe. The trend toward more information in the hands of the customer is not going to diminish. Marketing approaches must be altered to reflect and respond to this important change. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 13) GenY consumers tend to value relationships with marketers like State Farm Insurance in exactly the same way as the prior generations. Answer: FALSE Explanation: GenY consumers tend to be much more receptive to electronic commerce as a primary mode of receiving marketing communication and ultimately purchasing than are prior generations. For many, gone are the days of strictly relying on face-to-face selling. This preference has clear implications for how marketing carries out its management of customer relationships across generations and also calls into question how much value younger customers derive from the different approaches to relationships. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

14) In contrast to Marketing (Big M), marketing (little m) serves the firm and its stakeholders at a functional or operational level. Answer: TRUE Explanation: In contrast to Marketing (Big M), marketing (little m) serves the firm and its stakeholders at a functional or operational level; hence, marketing (little m) is often thought of as tactical marketing. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Marketing (Big M) refers to the strategic, long-term, firm-level commitment to investing in marketing. Answer: TRUE Explanation: Marketing (Big M) serves as a core driver of business strategy. This approach is often referred to as strategic marketing, which means a long-term, firm-level commitment to investing in marketing—supported at the highest organization level—for the purpose of enhancing organizational performance. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) For successful Marketing (Big M), firms need to align all internal organizational processes and systems around the customer. Answer: TRUE Explanation: For successful Marketing (Big M), firms today need to align all internal organizational processes and systems around the customer. They cannot let the IT system, telecommunications system, billing system, or any other internal process or system become an impediment to a customer orientation. If the people inside a firm understand the power of a customer-centric business approach, but the internal systems don't support it, Marketing (Big M) won't be successful. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Strategic marketing refers to the idea that firms should direct energy and resources into establishing a learning relationship with each customer and connect the learned knowledge with the firm's production and service capabilities. Answer: FALSE Explanation: Marketing (Big M) serves as a core driver of business strategy. That is, an understanding of markets, competitors, and other external forces, coupled with attention to internal capabilities, allows a firm to successfully develop strategies for the future. This approach is often referred to as strategic marketing, which means a long-term, firm-level commitment to investing in marketing—supported at the highest organization level—for the purpose of enhancing organizational performance. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

18) Practicing marketers tend to pitch marketing internally as an investment, not an expense, in the future success of the organization. Answer: TRUE Explanation: Practicing marketers tend to pitch marketing internally as an investment in the future success of the organization. As an investment, it is not unreasonable that expected returns be identified and measured. Difficulty: 2 Medium Topic: Marketing Return on Investment Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) If aspects of marketing can't be measured, they can still be managed. Answer: FALSE Explanation: As with all aspects of business, effective management of the various aspects of marketing requires quantification of objectives and results. Difficulty: 2 Medium Topic: Marketing Metrics Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Of all the business fields, ________ is generally the most visible to people outside the organization. A) financial management B) accounting C) marketing D) information technology E) operations management Answer: C Explanation: Unlike most other key areas of business, marketing as a field is highly public and readily visible outside the confines of the internal business operation. Of all the business fields, marketing is almost certainly the most visible to people outside the organization. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

21) Marketing often doesn't get the "respect" it deserves as a professional field of study, primarily because A) compared to other business functions, it has had few useful metrics to measure its performance impact. B) people generally don't understand what marketing is or what it does. C) marketing is all about the emotion and less about facts. D) marketing positions tend to pay less than other business functions. E) it fails to impact the bottom line of the company and isn't factored into executive decisions. Answer: A Explanation: Despite the fact that much of marketing is easily observable to just about anyone, marketing as a professional field worthy of serious study doesn't always get the respect it deserves, maybe in part because of its overexposure, but also because in the past, marketing has had few useful metrics or measures to gauge the performance impact of a firm's marketing investment, while other areas of the firm have historically been much more driven by measurement of results. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) Which of the following statements is TRUE of marketing? A) Unlike most other key areas of business, marketing as a field is not visible by nature. B) Marketing departments "own" an organization's marketing initiative. C) Most aspects of marketing take place behind the curtain of an organization, out of the public's sight. D) Marketing is all about advertising and selling. E) Marketing is no more inherently unethical than other business areas. Answer: E Explanation: Marketing is no more inherently unethical than other business areas. The accounting scandals at Enron, WorldCom, and other firms in the early 2000s show that to be true. However, when some element of marketing proves to be unethical (or even illegal), it tends to be visible to the general public. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

23) Which of the following areas of business is highly public and readily visible outside the confines of the internal business operation? A) marketing B) finance C) manufacturing D) operations management E) human resource management Answer: A Explanation: Unlike most other key areas of business, marketing as a field is highly public and readily visible outside the confines of the internal business operation. Most aspects of financial management, accounting, information technology, production, operations management, and human resource management take place behind the curtain of an organization, out of the general public's sight. But marketing is very different. A good portion of marketing is very public. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) A misconception about marketing is that it is ________. A) relevant to everyone B) no more inherently unethical than other business areas C) all about selling D) highly visible by nature E) highly public Answer: C Explanation: A misconception about marketing is that it is all about selling. The general public also experiences a lot of selling. Much of this day-to-day selling is in retail store environments. Selling, or more correctly "personal selling," is simply another method of marketing communication. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

25) Which of the following is NOT a facet of marketing? A) research B) advertising C) brand development D) public relations E) recruiting Answer: E Explanation: Managers are not sure how marketing works, or even if marketing really does work, but for competitive reasons—or maybe just because it's always been done—they continue to invest large sums of money in its many facets including market research, brand development, advertising, salespeople, public relations, and so forth. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) Peter Drucker, the father of modern management, stated that the only purpose of an organization is to ________. A) create products B) make products affordable and accessible to the majority of the public C) improve the quality of life for all people D) create a customer E) respect the environment Answer: D Explanation: Consider this quote from Drucker, circa 1954: If we want to know what a business is we have to start with its purpose. There is only one valid definition of business purpose: to create a customer. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

27) Peter Drucker, the father of modern management, believed that marketing ________. A) should be a separate function within the business B) is the business as seen from an internal point of view C) is the whole business as seen from the customer's point of view D) is not the central dimension of the entire business E) should be considered just as a "department" in an organization Answer: C Explanation: According to Peter Drucker, marketing is so basic that it cannot be considered a separate function within the business. It is a central dimension of the entire business. It is the whole business seen from the customer's point of view. Concern and responsibility for marketing must permeate all areas of the enterprise. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) ________ is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. A) Accounting B) Marketing C) Manufacturing D) Finance E) Economics Answer: B Explanation: The American Marketing Association's definition of marketing is "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

29) Purpose marketing, or pro-social marketing, as practiced by the well-known Tom's shoe company, ________. A) is a least preferred marketing strategy B) is a for-profit part of the business C) focuses primarily on increasing productivity D) engages consumers in a meaningful way E) has no impact on consumers who care about social issues Answer: D Explanation: Purpose marketing, or pro-social marketing, is growing as a marketing strategy. This growing popularity can be attributed to an increasing number of consumers who say what a company stands for influences their purchasing decisions. Toms shoe company is renowned for its social entrepreneurism and socially conscious purpose marketing. Toms' "One for One" mission assures customers that with every purchase, "Toms will help a person in need." Difficulty: 2 Medium Topic: Socially Responsible Marketing Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) From a customer's perspective, what is defined as a ratio of the bundle of benefits a customer receives from an offering, compared to the costs incurred by the customer in acquiring that bundle of benefits? A) Exchange B) Strategy C) Sustainability D) Value E) Power Answer: D Explanation: From a customer's perspective, we define value as a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

31) ________ is a central tenet of marketing in which a person gives up something of value to them for something else they desire to have. A) Power B) Sustainability C) Sales orientation D) Customization E) Exchange Answer: E Explanation: A central tenet of marketing is the concept of exchange, in which people give up something of value to them for something else they desire to have. Usually an exchange is facilitated by money, but not always. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 32) A medieval knight could not go to the armor maker and pick out a size 44 long suit of armor to protect him in battle. Nor could a person living in the middle ages go to the cobbler and get a pair of shoes in a few minutes. This period before the advent of marketing is known as the ________. A) Industrial Revolution B) mass production era C) Dark Ages D) pre–industrial revolution E) sales orientation era Answer: D Explanation: When a person needed a new pair of shoes in the pre–industrial revolution, one would likely go visit the village cobbler, who would take precise measurements and then send the customer away with instructions to return in a week or so to. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

33) The AMA's definition of marketing reflects the view toward marketing activities as focused on ________. A) producing innovative products B) increasing productivity C) maintaining relationships with suppliers D) creating and delivering offerings that have value E) advertising and selling Answer: D Explanation: The AMA defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) After a recent 140-day strike, the union members in California went back to work at area grocery stores. The union negotiated raises, better health care benefits, and a one-tier pay scale. The union may best be described as a(n) ________. A) governmental body B) stakeholder C) vendor D) internal customer E) management group Answer: B Explanation: The range of external stakeholders—those outside a firm—includes customers, vendors, governmental bodies, labor unions, and many others. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

35) Companies that promote sustainability practices like Starbucks, which has a stringent recycling program, or General Electric, which makes environmentally sensitive products, are practicing ________ marketing. A) green B) predictive C) affiliate D) shotgun E) one-to-one Answer: A Explanation: The concept of environmentally friendly marketing, or green marketing, has been a growing trend in socially responsible companies. Environmental awareness coupled with a sense of social responsibility is leading many companies to assess their environmental policies and business practices. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) Bryan gets reduced fees for his daughter's piano lessons by maintaining her teacher's website. Bryan is practicing the central tenet of marketing called ________. A) value B) exchange C) growth D) sustainability E) power Answer: B Explanation: A central tenet of marketing is the concept of exchange, in which people give up something of value to them for something else they desire to have. Usually an exchange is facilitated by money, but not always. Sometimes people trade or barter nonmonetary resources such as time, skill, expertise, intellectual capital, and other things of value for something else they want. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

37) Which of the following are two core marketing concepts? A) supply and demand B) money and time C) skill and expertise D) quality and quantity E) value and exchange Answer: E Explanation: Value and exchange are two core marketing concepts. From a customer's perspective, we define value as a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Another central tenet of marketing is the concept of exchange, in which a person gives up something of value to them for something else they desire to have. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 38) Henry Ford is well known to business students for creating the assembly line that enabled mass production of the Model T. This is an example of the ________ orientation. A) production B) selling C) marketing D) customer E) relationship Answer: A Explanation: Maximizing production capacity utilization became a predominant concern. For the early part of the 20th century, the focus was on this production orientation of improving products and production efficiency without much regard for what was going on in the marketplace. Difficulty: 1 Easy Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

39) The stereotypical automobile dealership uses tactics like high pressure and bargaining to get customers to buy. This is an example of the ________ orientation. A) production B) sales C) marketing D) customer E) relationship Answer: B Explanation: A sales orientation suggests that, to increase sales and consequently production capacity utilization, professional salespeople need to "push" product into the hands of customers, both businesses and end users. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40) Which of the following is a reason why production capacity utilization began to decline around the end of World War I? A) Firms that had dominated their respective industries before the war maintained their positions due to lack of competition. B) High entry barriers prevented new companies from entering into the market place. C) Financial markets placed more pressure on firms to continually increase sales volume and profits. D) Financial markets were becoming less sophisticated. E) Capacity had been decreased greatly for the war. Answer: C Explanation: Around the end of World War I, production capacity utilization began to decline for several reasons. First, capacity had been increased greatly for the war. Second, a number of firms that had dominated their respective industries before the war now found themselves with stiff competition for sales because many new competitors had flooded into the marketplace. And third, financial markets were becoming more sophisticated and were placing more pressure on firms to continually increase sales volume and profits. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

41) Companies that conduct a great deal of research to learn how they can successfully put the marketing concept into practice most likely have a ________ orientation. A) production B) selling C) marketing D) research E) differentiation Answer: C Explanation: A great deal of research has been devoted to learning how a firm can successfully put the marketing concept into practice. Think of market orientation as the implementation of the marketing concept. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42) The marketing concept was introduced ________. A) after the Civil War B) after World War I C) during the Great Depression D) in the 1980s E) in the 1950s Answer: E Explanation: In the 1950s, increased demand for consumer goods and services, a new focus on family and the need for normalcy, increased production capacity, and the advent of mainframe computers—combined with growing frustration with high-pressure selling—sparked a shift in the focus of American business. The resulting business philosophy has been labeled the marketing concept, which is an organization-wide customer orientation with the objective of achieving long-run profits. Difficulty: 1 Easy Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

43) The marketing concept was first articulated in the Annual Report of ________. A) Ford Motor Company B) AT&T C) RCA D) General Motors E) General Electric Answer: E Explanation: General Electric's 1952 Annual Report is often cited as the first time the marketing concept was articulated in writing by a major corporation. Difficulty: 1 Easy Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 44) Making a change in any one of the marketing mix elements will ________. A) leave the other elements unchanged B) have a negative effect on a similar element C) have a domino effect on the other elements D) require the firm to introduce new products E) require an increase in promotion Answer: C Explanation: An important rubric in marketing is the following: making a change in any one of the marketing mix elements tends to result in a domino effect on the others. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

45) After World War II, business began to change in many long-lasting ways. Which of the following is least likely to have caused this shift? A) Advent of readily available mainframe computing capability B) Opening up of production capacity dominated for years by war production C) Pent-up demand for consumer goods and services after the war D) Desperate need to regain a normalcy of day-to-day life after years of war E) Focus on sales orientation with the objective of achieving short-term profits Answer: E Explanation: After World War II, business began to change in many long-lasting ways. Business historians point to a number of reasons for this shift, including: pent-up demand for consumer goods and services after the war, euphoric focus on family and a desperate need to regain a normalcy of day-to-day life after years of war, opening up of production capacity dominated for years by war production, and advent of readily available mainframe computing capability, and especially the associated statistical analytic techniques that allowed for more sophisticated market research. Difficulty: 2 Medium Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 46) The Clean-O company makes a cleanser for the hospital and nursing home market that is guaranteed to kill 99 percent of Staphylococcus germs, a major concern for medical facilities. Unlike other companies, Clean-O is not interested in pursuing the consumer market. In this case, Clean-O has adopted a ________ orientation. A) market B) mass customization C) differentiation D) relationship E) product Answer: C Explanation: More sophisticated research and analytical approaches have made it possible to do increasingly precise refinement of market segmentation, target marketing, and positioning of products to serve very specific customer groups. Differentiation is what clearly distinguishes your products from those of competitors in the minds of customers. Difficulty: 3 Hard Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 22 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

47) Satern Brothers provides accounting services to small businesses. Before and after tax season, the partners meet with each client company. They send a monthly newsletter to update clients with tax changes. The firm's business practices mainly focus on keeping profitable current customers rather than gaining new customers. Satern Brothers has adopted a ________ orientation approach. A) market B) mass customization C) differentiation D) relationship E) product Answer: D Explanation: The move toward a relationship orientation by firms has been driven by the realization that it is far more efficient and effective to invest in keeping and cultivating profitable current customers instead of constantly having to invest in gaining new customers that come with unknown return on investment. Difficulty: 3 Hard Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 48) To significantly enhance customer choices, Levi combines flexible manufacturing with flexible marketing. Customers may visit the Levi's clothing website or some company-owned stores and order a pair of jeans that will be made especially for them. Levi's has adopted a ________ orientation approach. A) market B) mass customization C) differentiation D) product E) relationship Answer: B Explanation: Some firms come close to one-to-one marketing by employing mass customization, in which they combine flexible manufacturing with flexible marketing to greatly enhance customer choices. Retailers have even entered into mass customization. Difficulty: 3 Hard Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

49) The concept of engaging in a learning relationship with customers and directing the firm's resources to making each product or service as customized as possible is known as ________. A) market orientation B) pro-social marketing C) differentiation orientation D) one-to-one marketing E) relationship orientation Answer: D Explanation: In their books and articles, Don Peppers and Martha Rogers popularized the term one-to-one marketing, which advocates that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a manner as possible. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) Which of the following is NOT part of the marketing mix? A) product B) place C) promotion D) price E) policy Answer: E Explanation: In the mid-1960s, a convenient way of teaching the key components was developed with the advent of the marketing mix, or 4Ps of marketing, originally for product, price, place, and promotion. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

51) In the context of the 4Ps of the marketing mix, high-tech media options like cell phones and the Internet have had a huge impact on ________. A) product B) promotion C) people D) position E) policy Answer: B Explanation: To grasp the magnitude of changes in promotion since the 1960s one need only consider the proliferation of high-tech media options available to marketers today, from the Internet to cell phones and beyond. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 52) A local landscaping company works hard to keep and cultivate profitable current customers instead of constantly investing in gaining new customers that come with unknown return on investment. This company has a ________ orientation. A) sales B) differentiation C) market D) production E) relationship Answer: E Explanation: The move toward a relationship orientation by firms has been driven by the realization that it is far more efficient and effective to invest in keeping and cultivating profitable current customers instead of constantly having to invest in gaining new customers that come with unknown return on investment. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

53) Relationship-oriented firms tend to ________. A) be driven by meeting a quarter's financial projections B) keep and cultivate their profitable current customers who are highly satisfied with the firm's offering C) constantly invest in new customers that come with unknown return on investment D) often lose great customers and scramble to replace the associated lost revenue E) focus primarily on increasing sales through catchy and entertaining advertisements Answer: B Explanation: The move toward a relationship orientation by firms has been driven by the realization that it is far more efficient and effective to invest in keeping and cultivating profitable current customers instead of constantly having to invest in gaining new customers that come with unknown return on investment. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 54) Customer relationship management (CRM) is designed primarily to ________. A) assess the personality characteristics of target customers B) identify profitable customers in new markets C) position products to serve very specific customer groups D) clearly distinguish a firm's products from those of competitors in the minds of customers E) facilitate higher levels of customer satisfaction Answer: E Explanation: Much of customer relationship management (CRM) is designed to facilitate higher levels of customer satisfaction and loyalty, as well as to provide a means for identifying the most profitable customers—those worthy of the most marketing investment. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) Today customers have limitless access to facts about companies, products, competitors, other customers, and even detailed elements of marketing plans and strategies. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift in information power from marketer to customer B) shift to demanding return on marketing investment C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to product glut and customer shortage Answer: A Explanation: Nowadays, customers of all kinds have nearly limitless access to information about companies, products, competitors, other customers, and even detailed elements of marketing plans and strategies. Customers are empowered to access boundless information about all kinds of products and services on the Internet. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking; Reflective Thinking Accessibility: Keyboard Navigation 56) The Girl Scouts introduced a cookie finder app in 2013. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment Answer: C Explanation: In 2013 Girl Scouts of the USA introduced the Girl Scout Cookie Finder App. The app provides users with GPS coordinates for the nearest cookie sales location. For many, gone are the days of strictly relying on face-to-face selling. This preference has clear implications for how marketing carries out its management of customer relationships across generations and also calls into question how much value younger customers derive from the different approaches to relationships. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) The Bazooka brand of candy revamped its package inserts by changing from comic strips to quizzes and brainteasers that direct kids to digital content. In the context of change drivers impacting the future of marketing, this reflects the ________. A) shift to product glut and customer shortage B) shift in information power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment Answer: C Explanation: Generational changes have been noticed in the competitive candy industry. Bazooka brand candy rebranded its product line to remain relevant and to better position itself with younger, tech-savvy generations. The company began replacing the traditional miniature comic strips on its candy with quizzes and brainteasers that direct kids to digital content. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 58) In the context of change drivers impacting the future of marketing, the way a firm looks at strategy and tactics is reflected in the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment Answer: D Explanation: Marketing is thought of as occurring on two dimensions within an organization. These dimensions exist in tandem, and even intersect on occasion, but harbor fundamental differences in goals and properties. For convenience, we can distinguish these dimensions by capitalizing the word for one ("Marketing"—"Big M") and leaving the word in lowercase for the other ("marketing"—"little m"). Marketing (Big M) refers to strategic marketing, and marketing (little m) is often thought of as tactical marketing. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

59) In the context of change drivers impacting the future of marketing, marketing tactics such as designing the elements of the marketing mix are reflected in the ________. A) shift to product glut and customer shortage B) shift in power from marketer to customer C) shift in generational values and preferences D) shift to distinguishing Marketing (Big M) from marketing (little m) E) shift to justifying the relevance and payback of the marketing investment Answer: D Explanation: Marketing (Big M) and marketing (little m) should be quite naturally connected within a firm, as the latter tends to represent the day-to-day operationalization and implementation of the former. Everything from brand image, to the message sales people and advertisements deliver, to customer service, to packaging and product features, to the chosen distribution channel-in fact, all elements of the marketing mix and beyond-exemplify marketing (little m). Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 60) The 4Ps of marketing refer to ________. A) product, price, place, and promotion B) policy, production, plan, and preference C) promotion, plan, place, and procedure D) price, policy, program, and position E) place, production, provision, and plan Answer: A Explanation: In the mid-1960s, a convenient way of teaching the key components was developed with the advent of the marketing mix, or 4Ps of marketing, originally for product, price, place, and promotion. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) An offering today is considered to be the ________ in the marketing mix. A) product B) price C) promotion D) place E) policy Answer: A Explanation: The product is now regarded broadly in the context of an overall offering, which could include a bundle of goods, services, ideas (for example, intellectual property), and other components, often represented by strong overarching branding. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 62) The concept of supply chain management is considered to be part of the ________ of the marketing mix. A) product B) price C) promotion D) place E) plan Answer: D Explanation: Place has undergone tremendous change. Rather than just connoting the process of getting goods from Point A to Point B, firms now understand that sophisticated, integrated supply chain approaches are a crucial component of business success. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

63) In the context of the marketing mix, ________ today is largely regarded in relationship to the concept of value. A) product B) price C) promotion D) place E) policy Answer: B Explanation: Price today is largely regarded in relationship to the concept of value within the marketing mix. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 64) Hannah's alterations business works around the needs of the customer by providing hours of operation that vary throughout the week, including some evening and weekend hours. It could be said that Hannah's business is ________. A) differentiated B) customer-centric C) market oriented D) product oriented E) socially responsible Answer: B Explanation: The decisions to place the customer at the core of the enterprise (often referred to as a customer-centric approach to business), focus on investment in customers over the long term, and focus on marketing as an organization-wide issue. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

65) What clearly distinguishes your product from those of the competition is ________. A) orientation B) differentiation C) organization D) relationships E) development Answer: B Explanation: Differentiation is what clearly distinguishes your products from those of competitors in the minds of customers. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 66) In Wiersema's book, The New Market Leaders, he identifies six new market realities. Which of the following is included in the list? A) competitors fade away B) few secrets are open secrets C) innovation is universal D) information appreciates E) hard times make easy growth Answer: C Explanation: He identifies "six new market realities": Competitors proliferate, all secrets are open secrets, innovation is universal, information overwhelms and depreciates, easy growth makes hard times, and customers have less time than ever. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

67) Which of these characteristics about millennials is NOT true? A) They favor content over authenticity. B) They are brand loyal. C) They are highly connected through technology. D) They wish to be part of a company's development process. E) They seek ethical companies to work for. Answer: A Explanation: Millennials favor authenticity over content, are brand loyal (especially if those brands are active on social media), are highly connected through technology, and wish to be part of a company's product development process. They also seek to join companies that are tuned in to ethical business practices and social responsibility. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) Millennials represent roughly ________ of the population, and ________ in annual buying power. A) 10 percent; $100 billion B) 25 percent; $200 billion C) 35 percent; $1 trillion D) 60 percent; $1 trillion E) 75 percent; $1 trillion Answer: B Explanation: The millennial generation represents roughly 25 percent of the population and $200 billion in annual buying power. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) Claire and her mother are both in marketing positions. Claire's job is satisfying to her primarily because it gives her a flexible schedule and pays well so she can take vacations with her friends. Her mother chose a job that provides health benefits and structured work with regular hours. This demonstrates shifts in ________ that can influence work life versus family life. A) generational values and preferences B) information power from marketer to customer C) product glut and customer shortage D) buying power from customer to marketer E) competitive influences Answer: A Explanation: Generational differences in attitudes toward work life versus family life, expectations about job satisfaction and rewards, and preferred modes of learning and working (e.g., electronic versus face-to-face) affect the ability of firms to hire people into various marketing-related positions. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 70) Which of the following action elements is NOT desired for successful Marketing (Big M)? A) Ensuring that everyone in an organization, regardless of their position or title, understands the concept of customer orientation B) Aligning all internal organizational processes and systems around the customer C) Finding somebody at the top of the firm to consistently champion this Marketing (Big M) business philosophy D) Remembering the fact that the marketing department is where Marketing (Big M) takes place E) Creating market-driving, not just market-driven, strategies Answer: D Explanation: The concept of Marketing (Big M) necessitates several important actions on the part of the organization to maximize marketing's impact. Forgetting the concept that the marketing department is where Marketing (Big M) takes place is one of the action elements required for successful Marketing (Big M). Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) Marketing (Big M) is also known as ________ marketing. A) pro-social B) tactical C) strategic D) green E) operational Answer: C Explanation: Marketing (Big M) serves as a core driver of business strategy. That is, an understanding of markets, competitors, and other external forces, coupled with attention to internal capabilities, allows a firm to successfully develop strategies for the future. This approach is often referred to as strategic marketing, which means a long-term, firm-level commitment to investing in marketing—supported at the highest organization level—for the purpose of enhancing organizational performance. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) In the context of change drivers impacting the future of marketing, marketing (little m) is also known as ________ marketing. A) pro-social B) tactical C) strategic D) predatory E) green marketing Answer: B Explanation: Marketing (little m) serves the firm and its stakeholders at a functional or operational level; hence, marketing (little m) is often thought of as tactical marketing. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) Which of the following action elements is required for successful Marketing (Big M)? A) Aligning all internal organizational processes and systems around the product B) Ensuring that everyone in an organization understands the concept of customer orientation C) Find somebody at the lower level of the firm to consistently champion this Marketing (Big M) business philosophy D) Remembering the fact that the marketing department is where Marketing (Big M) takes place E) Creating market-driven, not market-driving, strategies Answer: B Explanation: The concept of Marketing (Big M) necessitates several important actions on the part of the organization to maximize marketing's impact. Ensuring that everyone in an organization understands the concept of customer orientation is an action element required for successful Marketing (Big M). Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) Strategic marketing refers, in part, to ________. A) a firm's internal focus on production and customer satisfaction B) working with competitors, when appropriate, and with suppliers C) a long-term, firm-level commitment to investing in marketing D) making an unwavering commitment on which customers to serve E) studying promotion, distribution, delivery, and production Answer: C Explanation: Marketing (Big M) serves as a core driver of business strategy. That is, an understanding of markets, competitors, and other external forces, coupled with attention to internal capabilities, allows a firm to successfully develop strategies for the future. This approach is often referred to as strategic marketing, which means a long-term, firm-level commitment to investing in marketing—supported at the highest organization level—for the purpose of enhancing organizational performance. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) The core marketing concept characteristics of an organization-wide customer orientation and long-run profits are ________ in nature. A) objective B) strategic C) ethical D) operational E) subjective Answer: B Explanation: The core concepts of customer value, exchange, customer relationships, and benefit to the organization and its stakeholders are all very strategic in nature and help form the core business philosophy of a firm. The marketing concept includes a strong Marketing (Big M) thrust: "an organization-wide customer orientation with the objective of achieving long-run profits." Certainly the core marketing concept characteristics of an organization-wide customer orientation and long-run profits are very strategic. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) ________ refers to approaches that drive the market toward fulfilling a whole new set of needs that customers did not realize was possible or feasible before. A) Green marketing B) Tactical marketing C) Market creation D) Market orientation E) Marketing mix Answer: C Explanation: Market creation refers to approaches that drive the market toward fulfilling a whole new set of needs that customers did not realize was possible or feasible before. A classic example of market creation include Microsoft's revolution of the information field. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) For successful Marketing (Big M), customer orientation must be understood by ________. A) an organization's competitors B) the top management only C) an organization's suppliers D) the existing customers E) everyone in the organization Answer: E Explanation: An action element required for successful Marketing (Big M) is making sure everyone in an organization, regardless of their position or title, understands the concept of customer orientation, which places the customer at the core of all aspects of the enterprise. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 78) For successful Marketing (Big M), all internal organizational practices should be aligned around ________. A) profits B) management C) manufacturing D) the customer E) information technology Answer: D Explanation: An action element required for successful Marketing (Big M) is aligning all internal organizational processes and systems around the customer. The concept of Marketing (Big M) necessitates several important actions on the part of the organization to maximize marketing's impact. Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) In order for Marketing (Big M) to succeed, it must be championed by ________. A) the sales force B) top management C) middle management D) frontline personnel E) everyone in the organization Answer: B Explanation: Finding somebody at the top of the firm to consistently champion this Marketing (Big M) business philosophy is crucial for its success. The CEO is the most appropriate person for this role, perhaps manifest through the CMO (chief marketing officer). Difficulty: 1 Easy Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) DeWanda's business spent a large amount of time determining its brand image and how it would deliver its message to its customers. These are elements of ________. A) Marketing (Big M) B) marketing (little m) C) strategic marketing D) the supply chain E) stakeholder relations Answer: B Explanation: Everything from brand image, to the message salespeople and advertisements deliver, to customer service, to packaging and product features, to the chosen distribution channel—in fact, all elements of the marketing mix and beyond—exemplify marketing (little m). Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

81) In order for Marketing (Big M) to succeed, firms should create ________ strategies. A) predatory pricing B) market-driving C) diversification D) vertical integration E) market-driven Answer: B Explanation: In order for Marketing (Big M) to succeed, firms should create market-driving, not just market-driven, strategies. It is imperative to study the market and competition as part of the marketing planning process. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) In the context of change drivers impacting the future of marketing, marketing (little m) ________. A) is often thought of as strategic marketing B) almost always takes place at the top level of a firm C) serves as a core driver of business strategy D) need not be couched within the philosophy of a firm's Marketing (Big M) E) serves the firm and its stakeholders at a functional level Answer: E Explanation: In contrast to Marketing (Big M), marketing (little m) serves the firm and its stakeholders at a functional or operational level; hence, marketing (little m) is often thought of as tactical marketing. In fact, marketing (little m) almost always takes place at the functional or operational level of a firm. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

83) Microsoft's revolution of the information field and Disney's creation of the modern theme park industry are classic examples of ________. A) marketing mix B) marketing (little m) C) pro-social marketing D) green marketing E) market creation Answer: E Explanation: Classic examples of market creation include Microsoft's revolution of the information field, Disney's creation of the modern theme park industry, and Apple's innovations in integrated communications with the iPhone and iPad. These were all market-driving strategies that created new markets. Difficulty: 2 Medium Topic: Marketing and Marketing Management Defined Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) Everything from brand image, to the message sales people and advertisements deliver, to customer service, to packaging and product features, to the chosen distribution channel exemplify ________. A) strategic marketing B) relationship orientation C) Marketing (Big M) D) sales orientation E) marketing (little m) Answer: E Explanation: Everything from brand image, to the message salespeople and advertisements deliver, to customer service, to packaging and product features, to the chosen distribution channel—in fact, all elements of the marketing mix and beyond—exemplify marketing (little m). Difficulty: 2 Medium Topic: Change Drivers Impacting the Future of Marketing Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) Appropriate and effective marketing metrics must be designed to identify, track, evaluate, and provide key benchmarks for improvement. In the context of change drivers affecting the future of marketing, this reflects the ________. A) shift to justifying the relevance and payback of the marketing investment B) shift to product glut and customer shortage C) shift to distinguishing Marketing ("Big M") from marketing ("little m") D) shift in generational values and preferences E) shift in information power from marketer to customer Answer: A Explanation: The final change driver affecting the future of marketing is a topic on the minds of many CEOs and CMOs today. The issue is how management can effectively measure and assess the level of success a firm's investment in various aspects of marketing has had. Appropriate and effective marketing metrics must be designed to identify, track, evaluate, and provide key benchmarks for improvement. Difficulty: 2 Medium Topic: Marketing Metrics Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Which of the following is LEAST likely to be true regarding marketing metrics? A) The topic of marketing metrics has been one of the highest priorities for most MSI member companies. B) Appropriate and effective marketing metrics help identify, track, evaluate, and provide key benchmarks for improvement. C) Although marketing carries a stigma as a cost center, metrics such as ROI cannot indicate marketing success. D) Effective management of the various aspects of marketing requires quantification of objectives and results. E) The marketing plan is one of the most important elements of a business plan and effective planning requires metrics. Answer: C Explanation: Appropriate and effective marketing metrics must be designed to identify, track, evaluate, and provide key benchmarks for improvement just as various financial metrics guide the financial management of the firm. Although, marketing carries a stigma as a cost center, metrics such as ROI can indicate marketing success. Difficulty: 2 Medium Topic: Marketing Metrics Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

87) Shari's manager asked her to identify, track, evaluate, and provide key benchmarks for improvement in her marketing department. To do this, Shari used ________. A) marketing metrics B) market research C) the marketing mix D) market creation E) strategic marketing Answer: A Explanation: The issue is how management can effectively measure and assess the level of success a firm's investment in various aspects of marketing has had. Appropriate and effective marketing metrics must be designed to identify, track, evaluate, and provide key benchmarks for improvement just as various financial metrics guide the financial management of the firm. Difficulty: 2 Medium Topic: Marketing Metrics Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 88) When the text states that marketers need to create tools for ongoing, meaningful measurement of marketing productivity, it is referring to the need for ________. A) accountability B) responsibility C) subjectivity D) visibility E) identification Answer: A Explanation: CEOs and stockholders expect marketing accountability. Marketers need to create tools for ongoing, meaningful measurement of marketing productivity. Difficulty: 2 Medium Topic: Marketing Metrics Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) Name three of the marketing misconceptions discussed in the text, and explain why these do not accurately describe the field of marketing. Answer: The common misperceptions about marketing include: • Catchy and entertaining advertisements—or perhaps the opposite, incessant and boring advertisements. • Pushy salespeople trying to persuade someone to buy it right now. • Incessant spam in your e-mail inbox and unwelcome solicitations on your smartphone. • Obtrusive tracking and recording of your every click and browsing activity online. • Famous brands and their celebrity spokespeople, such as Nike's athlete endorsers. • Product claims that turn out to be overstated or just plain false, causing doubt about the trustworthiness of a company. • Marketing departments "own" an organization's marketing initiative. Students should be able to explain each of these in terms of why some people may believe them, but also why they do not accurately represent the field. Difficulty: 3 Hard Topic: Marketing and Marketing Management Defined Learning Objective: 01-01 Identify typical misconceptions about marketing, why they persist, and the resulting challenges for marketing management. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) Define the term marketing. How does the AMA definition compare with Drucker's definition? Answer: The American Marketing Association defines marketing as "the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." Peter Drucker defines it as "Marketing is so basic that it cannot be considered a separate function (i.e., a separate skill or work) within the business . . . it is, first, a central dimension of the entire business. It is the whole business . . . seen from the customer's point of view. Concern and responsibility for marketing must, therefore, permeate all areas of the enterprise." Difficulty: 3 Hard Topic: Marketing and Marketing Management Defined Learning Objective: 01-02 Define what marketing and marketing management really are and how they contribute to a firm's success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) Compare and contrast the production orientation, the sales orientation, the differentiation orientation, the market orientation, and the relationship orientation. Answer: For the early part of the 20th century, the focus was on the production orientation of improving products and production efficiency without much regard for what was going on in the marketplace. In fact, consumers snapped up this new pipeline of reasonably priced goods, even if the products didn't give much choice in style or function. Around the end of World War I, production capacity utilization began to decline for several reasons. These factors resulted in the rise of many of the great sales organizations of today. A sales orientation suggests that, to increase sales and consequently production capacity utilization, professional salespeople need to "push" product into the hands of customers, both businesses and end users. More sophisticated research and analytical approaches have made it possible to do increasingly precise refinement of market segmentation, target marketing, and positioning of products to serve very specific customer groups. The idea is to create and communicate differentiation, or what clearly distinguishes your products from those of competitors in the minds of customers. The ability for marketers to tailor and deliver different product messages to different groups also has been greatly enhanced by the proliferation of multiple types of media that can be used with great precision to communicate to very specifically defined customer groups. A great deal of research has been devoted to learning how a firm can successfully put the marketing concept into practice. Think of market orientation as the implementation of the marketing concept. The notion of market orientation, one component of which is customer orientation—placing the customer at the core of all aspects of the enterprise—takes the guiding business philosophy of the marketing concept and works to more usefully define just how to implement it within a firm. The move toward a relationship orientation by firms has been driven by the realization that it is far more efficient and effective to invest in keeping and cultivating profitable current customers instead of constantly having to invest in gaining new customers that come with unknown return on investment. Most firms simultaneously focus on both current and new customers, but no company wants to be in a position of losing great customers and having to scramble to replace the associated lost revenue. A relationship orientation draws its power from the firm's capability to effectively collect and use ongoing, real-time information on customers in marketing management decision making. Difficulty: 3 Hard Topic: The Evolution of Marketing Learning Objective: 01-03 Appreciate how marketing has evolved from its early roots to be practiced as it is today. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

92) Describe how information power has shifted from the marketer to the customer. Answer: For decades, marketers held a degree of information power over their customers because firms had access to detailed and sophisticated information about their products and services that customers couldn't get without the help of someone in the firm (usually a salesperson). Now, customers are empowered to access boundless information about all kinds of products and services on the Internet. For competitive reasons, firms have no choice but to be more open about their businesses and products. Even if they wanted to, firms can't stop chat rooms, independent websites, web logs or blogs, and other customer-generated modes of communication from filling web page after web page with information, disinformation, and opinions about a company's products, services. Difficulty: 3 Hard Topic: Marketing Trends Learning Objective: 01-04 Recognize the impact of key change drivers on the future of marketing. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 2 Marketing Foundations: Global, Ethical, Sustainable 1) Businesses are not confined to a local market due to improved distribution, sophisticated communication tools, product standardization, and the Internet. 2) Small companies have to invest a lot of money to go global. 3) When companies sell in other countries through limited direct contact or indirect intermediaries, they always consider themselves to be involved in foreign marketing. 4) A company can do business with an international customer and still not engage in direct foreign marketing. 5) The most significant difference between international and global marketing organizations is management philosophy and corporate planning. 6) The first step in moving into global markets is to evaluate the market opportunities. 7) Global marketing research focuses on just three types of basic information: economic, cultural, and political/legal. 8) Countries create regional market zones for mutual economic benefit through reduced trade barriers and lower tariffs. 9) The European Union is the most successful regional market zone. 10) The economic output of the European Union (EU) is larger than that of the United States. 11) The most common foreign market entry strategy is licensing. 12) Licensing is a useful form of market entry when companies lack the resources to establish independent operations in foreign markets. 13) Franchisees have a great deal of control in how they manage their businesses. 14) Direct foreign investment is the market entry strategy with the greatest long-term implications. 15) Mr. Coffee had a good understanding of the Japanese culture when it introduced coffeemakers that fit well in Japanese kitchens. 16) Nestlé embraces a local branding strategy globally while other companies like Coca-Cola and Kellogg use a global branding strategy. 17) The country-of-origin effect is always positive in a customer's perception. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

18) The strategic objective of channel strategy known as "coverage" relates to how much the global market distribution systems cost. 19) The global market advertising approach in which distinct ads are built around several marketing messages, and local marketers select the ads that best fit their specific market situation, is known as global marketing with local content. 20) Farah's Fabrics Inc. prices its products for the global market by using cost plus markup to arrive at a final price. This is known as cost-based pricing. 21) Engaging in ethical business practices generally has little impact on marketing strategy and implementation. 22) Ethical issues related to product strategy begin with determining what markets should be targeted. 23) The concept of sustainability includes all business practices that seek to balance business success and societal success over the long term. 24) The triple bottom line metric is used for measuring the financial results of the company, but does not take into account equity, economic or environmental considerations. 25) An understanding of marketing beyond home markets develops over time as a company gets more international business experience. This process is referred to as the ________. A) global acceptance curve B) global learning continuum C) international experience learning curve D) global experience learning curve E) international experience continuum 26) Firms that manufacture in a foreign market and maintain an extensive sales organization and distribution network but have a "domestic first" mind-set are probably engaged in ________ marketing. A) organic B) buzz C) international D) viral E) local 27) ________ is one of the most widely used measures of economic growth. A) Return on investment B) Break-even point C) Gross domestic product D) Six Sigma E) Stock market index

28) Techel Electronics, a multinational company, manufactures its products in its home market, but treats the world as a single market with many segments in it. It sold televisions worth $47 million in 2017 in international markets, which was more than half of its total revenue. In the context of stages of global experience learning curve, the company is engaged in ________. A) global marketing B) no direct foreign marketing C) global partnerships D) foreign marketing E) international marketing 29) Sam is flying to Rio de Janeiro, Brazil, to meet with a prospective customer. He wants to learn the ethical standards, degree of formality, and gender biases of the country. Which of the following types of information will help Sam to accomplish his task? A) economic B) demographic C) business environment D) political and legal E) geography 30) John, the CEO of Tresnel Inc., learns that the government of one of his company's foreign markets has enacted a new law that limits the amount of profit it can make. He projects that this will result in future losses. If John researches the ________ environment, he can plan a strategy to deal with this situation. A) economic B) cultural and societal C) business D) political and legal E) geographical 31) In Serovia, most people eat dinner after 10:00 p.m. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography 32) The color red means different things in different parts of the world. For example, in China, a bride traditionally would wear red but not white. White is a symbol of death. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal trends C) business environment D) political, legal E) history, geography

33) Many countries base their court systems on those of former rulers. For example, the Spanish ruled many South American countries; therefore, the court system is based on code or civil law. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography 34) Data on consumer spending per capita or industrial purchasing trends would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography 35) Cho, the international sales manager at a fashion house, is concerned that the euro is stronger than the U.S. dollar. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography 36) Phillippe needs to fire a manager of a French subsidiary of his company. He recently found that French law makes it difficult to terminate employees. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography 37) ________ percent of the world's economic growth in the next 20 years is predicted to come from emerging markets, such as China and India. A) 10 B) 35 C) 52 D) 75 E) 90

38) The fastest-growing economy in the world in 2017 was ________. A) Sierra Leone B) Afghanistan C) Macau D) China E) Libya 39) Which of the following is NOT one of the forces that drives countries to form regional market zones? A) religious values B) geographic proximity C) economic D) cultural similarities E) political 40) MERCOSUR is a regional market zone in ________. A) Asia B) Africa C) North America D) The Mideast E) South America 41) NAFTA is a market zone that eliminates tariffs between the United States and ________. A) Canada, Mexico, and Costa Rica B) Canada and Mexico C) Mexico, Honduras, Nicaragua, Costa Rica, and Panama D) Canada, Mexico, Costa Rica, and Panama E) Canada, Costa Rica, and Panama 42) ________ is the most common method for entering foreign markets. A) Direct foreign investment B) Licensing C) Franchising D) Exporting E) Joint ventures 43) ________ represent an exporting firm in a foreign market. They become the face of a company through servicing customers, selling products, and receiving payment. They often take title to the goods and resell them. A) Brokers B) Export agents C) Distributors D) Direct sales forces E) Freight forwarders

44) A technology or high-end industrial product company is most likely to use a(n) ________ in foreign markets because customers expect the expertise of highly-trained, accessible personnel. A) broker B) export agent C) distributor D) direct sales force E) freight forwarder 45) Advantages to licensing as a market entry strategy include all of the following EXCEPT________. A) limited financial risk in the short run B) easy availability of raw materials C) services such as local distribution D) decrease in operational costs E) complete control of the patent 46) Which of the following is NOT an advantage of franchising as a market entry strategy? A) local market knowledge B) product consistency and easing of legal requirements C) local management expertise D) quality control is at the point of customer contact E) economies of scale exist 47) The ________ industry best illustrates the power of strategic alliances. A) automobile B) telecommunications C) airline D) computer E) video gaming 48) Herbie recently read that Crane Airways of Japan, Kestrel Airlines of Germany, Heron Air of Australia, and Egret Airways of India have code sharing partnership, which allows passengers to fly on any of the airlines, share frequent flyer miles, and give each other logistical support. Herbie had just learned in his Global Marketing class that this arrangement is known as a(n) ________. A) franchising B) strategic alliance C) green field project D) acquisition E) licensing

49) Arthur's Auto Parts Inc. wants to enter the Russian market. Russian law prevents foreign entities from owning a majority position in a company there. The best method of entry for Arthur's is most likely ________. A) merger B) joint venture C) acquisition D) franchising E) direct foreign investment 50) Many countries restrict marketing to children more severely than in the United States. A firm considering direct foreign investment would report this finding under the heading of ________. A) technology transfer B) legal issues C) transaction costs D) marketing communication barriers E) product differentiation 51) The value of the Japanese yen has fluctuated widely during the 2000s compared to the U.S. dollar. A firm considering direct foreign investment would report this finding under the heading of ________. A) timing B) legal issues C) transaction costs D) marketing communication barriers E) product differentiation 52) NaviCal Inc., a personal navigation system company, has contracted its manufacturing to a firm in Malaysia for five years. NaviCal had high financial growth, and it wants to purchase the manufacturing facility. This market entry method is called ________. A) franchising B) strategic alliance C) joint venture D) direct foreign investment E) licensing 53) The primary organizational patterns employed by organizations around the world are ________. A) highly decentralized, decentralized, and centralized B) highly centralized, centralized, and decentralized C) regionalized, highly regionalized, and centralized D) decentralized, centralized, and regionalized E) regionalized, moderately decentralized, and centralized

54) When local government relationships are critical to the success of international operations, the best organizational structure for a firm would be ________. A) targeted organization B) global product lines C) geographic regions D) hybrid or matrix E) multinationals 55) In the context of organizational structures, most companies today use some form of ________ structure that encourages regional autonomy while building product competence in key areas around the world. A) targeted organization B) global product lines C) geographic region D) matrix E) multinational 56) Coca-Cola changes the taste of its soft drinks to meet local market preferences. This is an example of ________. A) direct product extension B) product adaptation C) backward product invention D) product invention E) hybrid products 57) Bistrone corn canned soup was made expressly for the Japanese market by Coca-Cola Japan. This is an example of ________. A) direct product extension B) product adaptation C) backward product adaptation D) product invention E) hybrid products 58) Outdated cell phones used in Europe or Asia have been introduced into the Latin American markets that don't have more updated models. This is an example of ________. A) forward extension B) product adaptation C) backward invention D) product extension E) hybrid products

59) In the context of identifying specific consumer trends, ________ is not a product issue for international consumer marketers. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing 60) Coca-Cola introduced a new product called Diet Coke in Japan. Sales of this product were low in the initial stages because Japanese women associated the word diet with weakness; however, changing the name of the product from Diet Coke to Coke Light proved effective. Which of the following product issues affected the sales of Diet Coke in this scenario? A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing 61) Ford Motor Co. introduced its automobile called Nova in Mexico. It faced difficulty in selling the car because "Nova" in Spanish means "It doesn't go." This illustrates a problem with ________. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing 62) People around the world prefer Swiss watches over watches manufactured in other countries. In the context of product issues, which of the following best describes the customer's perception? A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing 63) Steve wants to gift a box of chocolates to his best friend. He walks into a store and buys Belgian chocolates because his friend once mentioned that they are the best in the world. This is an example of how consumers respond to ________. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) price

64) In the context of market channels, the use of local distribution networks to reach target customers is identified in the ________ channel factor. A) cost B) coverage C) character D) continuity E) control 65) Which of the following channel strategies helps in increasing the efficiency of local distribution systems by eliminating unnecessary middlemen? A) cost B) coverage C) character D) continuity E) control 66) Well-established distributors in a marketing channel often have relationships with competitors. In the context of market channels, which of the following channel strategies corresponds to this issue? A) capital B) coverage C) character D) continuity E) control 67) Aligning the firm's philosophy with that of a potential channel partner would be identified in the channel strategy of ________. A) cost B) coverage C) character D) continuity E) control 68) Most global marketers rely on local distribution networks in foreign markets. This is because it is very expensive to build a company's own distribution network in a foreign market. This issue can be identified in the channel strategy of ________. A) change B) coverage C) character D) continuity E) control

69) PepsiCo and Coca-Cola sponsor traveling carnivals in rural Latin America to encourage product trial. This element of marketing communications is called ________. A) advertising B) personal selling C) sales promotion D) public relations E) direct marketing 70) The task of handling crises and giving the company's perspective to news organizations belongs in the ________ element of marketing communications. A) advertising B) personal selling C) sales promotion D) public relations E) direct marketing 71) Jason went to an automobile dealership to buy a car, and he spent two hours talking to an employee about options. This element of marketing communications is called ________. A) advertising B) personal selling C) promotion D) public relations E) direct marketing 72) Delxen Inc., a multinational company, uses the same prices for all its products globally. This type of pricing is called ________. A) going-rate price B) one world price C) local market condition price D) transfer price E) cost-based price 73) Prices of products are often higher in a foreign country than the home country due to transportation charges, taxes, tariffs, and exchange rate fluctuations. This change in price from home country to foreign country is referred to as ________. A) price escalation B) price scaling C) cost-plus pricing D) cost-based pricing E) market price

74) Charging a price that is lower than actual costs or less than the company charges in its home market is called ________. A) gray marketing B) price fixing C) dumping D) compensation trading E) offset pricing 75) When distributors do not have authorization from manufacturers but divert products from low-price markets and sell them in high-price markets, they are practicing ________. A) gray market distribution B) price fixing C) dumping D) compensation trading E) offset pricing 76) ________ encompasses a societal and professional standard of right and fair practices that are expected of marketing managers in their oversight of strategy formulation, implementation, and control. A) Marketing ethics B) Price fixing C) Social responsibility D) Accreditation E) Personal selling 77) ________ is the net benefits (or costs) associated with a product or service, and it is affected by the buyer's trust that the company will keep its promises. A) Value B) Outlay C) Exchange D) Accreditation E) Gain 78) Perdue found that one of its chicken products may have been contaminated with bacteria, so it pulled it off the shelves and instituted a recall. This potential ethical issue was associated with which element of the marketing mix? A) product B) price C) distribution D) marketing communications E) promotion

79) Latosha was thrilled when she found a low-cost airfare to Moscow, but she was not happy when she bought the tickets and realized there were hundreds of dollars in added fees. Which element of the marketing mix was impacted? A) product B) price C) distribution D) marketing communications E) promotion 80) What area in marketing presents the most ethical challenges? A) product B) price C) distribution D) marketing communications E) promotion 81) The American Marketing Association's code of ethics speaks to six primary ethical values: honesty, responsibility, fairness, respect, transparency, and ________. A) social conscience B) loyalty C) consumer-orientation D) sustainability E) citizenship 82) In the 1930s, companies and consumers began to realize that utilizing resources efficiently and effectively was good for society and beneficial to business. This grew into the ________ movement. A) direct investment B) profitability C) consumer-orientation D) green E) active citizen 83) The text discusses the triple bottom line metric, and outlines an approach to consider the impact of TBL in marketing management. This includes people, planet, and ________. A) community B) environment C) product D) profit E) promotion

84) Starbucks has been successful in developing "ethically sourced" coffee that is socially responsible and environmentally safe. This demonstrates which element of TBL? A) people B) planet C) product D) profit E) promotion 85) Explain the difference between foreign marketing, international marketing, and global marketing. 86) Describe the following key regional market zones: European Union, MERCOSUR, NAFTA, and ASEAN. What countries do they include, what benefits do they have, and have they been successful? 87) Compare and contrast the various strategies for entering new global markets: exporting, licensing, franchising, strategic alliances, and direct foreign investment. Give examples of when each strategy would be best utilized. 88) Define the terms direct product extension, product adaptation, and product invention. Give an example of each. 89) What are the Six Cs of channel strategy? Give examples showing how each of these can impact channel partner decisions. 90) Explain the concept of the triple bottom line. How is this relevant to marketing?

3) When companies sell in other countries through limited direct contact or indirect intermediaries, they always consider themselves to be involved in foreign marketing. Answer: FALSE Explanation: Many companies with no direct foreign marketing still do business with international customers through intermediaries or limited direct contact. In these cases, however, there is no formal international channel relationship or global marketing strategy targeted at international customers. Of course, any company with a website is now a global company as someone can visit the site from anywhere in the world, but companies with no foreign marketing consider any sales to an international customer as incidental. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4) A company can do business with an international customer and still not engage in direct foreign marketing. Answer: TRUE Explanation: Many companies with no direct foreign marketing still do business with international customers through intermediaries or limited direct contact. In these cases, however, there is no formal international channel relationship or global marketing strategy targeted at international customers. Of course, any company with a website is now a global company as someone can visit the site from anywhere in the world, but companies with no foreign marketing consider any sales to an international customer as incidental. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

5) The most significant difference between international and global marketing organizations is management philosophy and corporate planning. Answer: TRUE Explanation: The most significant difference between international and global marketing organizations is management philosophy and corporate planning. Global marketers treat the world as a single, unified market with many different segments that may or may not fall along country political boundaries. International marketers, on the other hand, define markets along traditional political boundaries and most often, assign unique status to their domestic market. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The first step in moving into global markets is to evaluate the market opportunities. Answer: TRUE Explanation: The first step in moving into global markets is to evaluate the market opportunities. Since a company's management team is usually less familiar with foreign markets, research helps fill in the blanks, providing critical information for decision makers. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 7) Global marketing research focuses on just three types of basic information: economic, cultural, and political/legal. Answer: FALSE Explanation: Global market research focuses on five basic types of information: economic, culture/societal, business environment, political/legal, and specific market conditions. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

8) Countries create regional market zones for mutual economic benefit through reduced trade barriers and lower tariffs. Answer: TRUE Explanation: The single most significant global economic trend over the past 15 years is the emergence of regional market zones around the world. Regional market zones consist of a group of countries that create formal relationships for mutual economic benefit through lower tariffs and reduced trade barriers. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The European Union is the most successful regional market zone. Answer: TRUE Explanation: The European Union is the most successful regional market zone and it is also one of the oldest. Founded more than 50 years ago by six countries (Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany) with the Treaty of Rome, the EU now includes 28 countries spanning all of Europe. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10) The economic output of the European Union (EU) is larger than that of the United States. Answer: FALSE Explanation: The EU has become one of the most dominant economic entities in the world, with economic output approximately equal to the United States, and its currency, the euro, is one of the leading world currencies. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

11) The most common foreign market entry strategy is licensing. Answer: FALSE Explanation: Exporting is the most common method for entering foreign markets and accounts for 10 percent of all global economic activity. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Licensing is a useful form of market entry when companies lack the resources to establish independent operations in foreign markets. Answer: TRUE Explanation: Companies seeking to establish greater presence in a market without committing significant resources can choose to license their key asset (patent, trademark) to another company, effectively giving the company the right to use that asset in that market. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 13) Franchisees have a great deal of control in how they manage their businesses. Answer: FALSE Explanation: Franchisers exert a great deal of control with extensive franchise agreements that dictate how the franchisee will operate the business. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

14) Direct foreign investment is the market entry strategy with the greatest long-term implications. Answer: TRUE Explanation: The market entry strategy with the greatest long-term implications is direct foreign investment. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Mr. Coffee had a good understanding of the Japanese culture when it introduced coffeemakers that fit well in Japanese kitchens. Answer: FALSE Explanation: Manufacturers of kitchen products have found the Japanese market difficult to penetrate. Mr. Coffee and Philips Electronics NV found their coffeemakers did not sell well in Japan because Asian kitchens in general are much smaller than Western kitchens. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) Nestlé embraces a local branding strategy globally while other companies like Coca-Cola and Kellogg use a global branding strategy. Answer: TRUE Explanation: Local brands offer companies distinct awareness and built-in market loyalty. Nestlé, for example, follows a local branding strategy for individual products (the company carries more than 7,000 brands) but also promotes the Nestlé corporate brand globally. It believes that local branding helps differentiate its products. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

17) The country-of-origin effect is always positive in a customer's perception. Answer: FALSE Explanation: The country-of-origin effect is the influence of the country of manufacture, assembly, or design on a customer's positive or negative perception of a product. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) The strategic objective of channel strategy known as "coverage" relates to how much the global market distribution systems cost. Answer: FALSE Explanation: Both cost and capital relate to channels costs. Coverage relates to determining which distribution network has the widest distribution. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) The global market advertising approach in which distinct ads are built around several marketing messages, and local marketers select the ads that best fit their specific market situation, is known as global marketing with local content. Answer: FALSE Explanation: With the approach that is called a basket of global advertising themes, related but distinct ads built around several marketing messages are generated, often by the company's lead advertising agency, and local marketers select the ads that best fit their specific market situation. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

20) Farah's Fabrics Inc. prices its products for the global market by using cost plus markup to arrive at a final price. This is known as cost-based pricing. Answer: TRUE Explanation: Cost-based pricing considers cost plus markup to arrive at a final price. While the focus on costs precludes charging an unprofitable price, it does not consider actual market conditions. If costs are high as a result of tariffs or transportation, the final price may be too high for the market. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 21) Engaging in ethical business practices generally has little impact on marketing strategy and implementation. Answer: FALSE Explanation: Ethics plays a role in every aspect of marketing, from the value proposition through all the critical elements in the marketing mix, and even in marketing strategy and implementation. Difficulty: 1 Easy Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 22) Ethical issues related to product strategy begin with determining what markets should be targeted. Answer: TRUE Explanation: There are a number of ethical issues related to product strategy. It begins with what markets should be targeted. Difficulty: 2 Medium Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

23) The concept of sustainability includes all business practices that seek to balance business success and societal success over the long term. Answer: TRUE Explanation: Business and societal success over the long term are important goals in sustainability. Difficulty: 1 Easy Topic: Socially Responsible Marketing Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) The triple bottom line metric is used for measuring the financial results of the company, but does not take into account equity, economic or environmental considerations. Answer: FALSE Explanation: The triple bottom line (TBL) is a metric for evaluating not only the financial results of the company but the broader social equity, economic, and environmental considerations as well. Difficulty: 1 Easy Topic: Socially Responsible Marketing Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) An understanding of marketing beyond home markets develops over time as a company gets more international business experience. This process is referred to as the ________. A) global acceptance curve B) global learning continuum C) international experience learning curve D) global experience learning curve E) international experience continuum Answer: D Explanation: This describes the global experience learning curve. Difficulty: 1 Easy Topic: Understanding Global Markets Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

26) Firms that manufacture in a foreign market and maintain an extensive sales organization and distribution network but have a "domestic first" mind-set are probably engaged in ________ marketing. A) organic B) buzz C) international D) viral E) local Answer: C Explanation: International marketing aligns the company's assets and resources with global markets, but, in the vast majority of companies, management still takes a "domestic first" approach to the business. As a result, the corporate structure still divides international and domestic markets. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) ________ is one of the most widely used measures of economic growth. A) Return on investment B) Break-even point C) Gross domestic product D) Six Sigma E) Stock market index Answer: C Explanation: Gross domestic product (GDP), which is the total market value of all final goods and services produced in a country in a given year, is one of the most widely used measures of economic growth. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) Techel Electronics, a multinational company, manufactures its products in its home market, but treats the world as a single market with many segments in it. It sold televisions worth $47 million in 2017 in international markets, which was more than half of its total revenue. In the context of stages of global experience learning curve, the company is engaged in ________. A) global marketing B) no direct foreign marketing C) global partnerships D) foreign marketing E) international marketing Answer: A Explanation: A global marketing company realizes that all world markets (including the company's own domestic market) are, in reality, a single market with many different segments. This frequently happens when a company generates more than half its revenue in international markets Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 29) Sam is flying to Rio de Janeiro, Brazil, to meet with a prospective customer. He wants to learn the ethical standards, degree of formality, and gender biases of the country. Which of the following types of information will help Sam to accomplish his task? A) economic B) demographic C) business environment D) political and legal E) geography Answer: C Explanation: Ethical standards, management styles, degree of formality, and gender or other biases are all critical factors that management needs to know before entering a new market. Failure to understand the business environment can lead to misunderstanding and lost relationships as the company enters a new market. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

30) John, the CEO of Tresnel Inc., learns that the government of one of his company's foreign markets has enacted a new law that limits the amount of profit it can make. He projects that this will result in future losses. If John researches the ________ environment, he can plan a strategy to deal with this situation. A) economic B) cultural and societal C) business D) political and legal E) geographical Answer: D Explanation: Local political changes can create significant uncertainties for a business. As witnessed in Bolivia and other countries, new governments sometimes alter the relationship of government to industry by exerting greater control and even nationalizing some industries. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 31) In Serovia, most people eat dinner after 10:00 p.m. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography Answer: B Explanation: Understanding a global market's culture and social trends is fundamental for consumer products and helpful for business-to-business marketers. Cultural values, symbols and rituals, and cultural differences affect people's perception of products while B2B companies must learn local cultural practices to recruit employees and establish good business relationships. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

32) The color red means different things in different parts of the world. For example, in China, a bride traditionally would wear red but not white. White is a symbol of death. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal trends C) business environment D) political, legal E) history, geography Answer: B Explanation: Understanding a global market's culture and social trends is fundamental for consumer products and helpful for business-to-business marketers. Cultural values, symbols and rituals, and cultural differences affect people's perception of products while B2B companies must learn local cultural practices to recruit employees and establish good business relationships. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 33) Many countries base their court systems on those of former rulers. For example, the Spanish ruled many South American countries; therefore, the court system is based on code or civil law. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography Answer: D Explanation: Learning the legal landscape is fundamental before committing resources in a foreign market. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

34) Data on consumer spending per capita or industrial purchasing trends would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography Answer: A Explanation: An accurate understanding of the current economic environment, such as gross domestic product (GDP) growth, inflation, strength of the currency, and business cycle trends, is essential. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) Cho, the international sales manager at a fashion house, is concerned that the euro is stronger than the U.S. dollar. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography Answer: A Explanation: An accurate understanding of the current economic environment, such as gross domestic product growth, inflation, strength of the currency, and business cycle trends, is essential. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

36) Phillippe needs to fire a manager of a French subsidiary of his company. He recently found that French law makes it difficult to terminate employees. This would be identified in the ________ section of a global market research report. A) economic B) cultural, societal C) business environment D) political, legal E) history, geography Answer: D Explanation: Labor laws vary widely around the world. Germany and France, for example, make it difficult to terminate someone once that person has been hired, while Great Britain's termination policies are more consistent with those of the United States. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 37) ________ percent of the world's economic growth in the next 20 years is predicted to come from emerging markets, such as China and India. A) 10 B) 35 C) 52 D) 75 E) 90 Answer: D Explanation: Seventy-five percent of world economic growth over the next 20 years is projected to come from a new group of powerful economies, most notably China and India. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) The fastest-growing economy in the world in 2017 was ________. A) Sierra Leone B) Afghanistan C) Macau D) China E) Libya Answer: E Explanation: The fastest-growing economy in the world in 2017 was Libya. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-02 Learn the essential information components for assessing a global marketing opportunity. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) Which of the following is NOT one of the forces that drives countries to form regional market zones? A) religious values B) geographic proximity C) economic D) cultural similarities E) political Answer: A Explanation: Regional market zones generally form as a result of four forces. The first and most fundamental factor is economic. Second, research suggests geographic proximity to other alliance partners is advantageous in the development of a market zone. The third factor is political. Culture similarities, such as having a shared language, among alliance partners also facilitate markets zones as shared cultural experiences encourage greater cooperation and minimize possible conflicts from cultural disparities. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) MERCOSUR is a regional market zone in ________. A) Asia B) Africa C) North America D) The Mideast E) South America Answer: E Explanation: MERCOSUR, the most powerful market zone in South America, was inaugurated in 1995 and includes the economies of South America: Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) NAFTA is a market zone that eliminates tariffs between the United States and ________. A) Canada, Mexico, and Costa Rica B) Canada and Mexico C) Mexico, Honduras, Nicaragua, Costa Rica, and Panama D) Canada, Mexico, Costa Rica, and Panama E) Canada, Costa Rica, and Panama Answer: B Explanation: NAFTA (North American Free Trade Agreement) is the alliance of United States, Canada, and Mexico. It eliminates tariffs between these three countries. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

42) ________ is the most common method for entering foreign markets. A) Direct foreign investment B) Licensing C) Franchising D) Exporting E) Joint ventures Answer: D Explanation: Exporting is the most common method for entering foreign markets and accounts for 10 percent of all global economic activity. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) ________ represent an exporting firm in a foreign market. They become the face of a company through servicing customers, selling products, and receiving payment. They often take title to the goods and resell them. A) Brokers B) Export agents C) Distributors D) Direct sales forces E) Freight forwarders Answer: C Explanation: Distributors represent the company and often many others in foreign markets. These organizations become the face of the company in that country, servicing customers, selling products, and receiving payments. In many cases, they take title to the goods and then resell them. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) A technology or high-end industrial product company is most likely to use a(n) ________ in foreign markets because customers expect the expertise of highly-trained, accessible personnel. A) broker B) export agent C) distributor D) direct sales force E) freight forwarder Answer: D Explanation: For some industries, creating a direct sales force is required because customers will demand that company salespeople be in the country. This is often the case in the technology and high-end industrial product industries. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) Advantages to licensing as a market entry strategy include all of the following EXCEPT________. A) limited financial risk in the short run B) easy availability of raw materials C) services such as local distribution D) decrease in operational costs E) complete control of the patent Answer: E Explanation: Licensing is a contractual agreement which transmits something of value such as technology, a trademark, a patent, or a unique manufacturing process in return for financial compensation in the form of a licensing fee or percentage of sales. In licensing, companies can choose to license their key asset to another company, effectively giving the company the right to use that asset in that market. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) Which of the following is NOT an advantage of franchising as a market entry strategy? A) local market knowledge B) product consistency and easing of legal requirements C) local management expertise D) quality control is at the point of customer contact E) economies of scale exist Answer: B Explanation: Combining low capital investments, rapid expansion opportunities, and local market expertise, franchising offers many advantages as a market entry strategy. However, there are also challenges. Worldwide, consumer tastes vary significantly and franchisers need sufficient resources to create products that will meet demands of global customers while maintaining quality control. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) The ________ industry best illustrates the power of strategic alliances. A) automobile B) telecommunications C) airline D) computer E) video gaming Answer: C Explanation: In some industries, strategic alliances now dominate the competitive landscape. Nowhere is this more noticeable than the airline industry. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) Herbie recently read that Crane Airways of Japan, Kestrel Airlines of Germany, Heron Air of Australia, and Egret Airways of India have code sharing partnership, which allows passengers to fly on any of the airlines, share frequent flyer miles, and give each other logistical support. Herbie had just learned in his Global Marketing class that this arrangement is known as a(n) ________. A) franchising B) strategic alliance C) green field project D) acquisition E) licensing Answer: B Explanation: A number of airlines have created a worldwide network of airline partnerships that include code-sharing, frequent flyer mileage partnerships, and some logistical support, demonstrating a strategic alliance. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Arthur's Auto Parts Inc. wants to enter the Russian market. Russian law prevents foreign entities from owning a majority position in a company there. The best method of entry for Arthur's is most likely ________. A) merger B) joint venture C) acquisition D) franchising E) direct foreign investment Answer: B Explanation: A specific type of strategic alliance called joint venture enables many companies to enter a market that would otherwise be closed because of legal restrictions or cultural barriers. Additionally, like all strategic alliances, it reduces risk by spreading risk to other partners. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

50) Many countries restrict marketing to children more severely than in the United States. A firm considering direct foreign investment would report this finding under the heading of ________. A) technology transfer B) legal issues C) transaction costs D) marketing communication barriers E) product differentiation Answer: D Explanation: In direct foreign investment, risks go up substantially. A company must consider marketing communication barriers because local market practices vary a great deal. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 51) The value of the Japanese yen has fluctuated widely during the 2000s compared to the U.S. dollar. A firm considering direct foreign investment would report this finding under the heading of ________. A) timing B) legal issues C) transaction costs D) marketing communication barriers E) product differentiation Answer: C Explanation: Transaction costs are production and other costs stated in various currencies. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

52) NaviCal Inc., a personal navigation system company, has contracted its manufacturing to a firm in Malaysia for five years. NaviCal had high financial growth, and it wants to purchase the manufacturing facility. This market entry method is called ________. A) franchising B) strategic alliance C) joint venture D) direct foreign investment E) licensing Answer: D Explanation: Purchasing a manufacturing facility in another country is direct foreign investment. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 53) The primary organizational patterns employed by organizations around the world are ________. A) highly decentralized, decentralized, and centralized B) highly centralized, centralized, and decentralized C) regionalized, highly regionalized, and centralized D) decentralized, centralized, and regionalized E) regionalized, moderately decentralized, and centralized Answer: D Explanation: The degree of centralization is a second critical decision since it affects resource allocation and personnel. Three primary organizational patterns employed by organizations around the world are centralized, decentralized, and regionalized. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

54) When local government relationships are critical to the success of international operations, the best organizational structure for a firm would be ________. A) targeted organization B) global product lines C) geographic regions D) hybrid or matrix E) multinationals Answer: C Explanation: Geographic regions divide international markets by geography, building autonomous regional organizations that perform business functions in the geographic area. This model works particularly well when local government relationships are critical to the success of international operations as it affords company management a closer connection to local customers. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) In the context of organizational structures, most companies today use some form of ________ structure that encourages regional autonomy while building product competence in key areas around the world. A) targeted organization B) global product lines C) geographic region D) matrix E) multinational Answer: D Explanation: Matrix organizational structure is a hybrid of global product lines and geographic regions structures. Not surprisingly, most companies today use some form of matrix structure that encourages regional autonomy while building product competence in key areas around world. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

56) Coca-Cola changes the taste of its soft drinks to meet local market preferences. This is an example of ________. A) direct product extension B) product adaptation C) backward product invention D) product invention E) hybrid products Answer: B Explanation: Product adaptation means altering an existing product to fit local needs and legal requirements. Adaptation can range from regional levels all the way down to city-level differences. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) Bistrone corn canned soup was made expressly for the Japanese market by Coca-Cola Japan. This is an example of ________. A) direct product extension B) product adaptation C) backward product adaptation D) product invention E) hybrid products Answer: D Explanation: Product invention means creating a new product specifically for an international market. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

58) Outdated cell phones used in Europe or Asia have been introduced into the Latin American markets that don't have more updated models. This is an example of ________. A) forward extension B) product adaptation C) backward invention D) product extension E) hybrid products Answer: C Explanation: Sometimes old products discontinued in one market can be reintroduced in a new market, a process known as backward invention. Cell phone manufacturers have adopted this strategy, taking phones that have been replaced in European or Asian markets and introducing them in Latin America. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 59) In the context of identifying specific consumer trends, ________ is not a product issue for international consumer marketers. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing Answer: E Explanation: Four specific product issues face international consumer marketers—quality, fitting the product to the culture, brand strategy, and country of origin. Difficulty: 1 Easy Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

60) Coca-Cola introduced a new product called Diet Coke in Japan. Sales of this product were low in the initial stages because Japanese women associated the word diet with weakness; however, changing the name of the product from Diet Coke to Coke Light proved effective. Which of the following product issues affected the sales of Diet Coke in this scenario? A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing Answer: D Explanation: When Coca-Cola introduced Diet Coke in Japan, initial sales were disappointing until the company realized that Japanese women do not like the concept of dieting and the Japanese culture relates dieting to sickness (not a desired connection with a product). The company changed the name to Coke Light, which has been much more effective around the world. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 61) Ford Motor Co. introduced its automobile called Nova in Mexico. It faced difficulty in selling the car because "Nova" in Spanish means "It doesn't go." This illustrates a problem with ________. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing Answer: D Explanation: Cultural differences exert tremendous influence on consumer product choices and are critical in international markets. Brand names as well as product colors and features are heavily influenced by the culture in local foreign markets. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

62) People around the world prefer Swiss watches over watches manufactured in other countries. In the context of product issues, which of the following best describes the customer's perception? A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) manufacturing Answer: B Explanation: Increasingly, customers apply what is known as the country-of-origin effect in their purchase decisions. The country-of-origin effect is the influence of the country of manufacture, assembly, or design on a customer's positive or negative perception of a product. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 63) Steve wants to gift a box of chocolates to his best friend. He walks into a store and buys Belgian chocolates because his friend once mentioned that they are the best in the world. This is an example of how consumers respond to ________. A) brand strategy B) country-of-origin effect C) quality D) fitting the product to the culture E) price Answer: B Explanation: Increasingly, customers apply what is known as the country-of-origin effect in their purchase decisions. The country-of-origin effect is the influence of the country of manufacture, assembly, or design on a customer's positive or negative perception of a product. Difficulty: 2 Medium Topic: Global Product Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

64) In the context of market channels, the use of local distribution networks to reach target customers is identified in the ________ channel factor. A) cost B) coverage C) character D) continuity E) control Answer: B Explanation: Local distribution networks around the world may lack full exposure to a given market. Even in the United States, for example, complete coverage of a consumer market necessitates multiple distribution channels. As a result, it is necessary to evaluate which distribution network best reaches the target customers, which may not necessarily be the network with the widest distribution. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 65) Which of the following channel strategies helps in increasing the efficiency of local distribution systems by eliminating unnecessary middlemen? A) cost B) coverage C) character D) continuity E) control Answer: A Explanation: Estimating channel costs includes (1) the initial investment in creating the channel and (2) the cost of maintaining the channel. As companies expand into new markets, many search for ways to increase the efficiency of local distribution systems by eliminating unnecessary middlemen, thereby shortening the channel to the customer. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

66) Well-established distributors in a marketing channel often have relationships with competitors. In the context of market channels, which of the following channel strategies corresponds to this issue? A) capital B) coverage C) character D) continuity E) control Answer: D Explanation: Changing a distribution system creates anxiety among customers and gives competitors an opportunity to take advantage of inevitable inefficiencies and disruption of service. Identifying channel partners with a long-standing presence in the market provides some security; however, the best local partners are also the most difficult to establish a relationship with as they frequently already have established involvement with competitors. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) Aligning the firm's philosophy with that of a potential channel partner would be identified in the channel strategy of ________. A) cost B) coverage C) character D) continuity E) control Answer: C Explanation: The long-term nature of channel decisions makes character an issue in selecting the best channel partner. The capabilities, reputation, and skills of the local channel partner should match the company's characteristics. Difficulty: 1 Easy Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

68) Most global marketers rely on local distribution networks in foreign markets. This is because it is very expensive to build a company's own distribution network in a foreign market. This issue can be identified in the channel strategy of ________. A) change B) coverage C) character D) continuity E) control Answer: E Explanation: The more control the company wants in the channel, the more expensive it is to maintain. As a result, companies generally look for a balance between channel control and cost. The complexity of global supply chains coupled with lack of local market knowledge make the task of creating a distribution system so expensive that all but the most accomplished global marketers rely on local distribution networks in foreign markets. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 69) PepsiCo and Coca-Cola sponsor traveling carnivals in rural Latin America to encourage product trial. This element of marketing communications is called ________. A) advertising B) personal selling C) sales promotion D) public relations E) direct marketing Answer: C Explanation: A relatively small part of U.S. marketing communication budgets is allocated to sales promotion; however, this can be a significant component of marketing communication strategy in global markets. The need to stimulate consumer trial and purchase can be greater. Both PepsiCo and Coca-Cola sponsor traveling carnivals to outlying villages in Latin America with the purpose of encouraging product trial. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

70) The task of handling crises and giving the company's perspective to news organizations belongs in the ________ element of marketing communications. A) advertising B) personal selling C) sales promotion D) public relations E) direct marketing Answer: D Explanation: The expansion of global communications has greatly increased the importance of international public relations. Companies realize that dealing with crises must be done quickly and effectively as global news organizations move instantly on stories around the world. Difficulty: 2 Medium Topic: Public Relations Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 71) Jason went to an automobile dealership to buy a car, and he spent two hours talking to an employee about options. This element of marketing communications is called ________. A) advertising B) personal selling C) promotion D) public relations E) direct marketing Answer: B Explanation: The salesperson–customer relationship is dramatically different around the world. This one-to-one style of selling is called personal selling. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

72) Delxen Inc., a multinational company, uses the same prices for all its products globally. This type of pricing is called ________. A) going-rate price B) one world price C) local market condition price D) transfer price E) cost-based price Answer: B Explanation: The company assigns one price for its products in every global market. In theory, this approach enables a company to standardize other elements in the marketing mix and simplifies financial forecasting. In reality, this strategy is not followed very often. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 73) Prices of products are often higher in a foreign country than the home country due to transportation charges, taxes, tariffs, and exchange rate fluctuations. This change in price from home country to foreign country is referred to as ________. A) price escalation B) price scaling C) cost-plus pricing D) cost-based pricing E) market price Answer: A Explanation: A considerable quandary for companies in global marketing is that the costs of doing business globally are often higher than in their home market. This is called price escalation. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

74) Charging a price that is lower than actual costs or less than the company charges in its home market is called ________. A) gray marketing B) price fixing C) dumping D) compensation trading E) offset pricing Answer: C Explanation: Dumping refers to the practice of charging less than actual costs or less than the product price in the company's home markets. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 75) When distributors do not have authorization from manufacturers but divert products from low-price markets and sell them in high-price markets, they are practicing ________. A) gray market distribution B) price fixing C) dumping D) compensation trading E) offset pricing Answer: A Explanation: The gray market involves the unauthorized diversion of branded products into global markets. Gray market distributors (who are often authorized distributors) divert products from low-price to high-price markets. Companies should carefully watch unusual order patterns among their distributors because that can signal a gray market problem. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

76) ________ encompasses a societal and professional standard of right and fair practices that are expected of marketing managers in their oversight of strategy formulation, implementation, and control. A) Marketing ethics B) Price fixing C) Social responsibility D) Accreditation E) Personal selling Answer: A Explanation: Following the law does not mean the company is doing all it can do or even should do in its marketing efforts. Marketing ethics encompasses a societal and professional standard of right and fair practices that are expected of marketing managers in their oversight of strategy. Difficulty: 1 Easy Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Remember AACSB: Ethics Accessibility: Keyboard Navigation 77) ________ is the net benefits (or costs) associated with a product or service, and it is affected by the buyer's trust that the company will keep its promises. A) Value B) Outlay C) Exchange D) Accreditation E) Gain Answer: A Explanation: Value is the net benefits (or costs) associated with a product or service. The buyer considers all the benefits, then subtracts all the costs, and arrives at a value for the product. One of the key considerations is the buyer's trust or belief that the company will keep its promises with regard to the product experience, warranty, service, and a host of other interactions. Difficulty: 1 Easy Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Remember AACSB: Ethics Accessibility: Keyboard Navigation

78) Perdue found that one of its chicken products may have been contaminated with bacteria, so it pulled it off the shelves and instituted a recall. This potential ethical issue was associated with which element of the marketing mix? A) product B) price C) distribution D) marketing communications E) promotion Answer: A Explanation: This relates to product strategy. Food manufacturers need to be concerned about the quality and amounts of ingredients, as well as other decisions that directly impact the quality of the product. Difficulty: 2 Medium Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Apply AACSB: Ethics Accessibility: Keyboard Navigation 79) Latosha was thrilled when she found a low-cost airfare to Moscow, but she was not happy when she bought the tickets and realized there were hundreds of dollars in added fees. Which element of the marketing mix was impacted? A) product B) price C) distribution D) marketing communications E) promotion Answer: B Explanation: Sometimes companies charge a low price but then add on fees and other charges to substantially raise the actual price to the customer. Consider the purchase of airline tickets; while the fare may be low, many airlines charge you to check your luggage or book a certain type of seat. Difficulty: 2 Medium Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Apply AACSB: Ethics Accessibility: Keyboard Navigation

80) What area in marketing presents the most ethical challenges? A) product B) price C) distribution D) marketing communications E) promotion Answer: E Explanation: No area in marketing presents more ethical challenges than promotion. A persuasive, effective marketing message is an important element in any successful marketing strategy. However, marketing managers must be careful to avoid deceptive or false claims. Difficulty: 2 Medium Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Understand AACSB: Ethics Accessibility: Keyboard Navigation 81) The American Marketing Association's code of ethics speaks to six primary ethical values: honesty, responsibility, fairness, respect, transparency, and ________. A) social conscience B) loyalty C) consumer-orientation D) sustainability E) citizenship Answer: E Explanation: The American Marketing Association, the premier organization of marketing professionals in the world, has a code of ethics which defines the norms and values for marketers. The code speaks to six primary ethical values: honesty, responsibility, fairness, respect, transparency, and citizenship. Difficulty: 1 Easy Topic: Ethics Learning Objective: 02-06 Learn the importance of ethics in marketing strategy, the value proposition, and the elements of the marketing mix. Bloom's: Remember AACSB: Ethics Accessibility: Keyboard Navigation

82) In the 1930s, companies and consumers began to realize that utilizing resources efficiently and effectively was good for society and beneficial to business. This grew into the ________ movement. A) direct investment B) profitability C) consumer-orientation D) green E) active citizen Answer: D Explanation: A number of U.S. environmental laws grew out of the need to better manage resources such as water, air, and even farmland as a result of the Great Depression in the 1930s. This awareness was built on the realization that utilizing resources efficiently and effectively was good for society but also beneficial to business. The "green" movement was founded on the environmental concerns and resource utilization issues that have come to be known as sustainability. Difficulty: 2 Medium Topic: Socially Responsible Marketing Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 83) The text discusses the triple bottom line metric, and outlines an approach to consider the impact of TBL in marketing management. This includes people, planet, and ________. A) community B) environment C) product D) profit E) promotion Answer: D Explanation: The triple bottom line (TBL) is a metric for evaluating not only the financial results of the company but the broader social equity, economic, and environmental considerations as well. The text considers the impact of the TBL in marketing management using the people, planet, and profit approach. Difficulty: 2 Medium Topic: Socially Responsible Marketing Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

84) Starbucks has been successful in developing "ethically sourced" coffee that is socially responsible and environmentally safe. This demonstrates which element of TBL? A) people B) planet C) product D) profit E) promotion Answer: B Explanation: One TBL metric is the planet, and marketers are very involved in decisions that impact the planet. From sustainable sourcing of materials to efficient, environmentally sensitive supply chains, marketers are evaluating critical processes to maximize the environmental impact while meeting corporate objectives related to cost and product quality. Over time, companies like Starbucks have been successful in developing "ethically sourced" coffee that is socially responsible and environmentally safe. Difficulty: 2 Medium Topic: Socially Responsible Marketing Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 85) Explain the difference between foreign marketing, international marketing, and global marketing. Answer: Foreign marketing involves developing local distribution and service representation in a foreign market in one of two ways. One method is to identify local intermediaries in appropriate international markets and create a formal relationship. The second approach is for the company to establish its own direct sales force in major markets, thereby expanding the company's direct market reach. When a firm makes the commitment to manufacture products outside its domestic market, it is engaged in international marketing. International marketing aligns the company's assets and resources with global markets, but, in the vast majority of companies, management still takes a "domestic first" approach to the business. A global marketing company realizes that all world markets (including the company's own domestic market) are, in reality, a single market with many different segments. This frequently happens when a company generates more than half its revenue in international markets. Difficulty: 2 Medium Topic: Understanding Global Markets Learning Objective: 02-01 Identify the various levels in the Global Marketing Experience Curve. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 39 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

86) Describe the following key regional market zones: European Union, MERCOSUR, NAFTA, and ASEAN. What countries do they include, what benefits do they have, and have they been successful? Answer: The European Union is the most successful regional market zone and it is also one of the oldest. Founded more than 50 years ago by six countries (Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany) with the Treaty of Rome, the EU now includes 28 countries spanning all of Europe. The EU is one of the most dominant economic entities in the world, with economic output approximately equal to that of the United States, but it is not without challenges. Its currency, the euro, has been considered one of the strongest in the world. Despite the challenges it faces, the EU maintains a great deal of power over member states, with the ability to enact laws, impose taxes, and exert tremendous social influence in the lives of citizens. MERCOSUR, the most powerful market zone in South America, was inaugurated in 1995 and includes Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay. With over 200 million people and a combined GDP of more than $1 trillion, it is currently the third-largest free trade area in the world.9 One of the drawbacks has been a limited transnational transportation network, which restricts the movement of goods between member countries. However, MERCOSUR has overcome this problem by successfully leveraging the combined economic power of the individual member countries and creating additional economic benefits for its members. The most significant market zone in the Americas is the alliance of the United States, Canada, and Mexico, which is commonly referred to by the treaty that created the alliance, NAFTA (North American Free Trade Agreement). NAFTA created the single largest economic alliance and has eliminated tariffs between the member countries for more than 19 years. Many industries, such as automaking, have manufacturing plants in Mexico to supply the U.S. market. Retailers have also benefited; Gigante, a large Mexican supermarket chain, operates in the United States while Walmart, a U.S. company, has over 800 stores in Mexico. The most important Asian market zone is ASEAN, which was founded in 1967 and comprises 10 countries in the Pacific Rim (Brunei Darussalam, Indonesia, Malaysia, Philippines, Cambodia, Laos, Myanmar, Singapore, Thailand, and Vietnam). After the 1997–1998 Asian financial crisis, the group added China, Japan, and South Korea. While the relationships with these "plus 3" countries are less developed than among the full member countries, the combined economic activity of all participants makes ASEAN a powerful global economic force. ASEAN is currently leading talks to create an Asian free-trade area that would encompass "30 percent of the world's total export volume." The Regional Comprehensive Economic Partnership would be second only to the WTO in size. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-03 Define the key regional market zones and their marketing challenges. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

87) Compare and contrast the various strategies for entering new global markets: exporting, licensing, franchising, strategic alliances, and direct foreign investment. Give examples of when each strategy would be best utilized. Answer: Exporting is the most common method for entering foreign markets and accounts for 10 percent of all global economic activity. Primary advantages include the ability to penetrate foreign markets with minimal investment and very little risk. Most people consider exporting an initial entry strategy and not a long-term approach to global marketing. Companies choose licensing when local partnerships are required by law, legal restrictions prohibit direct importing of the product, or the company's limited financial resources limit more active foreign participation. Companies seeking to establish greater presence in a market without committing significant resources can choose to license their key asset (patent, trademark) to another company, effectively giving that company the right to use that asset in that market. Franchising has been growing over the last decade; it enables companies to gain access to a foreign market with local ownership. The franchisor, usually a company seeking to enter a foreign market, agrees to supply a bundle of products, systems, services, and management expertise to the franchisee in return for local market knowledge, financial consideration (franchisee fee, percentage of sales, required purchasing of certain products from franchisor), and local management experience. Franchisors exert a great deal of control with extensive franchise agreements that dictate how the franchisee will operate the business.15 In this way, the franchisor is able to maintain some level of quality control at the point of customer contact. As a market entry strategy, strategic alliances have grown in importance over the past 20 years in an effort to spread risk to other partners. In some industries, strategic alliances now dominate the competitive landscape. The market entry strategy with the greatest long-term implications is direct foreign investment. Risks go up substantially when a company moves manufacturing into a foreign market. Although this is the riskiest market entry strategy, future market potential can position it for long-term growth. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-04 Describe the strategies for entering new global markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

88) Define the terms direct product extension, product adaptation, and product invention. Give an example of each. Answer: Direct product extension: Introduce a product produced in the company's home market into an international market with no product changes. Advantages include no additional R&D or manufacturing costs. Disadvantages are that the product may not fit local needs or tastes. Product adaptation: Alter an existing product to fit local needs and legal requirements. Adaptation can range from regional levels all the way down to city-level differences. Product invention: Create a new product specifically for an international market. Sometimes old products discontinued in one market can be reintroduced in a new market, a process known as backward invention. Cell phone manufacturers have adopted this strategy, taking phones that have been replaced in European or Asian markets and introducing them in Latin America. Another strategy is forward invention, or creating new products to meet demand in a specific country or region. Difficulty: 2 Medium Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) What are the Six Cs of channel strategy? Give examples showing how each of these can impact channel partner decisions. Answer: Cost Estimating channel costs includes (1) the initial investment in creating the channel and (2) the cost of maintaining the channel. As companies expand into new markets, many search for ways to increase the efficiency of local distribution systems by eliminating unnecessary middlemen, thereby shortening the channel to the customer. Capital An inadequate global market distribution system is expensive in terms of both adding cost to the product and creating long-term damage to the brand and the company's reputation. If a channel network is already in place, the investment is low; however, if the company needs to develop or greatly improve an existing system, the cost can be very high. Control The more control the company wants in the channel, the more expensive it is to maintain. As a result, companies generally look for a balance between channel control and cost. The complexity of global supply chains coupled with lack of local market knowledge make the task of creating a distribution system so expensive that all but the most accomplished global marketers rely on local distribution networks in foreign markets. Coverage Local distribution networks around the world may lack full exposure to a given market. Even in the United States, for example, complete coverage of a consumer market necessitates multiple distribution channels. As a result, it is necessary to evaluate which distribution network best reaches the target customers, which may not necessarily be the network with the widest distribution. Character The long-term nature of channel decisions makes character an issue in selecting the best channel partner. The capabilities, reputation, and skills of the local channel partner should match the company's characteristics. A service-oriented company should look for local channel partners with a reputation for excellent service and high customer satisfaction. Continuity Changing a distribution system creates anxiety among customers and gives competitors an opportunity to take advantage of inevitable inefficiencies and disruption of service. Identifying channel partners with a long-standing presence in the market provides some security; however, the best local partners are also the most difficult to establish a relationship with as they frequently already have established involvement with competitors. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-05 Recognize key factors in creating a global product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

90) Explain the concept of the triple bottom line. How is this relevant to marketing? Answer: The triple bottom line (TBL) is a metric for evaluating not only the financial results of the company but the broader social equity, economic, and environmental considerations as well. Student answers regarding relevancy will vary. Difficulty: 3 Hard Topic: Global Market Strategies Learning Objective: 02-07 Recognize the significance of sustainability as part of marketing strategy and the use of the triple bottom line as a metric for evaluating corporate performance. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 3 Elements of Marketing Strategy, Planning, and Competition 1) From a customer's perspective, value is the ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. 2) Value is some type of utility that a company and its products provide for customers. 3) Starbucks is known to have shops located in close proximity to enable customers to shop conveniently. It appears that the coffee shop chain is offering place utility. 4) Samsung's first value proposition when the brand was launched in the United States was price and functionality. 5) When a firm communicates the value proposition of its products to customers, the value message only includes the benefits of the product. 6) For firms interested in building long-term customer relationships, having satisfied customers is enough to ensure the relationship is going to last. 7) Outbound logistics refers to the distribution of products. 8) As long as all activities in the value chain are working well, managers do not need to be concerned with aligning the activities. 9) The last element in the value chain is margin, which refers to profit made by the firm. 10) At the strategic level, marketing (little m) serves as the driver of business strategy. 11) According to the BCG matrix, a business that is classified as a star has high growth and low market share. 12) According to the BCG matrix, a business that is classified as a dog has high growth and high market share. 13) The GE Business Screen portfolio model evaluates businesses on the dimensions of market attractiveness and business position. 14) In the GE Business Screen model, the business position dimension looks at factors like government regulations, sensitivity to economic trends, and size of the market. 15) A mission statement does NOT include a discussion of the firm's strategic vision. 16) Goals are broad statements of generally desired accomplishments in support of the firm's mission statement. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) Strategy has two key phases: formulation and execution. 18) Companies in some business cultures based outside the United States seem to have less pressure to achieve high levels of growth. 19) A firm's competitive strategy leads it to decide if it can grow and if not, how to survive through stability or retrenchment. 20) Internal environmental factors are all under the firm's control. 21) Market penetration strategies allow the firm to introduce new products to new customers, often including international markets. 22) Market development strategies allow a firm to invest additional resources to have existing customers consume new products. 23) When Christy developed her marketing plan for her new store, she kept in mind that conditions can change, so her plan would also change. This demonstrates the importance of staying strategic, but also staying on top of the tactical, in the tips for a successful marketing planning experience. 24) Joelle bought a new Coach purse for herself as a birthday present. She had never spent that much on a purse, but decided it was worth it because it was so elegant. This demonstrates how a customer's perception of ________ can influence buying behavior. A) exchange B) utility C) place D) competition E) value 25) Form utility is ________. A) marketing's task in creating an offering that has value B) production's task in creating an offering that is desired by the market C) the firm's task in deciding where to distribute the product D) created when products are available to customers at a convenient location E) that which allows for transfer of the product ownership from seller to buyer 26) Although Michael knew he couldn't really afford the Mercedes, he wanted it anyway. The want-satisfying power of a good is called ________. A) exchange B) value C) necessity D) strategy E) utility

27) Utility created when a firm converts raw materials into finished products that are desired by the market is called ________ utility. A) time B) form C) place D) ownership E) price 28) Which of the following is TRUE of utility? A) The three utilities—form, price, and ownership—are created by marketing. B) Utility is defined as a ratio of benefits to costs, as viewed from the eyes of the beholder. C) Form utility is created when products are available to customers at a convenient location. D) The four major kinds of utility are form, time, place, and ownership. E) Place utility is created when the firm converts raw materials into finished products that are desired by the market. 29) The concept of the value chain was created by ________. A) Fred Wiserma B) Michael Porter C) Jim Collins D) Peter Drucker E) David Hunger 30) Which of the following is NOT one of the five primary activities in the value chain? A) inbound logistics B) operations C) technology procurement D) outbound logistics E) marketing and sales 31) A window manufacturer has trouble getting glass for its high-end windows. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service

32) Sean attributes the success of his video game arcade to advertising on the most popular website for gamers. Recently, the website raised ad prices, so Sean has cut his advertising in half. He believes that positive word-of-mouth will be enough now that his game is well established. However, sales are slipping. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service 33) Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been having some trouble getting the DVDs produced in a timely manner. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service 34) Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people. Recently, employees have been complaining that they were not told of changes in health insurance coverage and premiums. To which of the following support activities of the value chain can this problem be attributed? A) firm infrastructure B) human resource management C) technology development D) inbound logistics E) procurement 35) Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and has become a major supplier to restaurants in the northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a double-digit growth rate over the next decade. Under the Boston Consulting Group (BCG) Growth-Share Matrix, MJS would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) top gun

36) In the BCG matrix, ________ are characterized by high share and low growth and are the key sources of internal cash generation for a firm. A) stars B) cash cows C) dogs D) problem children E) top guns 37) In the BCG matrix, firms categorized as problem children are characterized by ________. A) high share and high growth B) low share and low growth C) high share and low growth D) low share and high growth E) moderate share and moderate growth 38) Lately the demand for building materials has dropped due to the slowdown in new housing construction. Woods Corp. is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Under the Boston Consulting Group Growth-Share Matrix, the fine wood division would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) top gun 39) Hot and Cold Corp. makes disposable coffee and soft drink cups for use in fast-food restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new product that will biodegrade within five years of being put in a landfill. According to the BCG matrix, this promising new product line would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) question mark 40) Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an environmentally friendly pesticide that is approved for use by commercial organic farmers. The pesticide is made from all-natural ingredients and has great potential. A small investment firm has injected cash in Green Scene. In the context of the BCG matrix, Green Scene is most likely considered a ________. A) star B) cash cow C) dog D) question mark E) top gun 5 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

41) Mega-Big Corp. has a small strategic business unit (SBU) that produces a component vital to the manufacturers of automobiles and has been extremely profitable for 18 years. The SBU acts as a key source of income for the firm. In the context of the BCG matrix, Mega-Big Corp. is most likely considered a ________. A) question mark B) cash cow C) dog D) problem child E) top gun 42) Mega-Big Corp. is interested in buying Soft works, a medical software firm. Soft works is highly regarded by medical practices for ease of use, but hasn't sold well. Two software engineers started the company, but they have made risky financial and poor management decisions. Mega Corp. believes that with proper management the software firm will become an industry leader. In the context of the BCG matrix, Soft works is most likely considered a ________. A) star B) cash cow C) dog D) problem child E) top gun 43) Which of the following is NOT included in the business position factors of the GE Business Screen? A) organization B) growth C) patents D) governmental regulations E) marketing 44) A ________ articulates an organization's reason for existence and defines the unique purpose that sets it apart from competitors and identifies the scope of the company's operations, products, and markets. A) mission statement B) functional-level plan C) value chain D) marketing strategy E) value proposition 45) Which of the following is considered an objective? A) to deliver the best customer service B) to practice responsible financial management C) to increase revenue by 15 to 20 percent in each of the next five years D) to hire the best people E) to minimize waste

46) Which of the following is most likely to be considered a goal rather than an objective? A) to improve customer satisfaction ratings to 95 percent B) to increase ROI by 20 percent C) to be the leader in one's field D) to reduce the cost of scrap material to less than one percent of total manufacturing cost E) to get five new distributors 47) Growth, stability, and retrenchment refer to a firm's position relating to its ________ strategy. A) specific B) generic C) future D) diversification E) differentiation 48) The Hernandez brothers manufacture trailers that are used by lawn service companies. The company was started in Texas by their father with one production site and four sales and service locations. Since the sons took over, they have expanded in the last 12 years to include 26 sales and service centers throughout the southeast. In this case, the company is most likely using a generic business strategy based on ________. A) retrenchment B) stability C) product differentiation D) diversification E) growth 49) Go Fish Sushi restaurants are primarily located in malls. The restaurants had rapid growth in their first seven years. The owner realizes that adding more restaurants would make it impossible to monitor operations. Therefore, he decides to continue current activities without making major changes. In this case, the owner is most likely pursuing a generic strategy of ________. A) retrenchment B) stability C) diversification D) growth E) differentiation 50) Zenith Homebuilders used to purchase many building lots and erect spec homes (i.e., it gambled that the demand for new houses would be so high that they would sell easily). Since the real estate slowdown, it builds homes only when owners are under contract. In this case, the company is most likely pursuing a generic business strategy of ________. A) retrenchment B) stability C) diversification D) growth E) differentiation

51) The activities a firm does better than its competitors are known as ________. A) core competencies B) strategic alignment C) distinctive competencies D) growth indicators E) competitive indicators 52) Which of the following is NOT one of the four strategic types of firms proposed by Miles and Snow? A) prospectors B) analyzers C) defenders D) reactors E) compromisers 53) Today many retailers create apps that customers can download to their smartphones or tablets to be up-to-date on the company's offerings. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? A) Economic factors B) Natural factors C) Technological factors D) Political, legal, ethical factors E) Sociocultural/demographic factors 54) According to the 2010 U.S. Census, Asian Americans are a high-income, fast-growing racial group in America. In the context of situation analysis, under which of the following macro-level external environmental factors will this be included? A) natural factors B) legal and ethical issues C) technological advancements D) sociocultural/demographic factors E) firm structure and systems 55) Automobile manufacturers must comply with regulations set by the National Transportation and Safety Board. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? A) sociocultural/demographic B) firm structure and systems C) political, legal, and ethical D) firm resources E) threat of new entrants

56) In the context of situation analysis, which of the following is a category for analysis in the internal environment? A) political, legal, and ethical B) technological C) firm resources D) threat of new entrants E) sociocultural/demographic 57) What can impact the competitive nature of an industry through the ability to raise prices or affect the quality of inbound goods and services? A) suppliers B) buyers C) new entrants D) substitute products E) retailers 58) Which of the following competitive forces is NOT addressed directly by Michael Porter? A) threat of new entrants B) threat of substitute products C) relative power of other stakeholders D) bargaining power of suppliers E) rivalry among existing firms 59) Which of the following is NOT a major category for analysis in the internal environment? A) firm resources B) firm leadership C) firm culture D) rivalry among existing firms E) firm structure and systems 60) A SWOT analysis of a firm is least likely to ________. A) reveal weaknesses B) look at internal strengths C) include external analysis D) identify potential opportunities and threats E) suggest solutions to problems 61) The best place in a SWOT analysis to identify problems with hurricanes, earthquakes, major snowfalls, and other natural phenomena is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses

62) The best place in a SWOT analysis to list the availability of credit for a firm seeking to expand through new construction of real estate is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses 63) The best place in a SWOT analysis to list a highly-competent workforce is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses 64) The best place in a SWOT analysis for an airline to identify the possibility of acquiring a competitor is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses 65) The best place in a SWOT analysis for a wristwatch manufacturer to identify the presence of competitive substitute products is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses 66) Goals and objectives should be set ________. A) at the beginning of marketing planning B) at the end of the situation analysis C) after marketing strategies are fixed D) after completion of market research, situation analysis, and competitor analysis E) during SWOT analysis while identifying external opportunities and threats 67) Victor Inc., a producer of headphones used with cell phones and MP3 players, uses contract manufacturing overseas. The firm is concerned that tariffs may be increased. Under which component of situation analysis will an examination of this issue be found? A) economic factors B) natural factors C) competitive factors D) political, legal, and ethical factors E) logistical factors 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

68) Malala, the marketing manager of an automobile dealership, is crafting a SWOT analysis. In this case, she should include the downturn in the U.S. economy and tightening of the credit markets under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses 69) Maria, the marketing manager of an automobile dealership, is crafting a SWOT analysis. In this case, she should list competitors that have gone bankrupt under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses 70) Lin Wai's company, New Home Builders Corp., specializes in designing homes that have wide hallways and walk-in showers that could accommodate the need to use a wheelchair or walker, and other amenities that allow couples to remain in their homes as they age. The company's strong value proposition has allowed it to maintain steady market share in a weak housing market. In the context of SWOT analysis, a discussion of this relative advantage would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses 71) Open Sesame is a chain of Thai restaurants located in the western United States. The marketing manager has discovered that there is a growing demand for Spanish food, and the appetite for Asian food is declining. In the context of SWOT analysis, this information would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses

72) The marketing manager at Little Red Architects, a firm that specializes in the design of school buildings, discovered a glitch in the software that the firm uses. As a result, some of its most recent projects will come in over budget. In the context of SWOT analysis, a discussion of this would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses 73) Time Express, a well-established North American delivery service, wants to expand service into Central and South America. According to Igor Ansoff's Product-Market Matrix, this is classified as the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 74) Biz Solutions has 12 call centers worldwide handling customer service issues for a variety of companies. The firm is considering the purchase of a software firm that serves the oil and gas industry. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 75) When Sunshine Inc., a cosmetics manufacturer, introduced an additional line of perfumes, the response from its existing customers was good. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 76) Bliss Massage Therapy Center maintains a database of over 700 clients and sends each one a special discount offer in the month of his or her birthday. Managers hope that as existing customers use the discount, they will see an overall growth in sales. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

77) Gabriel, vice president of marketing for Big Screen Televisions, wants the company to offer a DVD player, a product the company doesn't offer now. He thinks that the firm has many brandloyal customers who would buy it. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 78) Inga, marketing manager at Sunshine, a professional preschool center, thinks the firm should start an after-school program for its current clients. This makes sense as she wants to extend the trusting relationship already established with parents and children. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 79) Jamal's boss wants him to travel to Canada to do some research on good locations for their retail stores, which they are planning to open in Montreal and Ottawa. The firm currently operates 278 stores in the United States. According to Igor Ansoff's Product-Market Matrix, the extension into a new geographic region is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development 80) The process of measuring marketing results and adjusting the marketing plan as needed is called marketing ________. A) control B) metrics C) management D) strategy E) planning 81) Which of the following are often described in terms of a separate plan for a worst-case, bestcase, and expected-case performance against the forecast? A) action plans B) operational plans C) functional-level plans D) contingency plans E) strategic plans 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

82) In a marketing plan, every strategy must include an implementation element. These are sometimes called ________. A) strategic plans B) marketing metrics C) value propositions D) action plans E) marketing channels 83) Which of the following is LEAST likely to be included under action plans? A) timing B) forecasts and budgets C) individuals responsible for various aspects of implementation D) resources necessary to make the strategy happen E) separate plans for worst-case performance against the forecast 84) One part of a marketing plan should identify what to do if things go wrong. This section is called ________ planning. A) contingency B) strategic C) operational D) action E) tactical 85) Which of the following helps avoid scrambling to decide how to adjust marketing strategies when performance against a forecast is higher or lower than expected? A) marketing metrics B) product development strategies C) core competencies D) support activities E) contingency plans 86) Teel is a plumbing fixture manufacturer's salesperson. He sells to wholesalers, homebuilders, and retailers. His marketing plan calls for going to four trade shows a year. He recently found out that there would be a new Home Show aimed at consumers in his territory and he wants to attend. His boss gives him permission to attend the additional show. Which of the following concepts in successful marketing planning is exemplified in this scenario? A) Stay flexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again.

87) Mary's firm has delayed making a decision on acquiring a new product line because her marketing team members took more than three months to analyze the numbers. Which of the following tips for successful marketing planning experience did the firm fail to use? A) Stay inflexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again. 88) Tyler's event planning company hired a new marketing assistant who focuses only on longterm organizational goals and objectives, ignoring the functional or operational level aspects of planning. For having a successful marketing planning experience, in which concept should the new assistant be trained? A) Stay flexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again. 89) Describe the four support activities and the five primary activities in Porter's value chain. 90) Explain the Boston Consulting Group Growth-Share Matrix. What are the strengths and weaknesses of this method? Give examples of each of the four cells and their strategy recommendations. 91) What are the major categories for analysis within the external environment? Give an example of each.

Marketing Management, 3e (Marshall) Chapter 3 Elements of Marketing Strategy, Planning, and Competition 1) From a customer's perspective, value is the ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Answer: TRUE Explanation: Value is the ratio of benefits to costs as perceived by the customer. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Value is some type of utility that a company and its products provide for customers. Answer: FALSE Explanation: A benefit is some type of utility that a company and its products (and services) provide its customers, such as form, time, place, and ownership. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Starbucks is known to have shops located in close proximity to enable customers to shop conveniently. It appears that the coffee shop chain is offering place utility. Answer: TRUE Explanation: The three utilities—time, place, and ownership—are created by marketing. They are created when products are available to customers at a convenient location when they want to purchase them, and facilities of exchange are available that allow for transfer of the product ownership from seller to buyer. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

4) Samsung's first value proposition when the brand was launched in the United States was price and functionality. Answer: TRUE Explanation: When South Korean-based Samsung first brought its brand to the United States, it communicated a message that was centered primarily on functionality at a moderate price—a strategy designed to provide an advantage over pricier Japanese brands. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) When a firm communicates the value proposition of its products to customers, the value message only includes the benefits of the product. Answer: FALSE Explanation: When a firm communicates the value proposition of its products to customers, the value message may include the whole bundle of benefits the company promises to deliver, not just the benefits of the product itself. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) For firms interested in building long-term customer relationships, having satisfied customers is enough to ensure the relationship is going to last. Answer: FALSE Explanation: For years, firms have been preoccupied with measuring customer satisfaction, which at its most fundamental level means how much the customer likes the product. However, for firms interested in building long-term customer relationships, having satisfied customers is not enough to ensure the relationship is going to last. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Outbound logistics refers to the distribution of products. Answer: TRUE Explanation: One of the five primary activities in the value chain is outbound logistics—how the firm transports and distributes the final products to the marketplace. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) As long as all activities in the value chain are working well, managers do not need to be concerned with aligning the activities. Answer: FALSE Explanation: CEOs in recent years have been concentrating on aligning the various elements of the value chain, meaning that all facets of the company are working together to ensure that no snags will negatively impact the firm's value proposition. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The last element in the value chain is margin, which refers to profit made by the firm. Answer: TRUE Explanation: According to the text, the last element in the value chain is margin, or the profit made by the firm. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) At the strategic level, marketing (little m) serves as the driver of business strategy. Answer: FALSE Explanation: At the strategic level, Marketing (Big M) serves as a core driver of business strategy. At the functional or operational level, marketing (little m) represents the specific programs and tactics aimed at customers and other stakeholder groups. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) According to the BCG matrix, a business that is classified as a star has high growth and low market share. Answer: FALSE Explanation: According to the BCG matrix, a business that is classified as a star has high growth and high market share. Stars are important to building the future of the business and deserving any needed investment. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) According to the BCG matrix, a business that is classified as a dog has high growth and high market share. Answer: FALSE Explanation: According to the BCG matrix, a business that is classified as a dog has low growth and low market share. Dogs are potential high cash users and prime candidates for liquidation. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

13) The GE Business Screen portfolio model evaluates businesses on the dimensions of market attractiveness and business position. Answer: TRUE Explanation: The GE Business Screen is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) In the GE Business Screen model, the business position dimension looks at factors like government regulations, sensitivity to economic trends, and size of the market. Answer: FALSE Explanation: The GE Business Screen is a more realistic and complex portfolio model. It also evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Market attractiveness looks at factors like government regulations, sensitivity to economic trends, and size of the market. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) A mission statement does NOT include a discussion of the firm's strategic vision. Answer: FALSE Explanation: A mission statement identifies the scope of a company's operations, products, and markets. Most mission statements also include a discussion of what the company would like to become in the future—its strategic vision. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

16) Goals are broad statements of generally desired accomplishments in support of the firm's mission statement. Answer: TRUE Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Strategy has two key phases: formulation and execution. Answer: TRUE Explanation: Strategy has two key phases: formulation (or development) and execution. And it occurs at multiple levels in the firm: corporate level, SBU (or business) level, and functional level (marketing, finance, operations, etc.). Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) Companies in some business cultures based outside the United States seem to have less pressure to achieve high levels of growth. Answer: TRUE Explanation: Sometimes for reasons related to the competitive landscape or resource constraints, the best generic strategy for a firm may not actually be growth but stability or retrenchment instead. Interestingly, the pressure to constantly achieve accelerated growth is much less intense in many business cultures outside the United States. Difficulty: 1 Easy Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Remember AACSB: Diversity Accessibility: Keyboard Navigation

19) A firm's competitive strategy leads it to decide if it can grow and if not, how to survive through stability or retrenchment. Answer: FALSE Explanation: A firm's generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Internal environmental factors are all under the firm's control. Answer: TRUE Explanation: Internal environmental factors include the firm's structure and systems, culture, leadership, and various resources, all of which are under the firm's control. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Market penetration strategies allow the firm to introduce new products to new customers, often including international markets. Answer: FALSE Explanation: Market penetration strategies involve investing in existing customers to gain additional usage of existing products. Market development strategies allow for expansion of the firm's product line into heretofore untapped markets, often internationally. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) Market development strategies allow a firm to invest additional resources to have existing customers consume new products. Answer: FALSE Explanation: Market development strategies allow for expansion of the firm's product line into heretofore untapped markets, often internationally. Product development strategies recognize the opportunity to invest in new products that will increase usage from the current customer base. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) When Christy developed her marketing plan for her new store, she kept in mind that conditions can change, so her plan would also change. This demonstrates the importance of staying strategic, but also staying on top of the tactical, in the tips for a successful marketing planning experience. Answer: FALSE Explanation: This demonstrates the tip, stay flexible. Don't forget that marketing plans are not set in stone. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-05 Use the framework provided for marketing planning, along with the content in future chapters, to build a marketing plan. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

24) Joelle bought a new Coach purse for herself as a birthday present. She had never spent that much on a purse, but decided it was worth it because it was so elegant. This demonstrates how a customer's perception of ________ can influence buying behavior. A) exchange B) utility C) place D) competition E) value Answer: E Explanation: Value was defined from a customer's perspective as a ratio of the bundle of benefits a customer receives from an offering compared to the costs incurred by the customer in acquiring that bundle of benefits. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 25) Form utility is ________. A) marketing's task in creating an offering that has value B) production's task in creating an offering that is desired by the market C) the firm's task in deciding where to distribute the product D) created when products are available to customers at a convenient location E) that which allows for transfer of the product ownership from seller to buyer Answer: B Explanation: Form utility is created when the firm converts raw materials into finished products that are desired by the market. The other three utilities— time, place, and ownership—are created by marketing. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) Although Michael knew he couldn't really afford the Mercedes, he wanted it anyway. The want-satisfying power of a good is called ________. A) exchange B) value C) necessity D) strategy E) utility Answer: E Explanation: Utility is the want-satisfying power of a good or service. Four major kinds of utility exist: form, time, place, and ownership. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) Utility created when a firm converts raw materials into finished products that are desired by the market is called ________ utility. A) time B) form C) place D) ownership E) price Answer: B Explanation: Four major kinds of utility exist: form, time, place, and ownership. Form utility is created when a firm converts raw materials into finished products that are desired by the market. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) Which of the following is TRUE of utility? A) The three utilities—form, price, and ownership—are created by marketing. B) Utility is defined as a ratio of benefits to costs, as viewed from the eyes of the beholder. C) Form utility is created when products are available to customers at a convenient location. D) The four major kinds of utility are form, time, place, and ownership. E) Place utility is created when the firm converts raw materials into finished products that are desired by the market. Answer: D Explanation: Utility is the want-satisfying power of a good or service. Four major kinds of utility exist: form, time, place, and ownership. Form utility is created when the firm converts raw materials into finished products that are desired by the market. The other three utilities— time, place, and ownership—are created by marketing. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) The concept of the value chain was created by ________. A) Fred Wiserma B) Michael Porter C) Jim Collins D) Peter Drucker E) David Hunger Answer: B Explanation: Created by Michael Porter in his classic book Competitive Advantage, the value chain serves as a means for firms to identify ways to create, communicate, and deliver more customer value within a firm. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

30) Which of the following is NOT one of the five primary activities in the value chain? A) inbound logistics B) operations C) technology procurement D) outbound logistics E) marketing and sales Answer: C Explanation: The five primary activities in the value chain are inbound logistics, operations, outbound logistics, marketing and sales, and service. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) A window manufacturer has trouble getting glass for its high-end windows. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service Answer: A Explanation: Porter's nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, inbound logistics deals with how the firm goes about sourcing raw materials for production. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

32) Sean attributes the success of his video game arcade to advertising on the most popular website for gamers. Recently, the website raised ad prices, so Sean has cut his advertising in half. He believes that positive word-of-mouth will be enough now that his game is well established. However, sales are slipping. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service Answer: D Explanation: Porter's nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, marketing and sales deal with how the firm communicates the value proposition to the marketplace. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 33) Dave is a close-up magician who is famous for his card tricks. He creates and sells DVDs of his magic tricks. Lately he has been having some trouble getting the DVDs produced in a timely manner. Of the five primary activities in the value chain, this problem is most likely to occur in ________. A) inbound logistics B) operations C) outbound logistics D) marketing and sales E) service Answer: B Explanation: Porter's nine value-creating activities include five primary activities and four support activities. Of the five primary activities in the value chain, operations deal with how the firm converts the raw materials into final products. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

34) Mark and Gregory are partners in a manufacturing firm that employs over 1,500 people. Recently, employees have been complaining that they were not told of changes in health insurance coverage and premiums. To which of the following support activities of the value chain can this problem be attributed? A) firm infrastructure B) human resource management C) technology development D) inbound logistics E) procurement Answer: B Explanation: Porter's nine value-creating activities include five primary activities and four support activities. Of the four support activities in the value chain, human resource management deals with how the firm ensures it has the right people in place, trains them, and keeps them. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 35) Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and has become a major supplier to restaurants in the northeastern United States. The organic herbs, vegetables, and fruit market is expected to have a double-digit growth rate over the next decade. Under the Boston Consulting Group (BCG) Growth-Share Matrix, MJS would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) top gun Answer: A Explanation: Under the Boston Consulting Group Growth-Share Matrix, stars are characterized by high share and high growth and are important to building the future of the business and deserving any needed investment. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

36) In the BCG matrix, ________ are characterized by high share and low growth and are the key sources of internal cash generation for a firm. A) stars B) cash cows C) dogs D) problem children E) top guns Answer: B Explanation: The concept of the BCG approach to portfolio analysis is to position each SBU within a firm on the two-dimensional matrix. In the BCG matrix, cash cows are characterized by high share and low growth and are the key sources of internal cash generation for a firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) In the BCG matrix, firms categorized as problem children are characterized by ________. A) high share and high growth B) low share and low growth C) high share and low growth D) low share and high growth E) moderate share and moderate growth Answer: D Explanation: In the BCG matrix, firms categorized as problem children, or question marks, are characterized by low share and high growth. They are the high cash needs that, if properly nurtured, can convert into stars. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) Lately the demand for building materials has dropped due to the slowdown in new housing construction. Woods Corp. is thinking of closing its fine wood division that produces mahogany and cherry lumber for building cabinets and other applications. Under the Boston Consulting Group Growth-Share Matrix, the fine wood division would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) top gun Answer: C Explanation: Under the Boston Consulting Group Growth-Share Matrix, dogs are characterized by low share and low growth. They are potential high cash users and prime candidates for liquidation. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 39) Hot and Cold Corp. makes disposable coffee and soft drink cups for use in fast-food restaurants, hospitals, convenience stores, and the like. The company is working on a sturdy new product that will biodegrade within five years of being put in a landfill. According to the BCG matrix, this promising new product line would most likely be classified as a ________. A) star B) cash cow C) dog D) problem child E) question mark Answer: A Explanation: Under the Boston Consulting Group Growth-Share Matrix, stars are characterized by high share and high growth and are important to building the future of the business and deserving any needed investment. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 16 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

40) Green Scene Co., a struggling start-up firm that needs a huge cash injection, has an environmentally friendly pesticide that is approved for use by commercial organic farmers. The pesticide is made from all-natural ingredients and has great potential. A small investment firm has injected cash in Green Scene. In the context of the BCG matrix, Green Scene is most likely considered a ________. A) star B) cash cow C) dog D) question mark E) top gun Answer: D Explanation: Under the Boston Consulting Group Growth-Share Matrix, problem children or question marks are characterized by low share and high growth. They are high cash needs that, if properly nurtured, can convert into stars. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 41) Mega-Big Corp. has a small strategic business unit (SBU) that produces a component vital to the manufacturers of automobiles and has been extremely profitable for 18 years. The SBU acts as a key source of income for the firm. In the context of the BCG matrix, Mega-Big Corp. is most likely considered a ________. A) question mark B) cash cow C) dog D) problem child E) top gun Answer: B Explanation: Under the Boston Consulting Group Growth-Share Matrix, cash cows are characterized by high share and low growth and are key sources of internal cash generation for the firm. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 17 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

42) Mega-Big Corp. is interested in buying Soft works, a medical software firm. Soft works is highly regarded by medical practices for ease of use, but hasn't sold well. Two software engineers started the company, but they have made risky financial and poor management decisions. Mega Corp. believes that with proper management the software firm will become an industry leader. In the context of the BCG matrix, Soft works is most likely considered a ________. A) star B) cash cow C) dog D) problem child E) top gun Answer: D Explanation: Under the Boston Consulting Group Growth-Share Matrix, problem children or question marks are characterized by low share and high growth. They are high cash needs that, if properly nurtured, can convert into stars. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 43) Which of the following is NOT included in the business position factors of the GE Business Screen? A) organization B) growth C) patents D) governmental regulations E) marketing Answer: D Explanation: The GE Business Screen evaluates the business on two dimensions—market attractiveness and business position, which refers to its ability to compete. Factors of business position include organization, growth, market share by segment, customer loyalty, margins, distribution, technology skills, patents, marketing, and flexibility, among others. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

44) A ________ articulates an organization's reason for existence and defines the unique purpose that sets it apart from competitors and identifies the scope of the company's operations, products, and markets. A) mission statement B) functional-level plan C) value chain D) marketing strategy E) value proposition Answer: A Explanation: A mission statement articulates an organization's purpose, or reason for existence. A well-conceived mission statement defines the fundamental, unique purpose that sets a company apart from other firms of its type and identifies the scope of a company's operations, products, and markets. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) Which of the following is considered an objective? A) to deliver the best customer service B) to practice responsible financial management C) to increase revenue by 15 to 20 percent in each of the next five years D) to hire the best people E) to minimize waste Answer: C Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) Which of the following is most likely to be considered a goal rather than an objective? A) to improve customer satisfaction ratings to 95 percent B) to increase ROI by 20 percent C) to be the leader in one's field D) to reduce the cost of scrap material to less than one percent of total manufacturing cost E) to get five new distributors Answer: C Explanation: Goals, general statements of what the firm wishes to accomplish in support of the mission and vision, eventually become refined into specific, measurable, and (hopefully) attainable objectives for the firm. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) Growth, stability, and retrenchment refer to a firm's position relating to its ________ strategy. A) specific B) generic C) future D) diversification E) differentiation Answer: B Explanation: A firm's generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) The Hernandez brothers manufacture trailers that are used by lawn service companies. The company was started in Texas by their father with one production site and four sales and service locations. Since the sons took over, they have expanded in the last 12 years to include 26 sales and service centers throughout the southeast. In this case, the company is most likely using a generic business strategy based on ________. A) retrenchment B) stability C) product differentiation D) diversification E) growth Answer: E Explanation: A firm's generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. Growth may be in the form of sales, market share, assets, profits, or some combination of these and other factors. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Go Fish Sushi restaurants are primarily located in malls. The restaurants had rapid growth in their first seven years. The owner realizes that adding more restaurants would make it impossible to monitor operations. Therefore, he decides to continue current activities without making major changes. In this case, the owner is most likely pursuing a generic strategy of ________. A) retrenchment B) stability C) diversification D) growth E) differentiation Answer: B Explanation: A firm's generic strategy is its overall directional strategy at the business level. Fundamentally, all firms must decide whether they wish to (or are able to) grow, and if not, how they can survive through stability or retrenchment. The strategy to continue current activities with little significant change in direction may be appropriate for a successful organization operating in a reasonably predictable environment. It can be useful in the short term but potentially dangerous in the long term, especially if the competitive landscape changes. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 21 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

50) Zenith Homebuilders used to purchase many building lots and erect spec homes (i.e., it gambled that the demand for new houses would be so high that they would sell easily). Since the real estate slowdown, it builds homes only when owners are under contract. In this case, the company is most likely pursuing a generic business strategy of ________. A) retrenchment B) stability C) diversification D) growth E) differentiation Answer: A Explanation: An organization in a weak competitive position in some or all of its product lines, resulting in poor performance and pressure on management to quickly improve, may pursue retrenchment. Essentially, retrenchment involves pulling assets out of underperforming parts of the business and reinvesting in aspects of the business with greater future performance potential. Difficulty: 3 Hard Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 51) The activities a firm does better than its competitors are known as ________. A) core competencies B) strategic alignment C) distinctive competencies D) growth indicators E) competitive indicators Answer: C Explanation: Core competencies are the activities the firm can do exceedingly well. When these core competencies are superior to those of competitors, they are called distinctive competencies. Difficulty: 2 Medium Topic: Competing in Various Markets Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

52) Which of the following is NOT one of the four strategic types of firms proposed by Miles and Snow? A) prospectors B) analyzers C) defenders D) reactors E) compromisers Answer: E Explanation: Miles and Snow propose several categories of firms within any given industry based on strategic type. Four strategic types are prospectors, analyzers, defenders, and reactors— depending on a firm's approach to the competitive marketplace. Difficulty: 1 Easy Topic: Organizational Strategies Learning Objective: 03-03 Identify various types of organizational strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) Today many retailers create apps that customers can download to their smartphones or tablets to be up-to-date on the company's offerings. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? A) Economic factors B) Natural factors C) Technological factors D) Political, legal, ethical factors E) Sociocultural/demographic factors Answer: C Explanation: Constantly emerging and evolving technologies impact business in many ways. The goal is to try to understand the future impact of technological change so a firm's products will continue to be fresh and viable. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

54) According to the 2010 U.S. Census, Asian Americans are a high-income, fast-growing racial group in America. In the context of situation analysis, under which of the following macro-level external environmental factors will this be included? A) natural factors B) legal and ethical issues C) technological advancements D) sociocultural/demographic factors E) firm structure and systems Answer: D Explanation: Trends among consumers and in society as a whole impact marketing planning greatly. Many such trends are demographic in nature, including changing generational preferences and the rising buying power of minority groups domestically and consumers in developing nations in the global marketplace. JetBlue jumped on the video game trend among children and teens by providing in-seat games, much to the delight of parents who no longer have to entertain the kids for the duration of the flight. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) Automobile manufacturers must comply with regulations set by the National Transportation and Safety Board. In the context of situation analysis, which of the following macro-level external environmental factors does this exemplify? A) sociocultural/demographic B) firm structure and systems C) political, legal, and ethical D) firm resources E) threat of new entrants Answer: C Explanation: In the context of situation analysis, major categories for analysis within the external environment include political, legal, and ethical factors. All firms operate within certain rules, laws, and norms of operating behavior. For example, JetBlue has myriad regulations administered by the Federal Aviation Administration, the National Transportation Safety Board, and the Transportation Security Administration. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

56) In the context of situation analysis, which of the following is a category for analysis in the internal environment? A) political, legal, and ethical B) technological C) firm resources D) threat of new entrants E) sociocultural/demographic Answer: C Explanation: Categories for analysis in the internal environment include firm resources. Internal analysis involves taking an honest look at all aspects of a firm's functional/operational-level resources and capabilities and how they play into the ability to develop and execute marketdriven strategies. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) What can impact the competitive nature of an industry through the ability to raise prices or affect the quality of inbound goods and services? A) suppliers B) buyers C) new entrants D) substitute products E) retailers Answer: A Explanation: Suppliers impact the competitive nature of an industry through their ability to raise prices or affect the quality of inbound goods and services. Jet fuel literally fires the airline industry's economic engine. Also, few manufacturers of commercial aircraft still exist. Both of these factors point to a competitive environment with strong supplier power. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

58) Which of the following competitive forces is NOT addressed directly by Michael Porter? A) threat of new entrants B) threat of substitute products C) relative power of other stakeholders D) bargaining power of suppliers E) rivalry among existing firms Answer: C Explanation: One competitive force not directly addressed by Porter is the relative power of other stakeholders. This force is becoming more and more relevant in assessing industry competitiveness. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 59) Which of the following is NOT a major category for analysis in the internal environment? A) firm resources B) firm leadership C) firm culture D) rivalry among existing firms E) firm structure and systems Answer: D Explanation: Rivalry among existing firms is an element of the external environment. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

60) A SWOT analysis of a firm is least likely to ________. A) reveal weaknesses B) look at internal strengths C) include external analysis D) identify potential opportunities and threats E) suggest solutions to problems Answer: E Explanation: Upon completion of the situation analysis, a convenient way to summarize key findings is into a matrix of strengths, weaknesses, opportunities, and threats—a SWOT analysis. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 61) The best place in a SWOT analysis to identify problems with hurricanes, earthquakes, major snowfalls, and other natural phenomena is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses Answer: B Explanation: The best place in a SWOT analysis to identify problems with hurricanes, earthquakes, major snowfalls, and other natural phenomena is external threats. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

62) The best place in a SWOT analysis to list the availability of credit for a firm seeking to expand through new construction of real estate is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses Answer: A Explanation: The best place in a SWOT analysis to list the availability of credit for a firm seeking to expand through new construction of real estate is external opportunities. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 63) The best place in a SWOT analysis to list a highly-competent workforce is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses Answer: D Explanation: The best place in a SWOT analysis to list a highly competent workforce is internal strengths. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

64) The best place in a SWOT analysis for an airline to identify the possibility of acquiring a competitor is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses Answer: A Explanation: The best place in a SWOT analysis for an airline to identify the possibility of acquiring a competitor is external opportunities. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 65) The best place in a SWOT analysis for a wristwatch manufacturer to identify the presence of competitive substitute products is ________. A) external opportunities B) external threats C) internal opportunities D) internal strengths E) internal weaknesses Answer: B Explanation: The best place in a SWOT analysis for a wristwatch manufacturer to identify the presence of substitute products like cell phones is external threats. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

66) Goals and objectives should be set ________. A) at the beginning of marketing planning B) at the end of the situation analysis C) after marketing strategies are fixed D) after completion of market research, situation analysis, and competitor analysis E) during SWOT analysis while identifying external opportunities and threats Answer: D Explanation: Based on what is learned from the situation analysis, competitor analysis, and market research, goals and objectives can now be developed related to what the marketing manager intends to accomplish with the marketing plan. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) Victor Inc., a producer of headphones used with cell phones and MP3 players, uses contract manufacturing overseas. The firm is concerned that tariffs may be increased. Under which component of situation analysis will an examination of this issue be found? A) economic factors B) natural factors C) competitive factors D) political, legal, and ethical factors E) logistical factors Answer: D Explanation: The issue will be examined under the political, legal, and ethical factors of situation analysis. All firms operate within certain rules, laws, and norms of operating behavior. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

68) Malala, the marketing manager of an automobile dealership, is crafting a SWOT analysis. In this case, she should include the downturn in the U.S. economy and tightening of the credit markets under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses Answer: B Explanation: Malala, in the scenario, should include the downturn in the U.S. economy and tightening of the credit markets under threats. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 69) Maria, the marketing manager of an automobile dealership, is crafting a SWOT analysis. In this case, she should list competitors that have gone bankrupt under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses Answer: C Explanation: Maria should list competitors that have gone bankrupt under opportunities. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

70) Lin Wai's company, New Home Builders Corp., specializes in designing homes that have wide hallways and walk-in showers that could accommodate the need to use a wheelchair or walker, and other amenities that allow couples to remain in their homes as they age. The company's strong value proposition has allowed it to maintain steady market share in a weak housing market. In the context of SWOT analysis, a discussion of this relative advantage would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses Answer: A Explanation: In the context of SWOT analysis, a discussion of this relative advantage would be included under strengths. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 71) Open Sesame is a chain of Thai restaurants located in the western United States. The marketing manager has discovered that there is a growing demand for Spanish food, and the appetite for Asian food is declining. In the context of SWOT analysis, this information would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses Answer: B Explanation: In the context of SWOT analysis, the information regarding the growing demand for Spanish food would be included under threats. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

72) The marketing manager at Little Red Architects, a firm that specializes in the design of school buildings, discovered a glitch in the software that the firm uses. As a result, some of its most recent projects will come in over budget. In the context of SWOT analysis, a discussion of this would be included under ________. A) strengths B) threats C) opportunities D) strategies E) weaknesses Answer: E Explanation: In the context of SWOT analysis, a discussion of the issue mentioned in the scenario would be included under weaknesses. Internal analysis reveals strengths and weaknesses, while external analysis points to potential opportunities and threats. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 73) Time Express, a well-established North American delivery service, wants to expand service into Central and South America. According to Igor Ansoff's Product-Market Matrix, this is classified as the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: E Explanation: According to Igor Ansoff's Product-Market Matrix, market development strategies allow for expansion of a firm's product line into heretofore untapped markets, often internationally. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

74) Biz Solutions has 12 call centers worldwide handling customer service issues for a variety of companies. The firm is considering the purchase of a software firm that serves the oil and gas industry. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: A Explanation: According to Igor Ansoff's Product-Market Matrix, diversification strategies seize on opportunities to serve new markets with new products. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 75) When Sunshine Inc., a cosmetics manufacturer, introduced an additional line of perfumes, the response from its existing customers was good. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: D Explanation: According to Igor Ansoff's Product-Market Matrix, product development strategies recognize the opportunity to invest in new products that will increase usage from the current customer base. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

76) Bliss Massage Therapy Center maintains a database of over 700 clients and sends each one a special discount offer in the month of his or her birthday. Managers hope that as existing customers use the discount, they will see an overall growth in sales. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: C Explanation: According to Igor Ansoff's Product-Market Matrix, market penetration strategies involve investing in existing customers to gain additional usage of existing products. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 77) Gabriel, vice president of marketing for Big Screen Televisions, wants the company to offer a DVD player, a product the company doesn't offer now. He thinks that the firm has many brandloyal customers who would buy it. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: D Explanation: According to Igor Ansoff's Product-Market Matrix, product development strategies recognize the opportunity to invest in new products that will increase usage from the current customer base. Marketing strategies provide the road map for creating, communicating, and delivering value to customers. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

78) Inga, marketing manager at Sunshine, a professional preschool center, thinks the firm should start an after-school program for its current clients. This makes sense as she wants to extend the trusting relationship already established with parents and children. According to Igor Ansoff's Product-Market Matrix, this is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: D Explanation: According to Igor Ansoff's Product-Market Matrix, product development strategies recognize the opportunity to invest in new products that will increase usage from the current customer base. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 79) Jamal's boss wants him to travel to Canada to do some research on good locations for their retail stores, which they are planning to open in Montreal and Ottawa. The firm currently operates 278 stores in the United States. According to Igor Ansoff's Product-Market Matrix, the extension into a new geographic region is an example of the ________ strategy. A) market diversification B) product differentiation C) market penetration D) product development E) market development Answer: E Explanation: According to Igor Ansoff's Product-Market Matrix, market development strategies allow for expansion of the firm's product line into heretofore untapped markets, often internationally. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

80) The process of measuring marketing results and adjusting the marketing plan as needed is called marketing ________. A) control B) metrics C) management D) strategy E) planning Answer: A Explanation: Strategy development is only part of marketing planning. The other part is strategy implementation, including measuring results. The process of measuring marketing results and adjusting the marketing plan as needed is called marketing control. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 81) Which of the following are often described in terms of a separate plan for a worst-case, bestcase, and expected-case performance against the forecast? A) action plans B) operational plans C) functional-level plans D) contingency plans E) strategic plans Answer: D Explanation: Contingency plans are often described in terms of a separate plan for a worst-case, best-case, and expected-case performance against the forecast. The implementation of the marketing strategies would be different depending on how performance against the forecast actually materializes. Difficulty: 1 Easy Topic: Controls and Contingency Plans Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

82) In a marketing plan, every strategy must include an implementation element. These are sometimes called ________. A) strategic plans B) marketing metrics C) value propositions D) action plans E) marketing channels Answer: D Explanation: In a marketing plan, every strategy must include an implementation element. Sometimes these are called action plans or programs. Each must discuss timing, assign persons responsible for various aspects of implementation, and assign resources necessary to make the strategy happen. Difficulty: 1 Easy Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 83) Which of the following is LEAST likely to be included under action plans? A) timing B) forecasts and budgets C) individuals responsible for various aspects of implementation D) resources necessary to make the strategy happen E) separate plans for worst-case performance against the forecast Answer: E Explanation: In a marketing plan, every strategy must include an implementation element. Sometimes these are called action plans or programs. Each must discuss timing, assign persons responsible for various aspects of implementation, and assign resources necessary to make the strategy happen. Difficulty: 2 Medium Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

84) One part of a marketing plan should identify what to do if things go wrong. This section is called ________ planning. A) contingency B) strategic C) operational D) action E) tactical Answer: A Explanation: As a final step of marketing planning, marketing managers should develop contingency plans that can be implemented should something happen that negates the viability of the marketing plan. Difficulty: 1 Easy Topic: Controls and Contingency Plans Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 85) Which of the following helps avoid scrambling to decide how to adjust marketing strategies when performance against a forecast is higher or lower than expected? A) marketing metrics B) product development strategies C) core competencies D) support activities E) contingency plans Answer: E Explanation: Contingency plans are often described in terms of a separate plan for a worst-case, best-case, and expected-case performance against the forecast. Having these contingency plans in place avoids scrambling to decide how to adjust marketing strategies when performance against a forecast is higher or lower than expected. Difficulty: 2 Medium Topic: Controls and Contingency Plans Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

86) Teel is a plumbing fixture manufacturer's salesperson. He sells to wholesalers, homebuilders, and retailers. His marketing plan calls for going to four trade shows a year. He recently found out that there would be a new Home Show aimed at consumers in his territory and he wants to attend. His boss gives him permission to attend the additional show. Which of the following concepts in successful marketing planning is exemplified in this scenario? A) Stay flexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again. Answer: A Explanation: Staying flexible is important for having a successful marketing planning experience. Marketing plans are not set in stone. Markets and customers change, competitors do unexpected things, and the external environment has a nasty habit of creating unexpected surprises. Great marketing managers understand when to adjust a plan. Difficulty: 3 Hard Topic: Tips for Successful Marketing Planning Learning Objective: 03-05 Use the framework provided for marketing planning, along with the content in future chapters, to build a marketing plan. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 87) Mary's firm has delayed making a decision on acquiring a new product line because her marketing team members took more than three months to analyze the numbers. Which of the following tips for successful marketing planning experience did the firm fail to use? A) Stay inflexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again. Answer: B Explanation: Utilizing input, but not becoming paralyzed by information and analysis is important for having a successful marketing planning experience. Great marketing managers value research and analytics, but also know when to move forward with action. Difficulty: 3 Hard Topic: Tips for Successful Marketing Planning Learning Objective: 03-05 Use the framework provided for marketing planning, along with the content in future chapters, to build a marketing plan. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

88) Tyler's event planning company hired a new marketing assistant who focuses only on longterm organizational goals and objectives, ignoring the functional or operational level aspects of planning. For having a successful marketing planning experience, in which concept should the new assistant be trained? A) Stay flexible. B) Utilize input, but don't become paralyzed by information and analysis. C) Don't underestimate the implementation part of the plan. D) Stay strategic, but also stay on top of the tactical. E) Give yourself and your people room to fail and try again. Answer: D Explanation: A tip for having a successful marketing planning experience is to stay strategic, but also to stay on top of the tactical. Marketing has these two levels of interrelated issues, and both the strategic and tactical elements have to be right for the plan to be successful. Difficulty: 3 Hard Topic: Tips for Successful Marketing Planning Learning Objective: 03-05 Use the framework provided for marketing planning, along with the content in future chapters, to build a marketing plan. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

89) Describe the four support activities and the five primary activities in Porter's value chain. Answer: The five primary activities in the value chain are: 1. Inbound logistics—how the firm goes about sourcing raw materials for production. 2. Operations—how the firm converts the raw materials into final products. 3. Outbound logistics—how the firm transports and distributes the final products to the marketplace. 4. Marketing and sales—how the firm communicates the value proposition to the marketplace. 5. Service—how the firm supports customers during and after the sale. The four support activities in the value chain are: 1. Firm infrastructure—how the firm is set up for doing business; are the internal processes aligned and efficient? 2. Human resource management—how the firm ensures it has the right people in place, trains them, and keeps them. 3. Technology development—how the firm embraces technology usage for the benefit of customers. 4. Procurement—how the firm deals with vendors and quality issues. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 03-01 Examine the concept of value and the elements and role of the value chain. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

90) Explain the Boston Consulting Group Growth-Share Matrix. What are the strengths and weaknesses of this method? Give examples of each of the four cells and their strategy recommendations. Answer: The concept of the BCG approach to portfolio analysis is to position each SBU within a firm on the two-dimensional matrix. The competitive market-share dimension is the ratio of share to that of the largest competitor. The growth dimension is intended as a strong indicator of overall market attractiveness. Within the BCG matrix you find four cells, each representing strategy recommendations: Stars (high share, high growth): important to building the future of the business and deserving any needed investment. Cash Cows (high share, low growth): key sources of internal cash generation for the firm. Dogs (low share, low growth): potential high cash users and prime candidates for liquidation. Problem Children, or Question Marks (low share, high growth): high cash needs that, if properly nurtured, can convert into stars. For purposes of strategy development, the BCG matrix approach is seductively simple and has contributed to decision making about internal cash generation and usage across SBUs. It has also morphed in application downward to often be applied to product lines and product groups, which is nominally possible so long as costs and returns can be properly isolated for investment decisions. But because of its simplicity, BCG ignores other important factors that should go into this decision making and also ignores the viability of generating cash externally. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-02 Understand the conditions required for successful marketing planning, that marketing planning is focused on the value proposition, and that marketing planning is a dynamic process. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) What are the major categories for analysis within the external environment? Give an example of each. Answer: Political, legal, and ethical. All firms operate within certain rules, laws, and norms of operating behavior. Sociocultural/demographic. Trends among consumers and in society as a whole impact marketing planning greatly. Many such trends are demographic in nature, including changing generational preferences and the rising buying power of minority groups domestically and consumers in developing nations in the global marketplace. Technological. Constantly emerging and evolving technologies impact business in many ways. The goal is to try to understand the future impact of technological change so a firm's products will continue to be fresh and viable. Economic. The economy plays a role in all marketing planning. Part of a marketing plan is a forecast and accompanying budget, and forecasts are impacted by the degree to which predicted economic conditions actually materialize. Natural. The natural environment also frequently affects marketing planning. Examples will vary. Difficulty: 3 Hard Topic: The Marketing Plan Learning Objective: 03-04 Conduct a situation analysis. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 4 Market Research Essentials 1) A major problem for most managers today is having too little information. 2) A market information system (MIS) is a software package that companies purchase to help decision makers cope with critical information. 3) Market information systems serve as an information bank where important data are stored until it is needed. 4) The information needs of all marketing managers are essentially the same. 5) In evaluating internal and external information sources, companies need to consider not only what information is important but also the source of the data. 6) In marketing planning, situation analysis involves identification of competitive strengths, weaknesses, and trends. 7) Technology companies such as Apple use market research to understand product users' needs and also to understand the competition. 8) Managers are typically aware of all the information in their own company. 9) Most companies do a good job of maximizing their existing information. 10) Salespeople's reports summarizing each sales call are a source of internal data. 11) Not tracking and responding to demographic changes is a management failure because the data are easy to obtain and major changes occur slowly. 12) Companies can use demographic data to create profiles of current customers and identify new market opportunities. 13) Good marketing research looks to develop answers to fit a predecided outcome. 14) Secondary data are collected for some other purpose than the problem currently being considered. 15) Research almost always involves secondary data collection. 16) Market research can be a useful tool helping senior managers identify and deal with the real issue. 17) Causal research is useful for identifying characteristics of a target market or determining how customers use a product. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

18) Primary data are collected specifically for the research question at hand. 19) An in-depth interview is a structured conversation with an individual who was selected at random. 20) Open-ended questions allow respondents to express themselves freely, which tends to result in more detailed responses that are useful for exploratory research. 21) Conducting an online (virtual) focus group is an appropriate alternative to a traditional focus group format, and it offers cost-efficiency and convenience. 22) A continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical data to marketing decision makers is known as ________. A) market-driven strategic planning B) a marketing concept C) the marketing mix D) marketing orientation E) a market information system 23) A shoe manufacturing company is interested in selling its products in a new country. Before entering the marketplace, the company wishes to gather information about how the country's citizens set priorities and make buying decisions. For this purpose, the company is most likely to analyze the country's ________. A) political environment B) economic conditions C) technological transformations D) natural world E) geographic changes 24) Which of the following is one of the three factors a company needs to consider when creating a market information system? A) information needs B) technology needs C) flexibility D) diversity E) demographics 25) Which of the following is an internal source of collecting information for making marketing decisions? A) demographics B) ethnic groups C) technology transformations D) economic conditions E) customer orders

26) The marketing manager of Zenith Corp. is interested in ranking clients on the basis of their profitability, and accesses a database that tells him about the frequency and size of each client's order along with the actual costs per order. This database is part of the ________ system. A) sales information B) customer relationship management (CRM) C) financial information D) employee management E) promotion management 27) The sales manager at a company wants to keep informed, so he collects, analyzes, and stores data from the macro environment on a continuous basis. This illustrates the concept of ________. A) portfolio analysis B) exploratory research C) marketing intelligence D) probability sampling E) mechanical observation 28) The marketing manager for Ned's Bar and Grill notices that his typical customer is a male college student. In the context of external information sources, he is using ________ to define his market. A) stereotypes B) estimations C) visual cues D) demographics E) instincts 29) Jan Smith, the marketing manager of Big Wheel Autos, has noticed that in many European countries more of the population is moving into urban centers. This has resulted in an increased demand for subcompact cars that can maneuver through these congested streets rather than fullsize automobiles. In the context of external information sources, this is an example of how ________ can influence marketing management decisions. A) technology transformations B) geographic changes C) marketing plans D) customer inquiries E) internal factors 30) Which of the following is an external source of collecting information for making marketing decisions? A) customer orders B) marketing plans C) salesperson information systems D) customer inquiries E) ethnic groups

31) Concerned by recent negative trends in economic indicators such as the consumer price index, gross domestic product, and inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending. His recommendation is based on ________ data. A) microeconomic B) macroeconomic C) qualitative D) observational E) subjective 32) Small portable computers, powerful statistical software packages, and Internet-enabled supply chain management systems are all examples of how ________ influences marketing. A) competition B) the legal environment C) the natural world D) technology E) training 33) The marketing manager of Big Wheel Motors notices an increased demand for "green" cars that use less fossil fuel and emit fewer pollutants. Under which of the following external information sources for making marketing decisions will this information be included? A) legal environment B) technology transformations C) natural world D) competition E) economic conditions 34) The marketing manager for Dream Weaver Textiles reads in a trade magazine that the Federal Trade Commission is in the process of revising content labeling requirements for textiles that claim to be natural. In the context of external forces affecting marketing decisions, this represents the ________. A) economic conditions B) geographic changes C) technological transformations D) political/legal environment E) natural world 35) Since there are so many other companies that operate in the food service industry, the marketing manager of Gourmet Dining pays detailed attention to what other restaurants that offer similar meals, prices, and services are doing. In the context of external forces affecting marketing decisions, the marketing manager's focus is on ________. A) demographics B) competition C) the political/legal environment D) technological transformations E) the natural world 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

36) ________ is defined as the methodical identification, collection, analysis, and distribution of data to discover and solve marketing problems or enhance good decision making. A) Marketing control B) Market research C) Market development strategy D) Marketing mix E) Market orientation 37) Good market research will ________. A) develop answers to fit an already decided outcome B) not enhance the validity of information C) happen by accident D) be subjective E) be impartial 38) The marketing manager for Brand A Razors, a strong national brand, believes he knows how customers will react to a new product offering, but he conducts market research so that he can provide justification for this new product. This cannot be considered quality market research because it ________. A) fails to prejudge the outcome B) enhances the validity of the information C) is not impartial and objective D) enhances good decision making E) is a result of the methodical analysis of data 39) Which of the following is NOT a part of the market research process? A) defining the problem B) implementing the recommendations C) establishing the research design D) collecting the data E) searching secondary sources 40) In the market research process, once the management research deliverable has been identified, the next step is to ________. A) define the research problem B) establish the research design C) search secondary sources D) collect the data E) analyze the data

41) Apex Jerseys, a manufacturer of sports apparel and sports equipment, has experienced a sharp drop in sales over the last quarter. The marketing manager asks the marketing research department to investigate this alarming development. The first step taken by the researchers in their process should be to ________. A) design a questionnaire to gather pertinent data B) decide which statistical procedure to use C) determine sources of internal secondary data D) identify the sample of customers to survey E) formulate a specific research problem 42) B&B Co. is conducting market research to determine if a new beverage will be successful. The company is in the process of determining the kind of research that needs to be done, the information needed, and the sampling plan—including the research participants. B&B is in which stage of the market research process? A) collecting the data B) searching secondary sources C) establishing the research design D) analyzing the research data E) reporting the research findings 43) Reasons for conducting exploratory research include ________. A) discovering the cause and effect between variables B) discovering differences across demographic characteristics C) identifying characteristics of the target market D) assessing competitors' actions in the marketplace E) answering the research question 44) A restaurant's marketing manager is interested in finding out if reducing the price of food items will lead to increased sales. For this purpose, the manager should conduct ________ research. A) causal B) exploratory C) descriptive D) secondary E) longitudinal 45) Sheena, marketing manager for Yaard-Vark Lawn Tractors, is interested in the relationship between the prices of lawn tractors and the level of sales. To test whether increasing prices will lead to a change in sales and, if so, how much of a change, she should use ________ research. A) causal B) descriptive C) random D) academic E) exploratory

46) Brand X diapers, a national brand, has been declining in absolute level of sales for the last four consecutive months. The product manager asks the market research department to do a study to determine why sales have declined. The most appropriate research type would be ________. A) a laboratory experiment B) a field experiment C) a descriptive study D) an exploratory research E) a causal research 47) The sole proprietor of Sam's Swings is interested in gaining a better understanding of his current customers in terms of certain demographic and lifestyle characteristics so he may better serve their needs. For this purpose, he should most appropriately conduct ________ research. A) causal B) descriptive C) random D) academic E) exploratory 48) The owners of Tyrell's Tattoo Shop are interested in determining the nature of the relationship between their clients' professional occupation and the number of tattoos that individuals have. In this case, which research will result in the most appropriate way to explain the nature of this relationship? A) descriptive B) exploratory C) longitudinal D) clinical E) random 49) Which of the following is TRUE of descriptive research? A) It primarily involves developing hypotheses for testing in exploratory research. B) It is usually the first step when more sophisticated research is needed. C) It uses many different methods including secondary data, surveys, and observation. D) It primarily tries to discover the cause and effect between variables. E) It uses a different, less restrictive and rigorous methodology than exploratory research. 50) Brand Electronics' marketing manager would like to know about the typical consumer who purchases handheld computers. He begins by searching online and in databases for this information, but soon discovers that a product is too new for the sources to be of help. In this instance he will need ________ data to solve his research problem. A) secondary B) governmental C) experimental D) primary E) subjective

51) Burger Bistro recently experienced a decline in hamburger sales after salmonella was discovered during a health inspection at one of the restaurants. The marketing manager was interested in how other restaurants had dealt with similar situations. Which of the following types of data would be the most appropriate way to find answers related to this marketing problem? A) secondary B) subjective C) experimental D) primary E) quantitative 52) Which of the following types of research is less structured and can employ methods such as surveys and interviews to collect the data? A) quantitative B) qualitative C) computational D) statistical E) mathematical 53) The marketing managers of Brand Z Shoes have clearly defined their research problem as "If we increase our promotions expenditures, by what percentage will it increase sales?" They have also decided that they need primary data to answer this question. To collect these data, it is best for them to use ________ research. A) qualitative B) mechanical C) exploratory D) quantitative E) case-based 54) Vegan Videos has decided to conduct exploratory research to clarify its marketing-related research problem. The company needs to collect primary data using qualitative research, and it needs to collect this data from 10 customers with only one researcher. In this case, Vegan Videos would most likely use a(n) ________ to collect the data and meet its short deadline. A) in-depth interview B) experimental design C) statistical method D) case-study research E) focus group

55) The marketing manager for Joe's Shoe-Mart has decided to conduct descriptive research using primary data. Based on some preliminary research of trade journals and interviews with customers, she knows what questions to ask. However, the customers she wants information from are spread out over many stores in several states. The best technique for her to collect this data would be ________. A) in-depth interviews B) case studies C) focus groups D) experiments E) surveys 56) The marketing manager of Low Cost Retailer wants to conduct descriptive research to gather information on what customers purchase, when they purchase, and how often they purchase certain products. For this purpose, the marketing manager should use ________. A) an in-depth interview B) a focus group C) behavioral data D) causal data E) a laboratory experiment 57) The manager of Gina's Groceries wanted to see how customers would react to some new displays. To collect this information, she posted employees where they could see the display and had them record how long customers looked at it, whether they picked up the item, and if they took the item with them. In this case, she is using ________ for her market research. A) situation analysis B) secondary data C) in-depth interviews D) observational data E) focus groups 58) Core Market Research is testing how customers react to a proposed advertising campaign for Go Fast Sports Cars. The researchers scan consumers' brains using an fMRI machine while the consumers view a series of advertisements so that they can monitor the blood flow in different areas of the brain. In this case, Core is using ________ for its market research. A) in-depth interviews B) mechanical devices C) behavioral measures D) structured surveys E) focus groups

59) Juan Martinez, a researcher for ABC Research Group, is working on crafting a survey for a client. He is concentrating on framing the questions, selecting response choices, refining the wording, and determining how many questions to ask. In the context of establishing the research design, Juan is focusing on the ________. A) type of research B) nature of data C) nature of data collection D) information content E) sampling plan 60) Dan is creating a survey for his company. The question he is currently working on asks his business-to-business customers to describe the ideal purchasing transaction. Dan is utilizing a(n) ________ question. A) hypothetical B) open-ended C) observational D) closed-ended E) statistical 61) While writing a customer satisfaction survey, the marketing director for Brand X Bank created a set of questions that customers would answer by circling a number between 1 and 7. The number 1 meant that the customers were very dissatisfied by that aspect of the experience, whereas 7 meant that they were very satisfied. The director is using ________ questions to collect this information. A) behavioral B) open-ended C) observational D) closed-ended E) qualitative 62) The marketing manager of a firm has hired a market research team. Together, the manager and the researchers decide that they need data from current customers and noncustomers who fit a specific demographic and lifestyle profile. In the context of research design activities, the selection of these individuals as targets for data collection represents the ________. A) type of research B) nature of data C) nature of data collection D) information content E) sampling plan 63) In the context of sampling plan, a comprehensive record of each individual in the population of interest is known as a ________. A) survey B) database C) focus group D) sample E) census 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

64) The marketing director of Bank Y decides to conduct a survey of 5,000 current customers to gather information to answer the research problem of what the bank can do to improve its services and customer satisfaction. She starts with a database of 50,000 current customers and randomly picks a name on the list to start. She then selects every tenth person as she goes down the list to receive a survey. She is using a ________ sampling method to select the participants for the study. A) probability B) quota C) convenience D) observational E) judgment 65) The manager of Big Brand Clothing wants to determine what items consumers are looking for this Christmas so that he can plan his orders. He decides to collect data for the purpose by stationing employees outside the store on a particular Saturday with a list of questions to ask willing shoppers to answer as they pass by. In this case, the manager is using a ________ sampling method to select respondents. A) probability B) random C) systematic D) nonprobability E) stratified 66) ________ sampling uses a specific set of procedures to identify individuals from the population to be included in the research. A) Snowball B) Convenience C) Probability D) Quota E) Judgment 67) The CEO of Big Wheel Automotive is concerned about declining sales. He has identified his research problem as the fact that his competitors are drawing away his business. He purchases access to J. D. Power's automobile rankings to learn about possible reasons for the shift in consumer purchasing. In this case, the CEO is using ________ to collect secondary data for his research problem. A) a survey questionnaire B) a market research organization C) government sources D) focus groups E) unstructured interviews

68) A marketing manager is considering a new advertising campaign for Guzzle Beverages. She purchases six months of scanner data for Cruncheez Snack Foods, a company that recently ran a similar campaign. She wants to use this information to determine the campaign's effectiveness before implementing it for Guzzle. In this case, the marketing manager is using ________ to collect the needed information for research. A) mechanical observation B) unstructured interviews C) observational data D) secondary data E) behavioral data 69) Which of the following statements is true of secondary data? A) Secondary data are current. B) A specific answer to a research problem will be possible using secondary data alone. C) Secondary data are relatively more expensive. D) Getting information through secondary data is time-consuming. E) Secondary data will not fit the research problem exactly. 70) While researching the possible impact of economic conditions on a proposed new product introduction on the Internet, you find an article in Bloomberg Business Week online that reviews how new products have fared during times of rising inflation. Which of the following sources of secondary data does this scenario exemplify? A) market research organizations B) general knowledge sites C) government sources D) focus groups E) in-depth interviews 71) Which of the following is an advantage of secondary data? A) Secondary data has high validity regardless of the methodology used. B) Secondary data often fits the research problem exactly. C) Secondary data are a fast way to get information. D) Secondary data can alone provide specific answer to a research problem. E) Secondary data are always updated and current. 72) An advantage of secondary data over primary data is that they ________. A) provide specific answer to a research problem B) are less expensive C) fit the research problem exactly D) have high validity regardless of the methodology used E) are more current

73) The account manager of a market research firm is conducting secondary research on consumer preferences in energy drinks for his clients. His client's drink is 100 percent organic, but all of the secondary data he has found contains only beverages that contain a majority of artificial ingredients. This scenario illustrates the fact that secondary data ________. A) can alone provide specific answer to a research problem B) are more expensive than primary data C) are always updated and current D) will not fit the research problem exactly E) has high validity regardless of the methodology used 74) The owner of Joe's Pool Hall found some secondary data online that measured consumer reactions to certain amenities in bars and nightclubs. However, he is concerned about how these data were collected and from whom it was collected. This represents the concerns associated with the ________ of secondary data. A) validity B) cost C) speed D) aptness E) availability 75) The marketing manager for Brand K retail stores is in the process of getting primary data from customers to learn which current products need improvement. She is using a probability sampling method, but is having trouble figuring out how to contact customers and get them to participate. She is also debating alternative ways to record the responses so that they can be analyzed. She is concerned with the ________ part of the market research process. A) problem definition B) research design C) data collection D) data analysis E) reporting 76) For managers, the key section of the market research report that presents a synopsis of the analysis and essential findings is the ________. A) nature of data B) executive summary C) sampling plan D) information content E) research design 77) In the market research process, once the data are collected, coded, and verified, the next step is to ________. A) report the findings B) establish a research design C) choose a sampling method D) search secondary sources E) analyze the information 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

78) Mark Jones, the marketing manager for Big Brand Furniture, is conducting an analysis of internal sales data. These data are collected and stored electronically on site by each store. He is able to access the data on his computer at the corporate headquarters. He is gathering this information via a(n) ________. A) CRM system B) information broker C) market research organization D) online database E) sales force automation system 79) The manager of an automotive after-market specialties firm is interested in collecting secondary data. He is concerned with the future of the industry and his competition. He would like to find industry research reports along with industry and company analysis of his competitors. His best sources of this information would be ________. A) independent online databases B) research studies C) CRM systems D) online focus groups E) sales force automation systems 80) As the marketing manager for National Household Cleaner Co., you are interested in collecting some qualitative primary data about what outcomes consumers want from your products. You would like the customers you study to react to each other's ideas. However, you want information from a wide range of customers from across the country. The best way to achieve this is to use a(n) ________. A) online database B) survey study C) market research organization D) online focus group E) CRM system 81) A disadvantage of online focus groups is that ________. A) they require someone to transcribe the spoken words into a transcript B) they provide data in a format that is usually difficult to read and analyze C) participants can become distracted and environmental factors can affect their concentration D) they create an environment where participants are required to focus on the questions E) participants cannot respond from a remote location such as from home or workplace 82) Health+ is conducting an online focus group to learn more about the nutritional habits of senior citizens and the underlying causes of these behaviors. They are having problems because many of the members of their target market do not own computers. Which of the following disadvantages of online focus groups does this scenario illustrate? A) limited access B) identity verification C) environmental control D) family issues E) qualification 14 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

83) The marketing management team of Brand Z Toys is looking at the possibility of opening a new plant in one of several developing countries. Before they decide on which country they want to build in, they want to conduct some preliminary research including local population demographics and lifestyle characteristics. However, they have discovered that the governments in several of these countries do not have a department that collects these data and no independent research firm has measured any of these areas. This demonstrates which issue with secondary data in global markets? A) extendibility B) accessibility C) dependability D) compatibility E) comparability 84) When examining some secondary data from Uzbekistan, the marketing manager of RS Chemicals notices that the income figures seem high even after conversion to U.S. dollars. He later learns that the government agency that collects this information records total household income rather than per capita income as in most other countries. This demonstrates which issue with secondary data in global markets? A) extendibility B) accessibility C) dependability D) compatibility E) comparability 85) The recent controversy over the age of Chinese Olympic gymnasts because of differing ages on their passports and in government files exemplifies the difficulty with the ________ of secondary data in global markets. A) extendibility B) accessibility C) dependability D) compatibility E) comparability 86) The marketing management team of Superior Foods Inc. hired a research firm to collect preference data from consumers in several former Soviet Bloc countries. However, the researchers struggled to get these data, especially from older citizens who were afraid that the information would be used against them, as it had been when they were under a Communist government. Which of the following problems associated with collecting primary data in global markets does this scenario exemplify? A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inaccurate language translation E) Insufficient comprehension

87) To ensure the primary data they collected about consumer reactions to their product were accurate, the makers of Classic Toiletries hired a single research firm to visit certain cities in various countries. In the past, the company had used mail and telephone surveys by local companies in each country to gather data, but it was concerned about whom these companies were surveying and if they actually fit the demographic and lifestyle profiles of Classic's target market. Classic hired a new research firm to overcome the problem of ________ that can occur when collecting primary data in global markets. A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inaccurate language translation E) insufficient comprehension 88) The primary difference between domestic and international research is that, international market data are ________. A) more easily comparable than domestic data B) more accurate than domestic data C) more reliable than domestic data D) more difficult to understand than domestic data E) more easily accessible than domestic data 89) A manufacturer of food products is looking at entering several new markets in developing countries. Before it does this, the company wants to collect data on item and flavor preferences in these markets. It sends out a survey that has been accurately translated into the local language, but it still receives inconsistent results. In talking with a consulting firm, the manufacturer is informed that several of these countries have extremely high illiteracy rates and the survey answers may be only random guesses by the respondents. Which of the following problems associated with collecting primary data in global markets does this scenario exemplify? A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inadequate demographic information E) insufficient comprehension 90) Which of the following is TRUE of collecting data for market research in global markets? A) The quantity and quality of data found in the United States are not available in most of the world. B) The culture in countries such as China and India encourages the free flow of information. C) International market data are easier to get and understand than domestic data. D) Essential information about economic and general business trends cannot be gathered from secondary sources. E) In most Western European countries, it is much more difficult to access quality data than in the rest of the world. 91) Explain three ways that a CRM system can be used for marketing research. 92) Name and describe the six external forces that affect marketing decisions. 16 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

93) Briefly describe the six steps in the market research process.

Marketing Management, 3e (Marshall) Chapter 4 Market Research Essentials 1) A major problem for most managers today is having too little information. Answer: FALSE Explanation: A significant problem for most managers today is not having too little information but having too much. They frequently see interesting information that has no relevance to the immediate problem. Difficulty: 1 Easy Topic: Successful Marketing Management Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) A market information system (MIS) is a software package that companies purchase to help decision makers cope with critical information. Answer: FALSE Explanation: A market information system (MIS) is not a software package but a continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical information to marketing decision makers. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 3) Market information systems serve as an information bank where important data are stored until it is needed. Answer: TRUE Explanation: The MIS is really an "information bank" where data relevant to the company's marketing efforts are collected and stored until such time as management needs to "withdraw" them. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4) The information needs of all marketing managers are essentially the same. Answer: FALSE Explanation: Not all managers need the same information. The CEO probably doesn't want or need daily sales figures across individual product lines, but the local sales manager does. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) In evaluating internal and external information sources, companies need to consider not only what information is important but also the source of the data. Answer: TRUE Explanation: In evaluating internal and external information sources, companies need to consider not only what information is important but also the source of the data. Because there are so many sources of information, decisions must be made about what information will be collected and where it will come from. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) In marketing planning, situation analysis involves identification of competitive strengths, weaknesses, and trends. Answer: TRUE Explanation: In marketing planning, situation analysis involves identification of competitive strengths, weaknesses, and trends (opportunities and threats). Difficulty: 1 Easy Topic: The Situation Analysis Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Technology companies such as Apple use market research to understand product users' needs and also to understand the competition. Answer: TRUE Explanation: Before introducing a new model, Apple conducts tests with actual users to be sure the product fits their needs and performs as promised. The company also studies a wide range of other issues including competitors such as Samsung, and long-term technology trends to identify key technologies for the iPhone now and in the future. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) Managers are typically aware of all the information in their own company. Answer: FALSE Explanation: Managers are often not aware of all the information in their own company. Often, simply checking secondary sources such as legitimate websites will provide sufficient information for the marketing manager to make a decision in a particular situation. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Most companies do a good job of maximizing their existing information. Answer: FALSE Explanation: A market information system can be as complicated as the company wants or can afford. It is expensive to collect and analyze data, and most companies don't maximize their existing information. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Salespeople's reports summarizing each sales call are a source of internal data. Answer: TRUE Explanation: Internal customer service metrics include call wait times, ability of customer service representatives to handle the problems efficiently and effectively, number of customers who call back to address a problem, and a host of other metrics. These are all internal sources of data. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Not tracking and responding to demographic changes is a management failure because the data are easy to obtain and major changes occur slowly. Answer: TRUE Explanation: Not tracking and responding to demographic changes is a management failure because the data are easy to obtain and major changes occur slowly. Surprisingly, many companies do not do a good job of either learning about demographic trends or responding to them. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Companies can use demographic data to create profiles of current customers and identify new market opportunities. Answer: TRUE Explanation: Companies that deal directly with consumers develop customer profiles based on demographic information and compare their profiles against those of competitors. Companies even create pictures of their "average" customer, highlighting key demographic data (age, gender, and ethnicity). Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

13) Good marketing research looks to develop answers to fit a predecided outcome. Answer: FALSE Explanation: Good marketing research does not prejudge the information or develop answers to fit an already decided outcome; rather, it enhances good decision making. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-04 Recognize the value of market research and its role in marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Secondary data are collected for some other purpose than the problem currently being considered. Answer: TRUE Explanation: Secondary data are data collected for some other purpose than the problem currently being considered. Even if primary data are collected, almost all research involves some secondary data collection. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Research almost always involves secondary data collection. Answer: TRUE Explanation: Even if primary data are collected, almost all research involves some secondary data collection. Secondary data are data collected for some other purpose than the problem currently being considered. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) Market research can be a useful tool helping senior managers identify and deal with the real issue. Answer: TRUE Explanation: At the heart of the market research process is a search for understanding. The researcher knows that the real problem is not the company's declining sales; falling sales are the result, a symptom, of the real issue. Market research can be a useful tool helping senior managers identify and deal with the real issue. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Causal research is useful for identifying characteristics of a target market or determining how customers use a product. Answer: FALSE Explanation: Causal research tries to discover the cause and effect between variables. Descriptive research seeks to describe or explain some phenomenon. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) Primary data are collected specifically for the research question at hand. Answer: TRUE Explanation: Primary data are collected for a specific research question and may include qualitative or quantitative research. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) An in-depth interview is a structured conversation with an individual who was selected at random. Answer: FALSE Explanation: An in-depth interview is an unstructured (or loosely structured) interview with an individual who has been chosen based on some characteristic of interest, often a demographic attribute. This technique differs from focus groups in that the interview is done one on one rather than in a small group. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Open-ended questions allow respondents to express themselves freely, which tends to result in more detailed responses that are useful for exploratory research. Answer: TRUE Explanation: Open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses. As a result, these kinds of questions are often used in exploratory research. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Conducting an online (virtual) focus group is an appropriate alternative to a traditional focus group format, and it offers cost-efficiency and convenience. Answer: TRUE Explanation: The virtual focus group is becoming a viable alternative to the traditional focus group format (6 to 10 people in a room). Offering distinct advantages in terms of convenience and cost-efficiency, online focus groups provide data quickly and in a format that is usually easier to read and analyze. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) A continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical data to marketing decision makers is known as ________. A) market-driven strategic planning B) a marketing concept C) the marketing mix D) marketing orientation E) a market information system Answer: E Explanation: A market information system (MIS) is not a software package but a continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical information to marketing decision makers. The MIS is really an "information bank" where data relevant to the company's marketing efforts are collected and stored until such time as management needs to "withdraw" them. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) A shoe manufacturing company is interested in selling its products in a new country. Before entering the marketplace, the company wishes to gather information about how the country's citizens set priorities and make buying decisions. For this purpose, the company is most likely to analyze the country's ________. A) political environment B) economic conditions C) technological transformations D) natural world E) geographic changes Answer: B Explanation: Companies are keenly interested in the ability of their customers to purchase products and services. It is not surprising then that a good understanding of current and future economic trends is important in an effective market information system. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

24) Which of the following is one of the three factors a company needs to consider when creating a market information system? A) information needs B) technology needs C) flexibility D) diversity E) demographics Answer: A Explanation: A company needs to consider three factors in creating a market information system (MIS). First, what information should the system collect? Second, what are the information needs of each decision maker? Third, how does the system maintain the privacy and confidentiality of sensitive information? Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-01 Describe the difference between market information systems and market research systems. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) Which of the following is an internal source of collecting information for making marketing decisions? A) demographics B) ethnic groups C) technology transformations D) economic conditions E) customer orders Answer: E Explanation: At the heart of marketing is the relationship among the company, its products, and its customers. Internal sources of collecting information for making marketing decisions include customer orders, customer payments, customer inquiries, marketing plans, and salesperson information systems. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) The marketing manager of Zenith Corp. is interested in ranking clients on the basis of their profitability, and accesses a database that tells him about the frequency and size of each client's order along with the actual costs per order. This database is part of the ________ system. A) sales information B) customer relationship management (CRM) C) financial information D) employee management E) promotion management Answer: B Explanation: The data collected and analyzed in a CRM system enables companies to identify the frequency and size of customer orders, determine the actual cost of a customer order, rank customers based on established criteria like profitability, and calculate the efficiency of the company's production and distribution system. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 27) The sales manager at a company wants to keep informed, so he collects, analyzes, and stores data from the macro environment on a continuous basis. This illustrates the concept of ________. A) portfolio analysis B) exploratory research C) marketing intelligence D) probability sampling E) mechanical observation Answer: C Explanation: Staying connected to the business environment is no longer optional. Success is based, in part, on both the quality and quantity of information available to management. As a result, most companies engage in collecting, analyzing, and storing data from the macro environment on a continuous basis known as marketing intelligence. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) The marketing manager for Ned's Bar and Grill notices that his typical customer is a male college student. In the context of external information sources, he is using ________ to define his market. A) stereotypes B) estimations C) visual cues D) demographics E) instincts Answer: D Explanation: Demographics help define a market. How old is a typical customer? How educated? What is the typical customer's income? These are all demographic characteristics that help describe a market. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 29) Jan Smith, the marketing manager of Big Wheel Autos, has noticed that in many European countries more of the population is moving into urban centers. This has resulted in an increased demand for subcompact cars that can maneuver through these congested streets rather than fullsize automobiles. In the context of external information sources, this is an example of how ________ can influence marketing management decisions. A) technology transformations B) geographic changes C) marketing plans D) customer inquiries E) internal factors Answer: B Explanation: As a result of geographic changes, people are moving not only in the United States but around the world. The opening of borders in the European Union has increased the mobility of those living in the EU. A decades-old trend—people moving from the countryside to the city—continues around the globe. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

30) Which of the following is an external source of collecting information for making marketing decisions? A) customer orders B) marketing plans C) salesperson information systems D) customer inquiries E) ethnic groups Answer: E Explanation: The external sources of collecting information for making marketing decisions include the political/legal environment, technology transformations, demographics (ethnic groups, geographic changes, and populations of interest), competition, the natural world, and economic conditions. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) Concerned by recent negative trends in economic indicators such as the consumer price index, gross domestic product, and inflation, the marketing manager of Kevin's Kayaks recommends that the company reduce its advertising spending. His recommendation is based on ________ data. A) microeconomic B) macroeconomic C) qualitative D) observational E) subjective Answer: B Explanation: Macroeconomics refers to the study of economic activity in terms of broad measures of output (gross national product or GNP) and input as well as the interaction among various sectors of an entire economy. Macroeconomics gives a "big picture" perspective for an economy and can be helpful at looking for broad economic trends. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

32) Small portable computers, powerful statistical software packages, and Internet-enabled supply chain management systems are all examples of how ________ influences marketing. A) competition B) the legal environment C) the natural world D) technology E) training Answer: D Explanation: Few areas in business have been more affected by technology than marketing. Technology has been one of the major catalysts for change in the marketplace. Faster, smaller, and easier-to-use computers and powerful software facilitate sophisticated analysis right on the desks of front-line managers from anywhere in the world. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 33) The marketing manager of Big Wheel Motors notices an increased demand for "green" cars that use less fossil fuel and emit fewer pollutants. Under which of the following external information sources for making marketing decisions will this information be included? A) legal environment B) technology transformations C) natural world D) competition E) economic conditions Answer: C Explanation: Business operates within the constraints of available natural resources, but concerns about the natural world also influence marketers as they make decisions about how and where products are manufactured. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

34) The marketing manager for Dream Weaver Textiles reads in a trade magazine that the Federal Trade Commission is in the process of revising content labeling requirements for textiles that claim to be natural. In the context of external forces affecting marketing decisions, this represents the ________. A) economic conditions B) geographic changes C) technological transformations D) political/legal environment E) natural world Answer: D Explanation: Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry. Local, state, and federal legislatures pass more business-related legislation than ever before. In addition, government agencies are more active in monitoring business activity. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 35) Since there are so many other companies that operate in the food service industry, the marketing manager of Gourmet Dining pays detailed attention to what other restaurants that offer similar meals, prices, and services are doing. In the context of external forces affecting marketing decisions, the marketing manager's focus is on ________. A) demographics B) competition C) the political/legal environment D) technological transformations E) the natural world Answer: B Explanation: One of the most important external environmental factors to consider is the competition. Companies want to know as much as possible about competitors' products and strategies. In highly competitive markets, companies are constantly adjusting their strategies to the competition. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

36) ________ is defined as the methodical identification, collection, analysis, and distribution of data to discover and solve marketing problems or enhance good decision making. A) Marketing control B) Market research C) Market development strategy D) Marketing mix E) Market orientation Answer: B Explanation: Market research is the methodical identification, collection, analysis, and distribution of data related to discovering, then solving marketing problems or opportunities and enhancing good decision making. Good market research follows a well-defined set of activities and does not happen by accident. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-04 Recognize the value of market research and its role in marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) Good market research will ________. A) develop answers to fit an already decided outcome B) not enhance the validity of information C) happen by accident D) be subjective E) be impartial Answer: E Explanation: Good market research follows a well-defined set of activities and does not happen by accident. It enhances the validity of the information. It is impartial and objective and does not prejudge the information or develop answers to fit an already decided outcome; rather, it enhances good decision making. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-04 Recognize the value of market research and its role in marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) The marketing manager for Brand A Razors, a strong national brand, believes he knows how customers will react to a new product offering, but he conducts market research so that he can provide justification for this new product. This cannot be considered quality market research because it ________. A) fails to prejudge the outcome B) enhances the validity of the information C) is not impartial and objective D) enhances good decision making E) is a result of the methodical analysis of data Answer: C Explanation: The marketing manager's research cannot be considered as a good market research because it is not impartial and objective. Good market research is impartial and objective. It does not prejudge the information or develop answers to fit an already decided outcome; rather, it enhances good decision making. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-04 Recognize the value of market research and its role in marketing. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 39) Which of the following is NOT a part of the market research process? A) defining the problem B) implementing the recommendations C) establishing the research design D) collecting the data E) searching secondary sources Answer: B Explanation: The market research process consists of six steps: defining the problem, establishing the research design, searching secondary data, collecting the data, analyzing the data, and reporting the findings. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) In the market research process, once the management research deliverable has been identified, the next step is to ________. A) define the research problem B) establish the research design C) search secondary sources D) collect the data E) analyze the data Answer: A Explanation: One of the biggest challenges facing a market researcher is accurately defining the problem. Once the management research deliverable has been identified, the next step is to define the research problem. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) Apex Jerseys, a manufacturer of sports apparel and sports equipment, has experienced a sharp drop in sales over the last quarter. The marketing manager asks the marketing research department to investigate this alarming development. The first step taken by the researchers in their process should be to ________. A) design a questionnaire to gather pertinent data B) decide which statistical procedure to use C) determine sources of internal secondary data D) identify the sample of customers to survey E) formulate a specific research problem Answer: E Explanation: The first step in the market research process if to define the research problem. Given that management often does not have a clear understanding of the problem, defining the research problem involves two distinct steps. First, management, working with researchers and marketing decision makers, defines the management research deliverable. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

42) B&B Co. is conducting market research to determine if a new beverage will be successful. The company is in the process of determining the kind of research that needs to be done, the information needed, and the sampling plan—including the research participants. B&B is in which stage of the market research process? A) collecting the data B) searching secondary sources C) establishing the research design D) analyzing the research data E) reporting the research findings Answer: C Explanation: Following problem definition, companies must establish a research design, or a plan of action for attacking the research problem. Research designs consist of five activities: determining the type of research, nature of data, nature of data collection, information content, and sampling plan. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 43) Reasons for conducting exploratory research include ________. A) discovering the cause and effect between variables B) discovering differences across demographic characteristics C) identifying characteristics of the target market D) assessing competitors' actions in the marketplace E) answering the research question Answer: E Explanation: Reasons for conducting exploratory research include (1) clarifying the research problem, (2) developing hypothesis for testing in descriptive or causal research, (3) gaining additional insight to help in survey development or to identify other research variables for study, and (4) answering the research question. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) A restaurant's marketing manager is interested in finding out if reducing the price of food items will lead to increased sales. For this purpose, the manager should conduct ________ research. A) causal B) exploratory C) descriptive D) secondary E) longitudinal Answer: A Explanation: Causal research tries to discover the cause and effect between variables. Causal research can determine the change in the number of sales for different price levels. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 45) Sheena, marketing manager for Yaard-Vark Lawn Tractors, is interested in the relationship between the prices of lawn tractors and the level of sales. To test whether increasing prices will lead to a change in sales and, if so, how much of a change, she should use ________ research. A) causal B) descriptive C) random D) academic E) exploratory Answer: A Explanation: Causal research tries to discover the cause and effect between variables. Causal research can determine the change in the number of sales for different price levels. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

46) Brand X diapers, a national brand, has been declining in absolute level of sales for the last four consecutive months. The product manager asks the market research department to do a study to determine why sales have declined. The most appropriate research type would be ________. A) a laboratory experiment B) a field experiment C) a descriptive study D) an exploratory research E) a causal research Answer: D Explanation: Brand X would need to perform an exploratory study. Reasons for conducting exploratory research include to (1) clarify the research problem, (2) develop hypothesis for testing in descriptive or causal research, (3) gain additional insight to help in survey development or to identify other research variables for study, and (4) answer the research question. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 47) The sole proprietor of Sam's Swings is interested in gaining a better understanding of his current customers in terms of certain demographic and lifestyle characteristics so he may better serve their needs. For this purpose, he should most appropriately conduct ________ research. A) causal B) descriptive C) random D) academic E) exploratory Answer: B Explanation: Descriptive research seeks to describe or explain some phenomenon. Often this involves something going on in the marketplace and can include issues such as (1) identifying the characteristics of the target market, (2) assessing competitor actions in the marketplace, (3) determining how customers use the product, and (4) discovering differences across demographic characteristics (age, education, income) with respect to the use of the product or the competitors' product. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

48) The owners of Tyrell's Tattoo Shop are interested in determining the nature of the relationship between their clients' professional occupation and the number of tattoos that individuals have. In this case, which research will result in the most appropriate way to explain the nature of this relationship? A) descriptive B) exploratory C) longitudinal D) clinical E) random Answer: A Explanation: Descriptive research seeks to describe or explain some phenomenon. Often this involves something going on in the marketplace and can include issues such as (1) identifying the characteristics of the target market, (2) assessing competitor actions in the marketplace, (3) determining how customers use the product, and (4) discovering differences across demographic characteristics (age, education, income) with respect to the use of the product or the competitors' product. Descriptive research identifies associations between variables. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Which of the following is TRUE of descriptive research? A) It primarily involves developing hypotheses for testing in exploratory research. B) It is usually the first step when more sophisticated research is needed. C) It uses many different methods including secondary data, surveys, and observation. D) It primarily tries to discover the cause and effect between variables. E) It uses a different, less restrictive and rigorous methodology than exploratory research. Answer: C Explanation: Descriptive research uses many different methods including secondary data, surveys, and observation. Some of these methods are also used in exploratory research. The difference is how you use the information. Descriptive research uses a different, more restrictive and rigorous methodology than exploratory research. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

50) Brand Electronics' marketing manager would like to know about the typical consumer who purchases handheld computers. He begins by searching online and in databases for this information, but soon discovers that a product is too new for the sources to be of help. In this instance he will need ________ data to solve his research problem. A) secondary B) governmental C) experimental D) primary E) subjective Answer: D Explanation: The marketing manager will need to gather primary data to solve his research problem. Primary data refers to data collected specifically for a specific research question. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 51) Burger Bistro recently experienced a decline in hamburger sales after salmonella was discovered during a health inspection at one of the restaurants. The marketing manager was interested in how other restaurants had dealt with similar situations. Which of the following types of data would be the most appropriate way to find answers related to this marketing problem? A) secondary B) subjective C) experimental D) primary E) quantitative Answer: A Explanation: Secondary data would be the most appropriate way to find answers related to the marketing problem discussed in the scenario. Searching a wide variety of sources and compiling additional information provide greater insight to the research problem and supplement the primary data collected for a specific study. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

52) Which of the following types of research is less structured and can employ methods such as surveys and interviews to collect the data? A) quantitative B) qualitative C) computational D) statistical E) mathematical Answer: B Explanation: Qualitative research is less structured and can employ methods such as surveys and interviews to collect the data. It employs small samples and is not meant to be used for statistical analysis. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) The marketing managers of Brand Z Shoes have clearly defined their research problem as "If we increase our promotions expenditures, by what percentage will it increase sales?" They have also decided that they need primary data to answer this question. To collect these data, it is best for them to use ________ research. A) qualitative B) mechanical C) exploratory D) quantitative E) case-based Answer: D Explanation: To collect the required data, the marketing managers should use quantitative research. Quantitative research is used to develop a more measured understanding using statistical analysis to assess and quantify the results. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

54) Vegan Videos has decided to conduct exploratory research to clarify its marketing-related research problem. The company needs to collect primary data using qualitative research, and it needs to collect this data from 10 customers with only one researcher. In this case, Vegan Videos would most likely use a(n) ________ to collect the data and meet its short deadline. A) in-depth interview B) experimental design C) statistical method D) case-study research E) focus group Answer: E Explanation: For the purpose, Vegan Videos should use a focus group. Without question, the most widely used qualitative research technique is focus groups. A focus group is a meeting (either in person or increasingly online) of 6 to 10 people that is moderated by a professional who carefully moves the conversation through a defined agenda in an unstructured, open format. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 55) The marketing manager for Joe's Shoe-Mart has decided to conduct descriptive research using primary data. Based on some preliminary research of trade journals and interviews with customers, she knows what questions to ask. However, the customers she wants information from are spread out over many stores in several states. The best technique for her to collect this data would be ________. A) in-depth interviews B) case studies C) focus groups D) experiments E) surveys Answer: E Explanation: Of the quantitative research techniques used to collect primary data, surveys, in their various forms, are the most prevalent. While they can be used informally in exploratory research, their most common purpose is in descriptive research. Surveys are structured questionnaires given to a sample group of individuals representing the population of interest and are intended to solicit specific responses to explicit questions. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

56) The marketing manager of Low Cost Retailer wants to conduct descriptive research to gather information on what customers purchase, when they purchase, and how often they purchase certain products. For this purpose, the marketing manager should use ________. A) an in-depth interview B) a focus group C) behavioral data D) causal data E) a laboratory experiment Answer: C Explanation: The marketing manager, in the scenario, should use behavioral data. Behavioral data include information about when, what, and how often customers purchase products and services as well as other customer "touches" (for example, when they contact the organization with a complaint or question). Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 57) The manager of Gina's Groceries wanted to see how customers would react to some new displays. To collect this information, she posted employees where they could see the display and had them record how long customers looked at it, whether they picked up the item, and if they took the item with them. In this case, she is using ________ for her market research. A) situation analysis B) secondary data C) in-depth interviews D) observational data E) focus groups Answer: D Explanation: The manager of Gina's Groceries is collecting observational data to solve her research problem. Observational data are the behavioral patterns among the population of interest. One of the most common uses of this type of research is in retailing. Retailers' watch how people move through a store, noting what aisles they go down and where they spend their time. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

58) Core Market Research is testing how customers react to a proposed advertising campaign for Go Fast Sports Cars. The researchers scan consumers' brains using an fMRI machine while the consumers view a series of advertisements so that they can monitor the blood flow in different areas of the brain. In this case, Core is using ________ for its market research. A) in-depth interviews B) mechanical devices C) behavioral measures D) structured surveys E) focus groups Answer: B Explanation: In the scenario, Core is using mechanical devices for its market research. Mechanical devices can be very useful for researchers, but are often used sparingly because of the cost and also the bias associated with the respondent's awareness of the device. Eye cameras can track the movement of an eye as the individual watches an ad. From this, researchers can determine what the person sees first, what he is focusing on in the ad, and how his eyes move around the ad. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 59) Juan Martinez, a researcher for ABC Research Group, is working on crafting a survey for a client. He is concentrating on framing the questions, selecting response choices, refining the wording, and determining how many questions to ask. In the context of establishing the research design, Juan is focusing on the ________. A) type of research B) nature of data C) nature of data collection D) information content E) sampling plan Answer: D Explanation: Information content is a critical part of research design and involves determining exactly what information is needed and how to frame the questions to get that information. From the questions used in focus groups to long questionnaires, it is important to consider the structure and wording as well as the response choices. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

60) Dan is creating a survey for his company. The question he is currently working on asks his business-to-business customers to describe the ideal purchasing transaction. Dan is utilizing a(n) ________ question. A) hypothetical B) open-ended C) observational D) closed-ended E) statistical Answer: B Explanation: Since Dan asks his customers to describe their preferences rather than to give specific responses, he is utilizing an open-ended question. Open-ended questions encourage respondents to be expressive and offer the opportunity to provide more detailed, qualitative responses. As a result, these kinds of questions are often used in exploratory research. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 61) While writing a customer satisfaction survey, the marketing director for Brand X Bank created a set of questions that customers would answer by circling a number between 1 and 7. The number 1 meant that the customers were very dissatisfied by that aspect of the experience, whereas 7 meant that they were very satisfied. The director is using ________ questions to collect this information. A) behavioral B) open-ended C) observational D) closed-ended E) qualitative Answer: D Explanation: The marketing director, in the scenario, is using closed-ended questions to collect information. Closed-ended questions are precise and provide specific responses. As a result, they allow for quantitative analysis and are most often used in descriptive research. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

62) The marketing manager of a firm has hired a market research team. Together, the manager and the researchers decide that they need data from current customers and noncustomers who fit a specific demographic and lifestyle profile. In the context of research design activities, the selection of these individuals as targets for data collection represents the ________. A) type of research B) nature of data C) nature of data collection D) information content E) sampling plan Answer: E Explanation: The sampling plan determines who should be included in the research. The most basic decision is whether to conduct a census or to sample a group of individuals from the population. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 63) In the context of sampling plan, a comprehensive record of each individual in the population of interest is known as a ________. A) survey B) database C) focus group D) sample E) census Answer: E Explanation: A census is a comprehensive record of each individual in the population of interest. A census may seem like the better approach because everyone in the population is included in the study. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

64) The marketing director of Bank Y decides to conduct a survey of 5,000 current customers to gather information to answer the research problem of what the bank can do to improve its services and customer satisfaction. She starts with a database of 50,000 current customers and randomly picks a name on the list to start. She then selects every tenth person as she goes down the list to receive a survey. She is using a ________ sampling method to select the participants for the study. A) probability B) quota C) convenience D) observational E) judgment Answer: A Explanation: The marketing director is using a probability sampling method to select the participants for the study. Probability sampling uses a specific set of procedures to identify individuals from the population to be included in the research. From here, a specific protocol is identified to select a number of individuals for the research. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 65) The manager of Big Brand Clothing wants to determine what items consumers are looking for this Christmas so that he can plan his orders. He decides to collect data for the purpose by stationing employees outside the store on a particular Saturday with a list of questions to ask willing shoppers to answer as they pass by. In this case, the manager is using a ________ sampling method to select respondents. A) probability B) random C) systematic D) nonprobability E) stratified Answer: D Explanation: With nonprobability sampling, the probability of everyone in the population being included in the sample is not identified. The chance of selection may be zero or not known. This type of sampling is often done when time and/or financial constraints limit the opportunity to conduct probability sampling. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 29 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

66) ________ sampling uses a specific set of procedures to identify individuals from the population to be included in the research. A) Snowball B) Convenience C) Probability D) Quota E) Judgment Answer: C Explanation: Probability sampling uses a specific set of procedures to identify individuals from the population to be included in the research. From here, a specific protocol is identified to select a number of individuals for the research. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) The CEO of Big Wheel Automotive is concerned about declining sales. He has identified his research problem as the fact that his competitors are drawing away his business. He purchases access to J. D. Power's automobile rankings to learn about possible reasons for the shift in consumer purchasing. In this case, the CEO is using ________ to collect secondary data for his research problem. A) a survey questionnaire B) a market research organization C) government sources D) focus groups E) unstructured interviews Answer: B Explanation: A number of market research organizations publish data helpful to marketers. One resource many people are familiar with is Nielsen Media Research's TV ratings. The ratings are the basis for establishing national, cable, and local advertising rates. Another service well known to automobile enthusiasts is the J. D. Power automobile quality and customer satisfaction rankings. While automobile manufacturers pay a fee for more detailed information, the public has access to the overall rankings. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

68) A marketing manager is considering a new advertising campaign for Guzzle Beverages. She purchases six months of scanner data for Cruncheez Snack Foods, a company that recently ran a similar campaign. She wants to use this information to determine the campaign's effectiveness before implementing it for Guzzle. In this case, the marketing manager is using ________ to collect the needed information for research. A) mechanical observation B) unstructured interviews C) observational data D) secondary data E) behavioral data Answer: D Explanation: In the scenario, the marketing manager is using secondary data to collect the needed information for research. Secondary data are almost always part of marketing research. Searching a wide variety of sources and compiling additional information provide greater insight to the research problem and supplement the primary data collected for a specific study. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 69) Which of the following statements is true of secondary data? A) Secondary data are current. B) A specific answer to a research problem will be possible using secondary data alone. C) Secondary data are relatively more expensive. D) Getting information through secondary data is time-consuming. E) Secondary data will not fit the research problem exactly. Answer: E Explanation: Secondary data will not fit the research problem exactly. As a result, a specific answer to the research problem will not be possible using secondary data alone. Also, secondary data are not current. Sometimes the information may be only a few weeks or months old or it may be dated to the point where it is no longer useful for the current project. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

70) While researching the possible impact of economic conditions on a proposed new product introduction on the Internet, you find an article in Bloomberg Business Week online that reviews how new products have fared during times of rising inflation. Which of the following sources of secondary data does this scenario exemplify? A) market research organizations B) general knowledge sites C) government sources D) focus groups E) in-depth interviews Answer: B Explanation: Generally two kinds of data sources can be found on the Internet. The first is market research organizations willing to share or sell market data. A second source is "general knowledge" sites such as business publications, academic research sites, or other independent sources that have data applicable to the research problem. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) Which of the following is an advantage of secondary data? A) Secondary data has high validity regardless of the methodology used. B) Secondary data often fits the research problem exactly. C) Secondary data are a fast way to get information. D) Secondary data can alone provide specific answer to a research problem. E) Secondary data are always updated and current. Answer: C Explanation: Secondary data are a fast way to get information. Just a few minutes on a search engine can yield a lot of information. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

72) An advantage of secondary data over primary data is that they ________. A) provide specific answer to a research problem B) are less expensive C) fit the research problem exactly D) have high validity regardless of the methodology used E) are more current Answer: B Explanation: Secondary data are relatively less expensive than primary data. Even if a company chooses to subscribe to organizations such as J. D. Power, thereby getting access to more detailed data, it is still more cost-effective than conducting a primary research study. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 73) The account manager of a market research firm is conducting secondary research on consumer preferences in energy drinks for his clients. His client's drink is 100 percent organic, but all of the secondary data he has found contains only beverages that contain a majority of artificial ingredients. This scenario illustrates the fact that secondary data ________. A) can alone provide specific answer to a research problem B) are more expensive than primary data C) are always updated and current D) will not fit the research problem exactly E) has high validity regardless of the methodology used Answer: D Explanation: Secondary data will, almost by definition, not fit the research problem exactly. As a result, a specific answer to the research problem will not be possible using secondary data alone. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

74) The owner of Joe's Pool Hall found some secondary data online that measured consumer reactions to certain amenities in bars and nightclubs. However, he is concerned about how these data were collected and from whom it was collected. This represents the concerns associated with the ________ of secondary data. A) validity B) cost C) speed D) aptness E) availability Answer: A Explanation: The owner of Joe's Pool Hall is concerned about the validity of the secondary data collected. Without a clear understanding of the methodology used to collect and interpret secondary data, one should be a little skeptical about its validity. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 75) The marketing manager for Brand K retail stores is in the process of getting primary data from customers to learn which current products need improvement. She is using a probability sampling method, but is having trouble figuring out how to contact customers and get them to participate. She is also debating alternative ways to record the responses so that they can be analyzed. She is concerned with the ________ part of the market research process. A) problem definition B) research design C) data collection D) data analysis E) reporting Answer: C Explanation: Data collection involves access and distribution of the survey to the respondent, then recording the respondent's responses and making the data available for analysis. A company can choose to collect the data using its own resources or hire a market research firm to administer the data collection. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

76) For managers, the key section of the market research report that presents a synopsis of the analysis and essential findings is the ________. A) nature of data B) executive summary C) sampling plan D) information content E) research design Answer: B Explanation: The best research projects are only as good as the final report and presentation. For managers, the key section of the report is the Executive Summary because it presents a summation of the analysis and essential findings. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 77) In the market research process, once the data are collected, coded, and verified, the next step is to ________. A) report the findings B) establish a research design C) choose a sampling method D) search secondary sources E) analyze the information Answer: E Explanation: Once the data are collected, coded, and verified, the next step is to analyze the information. The appropriate analysis is performed based on the research questions developed at the beginning of the research. Difficulty: 1 Easy Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

78) Mark Jones, the marketing manager for Big Brand Furniture, is conducting an analysis of internal sales data. These data are collected and stored electronically on site by each store. He is able to access the data on his computer at the corporate headquarters. He is gathering this information via a(n) ________. A) CRM system B) information broker C) market research organization D) online database E) sales force automation system Answer: D Explanation: An online database is data stored on a server that is accessed remotely over the Internet or some other telecommunications network. Many, if not most, companies now have databases available to employees, suppliers, even customers. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Technology Accessibility: Keyboard Navigation 79) The manager of an automotive after-market specialties firm is interested in collecting secondary data. He is concerned with the future of the industry and his competition. He would like to find industry research reports along with industry and company analysis of his competitors. His best sources of this information would be ________. A) independent online databases B) research studies C) CRM systems D) online focus groups E) sales force automation systems Answer: A Explanation: Independent online databases available from government and other sources are extremely useful tools in market research. These services make it possible to review market research reports, industry and company analysis, even market share information. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Technology Accessibility: Keyboard Navigation

80) As the marketing manager for National Household Cleaner Co., you are interested in collecting some qualitative primary data about what outcomes consumers want from your products. You would like the customers you study to react to each other's ideas. However, you want information from a wide range of customers from across the country. The best way to achieve this is to use a(n) ________. A) online database B) survey study C) market research organization D) online focus group E) CRM system Answer: D Explanation: Online focus groups enable participants to be at home, work, or even a remote location with wireless access. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 81) A disadvantage of online focus groups is that ________. A) they require someone to transcribe the spoken words into a transcript B) they provide data in a format that is usually difficult to read and analyze C) participants can become distracted and environmental factors can affect their concentration D) they create an environment where participants are required to focus on the questions E) participants cannot respond from a remote location such as from home or workplace Answer: C Explanation: Traditional focus groups create an environment where participants are required to focus on the questions. Online focus groups enable participants to be at home, work, or even a remote location with wireless access. As a result, participants can become distracted and environmental factors can affect their concentration and responses. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

82) Health+ is conducting an online focus group to learn more about the nutritional habits of senior citizens and the underlying causes of these behaviors. They are having problems because many of the members of their target market do not own computers. Which of the following disadvantages of online focus groups does this scenario illustrate? A) limited access B) identity verification C) environmental control D) family issues E) qualification Answer: A Explanation: The primary disadvantage of online focus groups is that participants are limited to those with access to a computer or workstation. In addition, as people often participate remotely, it is not possible to verify who is actually responding to the questions. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Technology Accessibility: Keyboard Navigation 83) The marketing management team of Brand Z Toys is looking at the possibility of opening a new plant in one of several developing countries. Before they decide on which country they want to build in, they want to conduct some preliminary research including local population demographics and lifestyle characteristics. However, they have discovered that the governments in several of these countries do not have a department that collects these data and no independent research firm has measured any of these areas. This demonstrates which issue with secondary data in global markets? A) extendibility B) accessibility C) dependability D) compatibility E) comparability Answer: B Explanation: Secondary data accessibility is a problem in global markets. In the United States, businesspeople are accustomed to easily accessing information that simply does not exist in much of the world. The quantity and quality of data found in the United States are not available in most of the world. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 38 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

84) When examining some secondary data from Uzbekistan, the marketing manager of RS Chemicals notices that the income figures seem high even after conversion to U.S. dollars. He later learns that the government agency that collects this information records total household income rather than per capita income as in most other countries. This demonstrates which issue with secondary data in global markets? A) extendibility B) accessibility C) dependability D) compatibility E) comparability Answer: E Explanation: Secondary data comparability is a problem in global markets. Terms used in reporting information are not consistent. Standardized business terminology used in industrialized countries has not been adopted by many developing regions, making it difficult for researchers to interpret data. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 85) The recent controversy over the age of Chinese Olympic gymnasts because of differing ages on their passports and in government files exemplifies the difficulty with the ________ of secondary data in global markets. A) extendibility B) accessibility C) dependability D) compatibility E) comparability Answer: C Explanation: Secondary data dependability is a problem in global markets. In many cases the information cannot be considered accurate. Government agencies, particularly in developing countries, will distort data to present a more favorable analysis. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

86) The marketing management team of Superior Foods Inc. hired a research firm to collect preference data from consumers in several former Soviet Bloc countries. However, the researchers struggled to get these data, especially from older citizens who were afraid that the information would be used against them, as it had been when they were under a Communist government. Which of the following problems associated with collecting primary data in global markets does this scenario exemplify? A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inaccurate language translation E) Insufficient comprehension Answer: A Explanation: Many people don't respond because they are concerned about government interference or additional taxes. However, concerns about privacy and how personal data are used generate a broad distrust of surveys among consumers and businesses. It is not difficult to understand these concerns. In countries formerly under the control of the Soviet Union (Czech Republic, Poland, Hungary, and others), for example, people were concerned that personal information provided to authorities could be used against them. After the fall of the Soviet Union, the historical problems created by decades of living in a closed society made it very difficult for companies such as A. C. Nielsen to collect valid consumer opinions and business data. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

87) To ensure the primary data they collected about consumer reactions to their product were accurate, the makers of Classic Toiletries hired a single research firm to visit certain cities in various countries. In the past, the company had used mail and telephone surveys by local companies in each country to gather data, but it was concerned about whom these companies were surveying and if they actually fit the demographic and lifestyle profiles of Classic's target market. Classic hired a new research firm to overcome the problem of ________ that can occur when collecting primary data in global markets. A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inaccurate language translation E) insufficient comprehension Answer: C Explanation: Related to the quality of data is the problem of unreliable or inadequate demographic information to conduct primary research. The lack of reliable census information coupled with an inadequate infrastructure leave market researchers in many countries with no accurate sampling frame from which to draw respondents. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 88) The primary difference between domestic and international research is that, international market data are ________. A) more easily comparable than domestic data B) more accurate than domestic data C) more reliable than domestic data D) more difficult to understand than domestic data E) more easily accessible than domestic data Answer: D Explanation: The primary difference between domestic and international research is that international market data are more difficult to get and understand than domestic data. In most Western European countries and the United States, it is much easier to access quality data than in the rest of the world. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

89) A manufacturer of food products is looking at entering several new markets in developing countries. Before it does this, the company wants to collect data on item and flavor preferences in these markets. It sends out a survey that has been accurately translated into the local language, but it still receives inconsistent results. In talking with a consulting firm, the manufacturer is informed that several of these countries have extremely high illiteracy rates and the survey answers may be only random guesses by the respondents. Which of the following problems associated with collecting primary data in global markets does this scenario exemplify? A) unwillingness to respond B) limited access C) unreliable sampling procedures D) inadequate demographic information E) insufficient comprehension Answer: E Explanation: A specific problem of international primary data collection includes insufficient comprehension. In many parts of the world illiteracy rates are high, which rules out most survey methodology. In addition, some countries use multiple languages, making translation costly and increasing the likelihood of mistranslation. Difficulty: 3 Hard Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 90) Which of the following is TRUE of collecting data for market research in global markets? A) The quantity and quality of data found in the United States are not available in most of the world. B) The culture in countries such as China and India encourages the free flow of information. C) International market data are easier to get and understand than domestic data. D) Essential information about economic and general business trends cannot be gathered from secondary sources. E) In most Western European countries, it is much more difficult to access quality data than in the rest of the world. Answer: A Explanation: The quantity and quality of data found in the United States are not available in most of the world. In the United States, businesspeople are accustomed to easily accessing information that simply does not exist in much of the world. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-06 Illustrate current research technologies and how they are used in market research. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

91) Explain three ways that a CRM system can be used for marketing research. Answer: The data collected and analyzed in a CRM system enable companies to: Identify the frequency and size of customer orders. By charting the frequency, size, and specific items included in an order, it's possible to assess customer satisfaction. Determine the actual cost of a customer order. Tools such as activity-based cost accounting can allocate time and overhead costs to specific customers. By combining that with information from each customer order, it is possible to get accurate cost and profitability measures of individual customers. Rank customers based on established criteria like profitability. Not all customers are equal, and the customer mix changes over time. Companies need to understand how each customer rates on a defined set of criteria to better allocate current resources and develop strategies for future growth. Starbucks' reward system actually adjusts based on profitability and usage. Frequent users, for example, have to earn more stars (buy more products) for rewards than newer, less frequent customers. Calculate the efficiency of the company's production and distribution system. Tracking customer orders makes it possible to assess many of the company's critical functions. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-02 Identify how critical internal (inside the firm) information is collected and used in making marketing decisions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

92) Name and describe the six external forces that affect marketing decisions. Answer: Demographics: can be defined as the statistical characteristics of human populations, such as age or income, used to identify markets. They provide a statistical description of a group of people and are extremely useful in marketing. Economic conditions: are important in understanding the ability of custom-ers to purchase products and services. Technology Transformations: Few areas in business have been more affected by technology than marketing. Technology has been one of the major catalysts for change in the marketplace. Faster, smaller, and easier-to-use computers and powerful software facili-tate sophisticated analyses right on the desks of front-line managers from anywhere in the world. Natural World: Everyone lives on planet Earth, and business operates within the con-straints of available natural resources. Political/Legal Environment: Political judgments and, more broadly, the legal environment significantly affect company decisions and sometimes an entire industry. One of the most important external environmental factors to consider is the competition. Companies want to know as much as possible about competitors' products and strategies. In highly competitive markets, companies are constantly adjust-ing their strategies to the competition. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-03 Explain essential external (outside the firm) information collection methods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

93) Briefly describe the six steps in the market research process. Answer: The six steps are define the research problem, establish the research design, search secondary sources, collect the data, analyze the data, and report the findings. Research the problem: One of the biggest challenges to market researchers is accurately defining the problem. Once the research deliverable has been identified, the researcher is able to define the problem. Establish the research design: This is a plan of action for attacking the research problem. There are three basic types of research: exploratory, descriptive, and causal. Search secondary sources: Research may already exist on the existing problem. Some sources of secondary research include government sources, market research organizations, and the Internet. Collect the data: This is often the most costly element of research and it also has the greatest potential for error. Analyze the data: Researchers must be sure to use suitable analysis that is supported by the data and leads to findings that address the research question. Report the findings: For managers, the key section of the report is the Executive Summary. Difficulty: 2 Medium Topic: Understanding Market Research and Market Information Systems Learning Objective: 04-05 Define the market research process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 5 CRM, Big Data, and Marketing Analytics 1) Positioning customer relationship management (CRM) as a comprehensive business model provides the impetus for top management to properly support it over the long run. 2) It is possible today to calculate the total financial returns for each customer. 3) Customer satisfaction and customer loyalty, two metrics used by brand managers, are metrics used in customer relationship management. 4) One major objective of CRM is customer replacement. 5) Marketing planning is the first phase of the customer relationship management (CRM) process cycle. 6) Data mining helps in segmenting customers in order to target key markets. 7) When a salesperson calls on a prospect and meets face to face, it is an example of an interactive touchpoint. 8) When a customer willingly gives a company sensitive information, such as a social security number, the company is not responsible for the security of this information. 9) Increasing formalization of customer analysis processes is a component of a customer-centric culture. 10) The four Vs of Big Data are volume, velocity, variety, and visibility. 11) Data in a spreadsheet is considered unstructured data. 12) A POS system is in use when you go to a grocery store and your transaction is collected at the cash register so companies can analyze your purchase behavior. 13) Cross-promotional opportunities are a benefit of collecting data from mobile apps. 14) Marketing analytics is a new concept brought about by the increased use of mobile phones. 15) When the online shore store Zappos collects information on the average dollar amount a customer spends in a single transaction, it is using descriptive analytics. 16) Of the four marketing analytics approaches, diagnostic analytics is the most complex. 17) Jeremiah wants to find out if the new advertising campaign is positively impacting sales. He is likely to use diagnostic analytics. 18) Big Data can be leveraged to optimize the marketing mix. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

19) It has been demonstrated for some products that exposure to television advertisements influences the number of brand-specific keyword searches conducted online by customers. In this instance, the conclusion drawn is based on attribution. 20) About the only thing you know for certain about your first version of a marketing dashboard is that it will likely look the same in a year or two. 21) One potential pitfall of using a dashboard approach to marketing metrics is not insuring that senior management believe in and understand the dashboard. 22) Return on marketing investment (ROMI) looks at marketing as an investment, not an expense. 23) The expectation is that ROMI and other metrics of marketing performance will begin to decrease in use, as firms attempt to better quantify marketing's contribution to various dimensions of organizational success. 24) Customer relationship management (CRM) is considered critical largely because of ________. A) internal pressure by employees B) external pressure by suppliers and vendors C) competitive pressures in the marketplace D) increasing demand by customers E) revised government regulations 25) What is one of the three major objectives of customer relationship management? A) customer satisfaction B) customer service C) customer loyalty D) customer engagement E) customer acquisition 26) Customer loyalty is defined as ________. A) retention of satisfied and loyal profitable customers and channels B) the degree to which an individual will resist switching from one offering to another C) the total number of customers who purchase a product D) increased individual customer margins, while offering the right products at the right time E) the likelihood that a customer becomes a buzz marketer 27) Customer satisfaction is defined as ________. A) the degree to which an individual will resist switching from one offering to another B) the level at which the offering meets or exceeds a customer's expectations C) retaining satisfied and loyal profitable customers and channels D) increasing the likelihood that a customer becomes a buzz marketer E) the number of purchases in a defined period of time 2 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

28) Which of the following major objectives of customer relationship management relates to increased individual customer margins, while offering the right products at the right time? A) customer retention B) customer service C) customer acquisition D) customer profitability E) customer loyalty 29) What is one of the four elements of the process cycle for customer relationship management? A) customer interaction B) customer loyalty C) customer satisfaction D) customer support E) customer profitability 30) Customer touch points and data mining are related to which element of the process cycle for customer relationship management? A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning 31) In the CRM process cycle, ________ is the process of analyzing the customer information acquired through various customer touchpoints. A) analysis and refinement B) supplier interface C) customer interaction D) marketing planning E) knowledge discovery 32) Which phase of the process cycle for customer relationship management represents the actual implementation of the customer strategies and programs? A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning 33) The ________ phase of the customer relationship management process is where organizational learning occurs based on customer response to the implemented strategies and programs. A) analysis and refinement B) supplier interface C) marketing planning D) knowledge discovery E) customer interaction 3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

34) The Juice and Java company uses information from customers who write on its Twitter feed about its products. This is an example of a(n) ________ touchpoint. A) interactive B) direct interface C) noninteractive D) personal E) nonpersonal 35) To maximize the use of touchpoints, a firm needs to do all of the following EXCEPT________. A) identify all potential touchpoints B) inform customers that you will be using their information C) develop objectives for what to collect at each touchpoint D) determine how information will be collected E) develop policies on how the information will be accessed and used 36) Ichiro is a marketing manager at a consumer products company. Ichiro's company has started selling consumer information to other sources without informing its customers that it is doing so. This is referred to as the ________ of CRM. A) added benefit B) dark side C) unintended consequence D) evolution E) legal loophole 37) When Target had a data breach that resulted in the loss of the personal information of 40 million customers, it ________. A) postponed a campaign focused on Target's corporate citizenship B) refunded purchases to customers made during a two-week period C) sent all customers a gift card to Target stores D) hid the information from its customers E) fired the employee who caused the data breach. 38) Redefining the selling role within the firm to focus on customer business consultation and solutions is one way that CRM ________. A) increases profits for the firm B) keeps its costs down C) increases the formalization of customer analysis processes D) maintains customer loyalty E) facilitates a customer-centric culture

39) ________ means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. A) Reliability B) Formalization C) Trust D) Interactivity E) Accommodation 40) When Lucifer joined his company as CEO, he instituted an organization-wide focus on understanding the requirements of customers, making sure that everyone in the organization understood the customer marketplace. Lucifer was practicing ________. A) a customer orientation B) an organizational reorganization C) a product reflow D) a human resources policy E) a culture modification 41) A(n) ________ is a person's belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job. A) personal values system B) organizational buy-in C) consumer practice D) work philosophy E) customer mind-set 42) ________ refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. A) Little data B) Data mining C) Big Data D) A database E) Information overload 43) ________ relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. A) Volume B) Velocity C) Variety D) Veracity E) Value

44) ________ relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. A) Volume B) Velocity C) Variety D) Veracity E) Value 45) ________ relates to the different types of data, including text, video, images, and audio, to name a few types. A) Volume B) Velocity C) Variety D) Veracity E) Value 46) ________ relates to the reliability and validity of the data. A) Volume B) Velocity C) Variety D) Veracity E) Value 47) When Keung received the report from the interns who conducted surveys in the mall, he was concerned that they were not properly trained because the data did not match any of his other research. Keung was primarily concerned with the ________ of the data. A) volume B) velocity C) variety D) veracity E) value 48) Bjorn felt that the focus groups did not give him enough quantitative information to make a decision, so he directed his managers to conduct surveys online and look for secondary research. Which characteristic of Big Data is Bjorn trying to achieve? A) volume B) velocity C) variety D) veracity E) value

49) Mr. Evans is a fan of using Big Data because of its ability to generate a large amount of data that can be organized and quantified. Mr. Evans likes the ________ characteristic of Big Data. A) volume B) velocity C) variety D) veracity E) value 50) Fred has a sales meeting coming up and he needs to know sales figures by product and by region as quickly as possible so he can direct his managers on their presentations. Fred needs the ________ characteristic of Big Data. A) volume B) velocity C) variety D) veracity E) value 51) The CFO of BakersMark wasn't sure about using Big Data, and he couldn't justify the expense for collecting and storing it. In this case, he was concerned about the ________ of Big Data. A) volume B) velocity C) variety D) veracity E) value 52) ________ data refers to data that is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. A) Big B) Abstract C) Structured D) Unstructured E) Concrete 53) When you complete a form online with your name, address, and credit card information in order to make a purchase, you are giving the company ________ data that can populate a relational database or spreadsheet. A) unsecured B) abstract C) structured D) unstructured E) soft

54) After staying in a boutique hotel in Chicago, Marissa posted a picture on her Facebook feed and described how fabulous it was. This kind of information is considered ________ data. A) unsecured B) abstract C) structured D) unstructured E) soft 55) Tamra was so upset about how she was treated when she went on the Eiffel Tower tour that she recorded a video rant and posted it on YouTube. This is an example of ________ data. A) unsecured B) abstract C) structured D) unstructured E) soft 56) ________ data contains some elements of structure that make it easier for machines to understand its organization, but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation. A) Unsecured B) Semi-structured C) Unstructured D) Soft E) Abstract 57) ________ is a major source of data generation that will continue to grow in importance as more people rely on the Internet. A) Face-to-face research B) Mail surveys C) Focus groups D) Web-related activity E) Observation 58) The use of ________ at an early stage in a customer's exploration of an e-commerce website can provide insight into the state of his or her intentions. A) web logs B) social media C) competitive surfing D) phishing E) clickstream data

59) Which of the six key sources of Big Data is being used when a company collects Big Data on customers in order to sell it to other organizations? A) data from business systems B) data from Internet-connected devices C) data from mobile apps D) data from commercial entities E) data from government agencies 60) Big Data from ________, such as Cartwheel from Target, can be used to assist customers in finding in-store deals and provides opportunities for retailers to maximize the value of in-store shopping experiences. A) business systems B) Internet-connected devices C) mobile apps D) commercial entities E) government agencies 61) ________ include a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions. A) Customer decision systems B) Computer management systems C) Marketing databases D) Structured surveys E) Marketing analytics 62) Kalea works for a large global corporation. Her job is to conduct market analyses and manage the computational costs associated with them. Kalea is MOST likely a(n) ________. A) marketing manager B) high-level executive C) marketing analyst D) financial manager E) economist 63) Into the Abyss is an outdoor clothing company that is just starting to conduct analyses on new data. Which approach would be the appropriate first step before employing more complex analyses? A) descriptive analytics B) predictive analytics C) prescriptive analytics D) diagnostic analytics E) determinant analytics

64) An approach using ________ analytics utilizes data to make predictions about future marketing outcomes of interest. A) descriptive B) predictive C) prescriptive D) diagnostic E) determinant 65) An approach using ________ analytics involves determining the optimal level of marketingrelevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes. A) descriptive B) predictive C) prescriptive D) diagnostic E) determinant 66) What type of marketing analytics is being used when data is used from likes for posts on Facebook? A) Web analytics B) social media analytics C) retail analytics D) CRM analytics E) demographic analytics 67) ________ is an analytic method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering. A) Collaborative filtering B) Attribution C) Targeting D) Content filtering E) Content segmenting 68) ________ is an analytic method that predicts a customer's preferences for products or services based on the observed preferences of customers who are perceived to be similar. A) Collaborative filtering B) Attribution C) Targeting D) Content filtering E) Content segmenting

69) Personalization can be achieved at three possible levels of granularity: individual, segment, and ________. A) group B) mass C) customer D) product E) geographic 70) The marketing ________ is a comprehensive system providing managers with up-to-theminute information, including data such as actual sales versus forecast and progress on marketing plan objectives. A) accelerator B) matrix C) dashboard D) equation E) strategy 71) What is NOT an element of a great marketing dashboard? A) earnings report B) tools for customer insights C) goals and objectives D) predictive value E) forecasting 72) Taking a dashboard approach to marketing metrics goes a long way toward enabling successful marketing planning. However, several potential pitfalls exist in its execution, such as ________. A) very little reliance on "inside-out" measurement B) too few tactical metrics C) forgetting to market the dashboard internally D) not utilizing the approach to create marketing plans E) too much strategic insight 73) To compete in today's market, how often should firms focus on marketing planning so that managers and executives have the core information about progress toward relevant goals and metrics at their fingertips? A) at least each week B) at least each month C) at least once a month D) at all times E) at decision-making times

74) Two primary goals of any dashboard are diagnostic insight and ________. A) intuitive insight B) intuitive focus C) predictive foresight D) assuming results E) dictating goals 75) One of the benefits of a marketing dashboard is that it fosters a(n) ________ organization that values fact-based, logical decision making. A) informational B) learning C) quantitative behavioral D) analyzing E) evolving 76) A dashboard creates transparency in marketing's goals, operations, and performance. This in turn ________. A) leads to smaller marketing budgets B) leads to animosity among departments C) increases marketing's perceived credibility and trust by others D) makes marketing less attractive to key decision makers E) diminishes the alliances between marketing and the rest of the firm 77) A marketing dashboard uses graphical representations of crucial metrics in ways that begin to show, often for the first time, the direct, understandable links between marketing initiatives and ________. A) stock prices B) the number of employees C) the number of products sold D) financial results E) other expenses 78) In some cases, a marketing dashboard can overly rely on ________, putting the focus on what you already know. A) inside-out measurement B) external measurement C) strategic insights D) partial measurement E) internal marketing 79) A potential pitfall in marketing dashboards is that a company becomes too focused on tactical measures that may overshadow measures of ________. A) immediacy B) tenacity C) locus of control D) strategic insight E) financial performance 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

80) There are times when marketers forget that marketing is not just a department, and they fail to market the dashboard to ________. A) customers B) suppliers C) key stakeholders D) the accounting group E) the finance group 81) Investment decisions in marketing must consider the following elements EXCEPT ________. A) level of investment B) returns C) risks D) human resources E) hurdle rates 82) ROBI stands for return on ________ investment. A) brand B) basic C) budget D) bottom line E) Big Data 83) If a low-risk marketing program has a return on marketing investment (ROMI) of 4.0, this means that any marketing program must generate at a minimum $4.00 in revenue for every ________ in marketing expenditure. A) $1 B) $20 C) $100 D) $200 E) $5 84) When your boss, Fernando, says that you need a ROMI of 5.0, he is describing the ________ for the marketing investment. A) risk factor B) suitability factor C) total rate D) hurdle rate E) bounce rate

85) Which of the following is one of the basic elements that should be considered in making investment decisions in marketing? A) bounce rates B) inflation rates C) hurdle rates D) conversion rates E) expense rates 86) One of the problems with ROMI is that it often focuses on ________ rather than looking at the effects or changes in brand equity. A) long-term strategic goals B) short-term incremental profits and expenditures C) long-term relationship marketing goals D) short-term tactical perspective E) short-term target marketing goals 87) Describe the four elements of the CRM process cycle. 88) What is Big Data? How is it relevant to marketing? Describe the four Vs of Big Data. 89) There are six key sources of Big Data that capture data on both potential and current customers to yield actionable insights. Name three of them and give an example of each. 90) Compare and contrast the four key types of marketing analytics: descriptive, diagnostic, predictive, and prescriptive. 91) Describe the two goals of a marketing dashboard, and at least five of the elements that comprise it.

Marketing Management, 3e (Marshall) Chapter 5 CRM, Big Data, and Marketing Analytics 1) Positioning customer relationship management (CRM) as a comprehensive business model provides the impetus for top management to properly support it over the long run. Answer: TRUE Explanation: Positioning CRM as a comprehensive business model provides the impetus for top management to properly support it over the long run and for various internal stakeholder groups to have the opportunity to both use it and impact how it is used. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) It is possible today to calculate the total financial returns for each customer. Answer: TRUE Explanation: It is possible to actually calculate an estimate of the projected financial returns from a customer, or return on customer investment (ROCI), over the long run. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Customer satisfaction and customer loyalty, two metrics used by brand managers, are metrics used in customer relationship management. Answer: TRUE Explanation: Customer satisfaction and loyalty are two extremely popular metrics used by marketing managers to gauge the health of their business and brands. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) One major objective of CRM is customer replacement. Answer: FALSE Explanation: The three major objectives of CRM are customer acquisition, customer retention, and customer profitability. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Marketing planning is the first phase of the customer relationship management (CRM) process cycle. Answer: FALSE Explanation: Knowledge discovery is the first phase of the customer relationship management (CRM) process cycle. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Data mining helps in segmenting customers in order to target key markets. Answer: TRUE Explanation: Data mining is a sophisticated analytical approach to using the massive amounts of data accumulated through the CRM system to develop segments and micro-segments of customers for purposes of either market research or development of market segmentation and target marketing strategies. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) When a salesperson calls on a prospect and meets face to face, it is an example of an interactive touchpoint. Answer: TRUE Explanation: Some touchpoints are interactive and allow for such two-way information exchange. That is, they involve direct interface between a customer and a firm's customer contact person in the form of a salesperson, telemarketer, customer service representative, interactive website, and so on. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) When a customer willingly gives a company sensitive information, such as a social security number, the company is not responsible for the security of this information. Answer: FALSE Explanation: In many industries, firms having access to sensitive customer information, such as social security numbers, necessitates more heavy regulation of information usage (financial services is a good example). In such cases, firms may be required to communicate the different ways that customers' personal information may be used and which of those potential uses a customer can opt out of. In addition, marketing managers must consider regulatory requirements, which may impose constraints such as what information can be conveyed to the firm within a given marketing campaign or at any touchpoint. For any firm that collects large amounts of data through CRM, customers' perceptions of the organization's ability to securely handle and protect information can substantially influence trust. Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

9) Increasing formalization of customer analysis processes is a component of a customer-centric culture. Answer: TRUE Explanation: The effort a firm makes toward cultivating a customer-centric culture requires a high degree of formalization within the firm Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10) The four Vs of Big Data are volume, velocity, variety, and visibility. Answer: FALSE Explanation: Four characteristics generally characterize Big Data; taken together, these characteristics are commonly referred to as the four Vs of Big Data: volume, velocity, variety, and veracity. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Data in a spreadsheet is considered unstructured data. Answer: FALSE Explanation: Structured data is typically either numeric or text that is substantially limited to a certain set of input values. This is the type of data that is generally found in relational databases or spreadsheets such as Microsoft Excel or Google Sheets; it is generally organized into tables with columns that make it clear what types of information will be included in each of the entries within a given column. Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

12) A POS system is in use when you go to a grocery store and your transaction is collected at the cash register so companies can analyze your purchase behavior. Answer: TRUE Explanation: The collection of transaction data from customers through point-of-sales (POS) systems in retail locations, as well as online transaction processing systems, can be tied to other rich information about a customer and used to determine that customer's relative value. Difficulty: 2 Medium Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 13) Cross-promotional opportunities are a benefit of collecting data from mobile apps. Answer: TRUE Explanation: Data generated from a customer's use of different mobile applications (apps) can provide insight into cross-promotional opportunities, in addition to other benefits. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Marketing analytics is a new concept brought about by the increased use of mobile phones. Answer: FALSE Explanation: Marketing analytics is not technically a new concept, but with the explosion of data available to marketing managers, organizations have become increasingly interested in finding new ways to extract maximum value from the data that they continue to accumulate. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

15) When the online shore store Zappos collects information on the average dollar amount a customer spends in a single transaction, it is using descriptive analytics. Answer: TRUE Explanation: An approach using descriptive analytics utilizes data to provide summary insights. Customers who are members of a company's loyalty program, such as that of the online shoe and clothing shop Zappos, constitute a rich data source for use in descriptive analytics. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 16) Of the four marketing analytics approaches, diagnostic analytics is the most complex. Answer: FALSE Explanation: Prescriptive analytics is the most complex, followed by predictive analytics, diagnostic analytics, and descriptive analytics. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Jeremiah wants to find out if the new advertising campaign is positively impacting sales. He is likely to use diagnostic analytics. Answer: TRUE Explanation: Diagnostic analytics provide insights into the relationships of different factors with the implication being that an understanding of their relationships can have value for future marketing decisions. In this case, Jeremiah want to find out the relationship between advertising and sales. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

18) Big Data can be leveraged to optimize the marketing mix. Answer: TRUE Explanation: Optimizing the marketing mix is largely dependent on the ability to understand the different effects that the mix elements have on different marketing outcomes. Big Data has enhanced this capability by providing customer-level data in quantities that were not available in the past from sources that provide insights into specific aspects of a customer's experience with a product or service that heretofore were not easily measured. Difficulty: 1 Easy Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 19) It has been demonstrated for some products that exposure to television advertisements influences the number of brand-specific keyword searches conducted online by customers. In this instance, the conclusion drawn is based on attribution. Answer: TRUE Explanation: Attribution is determining how to give appropriate credit to different elements of the marketing mix through the measurement of their effects. As long as the organization has access to the required data on marketing mix elements, marketing analytics should be able to help disentangle the various effects that both individual elements of the marketing mix and specific combinations of those elements have on marketing outcomes. Difficulty: 2 Medium Topic: Database Marketing Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) About the only thing you know for certain about your first version of a marketing dashboard is that it will likely look the same in a year or two. Answer: FALSE Explanation: About the only thing you know for certain about your first version of a marketing dashboard is that it will likely look very different in a year or two. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

21) One potential pitfall of using a dashboard approach to marketing metrics is not insuring that senior management believe in and understand the dashboard. Answer: TRUE Explanation: You want the percentage of senior executives who both believe in and understand what the dashboard is presenting to be very high. Difficulty: 1 Easy Topic: The Marketing Dashboard Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 22) Return on marketing investment (ROMI) looks at marketing as an investment, not an expense. Answer: FALSE Explanation: ROMI looks at marketing as an expense tied to a percentage of historical or forecasted sales. Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) The expectation is that ROMI and other metrics of marketing performance will begin to decrease in use, as firms attempt to better quantify marketing's contribution to various dimensions of organizational success. Answer: FALSE Explanation: In spite of its potential problems, the expectation is that ROMI and other metrics of marketing performance will continue to proliferate, as firms home in on attempting to better quantify marketing's contribution to various dimensions of organizational success. Difficulty: 2 Medium Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

24) Customer relationship management (CRM) is considered critical largely because of ________. A) internal pressure by employees B) external pressure by suppliers and vendors C) competitive pressures in the marketplace D) increasing demand by customers E) revised government regulations Answer: C Explanation: Customer relationship management (CRM) is considered mission-critical largely because of competitive pressures in the marketplace; nobody can afford to be the lone wolf that does not have a handle on the customer side of an enterprise in a competitive space. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) What is one of the three major objectives of customer relationship management? A) customer satisfaction B) customer service C) customer loyalty D) customer engagement E) customer acquisition Answer: E Explanation: Customer relationship management has three major objectives: customer acquisition, customer retention, and customer profitability. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) Customer loyalty is defined as ________. A) retention of satisfied and loyal profitable customers and channels B) the degree to which an individual will resist switching from one offering to another C) the total number of customers who purchase a product D) increased individual customer margins, while offering the right products at the right time E) the likelihood that a customer becomes a buzz marketer Answer: B Explanation: Customer loyalty means the degree to which an individual will resist switching, or defecting, from one offering to another. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) Customer satisfaction is defined as ________. A) the degree to which an individual will resist switching from one offering to another B) the level at which the offering meets or exceeds a customer's expectations C) retaining satisfied and loyal profitable customers and channels D) increasing the likelihood that a customer becomes a buzz marketer E) the number of purchases in a defined period of time Answer: B Explanation: Customer satisfaction means the level of liking an individual has for an offering— that is, to what level is the offering meeting or exceeding the customer's expectations? Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) Which of the following major objectives of customer relationship management relates to increased individual customer margins, while offering the right products at the right time? A) customer retention B) customer service C) customer acquisition D) customer profitability E) customer loyalty Answer: D Explanation: Customer profitability relates to increased individual customer margins, while offering the right products at the right time. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-01 Define CRM and articulate its objectives and capabilities. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) What is one of the four elements of the process cycle for customer relationship management? A) customer interaction B) customer loyalty C) customer satisfaction D) customer support E) customer profitability Answer: A Explanation: The process cycle for CRM may be divided into the following four elements: (1) knowledge discovery, (2) marketing planning, (3) customer interaction, and (4) analysis and refinement. Difficulty: 1 Easy Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

30) Customer touch points and data mining are related to which element of the process cycle for customer relationship management? A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning Answer: D Explanation: Customer touch points and data mining are related to the element of knowledge discovery. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) In the CRM process cycle, ________ is the process of analyzing the customer information acquired through various customer touchpoints. A) analysis and refinement B) supplier interface C) customer interaction D) marketing planning E) knowledge discovery Answer: E Explanation: Knowledge discovery is the process of analyzing the customer information acquired through various customer touch points. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

32) Which phase of the process cycle for customer relationship management represents the actual implementation of the customer strategies and programs? A) analysis and refinement B) supplier interface C) customer interaction D) knowledge discovery E) marketing planning Answer: C Explanation: The customer interaction phase represents the actual implementation of the customer strategies and programs. This includes the personal selling effort, as well as all other customer-directed interactions. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) The ________ phase of the customer relationship management process is where organizational learning occurs based on customer response to the implemented strategies and programs. A) analysis and refinement B) supplier interface C) marketing planning D) knowledge discovery E) customer interaction Answer: A Explanation: The analysis and refinement phase of the CRM process is where organizational learning occurs based on customer response to the implemented strategies and programs. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

34) The Juice and Java company uses information from customers who write on its Twitter feed about its products. This is an example of a(n) ________ touchpoint. A) interactive B) direct interface C) noninteractive D) personal E) nonpersonal Answer: C Explanation: Noninteractive touchpoints are those in which the customer may simply provide information on a static website's data entry form or by mail, without the capability of simultaneous direct interface with a company representative. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) To maximize the use of touchpoints, a firm needs to do all of the following EXCEPT________. A) identify all potential touchpoints B) inform customers that you will be using their information C) develop objectives for what to collect at each touchpoint D) determine how information will be collected E) develop policies on how the information will be accessed and used Answer: B Explanation: To maximize a firm's ability to successfully use touchpoints, an ongoing concerted effort must be undertaken to (1) identify all potential touchpoints, (2) develop specific objectives for what kind of information can be collected at each touchpoint, (3) determine how that information will be collected and ultimately integrated into the firm's overall customer database, and (4) develop policies on how the information will be accessed and used. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

36) Ichiro is a marketing manager at a consumer products company. Ichiro's company has started selling consumer information to other sources without informing its customers that it is doing so. This is referred to as the ________ of CRM. A) added benefit B) dark side C) unintended consequence D) evolution E) legal loophole Answer: B Explanation: Customers must be absolutely certain that the information a firm collects and stores about them will not be used for unintended purposes. Often referred to as the "dark side of CRM," this issue has become so prominent in some industries that firms are beginning to publicly promote guarantees of nonabuse of stored customer information as a means of attracting customers. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) When Target had a data breach that resulted in the loss of the personal information of 40 million customers, it ________. A) postponed a campaign focused on Target's corporate citizenship B) refunded purchases to customers made during a two-week period C) sent all customers a gift card to Target stores D) hid the information from its customers E) fired the employee who caused the data breach. Answer: A Explanation: Target's marketing managers had to determine how best to rebuild trust after a massive data breach that resulted in the loss of the personal information of about 40 million customers. This also meant quickly altering already planned marketing communication, including postponing a major campaign focused on Target's corporate citizenship. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) Redefining the selling role within the firm to focus on customer business consultation and solutions is one way that CRM ________. A) increases profits for the firm B) keeps its costs down C) increases the formalization of customer analysis processes D) maintains customer loyalty E) facilitates a customer-centric culture Answer: E Explanation: At the strategic marketing level, a customer-centric culture includes redefining the selling role within the firm to focus on customer business consultation and solutions. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) ________ means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. A) Reliability B) Formalization C) Trust D) Interactivity E) Accommodation Answer: B Explanation: Formalization means that structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture. With these elements in place, strategies and programs can be successfully developed and executed toward the goals related to customers, accompanied by a high degree of confidence they will yield the desired results. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) When Lucifer joined his company as CEO, he instituted an organization-wide focus on understanding the requirements of customers, making sure that everyone in the organization understood the customer marketplace. Lucifer was practicing ________. A) a customer orientation B) an organizational reorganization C) a product reflow D) a human resources policy E) a culture modification Answer: A Explanation: Organizations practicing a customer orientation place the customer at the core of all aspects of the enterprise and: (1) Instill an organization-wide focus on understanding the requirements of customers. (2) Generate an understanding of the customer marketplace and disseminate that knowledge to everyone in the firm. (3) Align system capabilities internally so that the organization responds effectively to customers with innovative, competitively differentiated, satisfaction-generating products and services. Difficulty: 2 Medium Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 41) A(n) ________ is a person's belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job. A) personal values system B) organizational buy-in C) consumer practice D) work philosophy E) customer mind-set Answer: E Explanation: A customer mind-set, which is a person's belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job. Difficulty: 1 Easy Topic: Consumer Touchpoints in CRM Learning Objective: 05-03 Understand the concept of customer touchpoints and why touchpoints are critical in CRM. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

42) ________ refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. A) Little data B) Data mining C) Big Data D) A database E) Information overload Answer: C Explanation: Big Data refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) ________ relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. A) Volume B) Velocity C) Variety D) Veracity E) Value Answer: A Explanation: Volume relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) ________ relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. A) Volume B) Velocity C) Variety D) Veracity E) Value Answer: B Explanation: Velocity relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) ________ relates to the different types of data, including text, video, images, and audio, to name a few types. A) Volume B) Velocity C) Variety D) Veracity E) Value Answer: C Explanation: Variety relates to the different types of data, including text, video, images, and audio, to name a few types. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) ________ relates to the reliability and validity of the data. A) Volume B) Velocity C) Variety D) Veracity E) Value Answer: D Explanation: Veracity relates to the reliability and validity of the data. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) When Keung received the report from the interns who conducted surveys in the mall, he was concerned that they were not properly trained because the data did not match any of his other research. Keung was primarily concerned with the ________ of the data. A) volume B) velocity C) variety D) veracity E) value Answer: D Explanation: Veracity relates to the reliability and validity of the data. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

48) Bjorn felt that the focus groups did not give him enough quantitative information to make a decision, so he directed his managers to conduct surveys online and look for secondary research. Which characteristic of Big Data is Bjorn trying to achieve? A) volume B) velocity C) variety D) veracity E) value Answer: C Explanation: Variety relates to the different types of data, including text, video, images, and audio, to name a few types. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 49) Mr. Evans is a fan of using Big Data because of its ability to generate a large amount of data that can be organized and quantified. Mr. Evans likes the ________ characteristic of Big Data. A) volume B) velocity C) variety D) veracity E) value Answer: A Explanation: Volume relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

50) Fred has a sales meeting coming up and he needs to know sales figures by product and by region as quickly as possible so he can direct his managers on their presentations. Fred needs the ________ characteristic of Big Data. A) volume B) velocity C) variety D) veracity E) value Answer: B Explanation: Velocity relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 51) The CFO of BakersMark wasn't sure about using Big Data, and he couldn't justify the expense for collecting and storing it. In this case, he was concerned about the ________ of Big Data. A) volume B) velocity C) variety D) veracity E) value Answer: E Explanation: Without a clear idea of the value that can be obtained from Big Data, there is a limited justification for the expense of its collection and storage. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

52) ________ data refers to data that is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. A) Big B) Abstract C) Structured D) Unstructured E) Concrete Answer: C Explanation: Structured data is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) When you complete a form online with your name, address, and credit card information in order to make a purchase, you are giving the company ________ data that can populate a relational database or spreadsheet. A) unsecured B) abstract C) structured D) unstructured E) soft Answer: C Explanation: Structured data is generated in such a way that a logical organization is imposed on it during its generation, thus enabling it to be more readily analyzable for knowledge creation. Because of the method by which this data is collected—separate boxes in a webform—it qualifies as structured data that can populate a relational database or spreadsheet. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

54) After staying in a boutique hotel in Chicago, Marissa posted a picture on her Facebook feed and described how fabulous it was. This kind of information is considered ________ data. A) unsecured B) abstract C) structured D) unstructured E) soft Answer: D Explanation: Unstructured data may not be immediately actionable in the way that structured data is, but it has become the most common form of data available to organizations, and is a potentially rich source of deep insights on customer behavior and customer/provider relationships. Unstructured data can include posts that people make on social media. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 55) Tamra was so upset about how she was treated when she went on the Eiffel Tower tour that she recorded a video rant and posted it on YouTube. This is an example of ________ data. A) unsecured B) abstract C) structured D) unstructured E) soft Answer: D Explanation: Unstructured data may not be immediately actionable in the way that structured data is, but it has become the most common form of data available to organizations, and is a potentially rich source of deep insights on customer behavior and customer/provider relationships. Unstructured data may include videos that people make discussing their experiences with products. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

56) ________ data contains some elements of structure that make it easier for machines to understand its organization, but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation. A) Unsecured B) Semi-structured C) Unstructured D) Soft E) Abstract Answer: B Explanation: Semi-structured data fits between structured and unstructured data in the sense that it contains some elements of structure that make it easier for machines to understand its organization, but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) ________ is a major source of data generation that will continue to grow in importance as more people rely on the Internet. A) Face-to-face research B) Mail surveys C) Focus groups D) Web-related activity E) Observation Answer: D Explanation: Web-related activity is a major source of data generation that will continue to grow in importance as more people rely on the Internet and various technologies that enable Internet access to search for information, communicate with others, and transact business. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

58) The use of ________ at an early stage in a customer's exploration of an e-commerce website can provide insight into the state of his or her intentions. A) web logs B) social media C) competitive surfing D) phishing E) clickstream data Answer: E Explanation: The use of clickstream data at an early stage in a customer's exploration of an ecommerce website can provide insight into the state of his or her intentions (which may in fact change during a single browsing session on the site). Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 59) Which of the six key sources of Big Data is being used when a company collects Big Data on customers in order to sell it to other organizations? A) data from business systems B) data from Internet-connected devices C) data from mobile apps D) data from commercial entities E) data from government agencies Answer: D Explanation: Several organizations (commercial entities) collect Big Data on customers in order to sell it to other organizations as their primary business model. Some organizations, such as retailers and credit card processors, engage in this practice to generate additional revenue. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

60) Big Data from ________, such as Cartwheel from Target, can be used to assist customers in finding in-store deals and provides opportunities for retailers to maximize the value of in-store shopping experiences. A) business systems B) Internet-connected devices C) mobile apps D) commercial entities E) government agencies Answer: C Explanation: Mobile apps used to assist customers in finding in-store deals, such as Cartwheel from Target, provide opportunities for retailers to maximize the value of in-store shopping experiences; understand a customer's response to different price levels for different products, categories, and brands; and gain better insights on how shopping behavior that blends online and offline experiences might differ from traditional offline shopping behavior. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 61) ________ include a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions. A) Customer decision systems B) Computer management systems C) Marketing databases D) Structured surveys E) Marketing analytics Answer: E Explanation: Marketing analytics include a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

62) Kalea works for a large global corporation. Her job is to conduct market analyses and manage the computational costs associated with them. Kalea is MOST likely a(n) ________. A) marketing manager B) high-level executive C) marketing analyst D) financial manager E) economist Answer: C Explanation: A marketing analyst is an individual who is familiar with different forms of market and customer data and who is trained to conduct different market analyses, as well as the computational costs associated with those analyses. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 63) Into the Abyss is an outdoor clothing company that is just starting to conduct analyses on new data. Which approach would be the appropriate first step before employing more complex analyses? A) descriptive analytics B) predictive analytics C) prescriptive analytics D) diagnostic analytics E) determinant analytics Answer: A Explanation: The use of descriptive analytics is generally an appropriate first step to consider before employing more complex (and costly) analyses. The resulting information can provide some initial evidence that an event has occurred that has implications for marketing management decision making. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

64) An approach using ________ analytics utilizes data to make predictions about future marketing outcomes of interest. A) descriptive B) predictive C) prescriptive D) diagnostic E) determinant Answer: B Explanation: Predictive analytics can be divided into those that use historical measurements of the outcome of interest to determine a pattern that can be extrapolated in the future, and those that make predictions based on the examination of relationships between a set of factors and an outcome of interest that the factors are believed to influence. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 65) An approach using ________ analytics involves determining the optimal level of marketingrelevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes. A) descriptive B) predictive C) prescriptive D) diagnostic E) determinant Answer: C Explanation: An approach using prescriptive analytics involves determining the optimal level of marketing-relevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

66) What type of marketing analytics is being used when data is used from likes for posts on Facebook? A) Web analytics B) social media analytics C) retail analytics D) CRM analytics E) demographic analytics Answer: B Explanation: Social media analytics includes likes for posts or shares of posts. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 67) ________ is an analytic method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering. A) Collaborative filtering B) Attribution C) Targeting D) Content filtering E) Content segmenting Answer: D Explanation: Content filtering is an analytic method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

68) ________ is an analytic method that predicts a customer's preferences for products or services based on the observed preferences of customers who are perceived to be similar. A) Collaborative filtering B) Attribution C) Targeting D) Content filtering E) Content segmenting Answer: A Explanation: Collaborative filtering predicts a customer's preferences for products or services based on the observed preferences of customers who are perceived to be similar. Difficulty: 2 Medium Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 69) Personalization can be achieved at three possible levels of granularity: individual, segment, and ________. A) group B) mass C) customer D) product E) geographic Answer: B Explanation: The three levels of personalization are mass personalization, where everyone receives the same offering; segment-level personalization, in which groups of customers with similar preferences are identified and an offering is developed for each segment; and individuallevel personalization, in which each customer receives an offering customized to his or her specific tastes. Difficulty: 1 Easy Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation

70) The marketing ________ is a comprehensive system providing managers with up-to-theminute information, including data such as actual sales versus forecast and progress on marketing plan objectives. A) accelerator B) matrix C) dashboard D) equation E) strategy Answer: C Explanation: The marketing dashboard is a comprehensive system providing managers with upto-the-minute information necessary to run their operation including data on actual sales versus forecast, progress on marketing plan objectives, distribution channel effectiveness, sales force productivity, brand equity evolution, and whatever metrics and information are uniquely relevant to the role of the marketing manager in a particular organization. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) What is NOT an element of a great marketing dashboard? A) earnings report B) tools for customer insights C) goals and objectives D) predictive value E) forecasting Answer: A Explanation: An earnings report is not one of the elements of a great marketing dashboard. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

72) Taking a dashboard approach to marketing metrics goes a long way toward enabling successful marketing planning. However, several potential pitfalls exist in its execution, such as ________. A) very little reliance on "inside-out" measurement B) too few tactical metrics C) forgetting to market the dashboard internally D) not utilizing the approach to create marketing plans E) too much strategic insight Answer: C Explanation: The pitfalls of using the dashboard approach include: 1. Overreliance on "inside-out" measurement. 2. Too many tactical metrics; not enough strategic insight. 3. Forgetting to market the dashboard internally. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 73) To compete in today's market, how often should firms focus on marketing planning so that managers and executives have the core information about progress toward relevant goals and metrics at their fingertips? A) at least each week B) at least each month C) at least once a month D) at all times E) at decision-making times Answer: D Explanation: To successfully compete in today's market, firms must focus on marketing planning so that managers and executives have the core information about progress toward relevant goals and metrics at their fingertips at all times. This is what a dashboard approach delivers. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

74) Two primary goals of any dashboard are diagnostic insight and ________. A) intuitive insight B) intuitive focus C) predictive foresight D) assuming results E) dictating goals Answer: C Explanation: Two primary goals of any dashboard are diagnostic insight and predictive foresight—with a special emphasis on the latter. Some dashboard metrics are diagnostic, looking at what has happened and trying to discern why. Probably the most important metrics you'll come to rely on, however, are predictive, using the diagnostic experience to better forecast results under various assumptions of circumstances and resource allocations. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 75) One of the benefits of a marketing dashboard is that it fosters a(n) ________ organization that values fact-based, logical decision making. A) informational B) learning C) quantitative behavioral D) analyzing E) evolving Answer: B Explanation: A marketing dashboard fosters a learning organization that values fact-based, logical decision making about allocation of marketing resources to achieve desired organizational results. Difficulty: 2 Medium Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

76) A dashboard creates transparency in marketing's goals, operations, and performance. This in turn ________. A) leads to smaller marketing budgets B) leads to animosity among departments C) increases marketing's perceived credibility and trust by others D) makes marketing less attractive to key decision makers E) diminishes the alliances between marketing and the rest of the firm Answer: C Explanation: A dashboard creates transparency in marketing's goals, operations, and performance, creating stronger alliances between marketing and the rest of the firm. This elevates marketing's perceived accountability, earning greater trust and confidence from leadership and other key decision makers and influencers. Difficulty: 2 Medium Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 77) A marketing dashboard uses graphical representations of crucial metrics in ways that begin to show, often for the first time, the direct, understandable links between marketing initiatives and ________. A) stock prices B) the number of employees C) the number of products sold D) financial results E) other expenses Answer: D Explanation: A dashboard uses graphical representations of crucial metrics in ways that begin to show, often for the first time, the relationships between marketing initiatives and financial results. Difficulty: 2 Medium Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

78) In some cases, a marketing dashboard can overly rely on ________, putting the focus on what you already know. A) inside-out measurement B) external measurement C) strategic insights D) partial measurement E) internal marketing Answer: A Explanation: A marketing dashboard may lead to over reliance on "inside-out" measurement. Having too many internal measures puts the focus on what you already know instead of on the unpredictably dynamic external marketplace. A focus on monitoring external factors likely to cause significant changes to the marketing plan is what makes a dashboard especially valuable. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 79) A potential pitfall in marketing dashboards is that a company becomes too focused on tactical measures that may overshadow measures of ________. A) immediacy B) tenacity C) locus of control D) strategic insight E) financial performance Answer: D Explanation: The use of dashboards may lead to too many tactical metrics; not enough strategic insight. Because of the focus over the past decade on holding marketing accountable for financial results, tactical, or "intermediary," metrics have proliferated. Difficulty: 2 Medium Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

80) There are times when marketers forget that marketing is not just a department, and they fail to market the dashboard to ________. A) customers B) suppliers C) key stakeholders D) the accounting group E) the finance group Answer: C Explanation: Marketing is not just a department, but rather a part of the strategic and cultural fabric of the enterprise. As such, it is important to market the dashboard internally to key stakeholders, not just to marketers. Difficulty: 1 Easy Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 81) Investment decisions in marketing must consider the following elements EXCEPT ________. A) level of investment B) returns C) risks D) human resources E) hurdle rates Answer: D Explanation: Similar to other investment decisions, investment decisions in marketing must consider four basic elements: level of investment, returns, risks, and hurdle rates. Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

82) ROBI stands for return on ________ investment. A) brand B) basic C) budget D) bottom line E) Big Data Answer: A Explanation: Several offshoots of ROMI have been developed that apply the same principles to customers (ROCI), brands (ROBI), and promotion (ROPI). Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 83) If a low-risk marketing program has a return on marketing investment (ROMI) of 4.0, this means that any marketing program must generate at a minimum $4.00 in revenue for every ________ in marketing expenditure. A) $1 B) $20 C) $100 D) $200 E) $5 Answer: A Explanation: If the company has a marketing budget of $5 million and needs to generate $20 million in revenue, then the ROMI hurdle rate for any low-risk marketing program is 4.0. This means that any marketing program must generate at a minimum $4.00 in revenue for every $1.00 in marketing expenditure. Difficulty: 2 Medium Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

84) When your boss, Fernando, says that you need a ROMI of 5.0, he is describing the ________ for the marketing investment. A) risk factor B) suitability factor C) total rate D) hurdle rate E) bounce rate Answer: D Explanation: The ROMI hurdle rate is defined as the minimum acceptable, expected return on a program at a given level of risk. If a company has a marketing budget of $5 million and needs to generate $20 million in revenue, then the ROMI hurdle rate for any low-risk marketing program is 4.0. Difficulty: 2 Medium Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 85) Which of the following is one of the basic elements that should be considered in making investment decisions in marketing? A) bounce rates B) inflation rates C) hurdle rates D) conversion rates E) expense rates Answer: C Explanation: Similar to other investment decisions, investment decisions in marketing must consider four basic elements: level of investment, returns, risks, and hurdle rates. Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

86) One of the problems with ROMI is that it often focuses on ________ rather than looking at the effects or changes in brand equity. A) long-term strategic goals B) short-term incremental profits and expenditures C) long-term relationship marketing goals D) short-term tactical perspective E) short-term target marketing goals Answer: B Explanation: ROMI by nature ignores the effect of the marketing assets of the firm (for example, its brands) and tends to lead managers toward a more short-term decision perspective. That is, it typically considers only short-term incremental profits and expenditures without looking at longer-term effects or any change in brand equity. Difficulty: 1 Easy Topic: Marketing Return on Investment Learning Objective: 05-07 Explain return on marketing investment (ROMI), including cautions about its use. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 87) Describe the four elements of the CRM process cycle. Answer: The process cycle for CRM may be divided into the following four elements: (1) knowledge discovery, (2) marketing planning, (3) customer interaction, and (4) analysis and refinement. Knowledge discovery is the process of analyzing the customer information acquired through various customer touchpoints. The next phase in the CRM process cycle is marketing planning, which represents a key use of the output from the knowledge discovery phase. The customer interaction phase represents the actual implementation of the customer strategies and programs. Finally, the analysis and refinement phase of the CRM process is where organizational learning occurs based on customer response to the implemented strategies and programs. Difficulty: 2 Medium Topic: The CRM Process Cycle Learning Objective: 05-02 Describe the CRM process cycle. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

88) What is Big Data? How is it relevant to marketing? Describe the four Vs of Big Data. Answer: Big Data refers to the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources. Four characteristics generally characterize Big Data; taken together, these characteristics are commonly referred to as the four "Vs" of Big Data: volume, velocity, variety, and veracity. Volume relates to the amount of data produced, which is generally measured in bytes, given the digital media in which data is most commonly stored. Velocity relates to the frequency at which data is generated over time and the speed at which it can and should be analyzed and used. Variety relates to the different types of data, including text, video, images, and audio, to name a few types. And veracity relates to the reliability and validity of the data. For marketing managers, the rise of Big Data has provided significant opportunities to better understand several important elements of customer behavior. These include the varying experiences that make up the process through which customers choose to purchase a product or service, the different touchpoints that customers have with an organization through their use of a product or service, and the ways in which customers interact with and experience different products and services. In fact, some managers often include a fifth "V" when considering the different characteristics of the Big Data their firms possess—value. Without a clear idea of the value that can be obtained from Big Data, there is a limited justification for the expense of its collection and storage. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 89) There are six key sources of Big Data that capture data on both potential and current customers to yield actionable insights. Name three of them and give an example of each. Answer: Six key sources that serve this purpose are business systems, social media platforms, Internet-connected devices, mobile apps, commercial entities, and government entities. Examples will vary. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 05-04 Identify and appreciate the types of data used in marketing management decision making. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

90) Compare and contrast the four key types of marketing analytics: descriptive, diagnostic, predictive, and prescriptive. Answer: An approach using descriptive analytics utilizes data to provide summary insights. Data in raw form is transformed into measures that provide insight into the past and hopefully a basis for further explorations of the data. An approach using diagnostic analytics utilizes data to explore the relationships between different marketing-relevant factors that influence the organization's performance either directly or indirectly. There is significant value in understanding how marketing-relevant factors (for example, advertising frequency, advertisement placement, or product pricing) that can be influenced or controlled by the marketing managers can influence important firm outcomes such as product sales or customer satisfaction scores. Diagnostic analytics provide insights into the relationships of different factors with the implication being that an understanding of their relationships can have value for future marketing decisions. An approach using predictive analytics utilizes data to make predictions about future marketing outcomes of interest. Predictive analytics can be divided into those that use historical measurements of the outcome of interest to determine a pattern that can be extrapolated in the future, and those that make predictions based on the examination of relationships between a set of factors and an outcome of interest that the factors are believed to influence. The value of predictive analytics stems from its ability to help provide greater clarity into the impact that changes that are expected to occur in different marketing-relevant factors may have on related marketing outcomes. An approach using prescriptive analytics involves determining the optimal level of marketingrelevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes. Difficulty: 3 Hard Topic: Current Technologies Used in Market Research Learning Objective: 05-05 Recognize key approaches to marketing analytics. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) Describe the two goals of a marketing dashboard, and at least five of the elements that comprise it. Answer: Two primary goals of any dashboard are diagnostic insight and predictive foresight— with a special emphasis on the latter. Some dashboard metrics are diagnostic, looking at what has happened and trying to discern why. Probably the most important metrics you'll come to rely on, however, are predictive, using the diagnostic experience to better forecast results under various assumptions about circumstances and resource allocations. A great marketing dashboard is comprised of the following key elements: Company goals translated into a set of marketing objectives. Measurement of financial impact of marketing programs. Tracking of how marketing assets such as the brand and customer relationships are progressing. Execution of skills and competencies of the marketing team. Execution of other business processes necessary to deliver customer value. Continuous refinement of tools to increase access to and usability of customer insights. Insight on not only what is happening in the market but also why it is happening. A diagnostic for prediction, forecasting, and of course remediation. Ultimately, enhanced return on marketing investment (ROMI). Difficulty: 3 Hard Topic: Marketing Dashboards Learning Objective: 05-06 Understand the concept of a marketing dashboard and how it improves marketing planning for a firm. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 6 Understand Consumer and Business Markets 1) Delivering value to the customer is the core of marketing. 2) Internal factors affecting consumer choices include personal characteristics and psychological attributes. 3) According to the model of the consumer decision process, the environmental forces that affect the consumer decision process include the value proposition, distribution, and marketing communications. 4) Personality trait theories are based on the assumption that each person has a set of consistent, enduring personal characteristics. 5) Lifestyle refers to an individual's perspective on life as demonstrated by that person's activities, interests, and opinions (AIO). 6) Gender roles do not change over time and maintain uniformity across cultures. 7) Motivation is a system to select, organize, and interpret information to create a useful, informed picture of the world. 8) Maslow's hierarchy of needs theory suggests that individuals are interested in luxuries even if their basic needs have not been met. 9) An attitude is a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes are seldom if ever neutral. 10) Marketers can affect learning by providing information using a message, format, and delivery that will encourage customers to retain the information. 11) Research on brand personality identified five brand personality traits. These include honesty, enthusiasm, skill, hardiness, and sense of humor. 12) Men and women vary in the products they require, but not in the marketing communications they are receptive to. 13) The two categories of values are cultural and personal. 14) Cognitive learning involves creating an association between two stimuli. 15) Values, morals, and beliefs are all part of one's culture. 16) Bob, a Pittsburgh native, thinks of his family as his wife, children, siblings, and parents. Marco, a Mexican immigrant, thinks of his family as a larger network including cousins and grandparents. This reflects a difference in cultural values. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) Family is a societal factor that impacts consumer choices. 18) Berta maintains a blog on cooking on which she shares recipes, product recommendations, and shopping tips. She has 300,000 followers and she regularly answers questions from them about cooking and where to find her favorite kitchen tools. Berta would be considered a market maven. 19) While Ting was watching her favorite program, Housewives of Kankakee, she happened to see a political ad that told about a candidate's views on health insurance, and she decided she would vote for her. This represents high-involvement learning. 20) The reference group known as a secondary group includes people with whom one has frequent contact. 21) Keeping your hands in your pockets and looking at the clock are examples of positive nonverbal communication. 22) An individual watching a reality show will react differently whether watching the show alone or at a party with friends. 23) Mike and Judy find out they are going to have a baby and realize their Infiniti G coupe has to be replaced with a more practical vehicle. They engage in a thorough information search by reviewing car magazines, soliciting opinions from friends and family, conducting online research, reading consumer reports, and test-driving a number of new cars and SUVs before making a final purchase decision. This is an example of extensive information search. 24) Mary pretends that she has a three-bedroom house with a minivan in the driveway, even though she lives in an apartment and takes the train to work. The three-bedroom house reflects Mary's real state. 25) When Kobe decided it was time for a new car, he determined he wanted a Japanese-made four-door sedan. This represents Kobe's complete set. 26) After shopping around, Janine bought a top-of-the-line Vitamix, but when she got home she was worried that she spent too much and should have bought a less expensive juicer. Janine was experiencing post-purchase dissonance. 27) Business markets tend to concentrate in certain locations in the United States as a result of suppliers wanting to be located near their buyers. 28) A straight rebuy is a routine purchase that is often given to a preferred supplier. 29) A modified rebuy may occur when a buyer is familiar with the existing product and supplier but may be looking for additional information. Perhaps new competitors or products have entered the market or the current supplier is not meeting expectations.

30) Initiators are any individuals, both inside and outside the organization, with relevant expertise in a particular area that is used by the buying center in making the final decision. 31) The people in a company who block access to key personnel in the buying process are called goalkeepers. 32) The NAICS defines 300 major business sectors that cover all of North America. 33) OEM customers purchase in large quantities to support their own product demand. 34) The business market purchase decision process is triggered when someone inside or outside the company identifies a need. 35) The sales proposal gives the company an opportunity to showcase its unique products, service, and pricing. 36) Organizations have resorted to various e-procurement methods, such as setting up direct links to approved suppliers to make the business purchase easier and move it closer to front-line decision makers. 37) The process of business purchasing online is known as the e-chain. 38) Internal forces such as ________ affect consumer choices. A) age and attitude B) culture and education C) personality and society D) learning and culture E) income and culture 39) ________ are all marketing activities that affect the consumer decision process. A) Value proposition, technology, and culture B) Culture, society, and technology C) Value proposition, distribution, and marketing communications D) Distribution, technology, and culture E) Marketing communications, technology, and culture 40) Graduating from college, getting married, and having a child all transform an individual's buying habits and are referred to as the ________. A) lifecycle buying stages B) family life cycle C) life stage cycle D) lifestyle cycle E) family life stages

41) James is highly influenced by his work environment. He will most likely ________. A) go for a vacation at the same places as his coworkers B) avoid vacationing at the same places as his coworkers C) make different purchase decisions from his coworkers D) shop in locations that are not preferred by his coworkers E) wear clothes that set him apart from his coworkers 42) Which of the following is a psychological attribute that affects consumer choices? A) occupation B) gender C) perception D) lifestyle E) education 43) Which contemporary theory of motivation believes that satisfying hygiene factors does not create a loyal employee or customer? A) Maslow's hierarchy of needs B) Expectancy theory C) Herzberg's two-factor theory D) McClelland's achievement motivation theory E) Aldelfer's ERG theory 44) Attitudes are learned or at least influenced by ________. A) new information B) customer touch points C) behavioral segmentation D) motivation E) formalization 45) Managers gain important information such as the beliefs/values of customers by having them check off rating scales that evaluate a product's performance on a list of attributes by using the ________ model. A) repositioning B) formalization C) organizational learning D) psychographic segmentation E) multiattribute 46) Which of the following shapes a person's belief system? A) obedience B) information from trusted sources C) hard work and freedom D) reciprocity E) cognitive learning

47) Perception drives a person's attitudes, beliefs, motivation, and, eventually, his or her ________. A) values B) self-esteem C) performance D) behavior E) attention 48) Alma and Tarvares see an ad for a new Sony LCD flat-panel television. Alma sees the ad as a high-quality television worth the money while Tarvares sees the ad as an overpriced television that does not warrant a premium price. What makes them see the same ad so differently? A) acceleration factors B) degrees of affiliation C) cognitive dissonance D) perception E) formalization 49) What are the three psychological tools that shape perception? A) selective hearing, selective attention, selective vision B) selective attention, selective distortion, selective retention C) selective distortion, selective attention, selective vision D) selective awareness, selective vision, selective attention E) selective awareness, selective distortion, selective retention 50) Bella is exposed to around 2,500 messages daily. Since she cannot process, let alone retain, all those messages, she focuses on what is relevant and eliminates what is not. What psychological tool does she employ? A) selective attention B) selective distortion C) selective awareness D) selective retention E) selective hearing 51) Selective ________ refers to a tool that helps individuals focus on what is relevant and eliminate what is not. A) awareness B) distortion C) retention D) attention E) hearing

52) Selective ________ tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information to the contrary. A) awareness B) distortion C) memory D) retention E) hearing 53) Information can be misunderstood or made to fit existing beliefs, a process known as selective ________. A) awareness B) distortion C) memory D) retention E) hearing 54) ________ occurs when information is processed and added to long-term memory. A) Learning B) Cognitive dissonance C) Formalization D) Data mining E) Repositioning 55) ________ is any change in the content or organization of long-term memory or behavior. A) Conditioning B) Memory C) Learning D) Dissonance E) Training 56) The two fundamental approaches to learning are ________. A) coaching and listening B) trial and error and coaching C) coaching and conditioning D) conditioning and cognitive learning E) conditioning and trial and error 57) A company wants to create an association between two stimuli: marketing information and attitude. The company is relying on ________. A) cognitive affiliation B) organizational learning C) cognitive association D) operant conditioning E) classical conditioning

58) When baby boomers hear music that connects them with positive memories and the product and brand that is being advertised, it demonstrates the idea of ________. A) conditioned learning B) operant conditioning C) cognitive learning D) organizational learning E) operant memory 59) Frito-Lay is using ________ when offering free in-store samples of Doritos for the express purpose of getting people to try the product, enjoy the product, and finally purchase a bag of Doritos. A) operant conditioning B) cognitive learning C) behavioral mining D) database marketing E) classical conditioning 60) When Bob was asked to describe Sherry, he didn't describe her based on her age or education; rather, he talked about her easy-going manner, which reflected her ________. A) appearance B) personality C) household life cycle D) family life-cycle E) aptitude 61) ________ is a set of unique personal qualities that produce distinctive responses across similar situations. A) Attitude B) Personality C) Ideology D) Lifestyle E) Mind-set 62) Marketing managers need to pay attention to culture because ________. A) culture is a critical situational factor that affects individuals throughout the consumer choice process B) it has a profound impact on the consumer choice process by laying more emphasis on nonverbal communication C) it results in informal social systems that exert influence over an individual's attitudes and behaviors. D) it drives social status by laying more emphasis on success-driven factors E) failing to understand culture has a significant negative effect on product acceptance

63) Which of the following statements is true about language? A) It includes factors that focus primarily on group influences. B) It is considered to be a situational factor that is the primary driver of consumer behavior. C) It is time-sensitive and has a profound effect on the consumer buying process. D) It is an essential cultural building block. E) It includes principles shared by a society that assert positive ideals. 64) Americans value hard work and achievement while Japanese citizens value harmony and hierarchy. This shows a difference in ________ factors. A) cultural B) social C) internal D) psychological E) situational 65) In addition to culture, three factors are particularly relevant in consumer behavior. They are ________. A) language, values, and attitudes B) language, attitudes, and nonverbal communications C) values, attitudes, and language D) values, beliefs, and language E) language, values, and nonverbal communications 66) Which of the following statements best defines cultural values? A) Cultural values are a set of critical situational factors that affects individuals throughout the consumer choice process. B) Cultural values are the needs, desires, and objectives of those involved in a purchase decision. C) Cultural values are a set of unique personal qualities that produce distinctive responses across similar situations. D) Cultural values are principles shared by a society that assert positive ideals. E) Cultural values are a set of qualities that are formed at a relatively early age and are consistent and enduring. 67) ________ communication is the means of communicating through facial expressions, eye behavior, gestures, posture, and any other body language. A) Transformational B) Nonverbal C) Transactional D) Situational E) Meta

68) In the United States, most business conversations occur between three and five feet, which is a greater distance than in Latin American cultures. This is an example of differences in ________. A) situational factors B) personal space C) cultural factors D) time perception E) value equity 69) Maria identifies with a specific religious group, which is a smaller division of her culture. Maria's religious group is an example of a(n) ________. A) institution B) social group C) support network D) subculture E) society 70) A person shops differently when the line at the checkout is long. This is due to ________. A) aspirational purchases B) personal circumstances C) physical placement D) social factors E) cultural values 71) The household life cycle is changing due to changes in ________. A) cultural beliefs B) cultural values C) family structure D) product lifecycle E) social class 72) ________ is a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income, and occupation. A) Classical conditioning B) Social class C) Reference group D) Operant class E) Household life cycle (HLC) 73) John's beliefs, attitudes, and behaviors are influenced by his friends. His friends can be identified as a(n) ________ group. A) leading B) reference C) influential D) association E) transactional 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

74) Ammon works at Max's Pizza shop. He is a single father and makes only minimum wages. However, by utilizing the new financial terms available, he recently leased a BMW automobile; this is an example of a(n) ________ purchase. A) demographic B) organizational C) aspirational D) concentrated E) objective 75) ________ fulfill an important role by classifying, explaining, and then bestowing information, most often to family and friends but occasionally to a broader audience. A) Gatekeepers B) Influencers C) Affiliation groups D) Reference groups E) Opinion leaders 76) Jill is considered a(n) ________ when it comes to wine because she has information about many kinds of wines, places to shop, and other facets of the wine market. Her friends always go to her when they need something for a special occasion. A) social class B) market maven C) subculture D) cognitive dissonance E) cottage industry 77) When people are concerned about the outcome of a process, they will spend more time acquiring information about product options and become more emotionally connected to the process and the decision by engaging in ________. A) high-involvement purchase B) high-involvement learning C) low-involvement purchase D) limited information search E) minimal information search 78) Matthew has a new dog and is shopping for a pet grooming tool. He just picks up the first brush he sees and buys it. This is an example of ________. A) low-involvement purchasing B) low learning motivation C) low level of commitment D) low-involvement learning E) low-importance purchasing

79) ________ are the stages of the consumer decision-making process in order. A) Problem recognition, identifying alternatives, evaluation of alternatives, selection of an alternative, purchase decision B) Problem recognition, evaluation of alternatives, product choice, evaluation C) Evaluation of alternatives, product choice, evaluation D) Evaluation of alternatives, information search, product choice E) Problem recognition, search for information, evaluation of alternatives, product choice decision, post-purchase evaluation 80) Mia thinks about how she would like to feel or live today. She is thinking about a(n) ________ state. A) real B) ideal C) preferred D) experiential E) complete 81) Josh notices the low-fuel light is on as he is driving home. Without any additional information, he stops at the local station on the way home to fill up. This is an example of a(n) ________. A) high involvement purchase B) end-user purchase C) extensive information search D) minimal information search E) external information search 82) Before Gabriel bought a camera, he reviewed magazines, solicited opinions from friends and families, conducted online searches, and tested out different cameras in the store. This is an example of a(n) ________. A) extensive information search B) end-user investigation C) minimal information search D) low involvement purchase E) internal information search 83) ________ information sources include independent groups, personal associations, marketercreated information, and experiences. A) External B) Internal C) Low D) High E) Preferred

84) ________ choices tend to be more holistic than emotional choices, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. A) Rational B) Balanced C) Attitude-based D) State-of-mind E) Weighted 85) When shopping with her friend, Kristina chooses the same products that her friend likes and buys. This is an example of ________ affecting the actual choice decision. A) physical surroundings B) social circumstances C) time circumstances D) biorhythms E) state of mind 86) Karla bought her dress for the recital not because she liked the color and style, but because it made her feel good about herself, and she needed that confidence before performing. This represents the importance of the ________ aspect of a product. A) instrumental performance B) symbolic performance C) social aptitude D) disposability E) use/nonuse 87) The nature of B2B markets requires ________. A) impersonal communication at regular intervals through mediums such as direct mail B) investment of more resources primarily on service sectors C) organizations to invest more on consumers than suppliers to maintain their business D) a more personal relationship between the buyer and seller than in B2C markets E) companies to focus primarily on selling products that end up as components for finished goods 88) Which of the following statements is true about customer relationships in business markets? A) A strong impersonal relationship with customers is critical in maintaining one's business. B) One-on-one personal communication is the most important tool in developing and maintaining customer relationships. C) An impersonal relationship in B2B markets often connotes a greater emphasis on technology. D) Customers demand not only an impersonal relationship with their vendors but also an efficient one. E) Customers prefer direct communication mediums such as e-mail and direct mail for any correspondence.

89) It is said that B2B demand is more ________ in general than B2C demand for products or services. A) elastic B) bimodal C) inelastic D) systemic E) variable 90) A ________ chain is the synchronized movement of goods through the channel. A) delphi B) value C) supply D) time-series E) demand 91) The relationship between consumer demand for products and demand for B2B products is known as ________ demand. A) psychographic B) fluctuating C) derived D) latent E) inelastic 92) Small changes in consumer demand can lead to considerable shifts in business product demand and are referred to as the ________. A) transactional effect B) transverse effect C) degree of affiliation D) acceleration effect E) multi-attribute model 93) Reordering products that are used on a consistent basis is called a(n) ________. A) new purchase B) transactional purchase C) aspirational purchase D) modified rebuy E) straight rebuy 94) When Ford Motor Company is familiar with a product and supplier, but decides to seek additional information on new products in the marketplace, it is in the process of a(n) ________. A) straight rebuy B) modified rebuy C) new purchase D) adapted rebuy E) aspirational purchase

95) Johnson & Marshall, a growing producer of organic tea, creates a group to make purchase decisions that is made up of people from the purchasing department, senior management with financial knowledge, and engineers with design expertise. This group best represents a(n) ________. A) ad hoc group B) gate keeping group C) data warehouse D) buying center E) customer touch point 96) Paul is the groundskeeper for a golf course. He not only mows the greens and fairways but is also an expert on the grass that is used and how to care for it. The golf pro and club manager consult with him about what new equipment the club needs to maintain the greens. Paul plays the role of a(n) ________ in the buying process. A) market maven B) user C) decider D) opinion leader E) gatekeeper 97) Gatekeepers are important in the B2B buying process because ________. A) they provide the organization with relevant expertise in particular purchase decisions B) they engineer costly capital equipment purchases by employing a wide range of financial tools C) they act as a buffer between the buying center members and consumers in the buying process D) they limit the number of vendors in a given buying process E) they act as initiators in certain scenarios of the purchase decision process 98) Deciders are an important group for the salesperson to identify because ________. A) they make the ultimate purchase decision B) they decide what characteristics the product should possess C) they decide what price the company should pay D) they have control over who is allowed to be a vendor E) they decide who are the most significant influencers in the buying center 99) Mark is trying to sell a metal-bending machine to a manufacturing firm. He decides to talk to people inside the firm who have expertise in metal bending—who can then provide this information to the buying center. The people he is targeting are known as ________. A) influencers B) users C) gatekeepers D) initiators E) aggregators

100) Maryanne noticed that one of the manufacturing teams lost productivity over a six-month period. She puts together a document that describes the productivity loss and does a study to determine the cause. She finds that one of the key machines in the process breaks down often. Maryanne asks several machine manufacturers to come in to make proposals for new machines. Maryanne is playing the role of a(n) ________. A) influencer B) gatekeeper C) initiator D) arbitrator E) reseller 101) Boris Jankowski is a salesperson for a manufacturer of beer making equipment. He learns that a regional microbrewery is going to expand into another state. It has created a buying center to purchase the needed equipment. Boris's first job is to ________. A) discover the budget for the purchase B) develop criteria for the purchase C) discover the most important influencer D) discover who is part of the buying center E) develop a presentation for the buying center 102) Which of the following statements is TRUE about North American Industrial Classification System (NAICS) codes? A) The NAICS codes are considered to be perfect codes that adjust to a country's own unique economic structure. B) The NAICS codes apply to the major economies of the world except Mexico and Canada. C) The NAICS codes make it possible to purchase detailed information on each of the codes in the system. D) The NAICS code defines 10 business sectors based on a four-digit hierarchical code. E) The NAICS code classifies companies on the basis of their tertiary output. 103) MRO supplies are generally purchased through a ________. A) modified rebuy B) new purchase C) transactional purchase D) straight rebuy E) contractual rebuy 104) Companies like Home Depot sell to the B2B market and B2C market out of the same store. This puts the company in the category of a(n) ________. A) gatekeeper B) reseller C) out supplier D) market maven E) cottage industry

105) Which of the following statements is TRUE about government purchases? A) They require minimal information regarding product specifications. B) The purchase process is very simple and less time-consuming. C) The U.S. government is the single largest buyer of goods and services in the world. D) Profitability is the fundamental driver in making these purchases. E) These purchases often include an emotional component. 106) The primary difference between selling to the profit-oriented market and the nonprofit market is that nonprofits ________. A) generally opt for a new purchase rather than a straight or modified rebuy B) have a more rational decision process C) place more emphasis on their business goals than performance specifications D) have a limited number of resources compared to their for-profit counterparts E) entail purchase decisions that often include an emotional component to them 107) In the purchase process, once a problem has been identified, the next step is to ________. A) seek sales proposals B) identify potential suppliers C) clearly define the need and develop product specifications D) prepare a distribution document resembling the request for proposal E) evaluate equally-qualified vendors and purchase criteria 108) In the purchase process, the purpose of outlining product specifications is ________. A) to identify purchase agents who are experts at preparing a request for proposal B) to guide potential suppliers C) to ensure people buy the product D) to clearly and concisely present the timeline for the steps leading to the final decision E) to ensure that the customer has accepted the value proposition 109) In the purchase process, once the company's needs have been identified and product specifications have been outlined, the next step would involve ________. A) identifying potential problems in the purchase decision process B) evaluating the purchase decision C) evaluating suitable vendors to award contracts D) identifying and determining potential suppliers E) seeking sales proposals in response to a request for proposal 110) A request for proposal (RFP) is the process ________. A) of evaluating service recovery strategies adopted by a company to reacquire customers B) by which customer computers communicate directly with supplier computers C) undertaken by organizations to gain access to critical information withheld by gatekeepers D) of putting product specifications into a document for distribution E) of handing out sales contracts to vendors, preferably those on the supplier list

111) When a company solicits RFPs from suppliers with an open vendor search, the goal is to ________. A) get several proposals to help with negotiations B) get one good response from a preferred vendor C) get as many responses so as to gain a competitive advantage D) opt for a vendor who uses well-developed service recovery strategies to gain customers E) opt for a vendor who focuses primarily on the service criteria rather than on developing value 112) ________ criteria are a set of analyses and metrics grouped together to assess the cost of ownership. A) Financial B) Service C) Transactional D) End user E) Value 113) The most fundamental criterion in vendor selection is ________. A) degree of affiliation B) risk tolerance C) reliability D) location E) intangibility 114) Any influence on the product and supplier choice is an organizational factor. The primary organizational factor is ________. A) database marketing B) customer-relationship management C) psychographic segmentation D) organizational learning E) risk tolerance 115) Electronic data interchange (EDI) allows ________. A) organizations to request RFPs from potential vendors B) customer computers to communicate directly with supplier computers C) computers to fulfill the functions of a buying center on a virtual network D) customers to determine the real cost of a purchase through a set of computer metrics E) organizations to maintain a more personal relationship with customers through e-mail 116) Melony Inc., an automobile manufacturer, has created an integrated website to assist its purchasing department in purchasing and supplying products online. In this scenario, Melony's initiative best reflects a method of ________. A) e-resource B) e-retailing C) e-sourcing D) e-procurement E) e-governance 17 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

117) When evaluating purchase alternatives, research has found that consumers make product choices primarily from three perspectives: emotional, attitude-based, and attribute-based. Describe each of these. 118) Detail the five major roles of members of the buying center: users, initiators, influencers, gatekeepers, and deciders. 119) Explain the business market purchase decision process by taking a fictional company through the six stages of the process. 120) Discuss the four e-procurement methods and give an example of when each might be used.

Marketing Management, 3e (Marshall) Chapter 6 Understand Consumer and Business Markets 1) Delivering value to the customer is the core of marketing. Answer: TRUE Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 06-01 Understand the value of knowing the consumer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Internal factors affecting consumer choices include personal characteristics and psychological attributes. Answer: TRUE Explanation: Among the most difficult factors to understand are those internal to the consumer. Internal factors affecting consumer choices include personal characteristics and psychological attributes. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) According to the model of the consumer decision process, the environmental forces that affect the consumer decision process include the value proposition, distribution, and marketing communications. Answer: FALSE Explanation: According to the model of the consumer decision process, the environmental forces that affect the consumer decision process include economic, technological and political factors. Value proposition, distribution, and marketing communications are the marketing activities that affect the consumer decision process. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) Personality trait theories are based on the assumption that each person has a set of consistent, enduring personal characteristics. Answer: TRUE Explanation: Personality trait theories all have two basic assumptions: (1) each person has a set of consistent, enduring personal characteristics and (2) those characteristics can be measured to identify differences between individuals. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Lifestyle refers to an individual's perspective on life as demonstrated by that person's activities, interests, and opinions (AIO). Answer: TRUE Explanation: Lifestyle references an individual's perspective on life and manifests itself in that person's activities, interests, and opinions (AIOs). Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Gender roles do not change over time and maintain uniformity across cultures. Answer: FALSE Explanation: Gender roles are behaviors regarded as proper for men and women in a particular society. These roles change over time and across cultures. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Motivation is a system to select, organize, and interpret information to create a useful, informed picture of the world. Answer: FALSE Explanation: Motivation is the stimulating power that induces and then directs behavior. It is the force by which powerful unmet needs, or motives, prompt someone to action. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) Maslow's hierarchy of needs theory suggests that individuals are interested in luxuries even if their basic needs have not been met. Answer: FALSE Explanation: Individuals are not interested in luxuries until they have had basic needs (food, shelter) met. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) An attitude is a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes are seldom if ever neutral. Answer: TRUE Explanation: An attitude is defined as a learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way. Attitudes are favorable or unfavorable, positive or negative. In other words, attitudes are seldom, if ever, neutral. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Marketers can affect learning by providing information using a message, format, and delivery that will encourage customers to retain the information. Answer: TRUE Explanation: Learning occurs when information is processed and added to long-term memory. Marketers can therefore affect learning by providing information using a message, format, and delivery that will encourage customers to retain the information. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Research on brand personality identified five brand personality traits. These include honesty, enthusiasm, skill, hardiness, and sense of humor. Answer: FALSE Explanation: Research suggests that consumers purchase brands that have a personality consistent with their own. Research on brand personality identified five traits: (1) sincerity (down-to-earth, honest, wholesome, and cheerful); (2) excitement (daring, spirited, imaginative, and current); (3) competence (reliable, intelligent, and successful); (4) sophistication (upper class and charming); and (5) ruggedness (outdoorsy and tough). Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Men and women vary in the products they require, but not in the marketing communications they are receptive to. Answer: FALSE Explanation: Marketing managers understand that men and women vary not only in the products they require but also in the marketing communications they are receptive to. Difficulty: 2 Medium Topic: Key Concepts in Developing Effective Communications Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

13) The two categories of values are cultural and personal. Answer: TRUE Explanation: There are two categories of values. The first refers to cultural values based on national conscience. Americans, for example, value hard work and freedom, among other things. In Japan, national values include reciprocity, loyalty, and obedience. The second category is personal values held by the individual. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Cognitive learning involves creating an association between two stimuli. Answer: FALSE Explanation: Cognitive learning involves mental processes that acquire information to work through problems and manage life situations. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Values, morals, and beliefs are all part of one's culture. Answer: TRUE Explanation: Culture assimilates shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) Bob, a Pittsburgh native, thinks of his family as his wife, children, siblings, and parents. Marco, a Mexican immigrant, thinks of his family as a larger network including cousins and grandparents. This reflects a difference in cultural values. Answer: TRUE Explanation: Cultural values are principles shared by a society that assert positive ideals. Consider the value of limited versus extended family. In the United States, the obligation and commitment to family are often limited to an individual's immediate family, including his or her parents, children, and siblings. Most Latin American cultures, on the other hand, have a more wide-ranging definition of family that includes extended family members such as cousins and grandparents. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Family is a societal factor that impacts consumer choices. Answer: TRUE Explanation: As people move through life, they affect and, in turn, are affected by various social factors. These factors include groups like their family, social class, and reference groups, as well as individual opinion leaders. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

18) Berta maintains a blog on cooking on which she shares recipes, product recommendations, and shopping tips. She has 300,000 followers and she regularly answers questions from them about cooking and where to find her favorite kitchen tools. Berta would be considered a market maven. Answer: TRUE Explanation: Market mavens have information about many kinds of products, places to shop, and other facets of markets, and the members initiate discussions with consumers and respond to requests from consumers for market information. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 19) While Ting was watching her favorite program, Housewives of Kankakee, she happened to see a political ad that told about a candidate's views on health insurance, and she decided she would vote for her. This represents high-involvement learning. Answer: FALSE Explanation: Low-involvement learning happens when people are not prompted to value new information. This is more prevalent than high-involvement learning because the vast majority of marketing stimuli occur when there is little or no interest in the information. People do not watch TV for the commercials; they watch for the programming, and advertising is just part of the viewing experience. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

20) The reference group known as a secondary group includes people with whom one has frequent contact. Answer: FALSE Explanation: Primary groups are marked by frequent contact, while less frequent or limited dealings are known as secondary groups. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 21) Keeping your hands in your pockets and looking at the clock are examples of positive nonverbal communication. Answer: FALSE Explanation: These are examples of negative nonverbal communication during a presentation. Positive nonverbal communication includes eye contact, smiling, steady breathing, tone of voice, and moving closer to the person. Difficulty: 2 Medium Topic: Key Concepts in Developing Effective Communications Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 22) An individual watching a reality show will react differently whether watching the show alone or at a party with friends. Answer: TRUE Explanation: People are profoundly affected by their physical surroundings. An individual viewing a reality show will react differently whether watching the show alone or at a party with friends. Difficulty: 1 Easy Topic: Key Concepts in Developing Effective Communications Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Reflective Thinking Accessibility: Keyboard Navigation

23) Mike and Judy find out they are going to have a baby and realize their Infiniti G coupe has to be replaced with a more practical vehicle. They engage in a thorough information search by reviewing car magazines, soliciting opinions from friends and family, conducting online research, reading consumer reports, and test-driving a number of new cars and SUVs before making a final purchase decision. This is an example of extensive information search. Answer: TRUE Explanation: An extensive information search is when a consumer makes a purchase decision based on a thorough process of investigation and research. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) Mary pretends that she has a three-bedroom house with a minivan in the driveway, even though she lives in an apartment and takes the train to work. The three-bedroom house reflects Mary's real state. Answer: FALSE Explanation: People live in the perceived reality of present time or real state. At the same time, people also have desires that reflect how they would like to feel or live in the present time, and this is known as a preferred state. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 25) When Kobe decided it was time for a new car, he determined he wanted a Japanese-made four-door sedan. This represents Kobe's complete set. Answer: FALSE Explanation: As consumers move through the search for information, certain products (American cars) may be eliminated in favor of others (Japanese cars) and brands will be evaluated and discarded. The awareness set reduces the number of options. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

26) After shopping around, Janine bought a top-of-the-line Vitamix, but when she got home she was worried that she spent too much and should have bought a less expensive juicer. Janine was experiencing post-purchase dissonance. Answer: TRUE Explanation: High-involvement, large purchases often lead to a level of doubt or anxiety known as post-purchase dissonance. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 27) Business markets tend to concentrate in certain locations in the United States as a result of suppliers wanting to be located near their buyers. Answer: TRUE Explanation: While the Internet allows people to live anywhere, the nature of business relationships means companies want to have a strong presence near their best customers. Difficulty: 1 Easy Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) A straight rebuy is a routine purchase that is often given to a preferred supplier. Answer: TRUE Explanation: Many products are purchased so often that it is not necessary to evaluate every purchase decision. Companies use a wide range of products on a consistent basis (office supplies, raw materials) and simply reorder when needed. This type of purchase is called a straight rebuy. Increasingly, this is done automatically via secure Internet connections with approved or preferred suppliers. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

29) A modified rebuy may occur when a buyer is familiar with the existing product and supplier but may be looking for additional information. Perhaps new competitors or products have entered the market or the current supplier is not meeting expectations. Answer: TRUE Explanation: A modified rebuy occurs when the customer is familiar with the product and supplier but is looking for additional information. Most often this need for change has resulted from one or more of three circumstances. First, the approved supplier has performed poorly or has not lived up to the customer's expectations. Second, new products have come into the market triggering a reappraisal of the current purchase protocols. Third, the customer believes it is time for a change and wants to consider other suppliers. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) Initiators are any individuals, both inside and outside the organization, with relevant expertise in a particular area that is used by the buying center in making the final decision. Answer: FALSE Explanation: The initiator starts the buying decision process usually in one of two ways. In one scenario the initiator is also the user of the product, as in the office assistant who reorders when office supplies run low. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) The people in a company who block access to key personnel in the buying process are called goalkeepers. Answer: FALSE Explanation: Access to information and relevant individuals in the buying center is controlled by gatekeepers. Difficulty: 1 Easy Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

32) The NAICS defines 300 major business sectors that cover all of North America. Answer: FALSE Explanation: The NAICS has been expanded to include businesses in Mexico and Canada. NAICS defines 20 major business sectors based on a six-digit hierarchical code. The first five digits are standardized across Mexico, Canada, and the United States, while the sixth digit enables countries to adjust the code to fit the country's own unique economic structure. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) OEM customers purchase in large quantities to support their own product demand. Answer: TRUE Explanation: OEM customers purchase in large quantities to support their own product demand. Two important outcomes result from this purchase power. First, OEM customers seek the very "best" prices from sellers. The second result of large purchase quantities is the ability to dictate specific product specifications. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) The business market purchase decision process is triggered when someone inside or outside the company identifies a need. Answer: TRUE Explanation: The business market purchase decision process is triggered when someone inside or outside the company identifies a need. In many cases, the need is a problem that requires a solution. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

35) The sales proposal gives the company an opportunity to showcase its unique products, service, and pricing. Answer: TRUE Explanation: The sales proposal plays a critical role in marketing to businesses. Most of the time it is the first and best chance to impress the customer. Difficulty: 1 Easy Topic: The Business Market Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) Organizations have resorted to various e-procurement methods, such as setting up direct links to approved suppliers to make the business purchase easier and move it closer to front-line decision makers. Answer: TRUE Explanation: Organizations have resorted to various e-procurement methods such as setting up direct links to approved suppliers to make the business purchase easier and move it closer to front-line decision makers. Office Depot, for example, has a number of direct relationships using EDI with thousands of companies. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 06-08 Comprehend the role of technology in business markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) The process of business purchasing online is known as the e-chain. Answer: FALSE Explanation: The process of business purchasing online is referred to as e-procurement. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 06-08 Comprehend the role of technology in business markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) Internal forces such as ________ affect consumer choices. A) age and attitude B) culture and education C) personality and society D) learning and culture E) income and culture Answer: A Explanation: Among the most difficult factors to understand are those internal to the consumer. Internal forces include age, education, occupation, income, lifestyle, gender, motivation, attitude, perception, learning, and personality. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) ________ are all marketing activities that affect the consumer decision process. A) Value proposition, technology, and culture B) Culture, society, and technology C) Value proposition, distribution, and marketing communications D) Distribution, technology, and culture E) Marketing communications, technology, and culture Answer: C Explanation: Value proposition, distribution, and marketing communications are all marketing activities that affect the consumer decision process. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) Graduating from college, getting married, and having a child all transform an individual's buying habits and are referred to as the ________. A) lifecycle buying stages B) family life cycle C) life stage cycle D) lifestyle cycle E) family life stages Answer: B Explanation: Marketers realize that changes in life stage (for example, graduating from college, getting married, or having a child) transform an individual's buying habits and are referred to as the family life cycle. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) James is highly influenced by his work environment. He will most likely ________. A) go for a vacation at the same places as his coworkers B) avoid vacationing at the same places as his coworkers C) make different purchase decisions from his coworkers D) shop in locations that are not preferred by his coworkers E) wear clothes that set him apart from his coworkers Answer: A Explanation: People are influenced by their work environment. From the executive suite to the plant floor, people who work together tend to buy and wear similar clothes, shop at the same stores, and vacation at the same places. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

42) Which of the following is a psychological attribute that affects consumer choices? A) occupation B) gender C) perception D) lifestyle E) education Answer: C Explanation: Perception is a psychological attribute that affects consumer choices. Gender, occupation, lifestyle, and education are all personal characteristics that affect consumer choices. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) Which contemporary theory of motivation believes that satisfying hygiene factors does not create a loyal employee or customer? A) Maslow's hierarchy of needs B) Expectancy theory C) Herzberg's two-factor theory D) McClelland's achievement motivation theory E) Aldelfer's ERG theory Answer: C Explanation: According to Herzberg's two-factor theory, satisfying hygiene factors does not create a loyal employee or customer. For a company to really create satisfied employees it is important to focus on motivators. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) Attitudes are learned or at least influenced by ________. A) new information B) customer touch points C) behavioral segmentation D) motivation E) formalization Answer: A Explanation: Attitudes are learned or at least influenced by new information. This is important for marketers because they seek to affect a person's attitude about a product. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) Managers gain important information such as the beliefs/values of customers by having them check off rating scales that evaluate a product's performance on a list of attributes by using the ________ model. A) repositioning B) formalization C) organizational learning D) psychographic segmentation E) multiattribute Answer: E Explanation: Because people's beliefs/values impact their purchase decisions, marketing managers try to learn about those beliefs/values. They do that by having customers check off rating scales that evaluate a product's performance on a list of attributes. This is important information because most attitudes result from an individual's assessment of an object using a multiattribute model that evaluates the object on several important attributes. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) Which of the following shapes a person's belief system? A) obedience B) information from trusted sources C) hard work and freedom D) reciprocity E) cognitive learning Answer: B Explanation: Personal experiences, marketing communication, and information from trusted sources, such as family members or friends, all shape a person's belief system. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) Perception drives a person's attitudes, beliefs, motivation, and, eventually, his or her ________. A) values B) self-esteem C) performance D) behavior E) attention Answer: D Explanation: In marketing, perception of a product is even more important than the reality of that product because, in a very real sense, an individual's perception is his or her reality. Perception drives attitudes, beliefs, motivation, and, eventually, behavior. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) Alma and Tarvares see an ad for a new Sony LCD flat-panel television. Alma sees the ad as a high-quality television worth the money while Tarvares sees the ad as an overpriced television that does not warrant a premium price. What makes them see the same ad so differently? A) acceleration factors B) degrees of affiliation C) cognitive dissonance D) perception E) formalization Answer: D Explanation: Since each individual's perception is unique, everyone's perceptual response to the same reality will vary. Two people will see an ad for a new Samsung LCD flat-panel television, but their perception of the ad will be very different. One may see a high-quality television worth the money, while the other sees an overpriced television that does not warrant a premium price. Their attitudes toward the ad and the product are affected by their perceptions. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) What are the three psychological tools that shape perception? A) selective hearing, selective attention, selective vision B) selective attention, selective distortion, selective retention C) selective distortion, selective attention, selective vision D) selective awareness, selective vision, selective attention E) selective awareness, selective distortion, selective retention Answer: E Explanation: Perception is shaped by three psychological tools: selective awareness, selective distortion, and selective retention. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

50) Bella is exposed to around 2,500 messages daily. Since she cannot process, let alone retain, all those messages, she focuses on what is relevant and eliminates what is not. What psychological tool does she employ? A) selective attention B) selective distortion C) selective awareness D) selective retention E) selective hearing Answer: C Explanation: An individual is exposed, on average, to between 2,000 and 3,000 messages daily. People cannot process, let alone retain, all those messages, so they employ a psychological tool known as selective awareness to help them focus on what is relevant and eliminate what is not. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 51) Selective ________ refers to a tool that helps individuals focus on what is relevant and eliminate what is not. A) awareness B) distortion C) retention D) attention E) hearing Answer: A Explanation: People cannot process, let alone retain, all those messages, so they employ a psychological tool known as selective awareness to help them focus on what is relevant and eliminate what is not. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

52) Selective ________ tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information to the contrary. A) awareness B) distortion C) memory D) retention E) hearing Answer: D Explanation: Selective retention tends to reinforce existing attitudes and creates a real challenge for marketers trying to overcome negative beliefs and attitudes since people are less likely to be aware of or retain information to the contrary. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) Information can be misunderstood or made to fit existing beliefs, a process known as selective ________. A) awareness B) distortion C) memory D) retention E) hearing Answer: B Explanation: Information can be misunderstood or made to fit existing beliefs, a process known as selective distortion. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

54) ________ occurs when information is processed and added to long-term memory. A) Learning B) Cognitive dissonance C) Formalization D) Data mining E) Repositioning Answer: A Explanation: Learning occurs when information is processed and added to long-term memory. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) ________ is any change in the content or organization of long-term memory or behavior. A) Conditioning B) Memory C) Learning D) Dissonance E) Training Answer: C Explanation: Learning is any change in the content or organization of long-term memory or behavior. Learning occurs when information is processed and added to long-term memory. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

56) The two fundamental approaches to learning are ________. A) coaching and listening B) trial and error and coaching C) coaching and conditioning D) conditioning and cognitive learning E) conditioning and trial and error Answer: D Explanation: There are two fundamental approaches to learning. The first, conditioning, involves creating an association between two stimuli. While conditioning requires very little effort on the part of the learner, cognitive learning is more active and involves mental processes that acquire information to work through problems and manage life situations. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) A company wants to create an association between two stimuli: marketing information and attitude. The company is relying on ________. A) cognitive affiliation B) organizational learning C) cognitive association D) operant conditioning E) classical conditioning Answer: E Explanation: Classical conditioning seeks to have people learn by associating a stimulus (marketing information, brand experience) and response (attitude, feeling, behavior). Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

58) When baby boomers hear music that connects them with positive memories and the product and brand that is being advertised, it demonstrates the idea of ________. A) conditioned learning B) operant conditioning C) cognitive learning D) organizational learning E) operant memory Answer: A Explanation: Recently, many companies have started using popular songs from the 1960s and 1970s in their advertising. When individuals, particularly baby boomers, hear that music, it connects them with positive memories and, not coincidentally, the product and brand being advertised. This is conditioned learning, by connecting the stimulus such as music with a response such as a positive association with a particular brand. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 59) Frito-Lay is using ________ when offering free in-store samples of Doritos for the express purpose of getting people to try the product, enjoy the product, and finally purchase a bag of Doritos. A) operant conditioning B) cognitive learning C) behavioral mining D) database marketing E) classical conditioning Answer: A Explanation: Many different types of food retailers offer product samples in their stores. FritoLay, for instance, offers free in-store samples of Doritos for the express purpose of getting people to try the product, enjoy the product, and finally purchase a bag of Doritos. Enjoying the Doritos reinforces the positive attributes of the product and increases the probability of a purchase. Since the consumer must choose to try the product for operant conditioning to occur, Frito-Lay wants to make the trial as easy as possible. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

60) When Bob was asked to describe Sherry, he didn't describe her based on her age or education; rather, he talked about her easy-going manner, which reflected her ________. A) appearance B) personality C) household life cycle D) family life-cycle E) aptitude Answer: B Explanation: When people are asked to describe someone, most of us do not talk about the person's age or education. Rather, our response generally reflects the individual's personality and is based on our interactions with that person in different situations. Difficulty: 2 Medium Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 61) ________ is a set of unique personal qualities that produce distinctive responses across similar situations. A) Attitude B) Personality C) Ideology D) Lifestyle E) Mind-set Answer: B Explanation: Personality is a set of unique personal qualities that produce distinctive responses across similar situations. Difficulty: 1 Easy Topic: Personal and Psychological Factors in Consumer Decision-Making Learning Objective: 06-02 Consider the role of personal and psychological factors in consumer decision making. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

62) Marketing managers need to pay attention to culture because ________. A) culture is a critical situational factor that affects individuals throughout the consumer choice process B) it has a profound impact on the consumer choice process by laying more emphasis on nonverbal communication C) it results in informal social systems that exert influence over an individual's attitudes and behaviors. D) it drives social status by laying more emphasis on success-driven factors E) failing to understand culture has a significant negative effect on product acceptance Answer: E Explanation: Marketers need to be aware of culture for two reasons. First, learning a target market's culture is essential to an effective marketing strategy. Creating a value proposition that incorporates cultural cues is a prerequisite to success. Second, failing to understand cultural norms has a significant negative effect on product acceptance. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 63) Which of the following statements is true about language? A) It includes factors that focus primarily on group influences. B) It is considered to be a situational factor that is the primary driver of consumer behavior. C) It is time-sensitive and has a profound effect on the consumer buying process. D) It is an essential cultural building block. E) It includes principles shared by a society that assert positive ideals. Answer: D Explanation: Language is an essential cultural building block and the primary communication tool in society. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

64) Americans value hard work and achievement while Japanese citizens value harmony and hierarchy. This shows a difference in ________ factors. A) cultural B) social C) internal D) psychological E) situational Answer: A Explanation: At a very early age, young people learn values and concepts about their culture. Among the cultural values shared by Americans, for example, are achievement, hard work, and freedom while Japanese value social harmony, hierarchy, and devotion. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 65) In addition to culture, three factors are particularly relevant in consumer behavior. They are ________. A) language, values, and attitudes B) language, attitudes, and nonverbal communications C) values, attitudes, and language D) values, beliefs, and language E) language, values, and nonverbal communications Answer: E Explanation: While culture affects people in many ways, three factors are particularly relevant in consumer behavior: language, values, and nonverbal communications. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

66) Which of the following statements best defines cultural values? A) Cultural values are a set of critical situational factors that affects individuals throughout the consumer choice process. B) Cultural values are the needs, desires, and objectives of those involved in a purchase decision. C) Cultural values are a set of unique personal qualities that produce distinctive responses across similar situations. D) Cultural values are principles shared by a society that assert positive ideals. E) Cultural values are a set of qualities that are formed at a relatively early age and are consistent and enduring. Answer: D Explanation: Cultural values are principles shared by a society that assert positive ideals. These principles are often viewed on a continuum. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) ________ communication is the means of communicating through facial expressions, eye behavior, gestures, posture, and any other body language. A) Transformational B) Nonverbal C) Transactional D) Situational E) Meta Answer: B Explanation: Nonverbal communication is the means of communicating through facial expressions, eye behavior, gestures, posture, and any other body language. Difficulty: 1 Easy Topic: Key Concepts in Developing Effective Communications Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

68) In the United States, most business conversations occur between three and five feet, which is a greater distance than in Latin American cultures. This is an example of differences in ________. A) situational factors B) personal space C) cultural factors D) time perception E) value equity Answer: B Explanation: In the United States, most business conversations occur between three and five feet, which is a greater distance than in Latin American cultures. Salespeople used to a three-tofive-foot distance can find it a little disconcerting when the space shrinks to 18 inches to three feet. Difficulty: 2 Medium Topic: Key Concepts in Developing Effective Communications Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 69) Maria identifies with a specific religious group, which is a smaller division of her culture. Maria's religious group is an example of a(n) ________. A) institution B) social group C) support network D) subculture E) society Answer: D Explanation: A subculture is a group within a culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

70) A person shops differently when the line at the checkout is long. This is due to ________. A) aspirational purchases B) personal circumstances C) physical placement D) social factors E) cultural values Answer: B Explanation: An individual's behavior is always filtered through his or her immediate personal circumstances. If the line at the checkout is long, people may eliminate certain discretionary items or forgo the entire purchase. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) The household life cycle is changing due to changes in ________. A) cultural beliefs B) cultural values C) family structure D) product lifecycle E) social class Answer: C Explanation: The household life cycle (HLC) is fundamental to understanding the role of family in the consumer choice process. However, while this model is still relevant in many cases, several new models have emerged to reflect changes in family structure. People are marrying later and putting off the start of a family. Women are having children later in life for a variety of reasons (marry later, focus on career). Couples raise kids then divorce and remarry, creating blended families, or they start new families of their own. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

72) ________ is a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income, and occupation. A) Classical conditioning B) Social class C) Reference group D) Operant class E) Household life cycle (HLC) Answer: B Explanation: Social class is a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income, and occupation. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 73) John's beliefs, attitudes, and behaviors are influenced by his friends. His friends can be identified as a(n) ________ group. A) leading B) reference C) influential D) association E) transactional Answer: B Explanation: A reference group is a group of individuals whose beliefs, attitudes, and behavior influence (positively or negatively) the beliefs, attitudes, and behavior of an individual. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

74) Ammon works at Max's Pizza shop. He is a single father and makes only minimum wages. However, by utilizing the new financial terms available, he recently leased a BMW automobile; this is an example of a(n) ________ purchase. A) demographic B) organizational C) aspirational D) concentrated E) objective Answer: C Explanation: Aspirational purchases are products bought outside an individual's social standing. Difficulty: 3 Hard Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 75) ________ fulfill an important role by classifying, explaining, and then bestowing information, most often to family and friends but occasionally to a broader audience. A) Gatekeepers B) Influencers C) Affiliation groups D) Reference groups E) Opinion leaders Answer: E Explanation: Anyone whose opinions are valued by the individual can be an opinion leader. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

76) Jill is considered a(n) ________ when it comes to wine because she has information about many kinds of wines, places to shop, and other facets of the wine market. Her friends always go to her when they need something for a special occasion. A) social class B) market maven C) subculture D) cognitive dissonance E) cottage industry Answer: B Explanation: Market mavens have information about many kinds of products, places to shop, and other facets of markets, and the members initiate discussions with consumers and respond to requests from consumers for market information. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 77) When people are concerned about the outcome of a process, they will spend more time acquiring information about product options and become more emotionally connected to the process and the decision by engaging in ________. A) high-involvement purchase B) high-involvement learning C) low-involvement purchase D) limited information search E) minimal information search Answer: B Explanation: Someone stimulated to acquire new information is engaged in high-involvement learning. A high level of involvement usually means the entire process takes longer. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

78) Matthew has a new dog and is shopping for a pet grooming tool. He just picks up the first brush he sees and buys it. This is an example of ________. A) low-involvement purchasing B) low learning motivation C) low level of commitment D) low-involvement learning E) low-importance purchasing Answer: D Explanation: Low-involvement learning happens when people are not prompted to value new information. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-03 Appreciate the critical and complex role of cultural, situational, and social factors in a consumer purchase decision. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 79) ________ are the stages of the consumer decision-making process in order. A) Problem recognition, identifying alternatives, evaluation of alternatives, selection of an alternative, purchase decision B) Problem recognition, evaluation of alternatives, product choice, evaluation C) Evaluation of alternatives, product choice, evaluation D) Evaluation of alternatives, information search, product choice E) Problem recognition, search for information, evaluation of alternatives, product choice decision, post-purchase evaluation Answer: E Explanation: Years of consumer research have resulted in a five-stage model of consumer decision making. Problem recognition, search for information, evaluation of alternatives, product choice decision, post-purchase evaluation are the stages of the consumer decision-making process. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

80) Mia thinks about how she would like to feel or live today. She is thinking about a(n) ________ state. A) real B) ideal C) preferred D) experiential E) complete Answer: C Explanation: People live in the perceived reality of present time or real state. At the same time, people also have desires that reflect how they would like to feel or live in the present time and this is known as a preferred state. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 81) Josh notices the low-fuel light is on as he is driving home. Without any additional information, he stops at the local station on the way home to fill up. This is an example of a(n) ________. A) high involvement purchase B) end-user purchase C) extensive information search D) minimal information search E) external information search Answer: D Explanation: A minimal information search is when a consumer makes a purchase decision based on very little information or investigation. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

82) Before Gabriel bought a camera, he reviewed magazines, solicited opinions from friends and families, conducted online searches, and tested out different cameras in the store. This is an example of a(n) ________. A) extensive information search B) end-user investigation C) minimal information search D) low involvement purchase E) internal information search Answer: A Explanation: An extensive information search is when a consumer makes a purchase decision based on a thorough process of investigation and research. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 83) ________ information sources include independent groups, personal associations, marketercreated information, and experiences. A) External B) Internal C) Low D) High E) Preferred Answer: A Explanation: External information sources include independent groups (sources), personal associations (friend and family), marketer-created information (sales brochures, advertising), and experiences (product trial and demonstrations). Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

84) ________ choices tend to be more holistic than emotional choices, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. A) Rational B) Balanced C) Attitude-based D) State-of-mind E) Weighted Answer: C Explanation: Attitude-based choices tend to be more holistic, using summary impressions rather than specific attributes to evaluate the options and affect even important purchases such as a car or house. It is not uncommon for beliefs to affect the actual product decision. Difficulty: 1 Easy Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 85) When shopping with her friend, Kristina chooses the same products that her friend likes and buys. This is an example of ________ affecting the actual choice decision. A) physical surroundings B) social circumstances C) time circumstances D) biorhythms E) state of mind Answer: B Explanation: Shopping is a social activity and people are influenced by the social interaction at the time of purchase. A product is unlikely to be purchased if a friend does not like it. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

86) Karla bought her dress for the recital not because she liked the color and style, but because it made her feel good about herself, and she needed that confidence before performing. This represents the importance of the ________ aspect of a product. A) instrumental performance B) symbolic performance C) social aptitude D) disposability E) use/nonuse Answer: B Explanation: Symbolic performance refers to the image-building aspects of the product and answers the question: Did the product make me feel better about myself? A product that performs poorly on instrumental dimensions will ultimately lead to dissatisfaction. Difficulty: 2 Medium Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 87) The nature of B2B markets requires ________. A) impersonal communication at regular intervals through mediums such as direct mail B) investment of more resources primarily on service sectors C) organizations to invest more on consumers than suppliers to maintain their business D) a more personal relationship between the buyer and seller than in B2C markets E) companies to focus primarily on selling products that end up as components for finished goods Answer: D Explanation: The nature of business markets requires a more personal relationship between buyer and seller. Every relationship takes on additional significance as the sales potential of each customer increases. A strong personal relationship is critical because business customers demand fast answers, good service, and, in general, want a close relationship with suppliers. Difficulty: 2 Medium Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

88) Which of the following statements is true about customer relationships in business markets? A) A strong impersonal relationship with customers is critical in maintaining one's business. B) One-on-one personal communication is the most important tool in developing and maintaining customer relationships. C) An impersonal relationship in B2B markets often connotes a greater emphasis on technology. D) Customers demand not only an impersonal relationship with their vendors but also an efficient one. E) Customers prefer direct communication mediums such as e-mail and direct mail for any correspondence. Answer: B Explanation: Customers want direct communication with company representatives and prefer someone they know and trust. One-on-one personal communication is still the most important tool in developing and maintaining a strong customer relationship in business markets. Difficulty: 2 Medium Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 89) It is said that B2B demand is more ________ in general than B2C demand for products or services. A) elastic B) bimodal C) inelastic D) systemic E) variable Answer: C Explanation: B2B demand is more inelastic in general than B2C demand for products or services, meaning changes in demand are not significantly affected by changes in price. Difficulty: 1 Easy Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

90) A ________ chain is the synchronized movement of goods through the channel. A) delphi B) value C) supply D) time-series E) demand Answer: C Explanation: The movement of goods through a channel to the ultimate consumer requires a high level of coordination among the participants. A supply chain is the synchronized movement of goods through the channel. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 91) The relationship between consumer demand for products and demand for B2B products is known as ________ demand. A) psychographic B) fluctuating C) derived D) latent E) inelastic Answer: C Explanation: Demand for B2B products originates from the demand for consumer products, or put another way, demand for B2B products is derived demand. Difficulty: 2 Medium Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

92) Small changes in consumer demand can lead to considerable shifts in business product demand and are referred to as the ________. A) transactional effect B) transverse effect C) degree of affiliation D) acceleration effect E) multi-attribute model Answer: D Explanation: Small changes in consumer demand can lead to considerable shifts in business product demand and are referred to as the acceleration effect. Difficulty: 2 Medium Topic: How B2B and B2C Markets Differ Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 93) Reordering products that are used on a consistent basis is called a(n) ________. A) new purchase B) transactional purchase C) aspirational purchase D) modified rebuy E) straight rebuy Answer: E Explanation: Many products are purchased so often that it is not necessary to evaluate every purchase decision. Companies use a wide range of products on a consistent basis (office supplies, raw materials) and simply reorder when needed. This type of purchase is called a straight rebuy. Difficulty: 1 Easy Topic: The Buying Center Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

94) When Ford Motor Company is familiar with a product and supplier, but decides to seek additional information on new products in the marketplace, it is in the process of a(n) ________. A) straight rebuy B) modified rebuy C) new purchase D) adapted rebuy E) aspirational purchase Answer: B Explanation: A modified rebuy occurs when the customer is familiar with the product and supplier but is looking for additional information. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-05 Understand the differences between B2C and B2B markets. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 95) Johnson & Marshall, a growing producer of organic tea, creates a group to make purchase decisions that is made up of people from the purchasing department, senior management with financial knowledge, and engineers with design expertise. This group best represents a(n) ________. A) ad hoc group B) gate keeping group C) data warehouse D) buying center E) customer touch point Answer: D Explanation: A number of individuals with a stake in the purchase decision come together to form a buying center that manages the purchase decision process and ultimately makes the decision. The individuals included in the buying center may have direct responsibility over the decision (purchasing department) or financial control of the company (senior management). In other cases, the individuals might have a specific expertise helpful to the decision (engineer, consultant). Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

96) Paul is the groundskeeper for a golf course. He not only mows the greens and fairways but is also an expert on the grass that is used and how to care for it. The golf pro and club manager consult with him about what new equipment the club needs to maintain the greens. Paul plays the role of a(n) ________ in the buying process. A) market maven B) user C) decider D) opinion leader E) gatekeeper Answer: B Explanation: Users are the actual consumers of the product and play a critical role. While typically not the decision makers, they do have a lot of input at various stages of the process. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 97) Gatekeepers are important in the B2B buying process because ________. A) they provide the organization with relevant expertise in particular purchase decisions B) they engineer costly capital equipment purchases by employing a wide range of financial tools C) they act as a buffer between the buying center members and consumers in the buying process D) they limit the number of vendors in a given buying process E) they act as initiators in certain scenarios of the purchase decision process Answer: D Explanation: Access to information and relevant individuals in the buying center is controlled by gatekeepers. Purchasing departments act as gatekeepers by limiting possible vendors to those approved by the company. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

98) Deciders are an important group for the salesperson to identify because ________. A) they make the ultimate purchase decision B) they decide what characteristics the product should possess C) they decide what price the company should pay D) they have control over who is allowed to be a vendor E) they decide who are the most significant influencers in the buying center Answer: A Explanation: The purchase decision rests with one or more individuals, deciders, in the buying center. Often it will be the most senior member of the team; however, it can also include other individuals (users, influencers), in which case the decision is reached by consensus. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 99) Mark is trying to sell a metal-bending machine to a manufacturing firm. He decides to talk to people inside the firm who have expertise in metal bending—who can then provide this information to the buying center. The people he is targeting are known as ________. A) influencers B) users C) gatekeepers D) initiators E) aggregators Answer: A Explanation: Individuals, both inside and outside the organization, with relevant expertise in a particular area act as influencers, providing information that is used by the buying center in making the final decision. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

100) Maryanne noticed that one of the manufacturing teams lost productivity over a six-month period. She puts together a document that describes the productivity loss and does a study to determine the cause. She finds that one of the key machines in the process breaks down often. Maryanne asks several machine manufacturers to come in to make proposals for new machines. Maryanne is playing the role of a(n) ________. A) influencer B) gatekeeper C) initiator D) arbitrator E) reseller Answer: C Explanation: The initiator starts the buying decision process usually in one of two ways. In one scenario the initiator is also the user of the product, as in the secretary who reorders when office supplies run low. A second scenario occurs when senior executives make decisions that require new resources (manufacturing sites, product development, and information technology). In this scenario, Maryanne is playing the role of an initiator in the buying process. Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 101) Boris Jankowski is a salesperson for a manufacturer of beer making equipment. He learns that a regional microbrewery is going to expand into another state. It has created a buying center to purchase the needed equipment. Boris's first job is to ________. A) discover the budget for the purchase B) develop criteria for the purchase C) discover the most important influencer D) discover who is part of the buying center E) develop a presentation for the buying center Answer: D Explanation: Buying centers present marketers with three distinct challenges. First, who is part of the buying center? Difficulty: 2 Medium Topic: The Buying Center Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

102) Which of the following statements is TRUE about North American Industrial Classification System (NAICS) codes? A) The NAICS codes are considered to be perfect codes that adjust to a country's own unique economic structure. B) The NAICS codes apply to the major economies of the world except Mexico and Canada. C) The NAICS codes make it possible to purchase detailed information on each of the codes in the system. D) The NAICS code defines 10 business sectors based on a four-digit hierarchical code. E) The NAICS code classifies companies on the basis of their tertiary output. Answer: C Explanation: The North American Industrial Classification System (NAICS) includes businesses in the United States, Mexico, and Canada. It is possible to purchase detailed information on each of the codes in the system. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 103) MRO supplies are generally purchased through a ________. A) modified rebuy B) new purchase C) transactional purchase D) straight rebuy E) contractual rebuy Answer: D Explanation: MRO supplies are generally purchased through a straight rebuy. The individuals involved do not want to spend a lot of time making the purchase. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

104) Companies like Home Depot sell to the B2B market and B2C market out of the same store. This puts the company in the category of a(n) ________. A) gatekeeper B) reseller C) out supplier D) market maven E) cottage industry Answer: B Explanation: Companies that buy products and then resell them to other businesses or consumers are called resellers. Home Depot, for example, buys home products and then resells them to consumers, building contractors, and other professionals in the construction industry. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 105) Which of the following statements is TRUE about government purchases? A) They require minimal information regarding product specifications. B) The purchase process is very simple and less time-consuming. C) The U.S. government is the single largest buyer of goods and services in the world. D) Profitability is the fundamental driver in making these purchases. E) These purchases often include an emotional component. Answer: C Explanation: The single largest buyer of goods and services in the world is the U.S. government. Combined with state and local governments, the value of purchases is over $2 trillion. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

106) The primary difference between selling to the profit-oriented market and the nonprofit market is that nonprofits ________. A) generally opt for a new purchase rather than a straight or modified rebuy B) have a more rational decision process C) place more emphasis on their business goals than performance specifications D) have a limited number of resources compared to their for-profit counterparts E) entail purchase decisions that often include an emotional component to them Answer: D Explanation: Nonprofits have a limited number of resources. Even the largest NGOs, including the Red Cross, do not have access to the capital and resources of most large for-profit organizations. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 107) In the purchase process, once a problem has been identified, the next step is to ________. A) seek sales proposals B) identify potential suppliers C) clearly define the need and develop product specifications D) prepare a distribution document resembling the request for proposal E) evaluate equally-qualified vendors and purchase criteria Answer: C Explanation: Once a problem has been identified, the next step is to clearly define the need and product specifications. Individuals from across the organization clarify the problem and develop solutions. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

108) In the purchase process, the purpose of outlining product specifications is ________. A) to identify purchase agents who are experts at preparing a request for proposal B) to guide potential suppliers C) to ensure people buy the product D) to clearly and concisely present the timeline for the steps leading to the final decision E) to ensure that the customer has accepted the value proposition Answer: B Explanation: Product specifications should be defined so that everyone inside and outside of the company knows exactly what is needed to solve the problem. This serves two important purposes. First, individuals inside the organization can plan for the future. The second purpose of outlining product specifications is to guide potential suppliers. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 109) In the purchase process, once the company's needs have been identified and product specifications have been outlined, the next step would involve ________. A) identifying potential problems in the purchase decision process B) evaluating the purchase decision C) evaluating suitable vendors to award contracts D) identifying and determining potential suppliers E) seeking sales proposals in response to a request for proposal Answer: D Explanation: Once the company's needs have been identified and product specifications have been outlined, business customers can identify potential suppliers. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

110) A request for proposal (RFP) is the process ________. A) of evaluating service recovery strategies adopted by a company to reacquire customers B) by which customer computers communicate directly with supplier computers C) undertaken by organizations to gain access to critical information withheld by gatekeepers D) of putting product specifications into a document for distribution E) of handing out sales contracts to vendors, preferably those on the supplier list Answer: D Explanation: Putting product specifications into a document for distribution is known as a request for proposal (RFP). Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 111) When a company solicits RFPs from suppliers with an open vendor search, the goal is to ________. A) get several proposals to help with negotiations B) get one good response from a preferred vendor C) get as many responses so as to gain a competitive advantage D) opt for a vendor who uses well-developed service recovery strategies to gain customers E) opt for a vendor who focuses primarily on the service criteria rather than on developing value Answer: A Explanation: Companies frequently solicit proposals from a number of vendors. One reason for this is that getting additional proposals helps in negotiating with the preferred vendor. When a vendor is aware that other proposals are under consideration, that vendor works harder to meet the expectations of the customer. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

112) ________ criteria are a set of analyses and metrics grouped together to assess the cost of ownership. A) Financial B) Service C) Transactional D) End user E) Value Answer: A Explanation: Financial criteria are a set of analyses and metrics grouped together to assess the cost of ownership. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 113) The most fundamental criterion in vendor selection is ________. A) degree of affiliation B) risk tolerance C) reliability D) location E) intangibility Answer: C Explanation: The most fundamental criterion in vendor selection is reliability, which is the vendor's ability to meet contractual obligations including delivery times and service schedules. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

114) Any influence on the product and supplier choice is an organizational factor. The primary organizational factor is ________. A) database marketing B) customer-relationship management C) psychographic segmentation D) organizational learning E) risk tolerance Answer: E Explanation: An influence on the product and supplier choice is organizational factors. The primary organizational factor is risk tolerance. Individuals and companies all have a certain tolerance for risk. Their product decisions will be influenced by their aversion to or acceptance of risk. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 115) Electronic data interchange (EDI) allows ________. A) organizations to request RFPs from potential vendors B) customer computers to communicate directly with supplier computers C) computers to fulfill the functions of a buying center on a virtual network D) customers to determine the real cost of a purchase through a set of computer metrics E) organizations to maintain a more personal relationship with customers through e-mail Answer: B Explanation: Sophisticated programs manage inventories and automatically replenish supplies. By linking directly with electronic data interchange (EDI) customer computers communicate directly with supplier computers to reorder as needed. Difficulty: 1 Easy Topic: The B2B Purchase Decision Process Learning Objective: 06-08 Comprehend the role of technology in business markets. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

116) Melony Inc., an automobile manufacturer, has created an integrated website to assist its purchasing department in purchasing and supplying products online. In this scenario, Melony's initiative best reflects a method of ________. A) e-resource B) e-retailing C) e-sourcing D) e-procurement E) e-governance Answer: D Explanation: The process of business purchasing online is referred to as e-procurement. Setting up an industry purchasing site is a common e-procurement method. Difficulty: 2 Medium Topic: The B2B Purchase Decision Process Learning Objective: 06-08 Comprehend the role of technology in business markets. Bloom's: Apply AACSB: Technology Accessibility: Keyboard Navigation 117) When evaluating purchase alternatives, research has found that consumers make product choices primarily from three perspectives: emotional, attitude-based, and attribute-based. Describe each of these. Answer: Not all purchases are made strictly for rational reasons. Indeed, product choices can be emotional choices, based on attitudes about a product, or based on attributes of the product depending on the situation. Frequently, the product choice encompasses a mix of all three. Attitude-based choices tend to be more holistic, using summary impressions rather than specific attributes to evaluate the options, and affect even important purchases such as a car or house. It is not uncommon for beliefs to affect the actual product decision. By far the most prevalent approach to product decisions is attribute-based choice based on the premise that product choices are made by comparing brands across a defined set of attributes. These evaluative attributes are the product features or benefits considered relevant to the specific problem addressed in the purchase decision. Difficulty: 3 Hard Topic: The Consumer Decision-Making Process Learning Objective: 06-04 Understand the consumer decision-making process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

118) Detail the five major roles of members of the buying center: users, initiators, influencers, gatekeepers, and deciders. Answer: Users are the actual consumer of the product and play a critical role. While typically not the decision makers, they do have a lot of input at various stages of the process. They are the first to recognize the problem based on a need, and they help define the product specifications. Finally, they provide critical feedback after the product purchase. The initiator starts the buying decision process, usually in one of two ways. In one scenario the initiator is also the user of the product, as in the secretary who reorders when office supplies run low. Individuals, both inside and outside the organization, with relevant expertise in a particular area act as influencers, providing information that is used by the buying center in making the final decision. Engineers are frequently called on to detail product requirements and specifications. Purchasing agents, based on their experience, are helpful in evaluating sales proposals. Marketing personnel can provide customer feedback. In all of these cases, the influencer's knowledge on a given topic relevant to the purchase decision can affect the purchase decision. Access to information and relevant individuals in the buying center is controlled by gatekeepers. Purchasing departments act as gatekeepers by limiting possible vendors to those approved by the company. Ultimately, the purchase decision rests with one or more individuals, deciders, in the buying center. Often it will be the most senior member of the team; however, it can also include other individuals (users, influencers), in which case the decision is reached by consensus. The more expensive and strategic the purchase, the higher in the organization the decision must go for final authority. Difficulty: 3 Hard Topic: The B2B Purchase Decision Process Learning Objective: 06-06 Understand the critical role of the buying center and each participant in the B2B process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

119) Explain the business market purchase decision process by taking a fictional company through the six stages of the process. Answer: The stages are problem recognition, define the need and product specifications, search for suppliers, seek sales proposals―response to RFP, make the purchase decision, and post purchase evaluation of product and vendor. Examples will vary. Difficulty: 3 Hard Topic: The B2B Purchase Decision Process Learning Objective: 06-07 Learn the B2B purchase decision process and different buying situations. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 120) Discuss the four e-procurement methods and give an example of when each might be used. Answer: Industry purchasing sites: Industries have formed websites to streamline and standardize the e-procurement process. Steel, chemicals, paper, and automobile manufacturers have created integrated websites to assist their own purchasing departments in online purchasing and supplier selection. Business function sites: Certain business functions have websites to standardize purchasing. For example, individual utilities used to negotiate by phone to buy and sell electricity with each other; however, today the purchase of electricity by utility companies is done over a website dedicated to energy management. Extranet to major suppliers: Many companies have set up direct links to approved suppliers to make the purchase easier and move it closer to front-line decision makers. Office Depot, for example, has a number of direct relationships using EDI with thousands of companies. Company buying sites: Many large companies have created their own websites to assist vendors. RFPs and other relevant supplier information as well as some contact information are accessible for review. Examples will vary. Difficulty: 3 Hard Topic: The B2B Purchase Decision Process Learning Objective: 06-08 Comprehend the role of technology in business markets. Bloom's: Analyze AACSB: Technology Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 7 Segmentation, Target Marketing, and Positioning 1) One of the basic principles behind segmentation is that subgroups of customers can be identified on some basis of similarity. 2) Marketing (Big M) is not just identifying existing segments but also creating new ones. 3) Occupation segmentation and income segmentation are essentially the same thing. 4) For many marketing managers, segmentation by benefit sought is the best place to start the process of market segmentation. 5) One of the most straightforward and popular methods of segmentation is demographic. 6) Business market segmentation is less straightforward than segmentation of consumer markets. 7) Generation Y, people born between 1978 and 1994, tend to be pragmatic, optimistic, good team players, savvy consumers, and edgy in nature. 8) The largest generation is the Silent Generation. 9) Family and household segmentation has become more complex due to a variety of differing family arrangements. 10) The final step in target marketing is to develop profiles of each segment under consideration for investment as a target market. 11) A tertiary target market has reasonable potential but is not suited for development immediately. 12) A niche strategy is the same as Porter's focus strategy and is a concentrated target marketing approach. 13) Strategic fit means there is a good match of a target market to the firm's culture and resource capabilities. 14) Effective positioning is not affected by competitive forces. 15) A perceptual map is used to compare consumer perceptions of each competitor's delivery against specific paired attributes. 16) Marcia wanted a car she could drive for 10 years, so she bought a Toyota because they are known for their reliability and longevity. This BEST demonstrates the product leadership source of differentiation.

17) In overpositioning, consumers have a very broad understanding of the company, product, or brand. 18) McDonald's fell victim to confused positioning in the 1990s after introducing too many new products which caused customers to lose track of what the core brand was. 19) Firms that engage in unethical business practices are always aware of the magnitude of damage being done to their brand. 20) Which of the following is one of the basic principles behind segmentation? A) All customers are alike. B) Subgroups of customers are not similar. C) Subgroups will be smaller and more homogeneous than the overall market. D) Members of a heterogeneous market cannot allow for dividing the market into subgroups. E) In an undifferentiated market, each person has unique needs and wants. 21) Segmenting markets means that a company is ________. A) dividing the market into meaningful smaller markets based upon common characteristics B) selecting the markets to attack in the marketplace C) selecting a corporate position to communicate to potential customers D) identifying and calculating the churn rate in different markets E) identifying the customers who have frequently purchased competitor's products or services 22) Target marketing is the process by which ________. A) the market is divided into cohesive groups B) a company evaluates market segments and decides which ones have the most potential for development C) a company chooses which advertising strategy to use D) the customer groups are evaluated on the basis of high or low churn to see which is the most profitable E) a company collects cookies to track everyone who visits its website 23) Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between the ________. A) cost of the product and the quality B) way the 4Ps of the marketing mix work with one another C) customer's needs and wants and what the product has to offer D) product and its advertising E) salesperson and the customer at a personal level

24) Organizations communicate one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Execution of this approach is referred to as a firm's ________ strategy. A) segmentation B) positioning C) production D) sales E) distribution 25) In marketing, differentiation is a concept that means ________. A) consumer choices remain similar around the globe B) each age segment views products exactly the same C) products need to appear to be different from one another to be successful in the marketplace D) communicating and delivering value in different ways to different customer groups E) evaluating different market segments and deciding which shows the most promise for development 26) While developing a segmentation approach, Walter, the brand manager of a soft drinks manufacturing company says that a segment has sufficient size. He means that the market ________. A) has a large enough television audience to be worth considering B) is reachable C) can provide a positive return on investment D) has many customers in it E) is homogeneous 27) Which of the following criteria for market segmentation is least likely to enable successful segmentation? A) It should be measurable. B) It should be of sufficient size. C) It should be readily identifiable. D) It should be undifferentiated. E) It should be reachable in terms of communication. 28) Which of the following questions about market segmentation relates to creation and execution of different marketing strategies to the different submarkets identified? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?

29) American credit card companies would like to offer their services to people in a country in East Africa. However, they are finding it difficult because of language barriers and infrastructure challenges. These issues are related to which of the following questions about market segmentation? A) Do the people in this market segment have access to sufficient financial resources? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product? 30) The ability to get secondary and/or primary data on a market being considered for segmentation relates to which of the following questions about marketing? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product? 31) Approaches to geographic segmentation include all of these EXCEPT ________. A) region B) density of population C) size of population D) gender of population E) climate 32) The region, the density of the population, and the size of the population are various approaches to use in ________. A) positioning B) differentiation C) democratic segmentation D) population parameter estimation E) geographic segmentation 33) Marketers use geographic segmentation when ________. A) certain geographic regions have more diverse populations B) geography determines one's likes and dislikes C) there is evidence that consumers respond differently to marketing strategies and programs based on where they live D) there is a strong demand for the products and services of the company in some geographic regions E) people in some regions are richer than people in other regions 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

34) When a retail chain sells winter coats, it sends them to different stores at different times of the year. Which of the following approaches to geographic segmentation in the United States does this scenario exemplify? A) by region B) by climate C) by size of population D) by growth in population E) by density of population 35) Which of the following statements is TRUE of geographic segmentation? A) It divides consumer groups based on a variety of readily measurable descriptive factors about the group. B) In most instances, it is an insufficient criterion in and of itself. C) It does not consider climate while segmenting markets. D) It does not consider the size of population while segmenting markets. E) It is useful because the demand for all kinds of products is determined by where a person lives. 36) Demographic segmentation is one of the most popular segmentation approaches because ________. A) it takes into account the climate of different regions. B) the needs and wants of customers remain constant based on demographic differences C) it uses easily identifiable characteristics of human populations such as lifestyle D) it is relatively easy to measure the variables used in this approach to segmentation E) the demand for all kinds of products is determined by where a person lives 37) Age is a commonly used method of segmentation. Age alone, however, may be dangerous because ________. A) grouping older customers into one group is an approach that fails to consider the vast differences in other important variables B) chronological age and psychological age are the same C) older consumers exhibit very little differences from person to person on things such as income, mobility, and work status D) this approach ignores chronological age E) this approach presumes irregularity of consumer needs and wants by age 38) Demographic segmentation is best described as using characteristics of ________ to segment the market. A) human populations B) geography C) economics D) political stability E) government regulations

39) Sociologists look for defining events such as major economic upheaval, wars, and ________ as triggers for generational change. A) political stability B) marketing opportunities C) sociocultural revolution D) foreign policy changes E) population growth 40) Which of the following statements is TRUE of the baby boomers generational group? A) The baby boomers have been traditionally ignored by the marketing managers. B) The majority of baby boomers are in their early 80s. C) The baby boomers have an old outlook of life and the future. D) The baby boomers think that they don't age. E) The baby boomers will have limited impact on marketing decisions in the future. 41) Generation X is often referred to as the ________. A) spoiled generation B) nonconsumption generation C) millennial generation D) baby bust generation E) optimistic generation 42) Katherine was born in 1970. She is environmentally conscious and media-savvy. She is most likely to be a member of which generational group? A) baby boomer generation B) GI generation C) silent generation D) Generation X E) Generation Y 43) Cateleya was born in 2001. She is a member of ________. A) the baby boomer generation B) the millennial generation C) Generation Y D) Generation X E) Generation Z 44) Catalina was born in 1940. She is a member of ________. A) the baby boomer generation B) the silent generation C) Generation Y D) Generation X E) the Millennial generation

45) Which of the following would NOT be a good product for using gender segmentation? A) Nail polish B) Perfume C) Toothpaste D) Cigars E) Pregnancy tests 46) The ________ race and ethnicity market segment is about 12 percent of the U.S. population and is not growing rapidly. A) African-American B) Hispanic C) Asian-American D) Caucasian E) Indian-American 47) At one time, specialized companies catered to markets segmented by race. Today ________. A) the segments are indistinguishable B) the segments have declined in size C) the segments have become targets of mainstream businesses that offer specialized products D) the segments consist of such people who tend to buy the same type of products E) the segments lack differentiation 48) The razor is an example of a product that appeals to both men and women, but companies figured out that ________. A) the same product class cannot be used to attack different gender markets B) grooming equipment may be needed by men but certainly not by women C) there are different needs and wants for the same product category among different genders D) markets should not be segmented based on gender E) all products are clearly marketed for the primary consumption of both men and women 49) At about 17 percent of the U.S. population, ________ remain the largest minority group. A) Hispanics/Latinos B) Asians C) Indians D) Native Americans E) African Americans 50) Which of the following statements is TRUE of income segmentation? A) It is usually analyzed in incremental ranges. B) It is based on a very quantifiable geographic variable. C) Marketers seldom use income as a segmenting approach. D) It is time consuming to study consumers' buying habits based on their income. E) There is a direct correlation between income and price preferences.

51) ________ segmentation recognizes that there may be a number of consistent needs and wants demonstrated by consumers based on what type of job they have. A) Occupational B) Social C) Age D) Gender E) Educational 52) Offering credit cards to high school seniors is an example of ________ segmentation. A) income B) occupational C) educational D) lifestyle E) gender 53) Everything else being equal, ________ segmentation might lead a firm to offer its products based on some anticipated future payoff from the consumer. A) income B) occupational C) educational D) lifestyle E) gender 54) Social class has declined as a method of segmentation as a result of ________. A) higher education rates in the United States B) readily available credit flattening the classes C) the increase in minority consumers D) stores appealing to everyone E) wealthy individuals spending lavishly on luxury products 55) A marketing manager using the database called PRIZM is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational 56) A marketing manager using VALS is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational

57) An approach to segmenting consumer markets is ________ segmentation, which relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. A) occupational B) psychographic C) geographic D) educational E) gender 58) ________ segmentation is sometimes referred to as segmentation by lifestyle or values. A) Occupational B) Psychographic C) Geographic D) Educational E) G ender 59) ________ segmentation divides customers into groups according to similarities in benefits sought or product usage patterns. A) Behavioral B) Income C) Geographic D) Gender E) Educational 60) Advertisements with messages like "Orange juice—It's not just for breakfast anymore!" or "Soup can be a delicious way to start a cold winter's day" are using ________ segmentation. A) benefits sought B) lifestyle C) psychographic D) usage patterns E) geographic 61) ________ segmentation focuses on why people buy what they buy. A) Benefits sought B) Usage rate C) Demographic D) Social class E) Occasion 62) In analyzing the attractiveness of market segments, which of the following is NOT one of the most important variables? A) segment size B) growth potential C) strategic fit with the firm's goals D) location of the segment E) competitive forces related to the segment 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

63) Primary target markets differ from secondary and tertiary target markets by the ________. A) expected level of ROI derived from the market B) difficulty of attacking the market C) consumers' ability to buy multiple units D) advertising effort needed for the market E) average age of the consumers 64) Companies sometimes pick a one-market strategy. This marketing approach is called ________. A) mass approach B) undifferentiated target marketing C) differentiated strategy D) low-cost approach E) efficiency marketing 65) Differentiated target marketing means that a company is ________. A) offering different prices for different markets B) developing different products for the same market C) developing different value offerings for different targeted markets D) using the push and pull strategy to differentiate markets E) using a one-market strategy for different markets 66) Concentrated target marketing is often used by ________. A) large companies to dominate a market B) start-up firms to enter a market as a focus player C) multinational companies to enter a new market D) software consulting firms that use Internet marketing E) large e-commerce businesses to attract new customers 67) Firms that develop such close relationships with customers that they seem to deliver customized goods and services are engaged in ________ marketing. A) concentrated target marketing B) one-to-one marketing C) differentiated marketing D) undifferentiated marketing E) shotgun marketing 68) Once market segments have been defined and analyzed and target markets have been selected for development, the firm must turn its attention to creating, communicating, delivering, and exchanging offerings that have value to the target markets. This process is known as ________. A) positioning B) target marketing C) niche marketing D) outsourcing E) selling 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

69) Positioning strategy is a process that often starts with ________, which help(s) develop a set of attributes for further analysis. A) focus groups B) surveys C) case studies D) panel research E) interviews 70) Which of the following statements is TRUE of repositioning? A) It involves targeting a large portion of a small market. B) It involves understanding the marketing mix approach necessary to change present consumer perceptions of the product. C) It is popularly called a focus strategy or a niche strategy. D) It involves developing different value offerings for different targeted segments. E) It advocates that firms should direct energy and resources into establishing a learning relationship with each customer. 71) The local sandwich shop has always sold calorie-laden sandwiches and recently introduced six new sandwiches featuring vegetables and lower-calorie meats and cheeses to appeal to health-conscious customers. What strategy is the sandwich shop pursuing? A) repositioning B) one-to-one marketing C) concentration D) tertiary target marketing E) 80/20 rule 72) When a company tries to constantly develop the "next new thing," it is trying to establish ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) innovative 73) When a company only hires employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly, it achieves ________ leadership as a source of differentiation. A) personnel B) convenience C) image D) price E) service

74) Michael believes that the only motorcycle anyone should ever buy is a Harley-Davidson. Whenever he sees the Harley Davidson logo on a product, he knows that product is a leader in the market. What source of differentiation has Harley Davidson achieved? A) personnel B) convenience C) image D) price E) service 75) When a company tries to make the product or service significantly easier to obtain than the competition, it is trying to achieve ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) convenience 76) Pamela only bought her cars from Lexis because they made it so easy to get them serviced by picking her car up and bringing it back to her. Lexis shows ________ leadership. A) innovative B) image C) price D) personnel E) service 77) Harold buys most of his groceries at Aldi because it has the cheapest groceries even though he has to bring his own bags and bag his own groceries. Aldi demonstrates ________ leadership. A) innovative B) image C) price D) personnel E) service 78) Millie prefers to stay at the Omni Hotel rather than the Embassy Suites because she knows the Omni provides high-end bedding, luxurious robes and toiletry products for every customer. What differentiation factor is affecting Millie's decision? A) innovative B) convenience C) price D) personnel E) service

79) In the context of positioning errors, when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation, it is called ________. A) repositioning B) overpositioning C) underpositioning D) uninformed positioning E) fuzzy positioning 80) In the context of positioning errors, when the claims made for the product or brand are not regarded as credible by consumers, it is called ________. A) underpositioning B) repositioning C) doubtful positioning D) fuzzy positioning E) overpositioning 81) NovoTech Inc. is a manufacturer of PCs, and most of its revenue is generated by selling PCs to consumers. However, the company is struggling to extend the brand into other lucrative product lines such as tablets and smartphones. In this scenario, NovoTech is suffering from the error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning 82) In the 1970s, Michelob beer changed its advertising messages frequently and saw sales plummet. Slogans like "Weekends were made for Michelob," "Put a little weekend into your weekday," and "Special times deserve a special beer" had consumers checking their calendars to find the right time to drink a Michelob. Michelob was suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning 83) HerboCare, a company that sells herbal soaps, has failed to increase its sales, as consumers could not understand how soaps made by HerboCare were different or better than other herbal soaps available in the market. In this scenario, HerboCare is suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

84) Define the terms market segmentation, target marketing, and positioning. 85) What are the questions a marketing manager must answer in order to create effective segmentation? 86) What are the four consumer market segmentation approaches? Give an example of when you might use each one. 87) Describe the VALS framework. 88) Describe the three steps in target marketing. Explain what factors/options should be considered for each step. 89) Describe the four basic approaches to target marketing. 90) What are perceptual maps? How are they used to reposition a product?

Marketing Management, 3e (Marshall) Chapter 7 Segmentation, Target Marketing, and Positioning 1) One of the basic principles behind segmentation is that subgroups of customers can be identified on some basis of similarity. Answer: TRUE Explanation: One of the principles behind segmentation is that subgroups of customers can be identified on some basis of similarity. It is important to note that the basic logic and principles behind segmentation are sound, regardless of the basis on which a market is segmented. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Marketing (Big M) is not just identifying existing segments but also creating new ones. Answer: TRUE Explanation: When considering segmentation, it is important to remember that an essential part of Marketing (Big M)—strategic marketing—is not just identifying existing segments but also creating new ones through product development strategies. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Occupation segmentation and income segmentation are essentially the same thing. Answer: FALSE Explanation: As a segmentation variable, occupation is very closely related to income, although the two are not perfectly correlated. That is, many traditionally blue-collar jobs may pay higher wages than white-collar positions depending in part on the strength of the union within the firm and industry. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) For many marketing managers, segmentation by benefit sought is the best place to start the process of market segmentation. Answer: TRUE Explanation: For many marketing managers, segmentation by benefits sought is the best place to start the process of market segmentation. You might begin by identifying groups interested in the specific bundle of benefits afforded by your offering and then move toward utilizing the other segmentation variables to further hone the profile of the core group that is attracted to your product's benefits. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) One of the most straightforward and popular methods of segmentation is demographic. Answer: TRUE Explanation: Demographic segmentation is one of the most popular segmentation approaches because customer needs and wants tend to vary with some degree of regularity based on demographic differences and because of the relative ease of measurement of the variables. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Business market segmentation is less straightforward than segmentation of consumer markets. Answer: FALSE Explanation: In some ways, business market segmentation is more straightforward than that of consumer markets. This is partly because there is often a more defined universe of potential customers. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Generation Y, people born between 1978 and 1994, tend to be pragmatic, optimistic, good team players, savvy consumers, and edgy in nature. Answer: TRUE Explanation: Generation Y, people born between 1978 and 1994, tend to be pragmatic, optimistic, good team players, savvy consumers, and edgy. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) The largest generation is the Silent Generation. Answer: FALSE Explanation: Millennials are now the largest single generational segment in the population. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Family and household segmentation has become more complex due to a variety of differing family arrangements. Answer: TRUE Explanation: In years past, the concepts of family and household were fairly easy for marketers to define—a married man and woman, likely with children, and sometimes with other relatives such as a grandparent who had moved back in. Now, family and household segmentation can be more complex because of all kinds of different family arrangements. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) The final step in target marketing is to develop profiles of each segment under consideration for investment as a target market. Answer: FALSE Explanation: The final step in target marketing is to select the target marketing approach. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) A tertiary target market has reasonable potential but is not suited for development immediately. Answer: FALSE Explanation: Tertiary target markets are those segments that may develop emerging attractiveness for investment in the future but that do not appear attractive at present. Secondary target markets are those segments that have reasonable potential but for one reason or another are not best suited for development immediately. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) A niche strategy is the same as Porter's focus strategy and is a concentrated target marketing approach. Answer: TRUE Explanation: A concentrated target marketing approach, which Michael Porter refers to as a focus strategy and is also popularly called a niche strategy, involves targeting a large portion of a small market. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) Strategic fit means there is a good match of a target market to the firm's culture and resource capabilities. Answer: TRUE Explanation: Strategic fit means there is a good match of a target market to the firm's internal structure, culture, goals, and resource capabilities. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Effective positioning is not affected by competitive forces. Answer: FALSE Explanation: Positioning doesn't occur in a vacuum; firms must position their offerings against competitors' offerings. Difficulty: 1 Easy Topic: Competing in Various Markets Learning Objective: 07-04 Define positioning and link it to the use of the marketing mix. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) A perceptual map is used to compare consumer perceptions of each competitor's delivery against specific paired attributes. Answer: TRUE Explanation: A useful visual tool for positioning is a perceptual map, which displays paired attributes in order to compare consumer perceptions of each competitor's delivery against those attributes. Difficulty: 1 Easy Topic: Knowing the Consumer Learning Objective: 07-05 Use and interpret perceptual maps. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) Marcia wanted a car she could drive for 10 years, so she bought a Toyota because they are known for their reliability and longevity. This BEST demonstrates the product leadership source of differentiation. Answer: TRUE Explanation: Product leadership is characterized by performance, features, durability, reliability, style, and so on. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 17) In overpositioning, consumers have a very broad understanding of the company, product, or brand. Answer: FALSE Explanation: Overpositioning occurs when consumers have too narrow an understanding of the company, product, or brand. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) McDonald's fell victim to confused positioning in the 1990s after introducing too many new products which caused customers to lose track of what the core brand was. Answer: TRUE Explanation: Confused positioning occurs when frequent changes and contradictory messages confuse consumers regarding the positioning of the brand. McDonald's found itself the victim of confused positioning as it moved out of the 1990s. It had tried (and failed) at so many diverse new product launches in the restaurants that many customers lost track of what the core of the brand was. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) Firms that engage in unethical business practices are always aware of the magnitude of damage being done to their brand. Answer: FALSE Explanation: Sadly, firms that engage in unethical business practices often do not realize the magnitude of damage being done to their brand. When the claims made for the product or brand are not regarded as credible by consumers, it leads to doubtful positioning. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Which of the following is one of the basic principles behind segmentation? A) All customers are alike. B) Subgroups of customers are not similar. C) Subgroups will be smaller and more homogeneous than the overall market. D) Members of a heterogeneous market cannot allow for dividing the market into subgroups. E) In an undifferentiated market, each person has unique needs and wants. Answer: C Explanation: One of the basic principles behind segmentation is that the subgroups will be smaller and more homogeneous than the overall market. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Segmenting markets means that a company is ________. A) dividing the market into meaningful smaller markets based upon common characteristics B) selecting the markets to attack in the marketplace C) selecting a corporate position to communicate to potential customers D) identifying and calculating the churn rate in different markets E) identifying the customers who have frequently purchased competitor's products or services Answer: A Explanation: Market segmentation divides a market into meaningful smaller markets or submarkets based on common characteristics. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 7 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

22) Target marketing is the process by which ________. A) the market is divided into cohesive groups B) a company evaluates market segments and decides which ones have the most potential for development C) a company chooses which advertising strategy to use D) the customer groups are evaluated on the basis of high or low churn to see which is the most profitable E) a company collects cookies to track everyone who visits its website Answer: B Explanation: Once a segmentation approach is developed, marketing managers engage in target marketing, which involves evaluating the segments and deciding which shows the most promise for development. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between the ________. A) cost of the product and the quality B) way the 4Ps of the marketing mix work with one another C) customer's needs and wants and what the product has to offer D) product and its advertising E) salesperson and the customer at a personal level Answer: C Explanation: Positioning relies on the communication of one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

24) Organizations communicate one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Execution of this approach is referred to as a firm's ________ strategy. A) segmentation B) positioning C) production D) sales E) distribution Answer: B Explanation: Organizations communicate one or more sources of value to customers in a way that the customer can easily make the connection between his or her needs and wants and what the product has to offer. Execution of this approach is referred to as a firm's positioning strategy. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) In marketing, differentiation is a concept that means ________. A) consumer choices remain similar around the globe B) each age segment views products exactly the same C) products need to appear to be different from one another to be successful in the marketplace D) communicating and delivering value in different ways to different customer groups E) evaluating different market segments and deciding which shows the most promise for development Answer: D Explanation: Segmentation seeks to find one or more factors about members of a heterogeneous market that allow for dividing the market into smaller, more homogeneous subgroups for the purposes of developing different marketing strategies to best meet the segments' distinct needs and wants. The operative word is different, as in differentiation, which means communicating and delivering value in different ways to different customer groups. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) While developing a segmentation approach, Walter, the brand manager of a soft drinks manufacturing company says that a segment has sufficient size. He means that the market ________. A) has a large enough television audience to be worth considering B) is reachable C) can provide a positive return on investment D) has many customers in it E) is homogeneous Answer: C Explanation: There is no point doing market segmentation unless a positive return on investment is expected. Size of a segment doesn't necessarily mean number of customers but the financial size of the transaction. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 27) Which of the following criteria for market segmentation is least likely to enable successful segmentation? A) It should be measurable. B) It should be of sufficient size. C) It should be readily identifiable. D) It should be undifferentiated. E) It should be reachable in terms of communication. Answer: D Explanation: The segment must be clearly differentiated on one on more important dimensions when communicating the value of the product. For segmentation to work properly, it must allow for the creation and execution of different marketing strategies to the different submarkets identified. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) Which of the following questions about market segmentation relates to creation and execution of different marketing strategies to the different submarkets identified? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product? Answer: E Explanation: For segmentation to work properly, it must allow for the creation and execution of different marketing strategies to the different submarkets identified. It relates to the question, "Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product?" Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

30) The ability to get secondary and/or primary data on a market being considered for segmentation relates to which of the following questions about marketing? A) Can the segment be reached in terms of physical product? B) Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? C) Is the segment readily identifiable and can it be measured? D) Can the segment be reached in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? E) Is the segment clearly differentiated on one or more important dimensions when communicating the value of the product? Answer: C Explanation: For effective segmentation, managers should ask if the segment is readily identifiable and can it be measured. Segmentation most often requires data and if secondary data on the markets of interest aren't available or if primary data can't be easily collected, it may not be possible to do segmentation. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) Approaches to geographic segmentation include all of these EXCEPT ________. A) region B) density of population C) size of population D) gender of population E) climate Answer: D Explanation: Within the United States, some of the popular approaches to geographic segmentation include: by region, by density population, by size of population, by growth of population, and by climate. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

32) The region, the density of the population, and the size of the population are various approaches to use in ________. A) positioning B) differentiation C) democratic segmentation D) population parameter estimation E) geographic segmentation Answer: E Explanation: Within the United States, some of the popular approaches to geographic segmentation include: by region, by density population, by size of population, by growth of population, and by climate. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) Marketers use geographic segmentation when ________. A) certain geographic regions have more diverse populations B) geography determines one's likes and dislikes C) there is evidence that consumers respond differently to marketing strategies and programs based on where they live D) there is a strong demand for the products and services of the company in some geographic regions E) people in some regions are richer than people in other regions Answer: C Explanation: One of the most straightforward approaches to segmentation is when evidence exists that consumers respond differently to marketing strategies and programs based on where they live. Thus, geographic segmentation divides consumer groups based on physical location. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

34) When a retail chain sells winter coats, it sends them to different stores at different times of the year. Which of the following approaches to geographic segmentation in the United States does this scenario exemplify? A) by region B) by climate C) by size of population D) by growth in population E) by density of population Answer: B Explanation: This is an example of the geographic segmentation by climate. Target, a reputed winter apparel seller, for example, segments its target market by geographic climate. Starting in early September, Target begins marketing winter coats in its Minneapolis-area stores, an activity that won't begin until much later in Houston, where customers are still expecting several more months of 80 to 90 degrees. The chain's South Florida stores might never even stock traditional cold-weather apparel except in small quantities for travelers. Target wisely recognizes different customer needs across different climates and builds its marketing plans accordingly. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 35) Which of the following statements is TRUE of geographic segmentation? A) It divides consumer groups based on a variety of readily measurable descriptive factors about the group. B) In most instances, it is an insufficient criterion in and of itself. C) It does not consider climate while segmenting markets. D) It does not consider the size of population while segmenting markets. E) It is useful because the demand for all kinds of products is determined by where a person lives. Answer: B Explanation: Geographic segmentation is useful but, in most instances, is an insufficient segmentation criterion in and of itself. Because people in the United States are extremely mobile and because the demand for many products is not determined by where a person lives, additional types of segmentation are needed to successfully target customers. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

36) Demographic segmentation is one of the most popular segmentation approaches because ________. A) it takes into account the climate of different regions. B) the needs and wants of customers remain constant based on demographic differences C) it uses easily identifiable characteristics of human populations such as lifestyle D) it is relatively easy to measure the variables used in this approach to segmentation E) the demand for all kinds of products is determined by where a person lives Answer: D Explanation: Demographic segmentation is one of the most popular segmentation approaches because customer needs and wants tend to vary with some degree of regularity based on demographic differences and because of the relative ease of measurement of the variables. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) Age is a commonly used method of segmentation. Age alone, however, may be dangerous because ________. A) grouping older customers into one group is an approach that fails to consider the vast differences in other important variables B) chronological age and psychological age are the same C) older consumers exhibit very little differences from person to person on things such as income, mobility, and work status D) this approach ignores chronological age E) this approach presumes irregularity of consumer needs and wants by age Answer: A Explanation: Marketers must take care to understand that age alone often is not sufficient for successful segmentation. Older consumers exhibit great differences from person to person on such things as income, mobility, and work status. In fact, marketing managers have come to realize that lumping older consumers into one group is not an effective segmentation approach because of the vast differences in other important variables. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) Demographic segmentation is best described as using characteristics of ________ to segment the market. A) human populations B) geography C) economics D) political stability E) government regulations Answer: A Explanation: Demographics are the statistical characteristics of human populations such as age or income that are used to identify markets. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) Sociologists look for defining events such as major economic upheaval, wars, and ________ as triggers for generational change. A) political stability B) marketing opportunities C) sociocultural revolution D) foreign policy changes E) population growth Answer: C Explanation: Much research has been done on understanding differences in groups of people by generation. What defines a generational group and how does one know when a new generational group is emerging? Sociologists look for defining events such as wars, major economic upheaval, or sociocultural revolution as triggers for generational change. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) Which of the following statements is TRUE of the baby boomers generational group? A) The baby boomers have been traditionally ignored by the marketing managers. B) The majority of baby boomers are in their early 80s. C) The baby boomers have an old outlook of life and the future. D) The baby boomers think that they don't age. E) The baby boomers will have limited impact on marketing decisions in the future. Answer: D Explanation: Much of the research on baby boomers indicates that—at least in their minds— they don't age. Recall that a marketer must be cognizant of the difference between chronological age and attitudinal age. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) Generation X is often referred to as the ________. A) spoiled generation B) nonconsumption generation C) millennial generation D) baby bust generation E) optimistic generation Answer: D Explanation: Gen X is often referred to as the "baby bust" because it represents a natural cyclical downturn in birthrates. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

42) Katherine was born in 1970. She is environmentally conscious and media-savvy. She is most likely to be a member of which generational group? A) baby boomer generation B) GI generation C) silent generation D) Generation X E) Generation Y Answer: D Explanation: People born 1965–1977 constitute Generation X. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) Cateleya was born in 2001. She is a member of ________. A) the baby boomer generation B) the millennial generation C) Generation Y D) Generation X E) Generation Z Answer: E Explanation: People born 1994 to present constitute Generation Z. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) Catalina was born in 1940. She is a member of ________. A) the baby boomer generation B) the silent generation C) Generation Y D) Generation X E) the Millennial generation Answer: B Explanation: People born 1925–1945 constitute the silent generation. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) Which of the following would NOT be a good product for using gender segmentation? A) Nail polish B) Perfume C) Toothpaste D) Cigars E) Pregnancy tests Answer: C Explanation: A wide variety of products are clearly marketed for the primary consumption of either men or women, but not both—think Rogaine, cigars, and athletic supporters versus pregnancy tests, lipstick, and bras, for example. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) The ________ race and ethnicity market segment is about 12 percent of the U.S. population and is not growing rapidly. A) African-American B) Hispanic C) Asian-American D) Caucasian E) Indian-American Answer: A Explanation: African-Americans account for slightly more than 12 percent of the U.S. population, a figure that has not been growing. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) At one time, specialized companies catered to markets segmented by race. Today ________. A) the segments are indistinguishable B) the segments have declined in size C) the segments have become targets of mainstream businesses that offer specialized products D) the segments consist of such people who tend to buy the same type of products E) the segments lack differentiation Answer: C Explanation: In years past, very few products were marketed specifically to the AfricanAmerican segment other than by firms specializing only in that segment. Hair and beauty product pioneer Johnson Products, founded in 1954, was an early believer in the power of developing products such as Ultra Sheen, Afro Sheen, Classy Curl, and others that brought the company consistently double-digit sales increases throughout the 1970s and 1980s. Ultimately, the product line became so attractive that it was acquired by mainstream beauty care manufacturer L'Oréal and eventually by Well a Corporation, another broad-line marketer of beauty care products. Today, almost all major cosmetic and beauty aid firms, from Avon to P&G, market products specifically designed to appeal to this vital market segment. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) The razor is an example of a product that appeals to both men and women, but companies figured out that ________. A) the same product class cannot be used to attack different gender markets B) grooming equipment may be needed by men but certainly not by women C) there are different needs and wants for the same product category among different genders D) markets should not be segmented based on gender E) all products are clearly marketed for the primary consumption of both men and women Answer: C Explanation: Gillette learned some years ago that generally, women don't like to use a man's razor, which they had to do for decades because no thought was given to differences in gender usage preference. Research in the 1980s revealed that most women viewed men's razors as too bulky, with too many bells and whistles, and not feminine in color or design. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) At about 17 percent of the U.S. population, ________ remain the largest minority group. A) Hispanics/Latinos B) Asians C) Indians D) Native Americans E) African Americans Answer: A Explanation: Hispanics/Latinos are the largest minority group, comprising 17 percent of the total U.S. population. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

50) Which of the following statements is TRUE of income segmentation? A) It is usually analyzed in incremental ranges. B) It is based on a very quantifiable geographic variable. C) Marketers seldom use income as a segmenting approach. D) It is time consuming to study consumers' buying habits based on their income. E) There is a direct correlation between income and price preferences. Answer: A Explanation: Income segmentation is based on a very quantifiable demographic variable, and it is usually analyzed in incremental ranges. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 51) ________ segmentation recognizes that there may be a number of consistent needs and wants demonstrated by consumers based on what type of job they have. A) Occupational B) Social C) Age D) Gender E) Educational Answer: A Explanation: Occupational segmentation recognizes that there may be a number of consistent needs and wants demonstrated by consumers based on what type of job they have. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

52) Offering credit cards to high school seniors is an example of ________ segmentation. A) income B) occupational C) educational D) lifestyle E) gender Answer: C Explanation: Offering credit cards to high school seniors is an example of educational segmentation. Credit card providers are eager to market themselves to college-bound high school seniors because they know that, even with low beginning credit limits, gaining usage early increases the chances of loyalty to the card over the long run—after the student finishes college, gains professional employment, and starts making a bigger salary. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 53) Everything else being equal, ________ segmentation might lead a firm to offer its products based on some anticipated future payoff from the consumer. A) income B) occupational C) educational D) lifestyle E) gender Answer: C Explanation: Everything else being equal, educational segmentation might lead a firm to offer its products based on some anticipated future payoff from the consumer. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

54) Social class has declined as a method of segmentation as a result of ________. A) higher education rates in the United States B) readily available credit flattening the classes C) the increase in minority consumers D) stores appealing to everyone E) wealthy individuals spending lavishly on luxury products Answer: B Explanation: Today, many mitigating factors might affect one's inclusion in one or the other of the class strata. Readily available credit has flattened the classes and made many luxury products affordable to a broad spectrum of consumers who in the past would not have been able to purchase them. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) A marketing manager using the database called PRIZM is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational Answer: C Explanation: Claritas continually updates a large database called PRIZM that is zip-code driven. PRIZM profiles every zip code in the United States by both demographic and lifestyle (psychographic) variables and is used in geodemographic segmentation. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

56) A marketing manager using VALS is interested in ________ segmentation. A) geographic B) psychographic C) geodemographic D) occupational E) educational Answer: B Explanation: One popular psychographic instrument is VALS (formerly known as Values and Lifestyles), a product of Strategic Business Insights (SBI). Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 57) An approach to segmenting consumer markets is ________ segmentation, which relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. A) occupational B) psychographic C) geographic D) educational E) gender Answer: B Explanation: An approach to segmenting consumer markets is psychographic segmentation, which relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. Psychographic segmentation is sometimes also referred to as segmentation by lifestyle or values. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

58) ________ segmentation is sometimes referred to as segmentation by lifestyle or values. A) Occupational B) Psychographic C) Geographic D) Educational E) G ender Answer: B Explanation: Psychographic segmentation is sometimes referred to as segmentation by lifestyle or values. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 59) ________ segmentation divides customers into groups according to similarities in benefits sought or product usage patterns. A) Behavioral B) Income C) Geographic D) Gender E) Educational Answer: A Explanation: Behavioral segmentation divides customers into groups according to similarities in benefits sought or product usage patterns. Difficulty: 1 Easy Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

60) Advertisements with messages like "Orange juice—It's not just for breakfast anymore!" or "Soup can be a delicious way to start a cold winter's day" are using ________ segmentation. A) benefits sought B) lifestyle C) psychographic D) usage patterns E) geographic Answer: D Explanation: Segmentation by usage patterns includes usage occasions, usage rate, and user status. Occasions means specifically when the product is used. Many of consumer purchases are driven by an occasion, and marketers are very savvy at playing to consumers' desires to use occasions as a reason to buy. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Reflective Thinking Accessibility: Keyboard Navigation 61) ________ segmentation focuses on why people buy what they buy. A) Benefits sought B) Usage rate C) Demographic D) Social class E) Occasion Answer: A Explanation: Benefits sought focuses on why people buy. That is, it focuses on the crucial value-adding properties of an offering. Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

62) In analyzing the attractiveness of market segments, which of the following is NOT one of the most important variables? A) segment size B) growth potential C) strategic fit with the firm's goals D) location of the segment E) competitive forces related to the segment Answer: D Explanation: Several factors should be considered when analyzing segment attractiveness. The following are among the most important: segment size and growth potential, competitive forces related to the segment, and overall strategic fit of the segment to the company's goals and valueadding capabilities. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 63) Primary target markets differ from secondary and tertiary target markets by the ________. A) expected level of ROI derived from the market B) difficulty of attacking the market C) consumers' ability to buy multiple units D) advertising effort needed for the market E) average age of the consumers Answer: A Explanation: Primary target markets are those segments that clearly have the best chance of meeting ROI goals and the other attractiveness factors. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

64) Companies sometimes pick a one-market strategy. This marketing approach is called ________. A) mass approach B) undifferentiated target marketing C) differentiated strategy D) low-cost approach E) efficiency marketing Answer: B Explanation: Undifferentiated target marketing is essentially a one-market strategy, sometimes referred to as an unsegmented mass market. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 65) Differentiated target marketing means that a company is ________. A) offering different prices for different markets B) developing different products for the same market C) developing different value offerings for different targeted markets D) using the push and pull strategy to differentiate markets E) using a one-market strategy for different markets Answer: C Explanation: Differentiated target marketing, often referred to as simply differentiation, means developing different value offerings for different targeted segments. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

66) Concentrated target marketing is often used by ________. A) large companies to dominate a market B) start-up firms to enter a market as a focus player C) multinational companies to enter a new market D) software consulting firms that use Internet marketing E) large e-commerce businesses to attract new customers Answer: B Explanation: A concentrated target marketing approach, which Michael Porter refers to as a focus strategy and is also popularly called a niche strategy, involves targeting a large portion of a small market. Many start-up firms enter a marketplace as a focus player. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 67) Firms that develop such close relationships with customers that they seem to deliver customized goods and services are engaged in ________ marketing. A) concentrated target marketing B) one-to-one marketing C) differentiated marketing D) undifferentiated marketing E) shotgun marketing Answer: B Explanation: With the proliferation of CRM, firms are able to develop more customized approaches to target marketing. Customized (one-to-one) marketing advocates that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a manner as possible. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

68) Once market segments have been defined and analyzed and target markets have been selected for development, the firm must turn its attention to creating, communicating, delivering, and exchanging offerings that have value to the target markets. This process is known as ________. A) positioning B) target marketing C) niche marketing D) outsourcing E) selling Answer: A Explanation: Once market segments have been defined and analyzed and target markets have been selected for development, the firm must turn its attention to creating, communicating, delivering, and exchanging offerings that have value to the target markets—that is, positioning the product so that customers understand its ability to fulfill their needs and wants. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-04 Define positioning and link it to the use of the marketing mix. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 69) Positioning strategy is a process that often starts with ________, which help(s) develop a set of attributes for further analysis. A) focus groups B) surveys C) case studies D) panel research E) interviews Answer: A Explanation: Many positioning studies start with focus groups that allow participants to talk about aspects of their experiences with a product. From the focus groups, a set of attributes is developed for further analysis. Difficulty: 1 Easy Topic: Positioning Learning Objective: 07-04 Define positioning and link it to the use of the marketing mix. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

70) Which of the following statements is TRUE of repositioning? A) It involves targeting a large portion of a small market. B) It involves understanding the marketing mix approach necessary to change present consumer perceptions of the product. C) It is popularly called a focus strategy or a niche strategy. D) It involves developing different value offerings for different targeted segments. E) It advocates that firms should direct energy and resources into establishing a learning relationship with each customer. Answer: B Explanation: Perceptual maps aid in repositioning a product, which involves understanding the marketing mix approach necessary to change present consumer perceptions of the product. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-05 Use and interpret perceptual maps. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) The local sandwich shop has always sold calorie-laden sandwiches and recently introduced six new sandwiches featuring vegetables and lower-calorie meats and cheeses to appeal to health-conscious customers. What strategy is the sandwich shop pursuing? A) repositioning B) one-to-one marketing C) concentration D) tertiary target marketing E) 80/20 rule Answer: A Explanation: Repositioning changes the present consumer perceptions of a product. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-05 Use and interpret perceptual maps. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

72) When a company tries to constantly develop the "next new thing," it is trying to establish ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) innovative Answer: E Explanation: Innovative leadership involves constantly developing the "next new thing." Example: Apple. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 73) When a company only hires employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly, it achieves ________ leadership as a source of differentiation. A) personnel B) convenience C) image D) price E) service Answer: A Explanation: A company's personnel leadership position implies that it hires employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

74) Michael believes that the only motorcycle anyone should ever buy is a Harley-Davidson. Whenever he sees the Harley Davidson logo on a product, he knows that product is a leader in the market. What source of differentiation has Harley Davidson achieved? A) personnel B) convenience C) image D) price E) service Answer: C Explanation: A company's image leadership position reflects symbols, atmosphere, and creative media. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 75) When a company tries to make the product or service significantly easier to obtain than the competition, it is trying to achieve ________ leadership as a source of differentiation. A) service B) image C) price D) personnel E) convenience Answer: E Explanation: Convenience leadership is making the product or service significantly easier to obtain. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

76) Pamela only bought her cars from Lexis because they made it so easy to get them serviced by picking her car up and bringing it back to her. Lexis shows ________ leadership. A) innovative B) image C) price D) personnel E) service Answer: E Explanation: Service leadership is defined as having an unusual and notable commitment to providing service to customers. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 77) Harold buys most of his groceries at Aldi because it has the cheapest groceries even though he has to bring his own bags and bag his own groceries. Aldi demonstrates ________ leadership. A) innovative B) image C) price D) personnel E) service Answer: C Explanation: Price leadership is defined as efficiencies in cost of labor, materials, supply chain, or other operational elements enabling the price leader to charge less. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

78) Millie prefers to stay at the Omni Hotel rather than the Embassy Suites because she knows the Omni provides high-end bedding, luxurious robes and toiletry products for every customer. What differentiation factor is affecting Millie's decision? A) innovative B) convenience C) price D) personnel E) service Answer: E Explanation: Service leadership is reflected in companies that have an unusual and notable commitment to providing service to customers. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-06 Identify sources of differentiation. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 79) In the context of positioning errors, when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation, it is called ________. A) repositioning B) overpositioning C) underpositioning D) uninformed positioning E) fuzzy positioning Answer: C Explanation: When consumers have only a vague idea about the company and its products, and do not perceive any real differentiation, it is called underpositioning. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

80) In the context of positioning errors, when the claims made for the product or brand are not regarded as credible by consumers, it is called ________. A) underpositioning B) repositioning C) doubtful positioning D) fuzzy positioning E) overpositioning Answer: C Explanation: When the claims made for the product or brand are not regarded as credible by consumers, it is called doubtful positioning. Difficulty: 2 Medium Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 81) NovoTech Inc. is a manufacturer of PCs, and most of its revenue is generated by selling PCs to consumers. However, the company is struggling to extend the brand into other lucrative product lines such as tablets and smartphones. In this scenario, NovoTech is suffering from the error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning Answer: C Explanation: Overpositioning occurs when consumers have too narrow an understanding of the company, product, or brand. Difficulty: 3 Hard Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

82) In the 1970s, Michelob beer changed its advertising messages frequently and saw sales plummet. Slogans like "Weekends were made for Michelob," "Put a little weekend into your weekday," and "Special times deserve a special beer" had consumers checking their calendars to find the right time to drink a Michelob. Michelob was suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning Answer: D Explanation: Confused positioning is when frequent changes and contradictory messages confuse consumers regarding the positioning of the brand. Difficulty: 3 Hard Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 83) HerboCare, a company that sells herbal soaps, has failed to increase its sales, as consumers could not understand how soaps made by HerboCare were different or better than other herbal soaps available in the market. In this scenario, HerboCare is suffering from the positioning error of ________. A) underpositioning B) doubtful positioning C) overpositioning D) confused positioning E) repositioning Answer: A Explanation: Underpositioning occurs when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation. Difficulty: 3 Hard Topic: Positioning Learning Objective: 07-07 Avoid potential positioning errors. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

84) Define the terms market segmentation, target marketing, and positioning. Answer: Market segmentation is dividing a market into meaningful smaller markets or submarkets based on common characteristics. Target marketing is evaluating the market segments, then making decisions about which among them is most worthy of investment for development. Positioning is communicating one or more sources of value to customers in ways that connect needs and wants to what the product has to offer. Positioning strategies are executed through the development of unique combinations of the marketing mix variables. Difficulty: 3 Hard Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 85) What are the questions a marketing manager must answer in order to create effective segmentation? Answer: The four questions are: 1. Is the segment of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market? 2. Is the segment readily identifiable and can it be measured? 3. Is the segment clearly differentiated on one or more important decisions when communicating the value of the product? 4. Can the segment be reached (in terms of both communication and physical product) in order to deliver the value of the product, and subsequently can it be effectively and efficiently managed? Difficulty: 2 Medium Topic: Understanding Market Segmentation Learning Objective: 07-01 Explain the criteria for effective segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

86) What are the four consumer market segmentation approaches? Give an example of when you might use each one. Answer: Geographic segmentation divides consumer groups based on physical location. Demographic segmentation divides consumer groups based on a variety of readily measurable descriptive factors about the group. Many different demographic variables are available for measurement including age, generational group, gender, family, race and ethnicity, income, occupation, education, social class, and geodemographic group. Psychographic segmentation relies on consumer variables such as personality and AIOs (activities, interests, and opinions) to segment a market. Psychographic segmentation is sometimes also referred to as segmentation by lifestyle or values. Behavioral segmentation divides customers into groups according to similarities in benefits sought or product usage patterns. Examples will vary. Difficulty: 3 Hard Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 87) Describe the VALS framework. Answer: The VALS framework is a tool used to measure psychographics. VALS™ segments U.S. adults age 18 and older into eight consumer groups on the basis of a standardized questionnaire and proprietary algorithm. According to SBI (Strategic Business Insights, the owner and operator of VALS), "Each of us is an individual. Yet each of us also has personality traits, attitudes, or needs that are similar to those of other people. VALS™ measures the underlying psychological motivations and resources that groups of consumers share that explain and predict each group's most likely choices as consumers." VALS™ has shown consistently strong evidence of reliability and validity. Participants are grouped into categories based on low resources (survivors) and high resources (innovators) and ideals, achievement, and selfexpression. These categories include: thinkers, achievers, experiencers, believers, strivers, and makers. Difficulty: 3 Hard Topic: Understanding Market Segmentation Learning Objective: 07-02 Identify the various approaches to market segmentation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

88) Describe the three steps in target marketing. Explain what factors/options should be considered for each step. Answer: The three steps in target marketing are: 1. Analyze market segments. 2. Develop profiles of each potential target market. 3. Select a target marketing approach. Several factors should be considered when analyzing segment attractiveness. The following are among the most important: segment size and growth potential, competitive forces related to the segment, and overall strategic fit of the segment to the company's goals and value-adding capabilities. Once the market segments have been analyzed, marketing managers need to develop profiles of each segment under consideration for investment as a target market. Usually, this analysis results in segments that fall within four basic levels of priority for development: 1. Primary target markets—those segments that clearly have the best chance of meeting ROI goals and the other attractiveness factors. 2. Secondary target markets—those segments that have reasonable potential but for one reason or another are not best suited for development immediately. 3. Tertiary target markets—those segments that may develop emerging attractiveness for investment in the future but that do not appear attractive at present. 4. Target markets to abandon for future development. Difficulty: 3 Hard Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) Describe the four basic approaches to target marketing. Answer: The four basic approaches to target marketing range from very broad (undifferentiated) to very narrow (customized). Undifferentiated target marketing is a onemarket strategy and is sometimes referred to as an unsegmented mass market. Southwest Airlines uses this strategy by basing its business on cost advantages. Differentiated target marketing is referred to as simply differentiation which means developing different value offerings for different targeted segments. This differentiation might be based on product quality, service, employees, convenience, or corporate social responsibility. Concentrated target marketing is also called a niche strategy and involves targeting a large portion of a small market. Customized (one-to-one) marketing promotes the idea that firms should direct energy and resources into establishing a learning relationship with each customer and then connect that knowledge with the firm's production and service capabilities to fulfill that customer's needs in as custom a way as possible. Netflix ability to predict and recommend content demonstrates this approach. Difficulty: 3 Hard Topic: Target Markets Learning Objective: 07-03 Describe the steps in target marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) What are perceptual maps? How are they used to reposition a product? Answer: The data generated from the above analysis can be used to develop a useful visual tool for positioning called a perceptual map, which displays paired attributes in order to compare consumer perceptions of each competitor's delivery against those attributes. Today, this is usually accomplished by computer statistical software applications that plot each competitor's relative positioning on the attributes. Perceptual maps can be very useful in helping visualize where to make strategic changes to either move your product closer to the main market (clusters of competition) or further differentiate your product away from the competitive cluster and into more unique market space. In this way, perceptual maps aid in repositioning a product, which involves understanding the marketing mix approach necessary to change present consumer perceptions of the product. Difficulty: 3 Hard Topic: Positioning Learning Objective: 07-05 Use and interpret perceptual maps. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 8 Product Strategy and New Product Development 1) The essential component in delivering value is the product price. 2) When the product is wrong, skilled marketing communication and pricing sophistication can correct the problems. 3) The essential benefit is the fundamental need met by a product. 4) Different target markets will view the same product in completely different ways. 5) A stock-keeping unit (SKU) is a unique identification number used to track a product in the consumer's home. 6) Reliability is a product's ability to deliver on features and performance characteristics promised in marketing communications. 7) More than any other discriminator, style has the disadvantage of being difficult to copy. 8) Luxury cars such as the Chevrolet Corvette are available with tires that enable a driver to continue driving even after the tire has been damaged. This is an example of Corvette using style as a product discriminator. 9) One of the disadvantages of using style as a product discriminator is that consumer tastes change over time and what is considered stylish can quickly lose its appeal. 10) Barbara's Bakery sells custom cakes, cookies, and other pastries. These represent Barbara's Bakery's product line. 11) Product life cycle (PLC) includes four basic stages: introduction, growth, maturity, and delay. 12) The product life cycle (PLC) generally refers to a product item rather than a product category. 13) The targeted consumers during the maturing phase of a product life cycle are innovators and early adopters. 14) Desktop computers, cell phones, and tablet computers are examples of new-to-the-world products considered disruptive innovations. 15) The three major activities in new-product development are to (1) generate new ideas, (2) screen and evaluate ideas, and (3) define and test product concept. 16) A go-to-market mistake happens when a good idea is prematurely eliminated during the screening process. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) The number of products purchased by the same customer is called repeat purchases. 18) The business case analysis is an overall evaluation of a product and usually assesses the product's probability of success. 19) An individual moves through five stages before adopting a product, including awareness, notice, trial, testing, and feedback. 20) Trial purchase is the focus of a product launch marketing plan. 21) Early adopters are product watchers who seek out new products but are price-sensitive. 22) Everyone in a target market falls into one of five groups based on their willingness to try the innovation, including innovators, early adopters, early majority, late majority, and laggards. 23) Late majority are product followers who are price-sensitive and risk-averse. 24) The primary function of marketing and the entire organization, in a broader context, is to ________. A) increase employee turnover B) offer highly customized products C) deliver value to the customer D) focus on short-term benefits E) eliminate barriers to market entry 25) The failure of Apple Newton, the first PDA, highlights the fact that ________. A) the essential benefit is not the fundamental need met by a product B) people look for products that are technically superior C) the best product technically is not always the most successful product D) the essential component in delivering value is product pricing E) intense marketing communications can even make a wrong product successful 26) ________ can be defined as anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas. A) Utility B) Strategy C) Exchange D) Product E) Market

27) In the context of product characteristics, companies translate the essential benefit into physical, tangible elements known as the ________ product. A) augmented B) core C) deviated D) differentiated E) contrasting 28) The ________ product extends the core product to include additional features, designs, and innovations that exceed customer expectations. A) differentiated B) deviated C) amended D) specialized E) enhanced 29) In the context of product classifications, tangibility refers to the ________. A) service delivered with a product B) ability to create a combination of product and service C) physical aspects of a product D) value of a product in the market E) fundamental need met by a product 30) Today, many tangible products include aspects that impact the customer's satisfaction before and after the purchase. These aspects that complement the tangible features of a product are called ________. A) physical aspects B) core competencies C) monetary characteristics D) intangible characteristics E) essential benefits 31) Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information and rely heavily on prior purchase behavior are called ________ goods. A) shopping B) convenience C) specialty D) unsought E) consenting 32) Clothes, furniture, and major appliances such as refrigerators and dishwashers are examples of ________ goods. A) convenience B) specialty C) unsought D) capital E) shopping 3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

33) ________ goods are unique purchases made based on a defining characteristic for the consumer, which might be a real or perceived product feature, such as Apple iPhone's easy user interface. A) Shopping B) Convenience C) Specialty D) Unsought E) Capital 34) Unsought goods are characterized as being the kinds of goods that consumers ________. A) purchase solely for business purposes B) do more research on and compare across product dimensions such as color, size, features, and price C) frequently purchase and have little interest in seeking new information about D) would rather not purchase at all E) purchase solely for personal purposes 35) Companies often use features to differentiate themselves from competitors. However, a company must balance the features customers want with ________. A) what the competition offers B) the ability to manufacture the feature in a timely way C) what customers will pay D) the configurations that make a positive brand look stylish E) the resources available for production 36) An important issue for consumers is conformance, which is the product's ability to ________. A) deliver on features and performance characteristics promised in marketing communications B) conform to the standards set by the federal guidelines C) deliver value in the form of product quality D) get the manufacturing aligned using quality processes E) deliver additional features, designs, and innovations that exceed customer expectations 37) When a company can show that its product's projected lifetime is high under certain operating conditions, it is using ________ as a product discriminator. A) style B) performance quality C) form D) durability E) conformance quality

38) More than any other product discriminator, style offers the advantage to a company of being ________. A) a low-cost differentiator B) easy to do consistently over time C) able to ensure high quality D) difficult for competition to copy E) associated with high repairability 39) A product ________ is a group of products linked through usage, customer profile, price points, and distribution channels. A) form B) mix C) line D) cycle E) core 40) When companies provide too few products in a product line, they run the risk of ________. A) having inefficiencies in production B) increasing barriers to market entry C) delivering products that can be easily copied D) missing important market opportunities E) being differentiated from competitors 41) Combining all the products offered by a company is called the product ________. A) line B) mix C) profile D) standardization E) function 42) The product life cycle (PLC) defines the life of a product in four basic stages, which include ________. A) introduction, growth, maturity, and decline B) awareness, interest, trial, and adoption C) primary, secondary, advanced, and nominal D) production, development, distribution, and enhancement E) idea generation, creation, presentation, and promotion 43) The introduction phase of the product life cycle for an industry is usually characterized by ________. A) high profits B) no profits C) high sales D) low marketing costs E) low product development costs

44) The objective in the introduction phase of the product life cycle (PLC) is to ________. A) differentiate the product from those of new competitors, promoting rapid expansion B) transition the product from high growth to sales stability C) build market awareness for the product leading to trial purchase D) determine the future of the product E) develop product development strategies 45) The essential marketing objective in the growth phase of the product life cycle (PLC) is to ________. A) build trial of the product B) build public relations for the product C) build trial followed by loyalty D) differentiate the product from those of new competitors E) create market awareness for the product 46) In the ________ phase of the product life cycle (PLC), sales continue to increase but at a decreasing rate. A) maturity B) growth C) introduction D) decline E) initial 47) Informing and educating the target audience about the product's benefits and features is part of the communication strategy in the ________ phase of the product life cycle. A) introduction B) growth C) maturity D) decline E) regression 48) The most dramatic increase in revenue is most likely to occur in the ________ phase of the product life cycle. A) introduction B) growth C) maturity D) saturation E) decline 49) During the decline phase of the product life cycle, ________. A) promotion is focused on product awareness B) companies boost customer service efforts to keep up with product C) channel members cease to support the product D) the product reaches its maximum distribution E) promotion emphasizes brand advertising and comparative ads

50) During the maturity phase of the product life cycle, ________. A) sales grow, but at a rate lower than the growth stage B) no growth in sales occurs C) sales are low, typically with high failure rate D) sales grow at an increasing rate in comparison to the growth stage E) long-run drop in sales takes place 51) In the maturity phase of the product life cycle, the targeted consumers are ________. A) laggards B) majority adopters C) late adopters D) innovators E) early adopters 52) Which of the following characterizes the decline stage of the product life cycle? A) New and improved models are sold at high price points. B) Attractive price points are set to gain market share and discourage competitors. C) Established competition makes price pressures more pronounced, forcing lower-price strategy if product not well-differentiated. D) Significant price pressures come from competitors and consumers. E) Existing models or earlier generations move down in price. 53) Products that are new-to-the-world create a fundamental change in the marketplace and are known as ________. A) technological transformations B) convenience goods C) core products D) disruptive innovations E) enhanced products 54) New-to-the-world products are products that ________. A) have been available before but are recycled B) are innovative but only slightly different than previous products C) have not been available before their introduction to the market D) are not disruptive to the marketplace E) make existing products more desirable 55) When new-to-the-world products are better, faster versions of existing products that target, for the most part, existing customers, then these products are described as ________. A) specialized goods B) core products C) convenience goods D) sustaining innovations E) disruptive innovations

56) Once a product has been developed and is on the market, the company can extend the product by ________. A) creating additions to existing product lines B) creating new names for the same products C) developing persuasive advertisements D) upgrading or modifying existing products E) creating a fundamental change in the marketplace 57) When products like cell phones are promoted as a safety device for working women and moms, this demonstrates that one way to find "new" markets is to ________. A) develop product penetration strategies B) sell added benefits to the existing customers C) reposition the existing products targeting different customer segments D) alter the cost so more people can afford the product E) create advertisements targeting working women and moms 58) Customers view new products much differently than companies view them. Customers care only if a product is ________. A) new to their retail store B) new to them C) offered through a new outlet D) offered online instead of at a brick-and-mortar store E) repositioned to target new markets 59) External sources of generating product ideas include ________. A) employees from R&D B) marketing executives C) customer service representatives D) customers E) salespeople 60) Internal sources of generating product ideas include ________. A) existing customers B) distributers C) company salespeople D) retailers E) wholesalers 61) Many organizations are too small to have the resources for a national sales force to help discover new-product ideas. As a consequence, they often use ________ as a link between the customer and company. A) distributors B) parts manufacturers C) logistics companies D) server farms E) suppliers 8 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

62) While screening and evaluating ideas, a go-to-market mistake happens when ________. A) a good idea is prematurely eliminated during the screening process B) a company fails to stop a bad product idea from moving into product development C) a company uses only internal sources to generate product ideas D) a company uses only external sources to generate product ideas E) a good idea that involves high costs is implemented 63) While screening and evaluating ideas, a stop-to-market mistake happens when ________. A) a bad idea is allowed to make it to market B) a company decides to market a product that has a fatal flaw C) a good idea is pushed forward without knowing the ROI of its execution D) a good idea is prematurely eliminated during the screening process E) a company fails to stop a bad product idea from moving into product development 64) In the context of criteria used to prioritize product ideas, time to market refers to the time taken to ________. A) create awareness about a product among new market segments B) generate product ideas using internal forces C) develop and get the product to market D) get the product through the introduction stage to the growth stage E) analyze market conditions to forecast sales 65) The first step in the new-product development process is to ________. A) define the market opportunity B) generate new-product ideas C) define the product potential D) develop the product E) conduct business case analysis 66) Which of the following is an overall evaluation of a product and usually assesses the product's probability of success? A) business case analysis B) portfolio review C) trend prediction D) situation analysis E) SWOT analysis 67) New purchases of new products are called ________ purchases. A) original B) subliminal C) replacement D) trial E) repeat

68) Estimating total demand is a function of three separate purchase situations, which are ________ purchases. A) new, ideal, and impulse B) new, repeat, and replacement C) new, repeat, and impulse D) new, impulse, and replacement E) new, convenient, and impulse 69) In the context of product testing, beta testing is designed to ________. A) encourage customers to evaluate and provide feedback on a prototype B) let engineers test a product's performance C) give fake information to competitors about a new product D) allow product specialists to check the quality of a product E) clarify the basic operationalization of a product 70) Market testing of a new product can take a long time, and this can result in ________. A) competitors being able to develop marketing strategies to counter a product launch B) the company losing the excitement of a new product C) the product becoming obsolete by the time it reaches the target market D) online guerrilla tactics by competitors that will disrupt the sales cycle of the product E) customers forming negative opinions about the product 71) For products designed for business markets, market testing is ________. A) identical to the testing in B2C market B) smaller in scope and involves fewer individuals and companies C) larger in scope and involves more individuals and companies D) insignificant in the new-product development process E) not conducted for sustainable innovations 72) Which of the following helps clarify the basic operationalization of a product during product testing, such as the physical characteristics and features? A) alpha testing B) beta testing C) business case analysis D) innovation diffusion process E) concept testing 73) The rate at which new products become accepted is known as the ________ process. A) variance B) sensitivity C) adoption D) steering E) diffusion

74) An individual moves through five stages before adopting a product. The five stages include all of the following EXCEPT ________. A) awareness B) interest C) validation D) evaluation E) adoption 75) An individual purchases a product for the purpose of making a value decision. He or she is in the ________ stage of the product adoption process. A) awareness B) interest C) trial D) evaluation E) adoption 76) ________ is the focus of a product launch marketing plan, because if you can get consumers to use the product once, you can win them over with superior product design, features, and value. A) Adoption B) Trial purchase C) Interest D) Evaluation E) Awareness 77) The innovation diffusion process is how long it takes a product to move from ________. A) introduction to growth B) awareness to interest C) trial to adoption D) first purchase to last purchase E) growth to maturity 78) An individual moves through stages before adopting a product. During the interest stage, consumers ________. A) evaluate the product for trial purchase B) purchase the product for the purpose of making a value decision C) seek out added information about a product for further evaluation D) feel, see, and touch the product E) purchase the product with the intent of becoming a dependable user

79) An individual moves through stages before adopting a product. During the awareness stage, consumers ________. A) find they have a passion for the product B) receive additional information and be motivated to seek out added information for further evaluation C) know of the product, but have insufficient information to move forward through the adoption process D) purchase the product for the purpose of making a value decision E) purchase the product with the intent of becoming a dependable user 80) During the evaluation stage of the product adoption process, consumers ________. A) seek out information to further define the product B) get to know of the product, but have insufficient information to move forward through the adoption process C) purchase the product for the purpose of making a value decision D) combine all information and assess the product for trial purchase E) purchase the product with the intent of becoming a dependable user 81) During which stage do consumers purchase a product with the intent of becoming a dependable user? A) awareness B) adoption C) trial D) evaluation E) interest 82) Among the five groups of adopters, product avoiders who want to evade adoption as long as possible are known as ________. A) early adopters B) the early majority C) innovators D) the late majority E) laggards 83) ________ are product enthusiasts who enjoy being the first to try and master a new product. A) Innovators B) Early adopters C) Early majority D) Late majority E) Laggards 84) Among the five groups of adopters, laggards are people who ________. A) enjoy being the first to try and master a new product B) put off purchasing until there is no other option C) are price-sensitive and look for simplified products D) seek out new products consistent with their personal self-image E) are willing to pay the premium price for a product 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

85) Which group of adopters include prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase? A) innovators B) laggards C) early adopters D) late majority E) early majority 86) Product followers who purchase older generation models with lower prices and fewer features are called ________. A) laggards B) early adopters C) innovators D) the late majority E) the early majority 87) Among the five groups of adopters, which group is considered critical to long-term success? A) laggards B) early adopters C) late majority D) innovators E) early majority 88) Explain the four categories of consumer goods and give an example of each. 89) Explain the difference between a product line and a product mix, Give an example of each. 90) Choose a product and explain how it moves through the product life cycle. Include the objective of each phase, the targeted customers, and product strategies. 91) When consumer product market tests are created, what four key decisions must be made, and why?

Marketing Management, 3e (Marshall) Chapter 8 Product Strategy and New Product Development 1) The essential component in delivering value is the product price. Answer: FALSE Explanation: The essential component in delivering value is the product experience, which is why it is considered the heart of marketing. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 08-01 Understand the essential role of the product experience in marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) When the product is wrong, skilled marketing communication and pricing sophistication can correct the problems. Answer: FALSE Explanation: When the product is wrong, no amount of marketing communications and no degree of logistical expertise or pricing sophistication will make it successful. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-01 Understand the essential role of the product experience in marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) The essential benefit is the fundamental need met by a product. Answer: TRUE Explanation: The essential benefit is the fundamental need met by a product. No matter what other value-added product experiences are provided to the customer, the essential benefit must be part of the encounter. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) Different target markets will view the same product in completely different ways. Answer: TRUE Explanation: Different target markets will view the same product in completely different ways. Parents buying their daughter a pair of jeans would probably consider Hollister jeans to be just another pair of jeans; however, to the teenager, the same purchase makes an important statement about herself and her choice of clothes. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) A stock-keeping unit (SKU) is a unique identification number used to track a product in the consumer's home. Answer: FALSE Explanation: A stock-keeping unit (SKU) is a unique identification number used to track a product through a distribution system, inventory management, and pricing. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Reliability is a product's ability to deliver on features and performance characteristics promised in marketing communications. Answer: FALSE Explanation: Reliability is the percentage of time the product works without failure or stoppage. Conformance is a product's ability to deliver on features and performance characteristics promised in marketing communications. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) More than any other discriminator, style has the disadvantage of being difficult to copy. Answer: FALSE Explanation: One of the most difficult discriminators to accurately assess and build into a product is the look and feel of the product, or style. It is easy for someone to say a particular product has style, but designing it into a product can be a challenge. More than any other discriminator, style offers the advantage of being difficult to copy. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) Luxury cars such as the Chevrolet Corvette are available with tires that enable a driver to continue driving even after the tire has been damaged. This is an example of Corvette using style as a product discriminator. Answer: FALSE Explanation: This is an example of using repairability as a product discriminator, or ease of fixing a problem with the product. As a result, companies have built better diagnostics into their products to help isolate, identify, and repair products without the need for the costly repairs of a professional service. Luxury cars such as the Corvette are available with tires that enable the driver to continue driving even after the tire has been damaged. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) One of the disadvantages of using style as a product discriminator is that consumer tastes change over time and what is considered stylish can quickly lose its appeal. Answer: TRUE Explanation: One of the most difficult discriminators to accurately assess and build into a product is the look and feel of the product, or style. A challenge is that style can be difficult to create consistently. Consumer tastes change over time, and what is considered stylish can quickly lose it appeal. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Barbara's Bakery sells custom cakes, cookies, and other pastries. These represent Barbara's Bakery's product line. Answer: TRUE Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-03 Recognize how product strategies evolve from one product to many products. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 11) Product life cycle (PLC) includes four basic stages: introduction, growth, maturity, and delay. Answer: FALSE Explanation: Companies create, launch, and transform products as market conditions change over time. This product evolution is referred to as the product life cycle (PLC) and defines the life of a product in four basic stages: introduction, growth, maturity, and decline. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) The product life cycle (PLC) generally refers to a product item rather than a product category. Answer: FALSE Explanation: The product life cycle (PLC) generally refers to a product category (touring bicycles) rather than a product item (Giant Sedona bicycles), although companies often track their own product items against an industry PLC. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) The targeted consumers during the maturing phase of a product life cycle are innovators and early adopters. Answer: FALSE Explanation: The targeted consumers during the maturing phase of a product life cycle are majority adopters. The targeted consumers during the introduction phase of a product life cycle are innovators and early adopters. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Desktop computers, cell phones, and tablet computers are examples of new-to-the-world products considered disruptive innovations. Answer: TRUE Explanation: Most people would define new as a product that has not been available before or bears little resemblance to an existing product. Desktop computers, cell phones, and tablet computers are examples of new-to-the-world products considered disruptive innovations. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) The three major activities in new-product development are to (1) generate new ideas, (2) screen and evaluate ideas, and (3) define and test product concept. Answer: FALSE Explanation: The new-product development process consists of three main activities and eight specific tasks. The three major activities in new-product development are to (1) identify product opportunities, (2) define the product opportunity, and (3) develop the product opportunity. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) A go-to-market mistake happens when a good idea is prematurely eliminated during the screening process. Answer: FALSE Explanation: A stop-to-market mistake happens when a good idea is prematurely eliminated during the screening process. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) The number of products purchased by the same customer is called repeat purchases. Answer: TRUE Explanation: Repeat purchases are defined as the number of products purchased by the same customer. This can be important with frequently purchased products such as convenience goods that rely on frequent repeat purchases for success. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) The business case analysis is an overall evaluation of a product and usually assesses the product's probability of success. Answer: TRUE Explanation: The business case analysis is an overall evaluation of a product and usually assesses the product's probability of success. It is often done when there are changes to an existing marketing plan, such as an increase in the marketing communications budget. The business case would assess the feasibility of increasing the communications budget. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) An individual moves through five stages before adopting a product, including awareness, notice, trial, testing, and feedback. Answer: FALSE Explanation: An individual moves through five stages before adopting a product: awareness, interest, evaluation, trial, and adoption. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Trial purchase is the focus of a product launch marketing plan. Answer: TRUE Explanation: Trial purchase is the focus of a product launch marketing plan, because if you can get consumers to try the product, you can win them over with superior product design, features, and value. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Early adopters are product watchers who seek out new products but are price-sensitive. Answer: FALSE Explanation: Early adopters are product opinion leaders who seek out new products consistent with the personal self-image. This group is not price-sensitive and is willing to pay the price premium for a product. At the same time, early adopters demand a high level of personalized service and product features. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) Everyone in a target market falls into one of five groups based on their willingness to try the innovation, including innovators, early adopters, early majority, late majority, and laggards. Answer: TRUE Explanation: Everyone in a target market falls into one of five groups based on their willingness to try the innovation, including innovators, early adopters, early majority, late majority, and laggards. A person can be an innovator or early adopter in one product category and a laggard in another. Difficulty: 1 Easy Topic: Target Markets Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) Late majority are product followers who are price-sensitive and risk-averse. Answer: TRUE Explanation: Late majority are product followers who are price-sensitive and risk-averse. They purchase older generation or discontinued models with lower prices and fewer product features. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) The primary function of marketing and the entire organization, in a broader context, is to ________. A) increase employee turnover B) offer highly customized products C) deliver value to the customer D) focus on short-term benefits E) eliminate barriers to market entry Answer: C Explanation: The primary function of marketing and, more broadly speaking, the entire organization is to deliver value to the customer. The essential component in delivering value is the product experience, which is why it is considered the heart of marketing. Difficulty: 1 Easy Topic: Core Marketing Concepts Learning Objective: 08-01 Understand the essential role of the product experience in marketing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

25) The failure of Apple Newton, the first PDA, highlights the fact that ________. A) the essential benefit is not the fundamental need met by a product B) people look for products that are technically superior C) the best product technically is not always the most successful product D) the essential component in delivering value is product pricing E) intense marketing communications can even make a wrong product successful Answer: C Explanation: Newton's failure highlights the fact that the best product technically is not always the most successful product. People look for the product that delivers the best overall product experience. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 08-01 Understand the essential role of the product experience in marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) ________ can be defined as anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas. A) Utility B) Strategy C) Exchange D) Product E) Market Answer: D Explanation: Most people define a product as a tangible object; however, that is not accurate. The product experience encompasses a great deal more. Product can be defined as anything that delivers value to satisfy a need or want and includes physical merchandise, services, events, people, places, organizations, information, even ideas. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-01 Understand the essential role of the product experience in marketing. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

27) In the context of product characteristics, companies translate the essential benefit into physical, tangible elements known as the ________ product. A) augmented B) core C) deviated D) differentiated E) contrasting Answer: B Explanation: The physical, tangible elements of a product are known as the core product. Some companies do it better than others, making this critical challenge an important differentiator separating successful companies from their competitors. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) The ________ product extends the core product to include additional features, designs, and innovations that exceed customer expectations. A) differentiated B) deviated C) amended D) specialized E) enhanced Answer: E Explanation: The enhanced product extends the core product to include additional features, designs, and innovation that exceed customer expectations. In this way, companies build on the core product, creating opportunities to strengthen the brand. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

29) In the context of product classifications, tangibility refers to the ________. A) service delivered with a product B) ability to create a combination of product and service C) physical aspects of a product D) value of a product in the market E) fundamental need met by a product Answer: C Explanation: Products, as opposed to services, have a physical aspect referred to as tangibility. Tangible products present opportunities (customers can see, touch, and experience the product) and also some challenges (customers may find the product does not match their personal tastes and preferences). Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) Today, many tangible products include aspects that impact the customer's satisfaction before and after the purchase. These aspects that complement the tangible features of a product are called ________. A) physical aspects B) core competencies C) monetary characteristics D) intangible characteristics E) essential benefits Answer: D Explanation: Services are intangible. A significant challenge for marketers today is that many tangible products have intangible characteristics. For example a significant element in an individual's satisfaction with a new car is the customer service before and after the purchase. Intangible products, on the other hand, such as services have tangible characteristics. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

31) Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information and rely heavily on prior purchase behavior are called ________ goods. A) shopping B) convenience C) specialty D) unsought E) consenting Answer: B Explanation: Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information or considering other options and rely heavily on prior brand experience and purchase behavior are called convenience goods. These products include most items people buy regularly such as toiletries, gasoline, and paper products and fall into four categories. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 32) Clothes, furniture, and major appliances such as refrigerators and dishwashers are examples of ________ goods. A) convenience B) specialty C) unsought D) capital E) shopping Answer: E Explanation: Products that require consumers to do more research and compare across product dimensions such as color, size, features, and price are called shopping goods. Consumer products that fall into this category include clothes, furniture, and major appliances such as refrigerators and dishwashers. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

33) ________ goods are unique purchases made based on a defining characteristic for the consumer, which might be a real or perceived product feature, such as Apple iPhone's easy user interface. A) Shopping B) Convenience C) Specialty D) Unsought E) Capital Answer: C Explanation: Specialty goods are a unique purchase made based on a defining characteristic for the consumer. The characteristic might be a real or perceived product feature, such as Apple iPhone's easy user interface or brand identification like Porsche's reputation for building sports cars. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) Unsought goods are characterized as being the kinds of goods that consumers ________. A) purchase solely for business purposes B) do more research on and compare across product dimensions such as color, size, features, and price C) frequently purchase and have little interest in seeking new information about D) would rather not purchase at all E) purchase solely for personal purposes Answer: D Explanation: Unsought goods are products that consumers do not seek out and, indeed, often would rather not purchase at all. Insurance, particularly life insurance, is not a product people want to purchase. In general, customers do not want to purchase products or services related to sickness, death, or emergencies because, in part, the circumstances surrounding the purchase are not pleasant. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

35) Companies often use features to differentiate themselves from competitors. However, a company must balance the features customers want with ________. A) what the competition offers B) the ability to manufacture the feature in a timely way C) what customers will pay D) the configurations that make a positive brand look stylish E) the resources available for production Answer: C Explanation: A feature is any product attribute or performance characteristic and is often added or subtracted from a product to differentiate it from competitors. However, while delivering consumer value is the primary driver in making product decisions, a company must balance the features customers want with what they will pay at a given quality level. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) An important issue for consumers is conformance, which is the product's ability to ________. A) deliver on features and performance characteristics promised in marketing communications B) conform to the standards set by the federal guidelines C) deliver value in the form of product quality D) get the manufacturing aligned using quality processes E) deliver additional features, designs, and innovations that exceed customer expectations Answer: A Explanation: An important issue for consumers is conformance, which is the product's ability to deliver on features and performance characteristics promised in marketing communications. The challenge for marketers and manufacturing is that every product must deliver on those promises. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

37) When a company can show that its product's projected lifetime is high under certain operating conditions, it is using ________ as a product discriminator. A) style B) performance quality C) form D) durability E) conformance quality Answer: D Explanation: Consumer research and purchase patterns affirm that people find durability, the projected lifetime of a product under specific operating conditions, an important discriminating product characteristic and are willing to pay a premium for products that can demonstrate greater durability. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 38) More than any other product discriminator, style offers the advantage to a company of being ________. A) a low-cost differentiator B) easy to do consistently over time C) able to ensure high quality D) difficult for competition to copy E) associated with high repairability Answer: D Explanation: It is easy for someone to say a particular product has style, but designing it into a product can be a challenge. More than any other discriminator, style offers the advantage of being difficult to copy. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

39) A product ________ is a group of products linked through usage, customer profile, price points, and distribution channels. A) form B) mix C) line D) cycle E) core Answer: C Explanation: A product line is a group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction. Within a product line, strategies are developed for a single product, but also for all the products in the line. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-03 Recognize how product strategies evolve from one product to many products. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40) When companies provide too few products in a product line, they run the risk of ________. A) having inefficiencies in production B) increasing barriers to market entry C) delivering products that can be easily copied D) missing important market opportunities E) being differentiated from competitors Answer: D Explanation: Companies must balance the number of items in a product line. Too many items and customers find it difficult to differentiate between individual products. In addition, cost inefficiencies involved in producing multiple products lower margins for the entire product line. Too few products and the company runs the risk of missing important market opportunities. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 08-03 Recognize how product strategies evolve from one product to many products. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

41) Combining all the products offered by a company is called the product ________. A) line B) mix C) profile D) standardization E) function Answer: B Explanation: Combining all the products offered by a company is called the product mix. Developing strategies for the entire product mix is done at the highest levels of the organization. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 08-03 Recognize how product strategies evolve from one product to many products. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42) The product life cycle (PLC) defines the life of a product in four basic stages, which include ________. A) introduction, growth, maturity, and decline B) awareness, interest, trial, and adoption C) primary, secondary, advanced, and nominal D) production, development, distribution, and enhancement E) idea generation, creation, presentation, and promotion Answer: A Explanation: Companies create, launch, and transform products as market conditions change over time. This product evolution is the product life cycle (PLC) and defines the life of a product in four basic stages: introduction, growth, maturity, and decline. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

43) The introduction phase of the product life cycle for an industry is usually characterized by ________. A) high profits B) no profits C) high sales D) low marketing costs E) low product development costs Answer: B Explanation: New companies entering the market sustain product development and initial marketing costs associated with the product launch. As a result, the industry starts the PLC "in the red" (no profits). As the product category grows, successful companies recoup their initial costs and begin to realize are turn on their investments. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 44) The objective in the introduction phase of the product life cycle (PLC) is to ________. A) differentiate the product from those of new competitors, promoting rapid expansion B) transition the product from high growth to sales stability C) build market awareness for the product leading to trial purchase D) determine the future of the product E) develop product development strategies Answer: C Explanation: The objective in the introduction phase of the product life cycle (PLC) is to build market awareness for the product leading to trial purchase. This phase is characterized by low profitability and high costs. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

45) The essential marketing objective in the growth phase of the product life cycle (PLC) is to ________. A) build trial of the product B) build public relations for the product C) build trial followed by loyalty D) differentiate the product from those of new competitors E) create market awareness for the product Answer: D Explanation: The essential marketing objective in the growth phase of the product life cycle (PLC) is to differentiate the product from those of new competitors. During this phase, sales grow at increasing rate. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 46) In the ________ phase of the product life cycle (PLC), sales continue to increase but at a decreasing rate. A) maturity B) growth C) introduction D) decline E) initial Answer: A Explanation: In the maturity phase of the product life cycle (PLC), sales continue to increase but at a decreasing rate. The objective during this phase is to transition product from high growth to sales stability. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

47) Informing and educating the target audience about the product's benefits and features is part of the communication strategy in the ________ phase of the product life cycle. A) introduction B) growth C) maturity D) decline E) regression Answer: A Explanation: Informing and educating the target audience about the product's benefits, characteristics, and features is part of the communication strategy in the introduction phase of the product life cycle. Promotions are focused on product awareness and to stimulate primary demand. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 48) The most dramatic increase in revenue is most likely to occur in the ________ phase of the product life cycle. A) introduction B) growth C) maturity D) saturation E) decline Answer: B Explanation: The most dramatic increase in revenue is most likely to occur in the growth phase of the product life cycle. The objective during this phase is to differentiate product from those of new competitors, promoting rapid expansion. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

49) During the decline phase of the product life cycle, ________. A) promotion is focused on product awareness B) companies boost customer service efforts to keep up with product C) channel members cease to support the product D) the product reaches its maximum distribution E) promotion emphasizes brand advertising and comparative ads Answer: C Explanation: During the decline phase of the product life cycle, channel members cease to support the product. This stage is characterized by reduced distribution channels. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) During the maturity phase of the product life cycle, ________. A) sales grow, but at a rate lower than the growth stage B) no growth in sales occurs C) sales are low, typically with high failure rate D) sales grow at an increasing rate in comparison to the growth stage E) long-run drop in sales takes place Answer: A Explanation: During the maturity phase of the product life cycle, sales grow, but at a rate lower than the growth stage. During this stage, cost minimization has reached full extent. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

51) In the maturity phase of the product life cycle, the targeted consumers are ________. A) laggards B) majority adopters C) late adopters D) innovators E) early adopters Answer: B Explanation: In the maturity phase of the product life cycle, the targeted consumers are majority adopters. During this stage, marginal competitors tend to drop out. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 52) Which of the following characterizes the decline stage of the product life cycle? A) New and improved models are sold at high price points. B) Attractive price points are set to gain market share and discourage competitors. C) Established competition makes price pressures more pronounced, forcing lower-price strategy if product not well-differentiated. D) Significant price pressures come from competitors and consumers. E) Existing models or earlier generations move down in price. Answer: D Explanation: During the decline stage of the product life cycle, significant price pressures come from both competitors and more price-sensitive consumers. Cost of continued investment in marketing communications is not justified by market conditions. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

53) Products that are new-to-the-world create a fundamental change in the marketplace and are known as ________. A) technological transformations B) convenience goods C) core products D) disruptive innovations E) enhanced products Answer: D Explanation: Most people would define new as a product that has not been available before or bears little resemblance to an existing product, and one type of new product is actually referred to as a new-to-the-world product because it has not been available before. Sometimes new-tothe-world products are so innovative they create a fundamental change in the marketplace and are known as disruptive innovation. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 54) New-to-the-world products are products that ________. A) have been available before but are recycled B) are innovative but only slightly different than previous products C) have not been available before their introduction to the market D) are not disruptive to the marketplace E) make existing products more desirable Answer: C Explanation: Most people would define new as a product that has not been available before or bears little resemblance to an existing product, and one type of new product is actually referred to as a new-to-the-world product because it has not been available before. Difficulty: 1 Easy Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) When new-to-the-world products are better, faster versions of existing products that target, for the most part, existing customers, then these products are described as ________. A) specialized goods B) core products C) convenience goods D) sustaining innovations E) disruptive innovations Answer: D Explanation: Sustaining innovations are newer, better, faster versions of existing products that target, for the most part, existing customers. Sustaining innovations can be revolutionary by taking the market in a new direction. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 56) Once a product has been developed and is on the market, the company can extend the product by ________. A) creating additions to existing product lines B) creating new names for the same products C) developing persuasive advertisements D) upgrading or modifying existing products E) creating a fundamental change in the marketplace Answer: A Explanation: Once a product has been developed and on the market, the company can extend the product by creating additions to existing product lines. For years, Coca-Cola has added new products to the Coke line, first with Diet Coke in the early 1980s and now with many different Coke-branded products including Coke Zero. These products are also available in various sizes and packaging, giving Coke many different product items. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) When products like cell phones are promoted as a safety device for working women and moms, this demonstrates that one way to find "new" markets is to ________. A) develop product penetration strategies B) sell added benefits to the existing customers C) reposition the existing products targeting different customer segments D) alter the cost so more people can afford the product E) create advertisements targeting working women and moms Answer: C Explanation: A "new" product approach is to reposition existing products to target new markets. The cell phone market used this strategy successfully to introduce cell phones in the mid-1990s. Originally cell phone service providers positioned the phones as a tool for business people or as a safety tool targeting individuals such as working women and moms. As the product become more widely adopted, the positioning of the product changed to become an important work tool. As the market for cell phones expands, the positioning has evolved to include younger users. Cell phones are the dominant communication device for teenagers, and phones have been created for kids as young as seven. Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 58) Customers view new products much differently than companies view them. Customers care only if a product is ________. A) new to their retail store B) new to them C) offered through a new outlet D) offered online instead of at a brick-and-mortar store E) repositioned to target new markets Answer: B Explanation: While the company follows a specific strategy in creating a new product, the customer is unaware and, in reality, often does not really care about how the product arrived in the marketplace. The customer's perspective is much more narrow and self-directed. The customer is most interested in an answer to the fundamental question—is this product new to me? Difficulty: 2 Medium Topic: Product Life Cycle Learning Objective: 08-05 Recognize the importance of new product development to long-term success. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

59) External sources of generating product ideas include ________. A) employees from R&D B) marketing executives C) customer service representatives D) customers E) salespeople Answer: D Explanation: Internal sources include employees from R&D, marketing, and manufacturing. Key employees know both the capabilities of the company and the needs of the market. An excellent source of ideas comes from individuals and organizations not directly connected with the company. Customers and distributers are external sources of product ideas. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 60) Internal sources of generating product ideas include ________. A) existing customers B) distributers C) company salespeople D) retailers E) wholesalers Answer: C Explanation: People who work directly with customers are another source of ideas. As salespeople, customer service representatives, and others interact directly with customers, it is possible to identify new-product ideas. Often these ideas are incremental changes to existing products that solve a particular problem; however, occasionally the customer challenge requires a truly innovative solution. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) Many organizations are too small to have the resources for a national sales force to help discover new-product ideas. As a consequence, they often use ________ as a link between the customer and company. A) distributors B) parts manufacturers C) logistics companies D) server farms E) suppliers Answer: A Explanation: Distributors are a good source for new-product ideas particularly when they are the primary link between the customer and the company. Small organizations generally do not have the resources for a national sales force and use distributors in many markets. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 62) While screening and evaluating ideas, a go-to-market mistake happens when ________. A) a good idea is prematurely eliminated during the screening process B) a company fails to stop a bad product idea from moving into product development C) a company uses only internal sources to generate product ideas D) a company uses only external sources to generate product ideas E) a good idea that involves high costs is implemented Answer: B Explanation: Ideas need to be screened and evaluated as quickly as possible. While screening and evaluating ideas, a go-to-market mistake happens when a company fails to stop a bad product idea from moving into product development. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

63) While screening and evaluating ideas, a stop-to-market mistake happens when ________. A) a bad idea is allowed to make it to market B) a company decides to market a product that has a fatal flaw C) a good idea is pushed forward without knowing the ROI of its execution D) a good idea is prematurely eliminated during the screening process E) a company fails to stop a bad product idea from moving into product development Answer: D Explanation: Ideas need to be screened and evaluated as quickly as possible. A stop-to-market mistake happens when a good idea is prematurely eliminated during the screening process. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 64) In the context of criteria used to prioritize product ideas, time to market refers to the time taken to ________. A) create awareness about a product among new market segments B) generate product ideas using internal forces C) develop and get the product to market D) get the product through the introduction stage to the growth stage E) analyze market conditions to forecast sales Answer: C Explanation: The criteria used to prioritize the ideas vary by company but often include: time to market (how long it will take to develop and get the product to market), ROI, and new product fit with overall company product portfolio. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

65) The first step in the new-product development process is to ________. A) define the market opportunity B) generate new-product ideas C) define the product potential D) develop the product E) conduct business case analysis Answer: B Explanation: The first step in the new-product development process, identify potential product opportunities, has two specific tasks. First, companies must generate sufficient new-product ideas. Second, ideas need to be evaluated before resources are committed to development. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 66) Which of the following is an overall evaluation of a product and usually assesses the product's probability of success? A) business case analysis B) portfolio review C) trend prediction D) situation analysis E) SWOT analysis Answer: A Explanation: The business case analysis is an overall evaluation of a product and usually assesses the product's probability of success. It is often done when there are changes to an existing marketing plan, such as an increase in the marketing communications budget. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

67) New purchases of new products are called ________ purchases. A) original B) subliminal C) replacement D) trial E) repeat Answer: D Explanation: New purchases are first-time sales. With new products, these sales are called trial purchases. This is also calculated as the trial rate (how many individuals in a particular target market have tried the product). Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) Estimating total demand is a function of three separate purchase situations, which are ________ purchases. A) new, ideal, and impulse B) new, repeat, and replacement C) new, repeat, and impulse D) new, impulse, and replacement E) new, convenient, and impulse Answer: B Explanation: Estimating total demand is a function of three separate purchase situations, which includes new, repeat, and replacement purchases. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) In the context of product testing, beta testing is designed to ________. A) encourage customers to evaluate and provide feedback on a prototype B) let engineers test a product's performance C) give fake information to competitors about a new product D) allow product specialists to check the quality of a product E) clarify the basic operationalization of a product Answer: A Explanation: At some point, the company will want potential customers to begin testing the product. Beta testing encourages customers to evaluate and provide feedback on the prototype. The product may be close to the final configuration but beta tests allow for further product testing and refinement. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 70) Market testing of a new product can take a long time, and this can result in ________. A) competitors being able to develop marketing strategies to counter a product launch B) the company losing the excitement of a new product C) the product becoming obsolete by the time it reaches the target market D) online guerrilla tactics by competitors that will disrupt the sales cycle of the product E) customers forming negative opinions about the product Answer: A Explanation: Market testing takes time and competitors can take advantage to enhance their product mix or develop marketing strategies to counter a successful product launch. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) For products designed for business markets, market testing is ________. A) identical to the testing in B2C market B) smaller in scope and involves fewer individuals and companies C) larger in scope and involves more individuals and companies D) insignificant in the new-product development process E) not conducted for sustainable innovations Answer: B Explanation: Products designed for business markets are tested differently than their consumer product counterparts. Essentially, the tests are smaller in scope and involve fewer individuals and companies; however, they are no less important in the new-product development process. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) Which of the following helps clarify the basic operationalization of a product during product testing, such as the physical characteristics and features? A) alpha testing B) beta testing C) business case analysis D) innovation diffusion process E) concept testing Answer: A Explanation: As a product's characteristics are being finalized, most of the testing is done internally by engineers, product specialists, and other employees. This type of testing, called alpha testing, helps clarify the basic operationalization of the product such as the physical characteristics and features. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) The rate at which new products become accepted is known as the ________ process. A) variance B) sensitivity C) adoption D) steering E) diffusion Answer: C Explanation: The rate at which products become accepted is known as the adoption process. Marketers are interested in knowing the rate at which a product will be adopted into a market as well as the timeline. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) An individual moves through five stages before adopting a product. The five stages include all of the following EXCEPT ________. A) awareness B) interest C) validation D) evaluation E) adoption Answer: C Explanation: An individual moves through five stages before adopting a product: awareness, interest, evaluation, trail, and adoption. Marketers, particularly those involved in a new-product launch, want to move consumers through the process as quickly as possible. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) An individual purchases a product for the purpose of making a value decision. He or she is in the ________ stage of the product adoption process. A) awareness B) interest C) trial D) evaluation E) adoption Answer: C Explanation: An individual moves through five stages before adopting a product. During the fourth stage—trial—a person purchases a product for the purpose of making a value decision. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) ________ is the focus of a product launch marketing plan, because if you can get consumers to use the product once, you can win them over with superior product design, features, and value. A) Adoption B) Trial purchase C) Interest D) Evaluation E) Awareness Answer: B Explanation: An individual moves through five stages before adopting a product: awareness, interest, evaluation, trail, and adoption. Trial purchase is the focus of a product launch marketing plan because if you can get consumers to try the product, you can win them over with superior product design, features, and value. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) The innovation diffusion process is how long it takes a product to move from ________. A) introduction to growth B) awareness to interest C) trial to adoption D) first purchase to last purchase E) growth to maturity Answer: D Explanation: A product can be in the market for a long time and still be considered an innovation to an individual consumer. The innovation diffusion process is how long it takes a product to move from first purchase to last purchase (the last set of users to adopt the product). Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 78) An individual moves through stages before adopting a product. During the interest stage, consumers ________. A) evaluate the product for trial purchase B) purchase the product for the purpose of making a value decision C) seek out added information about a product for further evaluation D) feel, see, and touch the product E) purchase the product with the intent of becoming a dependable user Answer: C Explanation: An individual moves through five stages before adopting a product. During the interest stage, consumers receive additional information (advertising, word of mouth) and be motivated to seek out added information for further evaluation. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) An individual moves through stages before adopting a product. During the awareness stage, consumers ________. A) find they have a passion for the product B) receive additional information and be motivated to seek out added information for further evaluation C) know of the product, but have insufficient information to move forward through the adoption process D) purchase the product for the purpose of making a value decision E) purchase the product with the intent of becoming a dependable user Answer: C Explanation: An individual moves through stages before adopting a product. During the awareness stage, consumers know of the product, but have insufficient information to move forward through the adoption process. Marketers, particularly those involved in a new-product launch, want to move consumers through the process as quickly as possible. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) During the evaluation stage of the product adoption process, consumers ________. A) seek out information to further define the product B) get to know of the product, but have insufficient information to move forward through the adoption process C) purchase the product for the purpose of making a value decision D) combine all information and assess the product for trial purchase E) purchase the product with the intent of becoming a dependable user Answer: D Explanation: An individual moves through five stages before adopting a product. During the evaluation stage of the product adoption process, consumers combine all information (word of mouth, reviews, advertising) and evaluate the product for trial purchase. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

81) During which stage do consumers purchase a product with the intent of becoming a dependable user? A) awareness B) adoption C) trial D) evaluation E) interest Answer: B Explanation: An individual moves through five stages before adopting a product. During the adoption stage, consumers purchase a product with the intent of becoming a dependable user. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) Among the five groups of adopters, product avoiders who want to evade adoption as long as possible are known as ________. A) early adopters B) the early majority C) innovators D) the late majority E) laggards Answer: E Explanation: Product avoiders who want to evade adoption as long as possible are known as laggards. Resistant to change, they will put off the purchase until there is no other option. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

83) ________ are product enthusiasts who enjoy being the first to try and master a new product. A) Innovators B) Early adopters C) Early majority D) Late majority E) Laggards Answer: A Explanation: Innovators are product enthusiasts who enjoy being the first to try and master a new product. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 84) Among the five groups of adopters, laggards are people who ________. A) enjoy being the first to try and master a new product B) put off purchasing until there is no other option C) are price-sensitive and look for simplified products D) seek out new products consistent with their personal self-image E) are willing to pay the premium price for a product Answer: B Explanation: Laggards are product avoiders who want to evade adoption as long as possible. Resistant to change, they will put off the purchase until there is no other option. Difficulty: 2 Medium Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) Which group of adopters include prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase? A) innovators B) laggards C) early adopters D) late majority E) early majority Answer: A Explanation: Innovators are product enthusiasts who enjoy being the first to try and master a new product. Individuals in this group are prime candidates for beta testing and represent a good source of feedback late in the product development process or early in the product launch phase. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Product followers who purchase older generation models with lower prices and fewer features are called ________. A) laggards B) early adopters C) innovators D) the late majority E) the early majority Answer: D Explanation: Late majority refers to product followers who are price-sensitive and risk-averse. They purchase older generation or discontinued models with lower prices and fewer product features. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

87) Among the five groups of adopters, which group is considered critical to long-term success? A) laggards B) early adopters C) late majority D) innovators E) early majority Answer: E Explanation: The early majority group is considered critical to long-term success as they take the product into the mainstream. Difficulty: 1 Easy Topic: The New-Product Development Process Learning Objective: 08-07 Identify how new products become diffused in a market. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) Explain the four categories of consumer goods and give an example of each. Answer: Frequently purchased, relatively low-cost products for which customers have little interest in seeking new information or considering other options and rely heavily on prior brand experience and purchase behavior are called convenience goods. These products include most items people buy regularly such as toiletries, gasoline, and paper products. Products that require consumers to do more research and compare across product dimensions such as color, size, features, and price are called shopping goods. Consumer products that fall into this category include clothes, furniture, and major appliances such as refrigerators and dishwashers. Specialty goods are a unique purchase made based on a defining characteristic for the consumer. The characteristic might be a real or perceived product feature such as Apple iPhone's easy user interface or brand identification like Porsche's reputation for building sports cars. The final categories of goods, unsought goods, are products that consumers do not seek out and, indeed, often would rather not purchase at all. Insurance, particularly life insurance, is not a product people want to purchase. Examples will vary. Difficulty: 3 Hard Topic: The Characteristics of a Product Learning Objective: 08-02 Define the characteristics of a product. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) Explain the difference between a product line and a product mix, Give an example of each. Answer: A product line is a group of products linked through usage, customer profile, price points, and distribution channels or needs satisfaction. Within a product line, strategies are developed for a single product, but also for all the products in the line. Combining all the products offered by a company is called the product mix. Small, start-up companies frequently have a relatively limited product mix, but, as companies grow, their list of products grows as well. Examples will vary. Difficulty: 3 Hard Topic: The Characteristics of a Product Learning Objective: 08-03 Recognize how product strategies evolve from one product to many products. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 90) Choose a product and explain how it moves through the product life cycle. Include the objective of each phase, the targeted customers, and product strategies. Answer: Answers will vary. Difficulty: 3 Hard Topic: Product Life Cycle Learning Objective: 08-04 Understand the life of a product and how product strategies change over time. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) When consumer product market tests are created, what four key decisions must be made, and why? Answer: 1. Where: The location of the market test is based on how well it reflects the potential target markets. Most market tests involve somewhere between two and five cities to mitigate regional differences in purchase patterns (if there are any). 2. How long: Most test markets run less than a year. The test should be long enough to include several purchase cycles. With many consumer products, purchase cycles are relatively short (days or weeks) so there is less need for a long market test. 3. Data: Critical information needed to make necessary decisions must be identified. Management frequently wants to know how long it takes for the product to move through the distribution system, tracking the product from manufacturing plant through to the point of sale (matching inventory as it leaves the plant with store sales). In addition, buyers are interviewed on their product experience. 4. Decision criteria: Metrics for further action must be identified. At this stage it is difficult to pull a product, but if the product fails in the market test, management is faced with a difficult decision—drop the product or send it back for major redesign. If the product is a success, then the product launch decision is much easier. Difficulty: 3 Hard Topic: The New-Product Development Process Learning Objective: 08-06 Understand the new product development process. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 9 Build the Brand 1) The three customer brand roles include conveying information about a product, educating the customer about the product, and reassuring the customer in the purchase decision. 2) A company's brand offers a methodology for distributing products. 3) A good branding strategy can overcome a product that fails to deliver on the value proposition by infusing it with the brand image. 4) In industries with strong market-leading brands, competitors design and build products targeted specifically at the market leader. 5) One advantage unbranded products have over branded products is that customers will infer a level of quality from the unbranded product that facilitates their purchase decision. 6) The perceived quality of a brand enables companies to extend the product range, can lead to a price premium opportunity, and is a differentiator in the market. 7) A trademark for a product is a brand asset. 8) The major advantage of brand connections for the brand sponsor is that it is a barrier to entry for potential competitors, especially for smaller firms that lack brand recognition. 9) The strongest form of brand equity that reflects a commitment to repeat purchases is brand association. 10) The three benefits of high brand equity are perceived quality, brand connections, and brand loyalty. 11) A key advantage of a brand sponsor is that loyalty is transferred from the well-known sponsor brand to the less-known brand. 12) Products such as Crest, Tide, and Gillette that are sold under the same brand throughout the country are known as store brands. 13) Brand-loyal customers are less forgiving of problems related to the brand, which hinders the company's ability to respond to a negative experience. 14) Family branding separates the company from the brand, which insulates the company if there is a problem with the brand. 15) The characters from the popular cartoon show "SpongeBob Square Pants" can be found on a variety of merchandises such as clothing, toys and video games. Yet, the original creator of the show does not produce any of the items. This is an example of licensing the brand name to other manufacturers. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

16) The most important role of the package is to sell the product to the consumer. 17) The packaging for a Nerf product shows kids playing with it. This best demonstrates the protect function of packaging. 18) In most retail environments, a package has very little time to connect with the customer at the point of purchase. 19) The federal organization that requires nutritional labeling on packages of processed food is the Food and Drug Administration. 20) Package labeling represents the last marketing opportunity before the purchase decision. 21) When a company encases its product in a blister pack to protect the item, it is using the packaging to communicate its benefits. 22) The seller's commitment to the product is most clearly articulated through an integrated marketing plan. 23) Companies should not be concerned with whether the benefits of the warranty exceed the costs. 24) A(n) ________ is defined by the American Marketing Association as "a name, term, design, symbol, or any other feature that identifies one seller's goods or services as distinct from those of other sellers." A) identity B) profile C) trait D) brand E) product 25) Which of the these reflects a customer brand role? A) Brands offer legal protection for a product through a trademark. B) Brands convey information about a product. C) Brands enable companies to defend essential product elements. D) Brands provide competitors with a benchmark against which to compete. E) Brands offer an effective and efficient methodology for categorizing products. 26) A company's brand role includes ________. A) educating the customer about a product B) offering an effective and efficient methodology for categorizing products C) conveying information about a product D) helping reassure the customer in the purchase decision E) providing competitors with a benchmark against which to compete

27) When customers see the logo of McDougal's restaurant, they think of food served quickly in a clean, family-friendly environment. Which customer brand role does this exemplify? A) providing competitors with a benchmark against which to compete B) helping reassure the customer in the purchase decision C) conveying information about a product D) offering an effective and efficient methodology for categorizing products E) offering legal protection for the product through a trademark 28) The owner of Sorios Lawn Service is looking to buy a new lawn tractor, a major purchase and significant financial investment. The owner decides to purchase a Dixie Chopper because of its reputation for dependability and excellent customer service which made him feel more secure and less anxious about choosing this product. Which customer brand role does this scenario exemplify? A) providing competitors with a benchmark against which to compete B) helping reassure the customer in the purchase decision C) offering an effective and efficient methodology for categorizing products D) offering legal protection for a product through a trademark E) enabling competitors to build products targeted specifically at the market leader 29) When a competitor used its logo in a disparaging way in an advertisement, Max Corp. sued. It won the suit on the basis that the competitor violated its trademark. Which company brand role does this scenario exemplify? A) providing competitors with a benchmark against which to compete B) offering an effective and efficient methodology for categorizing products C) offering legal protection for a product D) helping reassure the customer in the purchase decision E) educating the customer about a product 30) Because Sony has so many different product offerings in various types of electronics, management has found that it is helpful to use brands to keep track of products in each type. Thus, it has different brand names for its televisions, DVD players, and portable music players. Which company brand role does this example illustrate? A) educating the customer about a product B) providing competitors with a benchmark against which to compete C) offering legal protection for a product through trademark D) helping reassure the customer in the purchase decision E) offering an effective and efficient methodology for categorizing products 31) ________ brands enable manufacturers to leverage marketing resources by creating efficiencies in marketing communications and distribution. A) Licensed B) Private C) Custom D) National E) Stand-alone

32) With brand ________, customers develop a number of emotional, performance, and psychological connections with a brand. A) validity B) link C) association D) identity E) awareness 33) The owners of NK Medical Equipment have been developing the brand equity of their MRI and CAT scan equipment. Now, on the mention of NK's machines, radiologists and hospital purchasing agents usually say that they have heard of NK's offerings and are interested in learning more about them. This response signals a familiarity and potential commitment to the brand. In this case, which dimension of brand equity has been achieved by NKMedical Equipment? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality 34) Gerry always purchases clothing made by S&G Clothing. He tells others about how much he likes their clothes and the high levels of quality maintained by S&G. When a shirt he purchased turned out to be defective, instead of switching to another clothing company, he gave S&G a chance to fix the problem and still shops there. Which dimension of brand equity does Gerry demonstrate? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality 35) Since Maytag's appliances have earned a reputation as being reliable and durable, John decided to buy a new Maytag washing machine, and was willing to buy it despite the fact that it was more expensive than other brands. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) specific warranty E) perceived quality

36) José has been to Farm Fresh Ice Cream Shops several times. Being a loyal customer, he has developed certain emotional and psychological connections with the brand. For instance, he links the brand with higher levels of customer service. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) brand strategy E) perceived quality 37) KFC is very protective of its "Seven Herbs and Spices" recipe, which, in the view of the company, gives it a significant competitive advantage over other restaurants, and will use any legal resource available to protect its patented formula. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality 38) Even though a national brand pain reliever and a store brand pain reliever both contain the same amount of ibuprofen per capsule and are both gel coated, Cho chooses to purchase the national brand because she thinks it will work better based on the brand name alone. Which dimension of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived value E) brand loyalty 39) Paedro's Pasta has developed a strong brand name in the dry pasta marketplace based on its texture and taste. Through its strong brand, Paedro's Pasta was able to introduce a successful line of sauces under the same brand name. Which of the following dimensions of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived bonuses E) brand loyalty

40) Because of its reputation for excellent flavor and increasing energy, DBM Beverages is able to charge a price premium for its products. Which of the following dimensions of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived bonuses E) brand loyalty 41) Hiroaki bought a bicycle from a well-known brand without even considering the other equally good, unbranded bicycles. This shows the advantage that branded products have over unbranded ones in terms of ________. A) price efficiency B) actual performance C) perceived quality D) physical features E) product variety 42) When Maria purchases laundry detergent, she is able to easily recall and process information about Tide, but not the other brands. Which benefit of brand equity for customers does this exemplify? A) generalized warranty B) brand strategy C) brand associations D) perceived bonuses E) specific warranty 43) Z brand is the market leader in small appliances. Its brand is also the strongest in the category and customers identify with the brand. Because of the strength of its brand, other competitors are finding it difficult to successfully enter the marketplace. Which of the following benefits of brand equity for brand sponsors does this exemplify? A) generalized warranty B) brand image C) brand connections D) perceived bonuses E) brand awareness 44) Courtney always prefers Coca-Cola products. She does not consider other beverages, even when they are cheaper than Coca-Cola. Which of the following benefits of brand equity for customers does this exemplify? A) brand strategy B) brand awareness C) brand assets D) perceived bonuses E) brand loyalty

45) Intel makes a product most people never see; however, it spends a great deal of money building its brand and now people ask for "Intel Inside." This is an example of linking the benefit of ________ to marketing strategy. A) brand standards B) brand image C) brand connections D) perceived bonuses E) brand loyalty 46) The most basic form of brand equity is ________. A) perceived reliability B) brand loyalty C) brand association D) perceptive quality E) brand awareness 47) The marketing manager for DRNK Spirits decided that all of the products his company produced would carry the same brand name of Nightlife. As a result, there is Nightlife Ale, Nightlife Lager, Nightlife Vodka, Nightlife Tequila, and Nightlife Whiskey. This is an example of ________ branding. A) family B) store C) stand-alone D) cooperative E) national 48) Lever Brothers, a worldwide leader in consumer products, follows a brand strategy in its personal care division with nine brands (AXE, Dove, Lifebuoy, Lux, Ponds, Rexona, Sunsilk, Signal, and Vaseline) that operate independently of one another. This is an example of ________ branding. A) family B) store C) stand-alone D) coE) national 49) A company can use its brand to expand into new product types. This is known as a ________. A) brand association B) store branding C) category extension D) cobranding E) franchise

50) International Delight coffee creamers frequently adds new flavors to its product offerings. This would be an example of a ________ extension. A) natural B) line C) service D) category E) basic 51) Dell used its brand to expand into new areas including printers and consumer electronics such as LCD and plasma televisions. Dell engaged in a ________ extension. A) natural B) line C) random D) category E) basic 52) Super-Mart decides to create its own brand of personal care products. It enters into an agreement with a large manufacturer of this type of product to supply Super-Mart with the products that will carry its newly formed brand's name. This is an example of ________ branding. A) family B) store C) stand-alone D) coE) national 53) RB Soaps, the market leader in body wash, sells its products in every state under the same brand. This is an example of ________ branding. A) category B) store C) stand-alone D) coE) national 54) Offering other manufacturers the right to use the brand in exchange for a set fee or percentage of sales is known as ________. A) family branding B) benchmarking C) stand-alone branding D) cobranding E) licensing

55) Costco and Visa joined together to offer a Costco-Visa card that allows users to get rebates on their purchases at Costco while expanding the reach of Visa to Costco members. This is an example of ________. A) family branding B) store branding C) stand-alone branding D) cobranding E) licensing 56) Pierre Cardin partnered with several other product manufacturers and attached its name to a wide assortment of products including clothing, housewares, and even cosmetics. Eventually, its brand image became diluted and lost its influence as a luxury manufacturer. Which of the following disadvantages of cobranding does this example illustrate? A) loss of control B) overexposure C) lack of perceived quality D) lack of brand awareness E) accommodation 57) Nickelodeon and Marriott partnered to create a kid-friendly chain of vacation-oriented hotels. Which of the following types of cobranding relationships does this exemplify? A) colocation B) multiple company venture C) joint venture D) internal brand combination E) merger 58) The Symbian operating system came about from the cobranding effort of Nokia, Ericsson, Sony, Panasonic, Siemens, and Samsung. They license Symbian to a number of wireless manufacturers including LG and Fujitsu. Which of the following types of cobranding relationships does this exemplify? A) partnering with a variety of third-party financial institutions B) bringing multiple companies together to form a new branded product C) retailers sharing the same retail location D) combining two of a company's own products E) merging with the industry leader 59) All of these are package objectives EXCEPT ________. A) to protect B) to communicate C) to promote usage D) to provide a layer of security and verification E) to entertain

60) Tiffany & Company's blue-colored box is widely recognized by consumers. Which of the following roles of packaging does this exemplify? A) promotions B) aesthetics C) communication D) harmony E) protection 61) Heinz revolutionized the industry when it introduced its inverted bottle because consumers had complained for years about how hard it was to get out that last bit of ketchup. The company spent three years designing the convenient container, which is equipped with a vacuum cap that stops dry ketchup from forming around the lid. Which of the following packaging objectives does this exemplify? A) promote usage B) aesthetic C) communication D) harmony E) protection 62) Feather Tissues Inc. decided to change the color of its tissue box from red to blue because blue was thought to be visually pleasing to consumers at the time of purchase. The change in color represents the ________ aspect of packaging. A) utility B) aesthetic C) communicative D) innovative E) protective 63) Barb's Butters recently changed the shape of its packages from a pouch to a tub because product testing revealed that the tubs created less mess for consumers. Which of the following package objectives does the change in shape exemplify? A) usage promotion B) aesthetic C) communication D) harmony E) protection 64) The marketing manager of a store brand pain reliever is designing the package for its new gel-coated capsules. Her main concerns are to design a package that prevents tampering with its contents and keeps children from accessing the product without adult assistance. On which of the following objectives of packaging is the marketing manager focusing? A) protection B) aesthetics C) communication D) harmony E) usage promotion 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

65) In an attempt to reduce product thefts in retail stores, companies include antitheft methodology, such as bar coding or magnetic stripes, in the package design that discourages shoplifting. Which of the following package objectives does this exemplify? A) harmony B) aesthetics C) communication D) protection E) usage promotion 66) Mrs. Butterworth's syrup comes in a bottle shaped like a woman. The intent of this type of packaging is to transfer critical brand messages quickly through design cues since many competitor syrup brands come in teardrop-shaped bottles. The unique shape of the Mrs. Butterworth's bottle fulfils which objective of packaging? A) usage promotion B) quality C) communication D) harmony E) protection 67) Procter & Gamble wanted Crest Vivid White Toothpaste to stand out from competitor brand toothpastes on store shelves, so it created a stand-up package and used a graphics-heavy box. In the context of objectives of packaging, the company focuses on ________. A) usage promotion B) quality C) protection D) harmony E) communication 68) The marketing manager of Easy Peasy Vegetables is working on the package for a new line of self-steaming microwaveable vegetables. She wants the package to show a physically fit individual happily eating the product in order to connect the product to the customer. In this case, on which objective of packaging is the marketing manager focusing? A) usage promotion B) aesthetic C) safety D) harmony E) protection 69) The marketing manager of Toddles Baby Food is redesigning the package for her product. She is trying to select a color that is visually appealing and is distinctive so that her brand is easy to identify. In the context of effective packaging, the marketing manager of Toddles is focusing on ________. A) usage promotion B) aesthetics C) quality D) harmony E) protection 11 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

70) Hazardous materials such as cleaning products, pesticides, and many other items require 14 different pieces of information be included on the label. This is an example of the ________ requirements of labeling. A) aesthetic B) marketing C) legal D) industry E) consumer 71) The Food and Drug Administration requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. This is an example of the ________ requirements of labeling. A) aesthetic B) marketing C) legal D) industry E) consumer 72) Veronica, the marketing manager of QRS Children's Furniture, is designing a new label for the company's line of highchairs. The two key aspects of the label that she is working on are the assembly instructions and the simple usage instructions. These are examples of the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer 73) Robitussin redesigned its packaging to provide specific product use information to help buyers make a purchase decision and to inform them about proper product usage. The package lists four key pieces of information: the product's formulation, its possible side effects, the symptoms it treats, and the recommended age for usage. This is an example of meeting the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer

74) On a box of Procter & Gamble's Bounce fabric softener sheets, the brand name "Bounce" is approximately 50 percent of the space on the front panel and the rest of the space is a bright color (orange) with clean fresh images of a sun rising and a green field. This is an example of the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer 75) The manager of NRG Beverage Company is revamping a product's label to carry a better product image to help the consumer recognize it quickly. He is focusing on the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer 76) The owner of NOP Detergents is working with an art designer on the label for a new line of naturally- scented detergents. They are trying to come up with the best way to place the brand and logo along with the other required information on the label. They are working on the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer 77) Food product manufacturers are required to list the number of calories at the top of the nutrition panel. Posting calorie information is an example of meeting the ________ requirements of labeling. A) industry B) aesthetic C) legal D) marketing E) customer 78) In 1914, the federal government, through the Federal Trade Commission, first ruled misleading or blatantly phony labels were illegal and represented unfair competition. This demonstrates a ________ requirement of labeling. A) industry B) aesthetic C) legal D) marketing E) customer 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

79) The warranty on a bottle of store brand pain relievers says that consumers may return this product if they are dissatisfied with it for any reason. This is an example of a(n) ________ warranty. A) specific B) additional C) extended D) general E) basic 80) The manufacturer of Fast Peddle Bikes offers a warranty that states that the gear-shifting mechanism for its product will work consistently and be free of mechanical defects for five years. This is an example of a(n) ________ warranty. A) specific B) additional C) extended D) general E) basic 81) Warranties that make broad promises about product performance and customer satisfaction are known as ________ warranties. A) limited B) exclusive C) general D) inclusive E) specific 82) Mercedes-Benz offers a lifetime roadside assistance warranty on all of its vehicles, which shows that Mercedes is committed to customer service. This is an example of the ability of a warranty to ________. A) provide a cost to customers B) provide a service to customers C) convey a message to customers D) build brand awareness E) build brand identity 83) Recently, Mercedes-Benz quietly reduced its warranty coverage by eliminating some free scheduled maintenance because the expense for the firm was too high. At the same time, Hyundai and others have expanded their warranties to build consumer confidence in their cars. They realize that extending the period of warranty coverage demonstrates they are making better cars in a very tangible way. These are examples of firms considering the ________ of product warranty. A) storage and handling B) costs versus benefits C) message D) product differentiation E) persuasiveness 14 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

84) Warranties that offer explicit product performance promises related to components of the product are known as ________ warranties. A) specific B) basic C) inclusive D) additional E) unlimited 85) ________ warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. A) Explicit B) General C) Limited D) Basic E) Controlled 86) Compare and contrast customer, company, and competitor brand roles. 87) Explain the four basic strategic decisions that help define a brand and the advantages of using each. 88) Explain and give examples of how packaging protects, communicates, and promotes usage. 89) What are the three requirements of labels? Why are these important? 90) Describe the difference between a general warranty and a specific warranty.

Marketing Management, 3e (Marshall) Chapter 9 Build the Brand 1) The three customer brand roles include conveying information about a product, educating the customer about the product, and reassuring the customer in the purchase decision. Answer: TRUE Explanation: Whether the customer is a consumer or another business, brands have three primary roles. First, the brand conveys information about the product. Brands also educate the customer about the product. A third brand role is to help reassure the customer in the purchase decision. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) A company's brand offers a methodology for distributing products. Answer: FALSE Explanation: Brands perform important roles for the brand's sponsor (manufacturer, distributor, or retailer). They offer legal protection for the product through a trademark. A second critical role is that brands offer an effective and efficient methodology for categorizing products. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) A good branding strategy can overcome a product that fails to deliver on the value proposition by infusing it with the brand image. Answer: FALSE Explanation: While branding can have a strong effect on the product experience, it is not allpowerful. A good branding strategy will not overcome a poorly designed product that fails to deliver on the value proposition. Difficulty: 2 Medium Topic: Branding Strategies Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) In industries with strong market-leading brands, competitors design and build products targeted specifically at the market leader. Answer: TRUE Explanation: Market-leading brands provide competitors with a benchmark against which to compete. In industries with strong market-leading brands, competitors design and build products targeted specifically at the market leader. Difficulty: 2 Medium Topic: Branding Strategies Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) One advantage unbranded products have over branded products is that customers will infer a level of quality from the unbranded product that facilitates their purchase decision. Answer: FALSE Explanation: All things being equal (value proposition, product features) the branded product gives customers a reason to buy. This is a big advantage over unbranded products because customers will infer a level of quality from the branded product that facilitates their purchase decision. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) The perceived quality of a brand enables companies to extend the product range, can lead to a price premium opportunity, and is a differentiator in the market. Answer: TRUE Explanation: The perceived quality of a brand provides three distinct benefits to the company. First, the perception of a brand's quality enables companies to extend the product range. Second, the perception of quality can lead to a price premium opportunity. Finally, the perception of quality is an excellent differentiator in the market. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) A trademark for a product is a brand asset. Answer: TRUE Explanation: Brands possess other assets such as trademarks and patents that represent a significant competitive advantage. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) The major advantage of brand connections for the brand sponsor is that it is a barrier to entry for potential competitors, especially for smaller firms that lack brand recognition. Answer: TRUE Explanation: When customers identify with a brand and then transfer that loyalty to the product, it creates an additional barrier to entry for new brands, particularly for smaller firms that lack brand recognition. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The strongest form of brand equity that reflects a commitment to repeat purchases is brand association. Answer: FALSE Explanation: Brand loyalty is the strongest form of brand equity and reflects a commitment to repeat purchases. Loyal customers are reassured by the brand and are often ambassadors to new customers. Loyal customers enable a company to reduce marketing costs, leverage trade relationships, and speak to competitive threats with greater success. Difficulty: 1 Easy Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) The three benefits of high brand equity are perceived quality, brand connections, and brand loyalty. Answer: TRUE Explanation: High brand equity delivers a number of benefits to the customers and manufacturers, retailers, and distributors or brand sponsors who control the brand. Three benefits are perceived quality, brand connections, and brand loyalty. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) A key advantage of a brand sponsor is that loyalty is transferred from the well-known sponsor brand to the less-known brand. Answer: FALSE Explanation: When customers identify with a brand and then transfer that loyalty to the product, it creates an additional barrier to entry for new brands, particularly for smaller firms that lack brand recognition. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Products such as Crest, Tide, and Gillette that are sold under the same brand throughout the country are known as store brands. Answer: FALSE Explanation: Large consumer products companies such as Procter & Gamble create national brands that are sold around the country under the same brand. Gillette Fusion, Crest toothpaste, and many others are national brands that can be found anywhere. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) Brand-loyal customers are less forgiving of problems related to the brand, which hinders the company's ability to respond to a negative experience. Answer: FALSE Explanation: Brand-loyal customers are forgiving, which enables companies to respond to a negative experience. This creates a sense of ownership (equity) and loyalty. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Family branding separates the company from the brand, which insulates the company if there is a problem with the brand. Answer: FALSE Explanation: Family branding does not separate the company from the brand. There is synergy among members of a brand family, but a negative event with one product often leads to negative publicity for the entire brand family. Stand-alone brands separate the company from the brand. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) The characters from the popular cartoon show "SpongeBob Square Pants" can be found on a variety of merchandises such as clothing, toys and video games. Yet, the original creator of the show does not produce any of the items. This is an example of licensing the brand name to other manufacturers. Answer: TRUE Explanation: Among the best followers of the license strategy are movies, which license their brand (the movie) to a wide range of companies (restaurants, toy manufacturers, and others). For example, the Avengers broke box office records with $1.5 billion in global box office revenue opening week, but license agreements will keep making money for the franchise for years. Not only does Disney sell merchandise through the Marvel division, it has licensing agreements with Acura, Wyndham Hotels, and Hasbro, among many others. Difficulty: 2 Medium Topic: Branding Strategies Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) The most important role of the package is to sell the product to the consumer. Answer: FALSE Explanation: Above all, the package must protect the product. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) The packaging for a Nerf product shows kids playing with it. This best demonstrates the protect function of packaging. Answer: FALSE Explanation: In this case, the package design encourages product use. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) In most retail environments, a package has very little time to connect with the customer at the point of purchase. Answer: TRUE Explanation: A visually-appealing package is not enough. It must be directed at the target audience to be successful. In most retail environments, a package has very little time to connect with the customer at the point of purchase. As a result, designs that are appropriate, interesting, and persuasive to the target market are critical. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) The federal organization that requires nutritional labeling on packages of processed food is the Food and Drug Administration. Answer: TRUE Explanation: Labels must meet federal, state, even local rules and regulations. The Food and Drug Administration (FDA) requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Package labeling represents the last marketing opportunity before the purchase decision. Answer: TRUE Explanation: Since package labeling represents the last marketing opportunity before the purchase decision, as much label space as possible is allocated to marketing communications. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) When a company encases its product in a blister pack to protect the item, it is using the packaging to communicate its benefits. Answer: FALSE Explanation: When marketers and package designers make extensive use of blister packs (products encased in clear plastic) and other package designs to visibly present and protect the product, they are promoting product usage. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) The seller's commitment to the product is most clearly articulated through an integrated marketing plan. Answer: FALSE Explanation: Part of the customer's overall perception of a brand is the seller's commitment to the product. This commitment is most clearly articulated in the product's warranties and service agreements. Difficulty: 2 Medium Topic: The Characteristics of a Product Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) Companies should not be concerned with whether the benefits of the warranty exceed the costs. Answer: FALSE Explanation: Companies constantly evaluate their warranties (length of time, return/replacement/refund policies, nature of product performance) to consider whether the benefits of the warranty exceed the costs. Difficulty: 1 Easy Topic: The Characteristics of a Product Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

24) A(n) ________ is defined by the American Marketing Association as "a name, term, design, symbol, or any other feature that identifies one seller's goods or services as distinct from those of other sellers." A) identity B) profile C) trait D) brand E) product Answer: D Explanation: A brand, as defined by the American Marketing Association, is " a name, term, design, symbol, or any other feature that identifies one seller's goods or services as distinct from those of other sellers." Difficulty: 1 Easy Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) Which of the these reflects a customer brand role? A) Brands offer legal protection for a product through a trademark. B) Brands convey information about a product. C) Brands enable companies to defend essential product elements. D) Brands provide competitors with a benchmark against which to compete. E) Brands offer an effective and efficient methodology for categorizing products. Answer: B Explanation: Whether the customer is a consumer or another business, brands have three primary roles. First, the brand conveys information about the product. Brands also educate the customer about the product. Finally, brands help reassure the customer in the purchase decision. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) A company's brand role includes ________. A) educating the customer about a product B) offering an effective and efficient methodology for categorizing products C) conveying information about a product D) helping reassure the customer in the purchase decision E) providing competitors with a benchmark against which to compete Answer: B Explanation: Brands perform important roles for the brand's sponsor (manufacturer, distributor, or retailer). They offer legal protection for the product through a trademark. A second critical role is that brands offer an effective and efficient methodology for categorizing products. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) When customers see the logo of McDougal's restaurant, they think of food served quickly in a clean, family-friendly environment. Which customer brand role does this exemplify? A) providing competitors with a benchmark against which to compete B) helping reassure the customer in the purchase decision C) conveying information about a product D) offering an effective and efficient methodology for categorizing products E) offering legal protection for the product through a trademark Answer: C Explanation: Whether the customer is a consumer or another business, brands have three primary roles. First, the brand conveys information about the product. Without any additional data, customers construct expectations about quality, service, even features based on the brand. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

28) The owner of Sorios Lawn Service is looking to buy a new lawn tractor, a major purchase and significant financial investment. The owner decides to purchase a Dixie Chopper because of its reputation for dependability and excellent customer service which made him feel more secure and less anxious about choosing this product. Which customer brand role does this scenario exemplify? A) providing competitors with a benchmark against which to compete B) helping reassure the customer in the purchase decision C) offering an effective and efficient methodology for categorizing products D) offering legal protection for a product through a trademark E) enabling competitors to build products targeted specifically at the market leader Answer: B Explanation: Brands help reassure the customer in the purchase decision. Older, established brands provide a sense of security and reduce concerns about product quality. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 29) When a competitor used its logo in a disparaging way in an advertisement, Max Corp. sued. It won the suit on the basis that the competitor violated its trademark. Which company brand role does this scenario exemplify? A) providing competitors with a benchmark against which to compete B) offering an effective and efficient methodology for categorizing products C) offering legal protection for a product D) helping reassure the customer in the purchase decision E) educating the customer about a product Answer: C Explanation: Brands perform important roles for the brand's sponsor (manufacturer, distributor, or retailer). They offer legal protection for the product through a trademark. By protecting the brand, the company is able to defend essential product elements such as its features, patentable ideas in manufacturing or product design, and packaging. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

30) Because Sony has so many different product offerings in various types of electronics, management has found that it is helpful to use brands to keep track of products in each type. Thus, it has different brand names for its televisions, DVD players, and portable music players. Which company brand role does this example illustrate? A) educating the customer about a product B) providing competitors with a benchmark against which to compete C) offering legal protection for a product through trademark D) helping reassure the customer in the purchase decision E) offering an effective and efficient methodology for categorizing products Answer: E Explanation: Brands offer an effective and efficient methodology for categorizing products. Sony has thousands of products across many product categories and branding helps keep track of those products. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 31) ________ brands enable manufacturers to leverage marketing resources by creating efficiencies in marketing communications and distribution. A) Licensed B) Private C) Custom D) National E) Stand-alone Answer: D Explanation: National brands enable manufacturers to leverage marketing resources by creating efficiencies in marketing communications and distribution. In addition, national brands generally have a higher perceived quality and, as a result, enjoy a price premium. However, developing a national brand is costly and lower-priced store brands are strong competitors in many product categories. Difficulty: 2 Medium Topic: Branding Decisions Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

32) With brand ________, customers develop a number of emotional, performance, and psychological connections with a brand. A) validity B) link C) association D) identity E) awareness Answer: C Explanation: Customers develop a number of emotional, psychological, and performance associations with a brand, called brand association. In many cases, these associations become a primary purchase driver, particularly with brand-loyal users. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) The owners of NK Medical Equipment have been developing the brand equity of their MRI and CAT scan equipment. Now, on the mention of NK's machines, radiologists and hospital purchasing agents usually say that they have heard of NK's offerings and are interested in learning more about them. This response signals a familiarity and potential commitment to the brand. In this case, which dimension of brand equity has been achieved by NKMedical Equipment? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality Answer: C Explanation: The most basic form of brand equity is simply being aware of the brand. Awareness is the foundation of all other brand relationships. It signals a familiarity and potential commitment to the brand. Difficulty: 3 Hard Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

34) Gerry always purchases clothing made by S&G Clothing. He tells others about how much he likes their clothes and the high levels of quality maintained by S&G. When a shirt he purchased turned out to be defective, instead of switching to another clothing company, he gave S&G a chance to fix the problem and still shops there. Which dimension of brand equity does Gerry demonstrate? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality Answer: D Explanation: Brand loyalty is the strongest form of brand equity and reflects a commitment to repeat purchases. Loyal customers are reassured by the brand and are often ambassadors to new customers. Loyal customers enable a company to reduce marketing costs, leverage trade relationships, and speak to competitive threats with greater success. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 35) Since Maytag's appliances have earned a reputation as being reliable and durable, John decided to buy a new Maytag washing machine, and was willing to buy it despite the fact that it was more expensive than other brands. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) specific warranty E) perceived quality Answer: E Explanation: Brands convey a perception of quality that is either positive or negative. Companies use a positive perceived quality to differentiate the product and create higher price points. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

36) José has been to Farm Fresh Ice Cream Shops several times. Being a loyal customer, he has developed certain emotional and psychological connections with the brand. For instance, he links the brand with higher levels of customer service. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) brand strategy E) perceived quality Answer: B Explanation: Customers develop a number of emotional, psychological, and performance associations with a brand. In many cases, these associations become a primary purchase driver, particularly with brand-loyal users. Difficulty: 3 Hard Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 37) KFC is very protective of its "Seven Herbs and Spices" recipe, which, in the view of the company, gives it a significant competitive advantage over other restaurants, and will use any legal resource available to protect its patented formula. Which dimension of brand equity does this example illustrate? A) brand assets B) brand association C) brand awareness D) brand loyalty E) perceived quality Answer: A Explanation: Brands possess assets such as trademarks and patents that represent a significant competitive advantage. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

38) Even though a national brand pain reliever and a store brand pain reliever both contain the same amount of ibuprofen per capsule and are both gel coated, Cho chooses to purchase the national brand because she thinks it will work better based on the brand name alone. Which dimension of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived value E) brand loyalty Answer: A Explanation: Brands convey a perception of quality that is either positive or negative. Companies use a positive perceived quality to differentiate the product and create higher price points. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 39) Paedro's Pasta has developed a strong brand name in the dry pasta marketplace based on its texture and taste. Through its strong brand, Paedro's Pasta was able to introduce a successful line of sauces under the same brand name. Which of the following dimensions of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived bonuses E) brand loyalty Answer: A Explanation: Brands convey a perception of quality that is either positive or negative. Companies use a positive perceived quality to differentiate the product and create higher price points. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

40) Because of its reputation for excellent flavor and increasing energy, DBM Beverages is able to charge a price premium for its products. Which of the following dimensions of brand equity does this example illustrate? A) perceived quality B) brand strategy C) brand connections D) perceived bonuses E) brand loyalty Answer: A Explanation: Brands convey a perception of quality that is either positive or negative. Companies use a positive perceived quality to differentiate the product and create higher price points. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 41) Hiroaki bought a bicycle from a well-known brand without even considering the other equally good, unbranded bicycles. This shows the advantage that branded products have over unbranded ones in terms of ________. A) price efficiency B) actual performance C) perceived quality D) physical features E) product variety Answer: C Explanation: All things being equal (value proposition, product features), the branded product gives customers a reason to buy. This is a big advantage over unbranded products because customers will infer a level of quality from the branded product that facilitates their purchase decision. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

42) When Maria purchases laundry detergent, she is able to easily recall and process information about Tide, but not the other brands. Which benefit of brand equity for customers does this exemplify? A) generalized warranty B) brand strategy C) brand associations D) perceived bonuses E) specific warranty Answer: C Explanation: Two primary customer advantages result from brand associations. First, customers process, store, and retrieve product information by brand, which is a big advantage for strong brands. People are more likely to connect information with a brand they know rather than sort through information on unfamiliar brands. A second benefit is that strong brands generate a more positive attitude toward the product. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 43) Z brand is the market leader in small appliances. Its brand is also the strongest in the category and customers identify with the brand. Because of the strength of its brand, other competitors are finding it difficult to successfully enter the marketplace. Which of the following benefits of brand equity for brand sponsors does this exemplify? A) generalized warranty B) brand image C) brand connections D) perceived bonuses E) brand awareness Answer: C Explanation: When customers identify with a brand and then transfer that loyalty to the product, it creates an additional barrier to entry for new brands, particularly for smaller firms that lack brand recognition. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

44) Courtney always prefers Coca-Cola products. She does not consider other beverages, even when they are cheaper than Coca-Cola. Which of the following benefits of brand equity for customers does this exemplify? A) brand strategy B) brand awareness C) brand assets D) perceived bonuses E) brand loyalty Answer: E Explanation: Brand-loyal customers do not spend as much time searching for new information and, as a result, generally spend less time in the purchase decision process. Difficulty: 2 Medium Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 45) Intel makes a product most people never see; however, it spends a great deal of money building its brand and now people ask for "Intel Inside." This is an example of linking the benefit of ________ to marketing strategy. A) brand standards B) brand image C) brand connections D) perceived bonuses E) brand loyalty Answer: E Explanation: Intel spends a great deal of money building its brand and now people ask for "Intel Inside." Marketing managers know that loyal customers are great advocates for a brand. As a result, blogs and other online communities have become excellent tools for marketers to reinforce the brands message. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

46) The most basic form of brand equity is ________. A) perceived reliability B) brand loyalty C) brand association D) perceptive quality E) brand awareness Answer: E Explanation: The most basic form of brand equity is simply being aware of the brand. Awareness is the foundation of all other brand relationships. It signals a familiarity and potential commitment to the brand. Difficulty: 1 Easy Topic: Brand Equity Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) The marketing manager for DRNK Spirits decided that all of the products his company produced would carry the same brand name of Nightlife. As a result, there is Nightlife Ale, Nightlife Lager, Nightlife Vodka, Nightlife Tequila, and Nightlife Whiskey. This is an example of ________ branding. A) family B) store C) stand-alone D) cooperative E) national Answer: A Explanation: In family branding, there is synergy among members of a brand family, but a negative event with one product often leads to negative publicity for the entire brand family. Heinz uses a family branding strategy with all products introduced under the Heinz brand (ketchup and other condiments). Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

48) Lever Brothers, a worldwide leader in consumer products, follows a brand strategy in its personal care division with nine brands (AXE, Dove, Lifebuoy, Lux, Ponds, Rexona, Sunsilk, Signal, and Vaseline) that operate independently of one another. This is an example of ________ branding. A) family B) store C) stand-alone D) coE) national Answer: C Explanation: Stand-alone brands separate the company from the brand, which insulates the company if there is a problem with the brand. But stand-alone brands are expensive to create and maintain as there is little or no synergy between company brands. Lever Brothers, a worldwide leader in consumer products, follows a stand-alone brand strategy in its personal care division with nine brands that operate independently of each other (AXE, Dove, Lifebuoy, Lux, Ponds, Rexona, Sunsilk, Signal, and Vaseline). Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) A company can use its brand to expand into new product types. This is known as a ________. A) brand association B) store branding C) category extension D) cobranding E) franchise Answer: C Explanation: A company can use its brand to expand into new product categories, known as a category extension. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

50) International Delight coffee creamers frequently adds new flavors to its product offerings. This would be an example of a ________ extension. A) natural B) line C) service D) category E) basic Answer: B Explanation: Companies use branding to extend a line. International Delight coffee creamers frequently adding new flavors to its product offerings is an example of a line extension. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 51) Dell used its brand to expand into new areas including printers and consumer electronics such as LCD and plasma televisions. Dell engaged in a ________ extension. A) natural B) line C) random D) category E) basic Answer: D Explanation: A company can use its brand to expand into new product categories, known as a category extension. Dell used its brand to expand into new product categories, including printers and consumer electronics such as LCD and plasma televisions. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

52) Super-Mart decides to create its own brand of personal care products. It enters into an agreement with a large manufacturer of this type of product to supply Super-Mart with the products that will carry its newly formed brand's name. This is an example of ________ branding. A) family B) store C) stand-alone D) coE) national Answer: B Explanation: An alternative to creating a national brand is a store brand. Many large retailers create a store brand to market their own products. Often contracting with the large manufacturers such as Procter & Gamble, retailers are able to compete directly with national brands by offering lower prices. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 53) RB Soaps, the market leader in body wash, sells its products in every state under the same brand. This is an example of ________ branding. A) category B) store C) stand-alone D) coE) national Answer: E Explanation: Large consumer products companies such as Procter & Gamble create national brands that are sold around the country under the same brand. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

54) Offering other manufacturers the right to use the brand in exchange for a set fee or percentage of sales is known as ________. A) family branding B) benchmarking C) stand-alone branding D) cobranding E) licensing Answer: E Explanation: Companies can choose to extend their brand by licensing—offering other manufacturers the right to use the brand in exchange for a set fee or percentage of sales. There is very little risk to the brand sponsor, and licensing can generate incremental revenue. Difficulty: 1 Easy Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) Costco and Visa joined together to offer a Costco-Visa card that allows users to get rebates on their purchases at Costco while expanding the reach of Visa to Costco members. This is an example of ________. A) family branding B) store branding C) stand-alone branding D) cobranding E) licensing Answer: D Explanation: Successful cobranding relationships work best when both brands come together as equals that make sense in the marketplace. Costco and Visa joined together to offer a CostcoVisa card that allows users to get rebates on their purchases at Costco while expanding the reach of Visa to Costco members. Difficulty: 2 Medium Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

56) Pierre Cardin partnered with several other product manufacturers and attached its name to a wide assortment of products including clothing, housewares, and even cosmetics. Eventually, its brand image became diluted and lost its influence as a luxury manufacturer. Which of the following disadvantages of cobranding does this example illustrate? A) loss of control B) overexposure C) lack of perceived quality D) lack of brand awareness E) accommodation Answer: B Explanation: A potential disadvantage of cobranding is overexposure; a successful product does not want too many cobranded relationships because it can dilute the brand's image. Difficulty: 3 Hard Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 57) Nickelodeon and Marriott partnered to create a kid-friendly chain of vacation-oriented hotels. Which of the following types of cobranding relationships does this exemplify? A) colocation B) multiple company venture C) joint venture D) internal brand combination E) merger Answer: C Explanation: Generally, cobranding involves one of four relationships. This is an example of a joint venture between two companies. Difficulty: 3 Hard Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

58) The Symbian operating system came about from the cobranding effort of Nokia, Ericsson, Sony, Panasonic, Siemens, and Samsung. They license Symbian to a number of wireless manufacturers including LG and Fujitsu. Which of the following types of cobranding relationships does this exemplify? A) partnering with a variety of third-party financial institutions B) bringing multiple companies together to form a new branded product C) retailers sharing the same retail location D) combining two of a company's own products E) merging with the industry leader Answer: B Explanation: This type of cobranding relationship involves bringing multiple companies together to form a new branded product. Difficulty: 3 Hard Topic: Branding Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 59) All of these are package objectives EXCEPT ________. A) to protect B) to communicate C) to promote usage D) to provide a layer of security and verification E) to entertain Answer: E Explanation: A product package protects, communicates, promotes usage, and provides a layer of security and verification. It is not meant to entertain. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

60) Tiffany & Company's blue-colored box is widely recognized by consumers. Which of the following roles of packaging does this exemplify? A) promotions B) aesthetics C) communication D) harmony E) protection Answer: B Explanation: Color plays a significant role in package design, indeed, in the entire branding strategy. The colors reflect the brand and are carried through in the package design. This relates to aesthetics. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 61) Heinz revolutionized the industry when it introduced its inverted bottle because consumers had complained for years about how hard it was to get out that last bit of ketchup. The company spent three years designing the convenient container, which is equipped with a vacuum cap that stops dry ketchup from forming around the lid. Which of the following packaging objectives does this exemplify? A) promote usage B) aesthetic C) communication D) harmony E) protection Answer: A Explanation: Innovative package designs encourage product use. Heinz revolutionized the 170year-old industry when it introduced its inverted bottle (consumers had complained for years about how hard it was to squeeze out that last bit of ketchup). Since the product's introduction, Heinz ketchup sales consistently beat the industry average sales growth. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

62) Feather Tissues Inc. decided to change the color of its tissue box from red to blue because blue was thought to be visually pleasing to consumers at the time of purchase. The change in color represents the ________ aspect of packaging. A) utility B) aesthetic C) communicative D) innovative E) protective Answer: B Explanation: Color plays a significant role in package design, indeed, in the entire branding strategy. The colors reflect the brand and are carried through in the package design, and are a part of aesthetics. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 63) Barb's Butters recently changed the shape of its packages from a pouch to a tub because product testing revealed that the tubs created less mess for consumers. Which of the following package objectives does the change in shape exemplify? A) usage promotion B) aesthetic C) communication D) harmony E) protection Answer: A Explanation: Package design also encourages product use. By creating a more user-friendly package, a company can encourage consumers to buy its product. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

64) The marketing manager of a store brand pain reliever is designing the package for its new gel-coated capsules. Her main concerns are to design a package that prevents tampering with its contents and keeps children from accessing the product without adult assistance. On which of the following objectives of packaging is the marketing manager focusing? A) protection B) aesthetics C) communication D) harmony E) usage promotion Answer: A Explanation: Protecting customers from unauthorized access to the product is part of package design. Prescription bottles and most over-the-counter medicines are required to be tamper-proof and child-proof to protect customers. Package safety seals provide a layer of security and verification to the customer that the product has not been altered before purchase. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 65) In an attempt to reduce product thefts in retail stores, companies include antitheft methodology, such as bar coding or magnetic stripes, in the package design that discourages shoplifting. Which of the following package objectives does this exemplify? A) harmony B) aesthetics C) communication D) protection E) usage promotion Answer: D Explanation: Protecting customers from unauthorized access to the product is part of package design. A growing concern is product theft, particularly in the retail store. As a result, the package design should include antitheft methodology, such as bar coding or magnetic stripes, that discourages shoplifting. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

66) Mrs. Butterworth's syrup comes in a bottle shaped like a woman. The intent of this type of packaging is to transfer critical brand messages quickly through design cues since many competitor syrup brands come in teardrop-shaped bottles. The unique shape of the Mrs. Butterworth's bottle fulfils which objective of packaging? A) usage promotion B) quality C) communication D) harmony E) protection Answer: C Explanation: As the customer stands in front of a shelf full of products in a store, the marketer wants the brand to be clearly visible to the buyer. This means packaging must be designed to easily communicate critical brand messages quickly through color or design cues. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 67) Procter & Gamble wanted Crest Vivid White Toothpaste to stand out from competitor brand toothpastes on store shelves, so it created a stand-up package and used a graphics-heavy box. In the context of objectives of packaging, the company focuses on ________. A) usage promotion B) quality C) protection D) harmony E) communication Answer: E Explanation: As the customer stands in front of a shelf full of products in a store, the marketer wants the brand to be clearly visible to the buyer. This means packaging must be designed to easily communicate critical brand messages quickly through color or design cues. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

68) The marketing manager of Easy Peasy Vegetables is working on the package for a new line of self-steaming microwaveable vegetables. She wants the package to show a physically fit individual happily eating the product in order to connect the product to the customer. In this case, on which objective of packaging is the marketing manager focusing? A) usage promotion B) aesthetic C) safety D) harmony E) protection Answer: A Explanation: Package design encourages product use in several ways. Packages frequently show the product being used by a happy customer, which supports the overall marketing message. This connects the product to the target customer. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 69) The marketing manager of Toddles Baby Food is redesigning the package for her product. She is trying to select a color that is visually appealing and is distinctive so that her brand is easy to identify. In the context of effective packaging, the marketing manager of Toddles is focusing on ________. A) usage promotion B) aesthetics C) quality D) harmony E) protection Answer: B Explanation: Color plays a significant role in package design, indeed, in the entire branding strategy. It is an aesthetic feature. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

70) Hazardous materials such as cleaning products, pesticides, and many other items require 14 different pieces of information be included on the label. This is an example of the ________ requirements of labeling. A) aesthetic B) marketing C) legal D) industry E) consumer Answer: C Explanation: Labels must meet federal, state, even local rules and regulations. Some products must have warnings of a certain size that are easily read and understood by the customer. Hazardous materials such as cleaning products, pesticides, and many other items require 14 different pieces of information be included on the label. It is easy to understand why space on the label is at such a premium. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 71) The Food and Drug Administration requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. This is an example of the ________ requirements of labeling. A) aesthetic B) marketing C) legal D) industry E) consumer Answer: C Explanation: Labels must meet federal, state, even local rules and regulations. The Food and Drug Administration (FDA) requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. Other products must have warnings of a certain size that are easily read and understood by the customer. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

72) Veronica, the marketing manager of QRS Children's Furniture, is designing a new label for the company's line of highchairs. The two key aspects of the label that she is working on are the assembly instructions and the simple usage instructions. These are examples of the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer Answer: E Explanation: Consumers want to use products out of the box and package labeling is the most convenient place for initial use instructions. Additionally, product precautions, simple assembly information, and appropriate age for product use may also be included on the package. Essentially, any information the consumer needs to make a product choice, particularly at the point of purchase, needs to be on the package. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

73) Robitussin redesigned its packaging to provide specific product use information to help buyers make a purchase decision and to inform them about proper product usage. The package lists four key pieces of information: the product's formulation, its possible side effects, the symptoms it treats, and the recommended age for usage. This is an example of meeting the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer Answer: E Explanation: Consumers want to use products out of the box and package labeling is the most convenient place for initial use instructions. Additionally, product precautions, simple assembly information, and appropriate age for product use may also be included on the package. Essentially, any information the consumer needs to make a product choice, particularly at the point of purchase, needs to be on the package. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 74) On a box of Procter & Gamble's Bounce fabric softener sheets, the brand name "Bounce" is approximately 50 percent of the space on the front panel and the rest of the space is a bright color (orange) with clean fresh images of a sun rising and a green field. This is an example of the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer Answer: B Explanation: Since package labeling represents the last marketing opportunity before the purchase decision, as much label space as possible is allocated to marketing communications. Brand, logo, product image, and other relevant marketing messages take up the dominant space on the label. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

75) The manager of NRG Beverage Company is revamping a product's label to carry a better product image to help the consumer recognize it quickly. He is focusing on the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer Answer: B Explanation: Since package labeling represents the last marketing opportunity before the purchase decision, as much label space as possible is allocated to marketing communications. Brand, logo, product image, and other relevant marketing messages take up the dominant space on the label. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 76) The owner of NOP Detergents is working with an art designer on the label for a new line of naturally- scented detergents. They are trying to come up with the best way to place the brand and logo along with the other required information on the label. They are working on the ________ requirements of labeling. A) legislative B) marketing C) legal D) industry E) consumer Answer: B Explanation: Since package labeling represents the last marketing opportunity before the purchase decision, as much label space as possible is allocated to marketing communications. Brand, logo, product image, and other relevant marketing messages take up the dominant space on the label. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

77) Food product manufacturers are required to list the number of calories at the top of the nutrition panel. Posting calorie information is an example of meeting the ________ requirements of labeling. A) industry B) aesthetic C) legal D) marketing E) customer Answer: C Explanation: Labels must meet federal, state, even local rules and regulations. The Food and Drug Administration (FDA) requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 78) In 1914, the federal government, through the Federal Trade Commission, first ruled misleading or blatantly phony labels were illegal and represented unfair competition. This demonstrates a ________ requirement of labeling. A) industry B) aesthetic C) legal D) marketing E) customer Answer: C Explanation: Labels must meet federal, state, even local rules and regulations. The Food and Drug Administration (FDA) requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) The warranty on a bottle of store brand pain relievers says that consumers may return this product if they are dissatisfied with it for any reason. This is an example of a(n) ________ warranty. A) specific B) additional C) extended D) general E) basic Answer: D Explanation: The two kinds of warranties are general and specific. General warranties make broad promises about product performance and customer satisfaction. These warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. Many companies have adopted lenient policies that allow a product return without even asking the customer for a reason. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) The manufacturer of Fast Peddle Bikes offers a warranty that states that the gear-shifting mechanism for its product will work consistently and be free of mechanical defects for five years. This is an example of a(n) ________ warranty. A) specific B) additional C) extended D) general E) basic Answer: A Explanation: Specific warranties offer explicit product performance promises related to components of the product. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

81) Warranties that make broad promises about product performance and customer satisfaction are known as ________ warranties. A) limited B) exclusive C) general D) inclusive E) specific Answer: C Explanation: General warranties make broad promises about product performance and customer satisfaction. These warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) Mercedes-Benz offers a lifetime roadside assistance warranty on all of its vehicles, which shows that Mercedes is committed to customer service. This is an example of the ability of a warranty to ________. A) provide a cost to customers B) provide a service to customers C) convey a message to customers D) build brand awareness E) build brand identity Answer: C Explanation: Warranties convey a powerful message to the customer about perceived product quality and manufacturer commitment to customer satisfaction. Particularly with expensive products or purchase decisions in which the customer has anxiety, the warranty can play a significant role in the final product choice. As a result, companies focus a lot of time not only creating the warranty but also considering how best to communicate it to the customer. Difficulty: 3 Hard Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

83) Recently, Mercedes-Benz quietly reduced its warranty coverage by eliminating some free scheduled maintenance because the expense for the firm was too high. At the same time, Hyundai and others have expanded their warranties to build consumer confidence in their cars. They realize that extending the period of warranty coverage demonstrates they are making better cars in a very tangible way. These are examples of firms considering the ________ of product warranty. A) storage and handling B) costs versus benefits C) message D) product differentiation E) persuasiveness Answer: B Explanation: These companies are weighing costs vs. benefits. Difficulty: 2 Medium Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 84) Warranties that offer explicit product performance promises related to components of the product are known as ________ warranties. A) specific B) basic C) inclusive D) additional E) unlimited Answer: A Explanation: Specific warranties offer explicit product performance promises related to components of the product. Automobile warranties are specific warranties covering various components of the product with different warranties. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) ________ warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. A) Explicit B) General C) Limited D) Basic E) Controlled Answer: B Explanation: General warranties make broad promises about product performance and customer satisfaction. These warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. Difficulty: 1 Easy Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Compare and contrast customer, company, and competitor brand roles. Answer: Whether the customer is a consumer or another business, brands have three primary roles. First, the brand conveys information about the product. Without any additional data, customers construct expectations about quality, service, even features based on the brand. Brands also educate the customer about the product. People assign meaning to their product experiences by brand and, over time, make judgments about which brands are best at meeting their needs and which are not. As a result, product evaluations and purchase decisions become less formidable as the customer relies on the cumulative brand experience to simplify the purchase process. A third brand role is to help reassure the customer in the purchase decision. Brands also perform important roles for the brand's sponsor (manufacturer, distributor, or retailer). They offer legal protection for the product through a trademark. By protecting the brand, the company is able to defend essential product elements such as its features, patentable ideas in manufacturing or product design, and packaging. A second critical role is that brands offer an effective and efficient methodology for categorizing products. Market-leading brands provide competitors with a benchmark against which to compete. In industries with strong market-leading brands, competitors design and build products targeted specifically at the market leader. In these situations, the competitor leverages its product strength against the market-leading brand's perceived weakness. Difficulty: 3 Hard Topic: Branding Learning Objective: 09-01 Recognize the essential elements in a brand. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

87) Explain the four basic strategic decisions that help define a brand and the advantages of using each. Answer: Four basic strategic decisions in defining a brand are (1) stand-alone or family branding, (2) national or store branding, (3) licensing, and (4) cobranding. Stand-alone brands separate the company from the brand, which insulates the company if there is a problem with the brand. But stand-alone brands are expensive to create and maintain as there is little or no synergy between company brands. Family branding advantages and disadvantages are just the opposite. There is synergy among members of a brand family, but a negative event with one product often leads to negative publicity for the entire brand family. Another decision is whether the product should adopt a national or store brand strategy. Large consumer products companies such as Procter & Gamble create national brands that are sold around the country under the same brand. An alternative to creating a national brand is a store brand. Many large retailers create a store brand to market their own products. Companies can also choose to extend their brand by licensing—offering other manufacturers the right to use the brand in exchange for a set fee or percentage of sales. There is very little risk to the brand sponsor, and licensing can generate incremental revenue. Frequently a company discovers advantages to linking its products with other products inside the company or externally with products from other companies, called cobranding. Cobranding joins two or more well-known brands in a common product or takes two brands and markets them in partnership. Difficulty: 3 Hard Topic: Brand Strategies Learning Objective: 09-02 Learn the importance of brand equity in product strategy. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

88) Explain and give examples of how packaging protects, communicates, and promotes usage. Answer: Above all, the package must protect the product. The challenge is defining how much protection is necessary and cost-effective. Protecting customers from unauthorized access to the product is also part of package design. Prescription bottles and most over-the-counter medicines are required to be tamper-proof and child-proof to protect customers. Package safety seals provide a layer of security and verification to the customer that the product has not been altered before purchase. Finally, a growing concern is product theft, particularly in the retail store. As a result, the package design should include anti-theft methodology, such as bar coding or magnetic stripes, that discourages shoplifting. Packages communicate a great deal of information about the product. Some of that information is designed as marketing communications. At the point of sale, the package is the last marketing communication the customer will see before the purchase. Consequently, packaging plays a critical role in the company's overall marketing communications strategy, particularly for consumer products. Packaging must be designed to easily communicate critical brand messages quickly through color or design cues. Unique package design can create a distinctive competitive advantage. Package design also encourages product use. It does this in several ways. First, packages frequently show the product being used by a happy customer. This connects the product to the target customer. Second, in many cases, packages visually demonstrate a product. Third, marketers and package designers make extensive use of blister packs (products encased in clear plastic) and other package designs to visibly present and protect the product. Difficulty: 3 Hard Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

89) What are the three requirements of labels? Why are these important? Answer: Legal Requirements Labels must meet federal, state, even local rules and regulations. The Food and Drug Administration (FDA) requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information. Other products must have warnings of a certain size that are easily read and understood by the customer. Hazardous materials such as cleaning products, pesticides, and many other items require 14 different pieces of information be included on the label. It is easy to understand why space on the label is at such a premium. Consumer advocacy groups and government agencies evaluate labels to identify misleading or mislabeled products, and there is a long history of legal prosecution for inappropriate, unethical, even illegal product labeling. In 1914, the federal government, through the Federal Trade Commission, first ruled misleading or blatantly phony labels were illegal and represented unfair competition. Since then, additional legislation has been passed by the federal government such as the Fair Packaging and Labeling Act (1967). States have also passed legislation, which, in most cases, supports federal legislation but also extends specific rules and policies. Consumer Requirements Consumers want to use products out of the box and package labeling is the most convenient place for initial use instructions. Additionally, product precautions, simple assembly information, and appropriate age for product use may also be included on the package. Essentially, any information the consumer needs to make a product choice, particularly at the point of purchase, needs to be on the package. Marketing Requirements Since package labeling represents the last marketing opportunity before the purchase decision, as much label space as possible is allocated to marketing communications. Brand, logo, product image, and other relevant marketing messages take up the dominant space on the label. On a box of Procter & Gamble's Bounce fabric softener sheets, the brand name "Bounce" is approximately 50 percent of the space on the front panel and the rest of the space is a bright color (orange) with clean, fresh clothes hanging on the line and a green field. P&G uses the entire front panel of the box to support the marketing efforts of the brand. Difficulty: 3 Hard Topic: Packaging and Labeling Learning Objective: 09-03 Explain the role of packaging and labeling as critical brand elements. Bloom's: Analyze AACSB: Knowledge Application Accessibility: Keyboard Navigation

90) Describe the difference between a general warranty and a specific warranty. Answer: The two kinds of warranties are general and specific. General warranties make broad promises about product performance and customer satisfaction. These warranties are generally open to customers returning the product for a broad range of reasons beyond specific product performance problems. Many companies have adopted lenient policies that allow a product return without even asking the customer for a reason. Others require a reason, although there is often a great deal of latitude in what is an acceptable justification. Specific warranties, on the other hand, offer explicit product performance promises related to components of the product. Difficulty: 3 Hard Topic: Packaging and Labeling Learning Objective: 09-04 Define the responsibility of warranties and service agreements in building consumer confidence. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 10 Service as the Core Offering 1) A service is a product in the sense that it represents a bundle of benefits that can satisfy customer wants and needs with physical form. Answer: FALSE Explanation: A service is a product in the sense that it represents a bundle of benefits that can satisfy customer wants and needs, yet it does so without physical form. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) It is widely accepted that today we operate in an economy that is increasingly focused on tangible offerings—goods—instead of just services. Answer: FALSE Explanation: There's no debate that today we operate in an economy that is increasingly focused on intangible offerings—services—instead of just physical goods. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) In today's workplace, everyone is involved in service in some way, and everyone has customers either outside or inside the firm, or both. Answer: TRUE Explanation: In today's workplace, everyone is involved in service in some way; everyone has customers either outside or inside the firm, or both. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) A service-centered perspective is very consistent with a customer-centric approach in which people, processes, systems, and other resources are to be aligned to best serve customers. Answer: TRUE Explanation: A service-centered perspective is very consistent with a customer-centric approach in which people, processes, systems, and other resources are to be aligned to best serve customers. It disposes of the limitations of thinking about marketing in terms of goods taken to the marketplace and instead leads to opportunities for expanding the market by assisting customers in the process of specialization and value creation. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Services possess several distinct characteristics that are different from those of physical goods, including intangibility, inseparability, variability, and perishability. Answer: TRUE Explanation: Services possess several distinct characteristics different from physical goods. These are intangibility, inseparability, variability, and perishability. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Customer trial is one way to overcome the problem of marketing an intangible service. Answer: TRUE Explanation: Sometimes it is possible to enhance tangibility of a service through a bit of customer trial. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Employees play a critical role in the success of services because of their inseparability and variability. Answer: TRUE Explanation: Because of the inseparability and variability of services, employees play a critical role in their level of success. The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) A fundamental rule in marketing is to set high customer expectations. Answer: FALSE Explanation: A fundamental rule in marketing is to not set customer expectations so high that they cannot be effectively met on a consistent basis. This is because it is always better to under promise and over deliver than the reverse scenario. This concept is often called customer expectations management. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) One of the causes of switching behavior is unfair pricing. Answer: TRUE Explanation: One of the causes of switching behavior is unfair pricing. Other causes of switching behavior related to pricing include high price, increase in price, and deceptive pricing. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) As noted in the text, Caesars Entertainment has found that its ROI for customers in the "Zone of Defection" is considerably higher than in the other zones. Answer: FALSE Explanation: Caesars Entertainment has found that its ROI for customers in the "Zone of Affection" is considerably higher than in the other zones ("Indifference" and "Defection"). This includes very satisfied customer "apostles" who are the ones that Caesars wants to develop to the fullest extent to keep them coming back and spending money in its hotels and casinos. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) The ultimate Caesars customer is the "apostle"; they are highly satisfied, fiercely loyal, frequent Caesars guests who serve as strong advocates for the Caesars experience to friends and acquaintances. Answer: TRUE Explanation: Caesars embraces customer satisfaction measurement and it segments markets based on satisfaction score groups. The ultimate Caesars customer is the "apostle"—highly satisfied, fiercely loyal, a frequent Caesars guest who serves as a strong advocate for the Caesars experience to friends and acquaintances. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Research indicates that investing in indifferent customers to improve their satisfaction truly maximizes their profitability to a brand. Answer: FALSE Explanation: Research indicates that, although investing in indifferent customers to improve their satisfaction may yield some returns, only when customers reach the "Zone of Affection" do they truly maximize their profitability to a brand. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

13) Providers of professional services such as doctors, lawyers, and accountants use their degrees and designations to convey a level of trust to a purchaser. Answer: TRUE Explanation: To assess credence attributes would require customers to have expertise not generally shared by the public. As such, many providers of services rely on professional certifications or degrees to convey a level of trust to a purchaser. Thus, services at this end of the continuum are often referred to as professional services—providers such as doctors, lawyers, accountants, even plumbers. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) There is a debate about whether students in business education are "customers" or products that need to be branded. Answer: TRUE Explanation: The perennial question in business education is, "Who is the customer?" One approach frames the companies that hire a business school's students as primary customers, which would seem to imply the students are a product of the business school rather than its customers. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Services tend to exhibit high experience and credence attributes. Answer: TRUE Explanation: Since services tend to exhibit high experience and credence attributes, marketing strategies must be developed that consider the implications of these characteristics. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) When Dominoes promises delivery within 30 minutes, but it actually takes 45 minutes, Dominoes is demonstrating gap 1: management's perceptions of customer service expectations versus actual customer expectations of service. Answer: FALSE Explanation: Dominoes is demonstrating gap 4: actual service delivery versus what the firm communicates it delivers. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 17) The fifth and final service gap involves customers' perceived service versus actual customer expectations of service. Answer: TRUE Explanation: Gap 5 represents the core issue of expectations versus perceptions. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Knowledge Application Accessibility: Keyboard Navigation 18) Service failure, when properly handled through service recovery, does not necessarily impact customer satisfaction. Answer: TRUE Explanation: Much research in services marketing has shown that service failure, when properly handled through service recovery, does not necessarily impact customer satisfaction, loyalty, or retention unless service failures become habitual. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) Exceeding customer expectations is often referred to as customer delight. Answer: TRUE Explanation: Exceeding customer expectations is often referred to as customer delight, which has been shown to correlate highly with loyalty and high return on customer investment. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) The ability to provide prompt service and to respond quickly to customer requests is called reliability. Answer: FALSE Explanation: Reliability is the ability to provide service dependably and accurately and thus to deliver what was promised. Responsiveness is the willingness and ability to provide prompt service and to respond quickly to customer requests. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Of the five dimensions of service quality, empathy means considering things from a service provider's point of view. Answer: FALSE Explanation: Empathy is the caring and individual attention a service provider gives to customers. Empathy means considering things from a customer's point of view. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) In a service blueprint, "moments of truth" occur below the line of visibility. Answer: FALSE Explanation: Moments of truth occur above the line of visibility. Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 10-07 Understand service blueprinting and how it aids marketing managers. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) A service is a product in a sense that it represents a bundle of benefits that can satisfy customer wants and needs, yet it does so without ________. A) people B) price perceptions C) physical form D) time utility E) ethics Answer: C Explanation: We operate in an economy that is increasingly focused on intangible offerings— services—instead of just physical goods. A service is a product in the sense that it represents a bundle of benefits that can satisfy customer wants and needs, yet it does so without physical form. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

24) The percentage of jobs in the United States that are service-related is more than ________ of all jobs. A) 20 percent B) 40 percent C) 60 percent D) 80 percent E) 100 percent Answer: D Explanation: More than 80 percent of jobs in the United States are service-related. The Bureau of Labor Statistics expects service jobs to account for all new domestic job growth for the foreseeable future, partly because the number of jobs outside the service sector is actually declining. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 25) Which of the following is TRUE of the service sector? A) Jobs represented in the service sector of the economy exclude categories such as intellectual property and consulting. B) In terms of U.S. gross domestic product, services account for less than 60 percent and that number is declining. C) Changing U.S. demographics represent a major driver for why the service sector is thriving. D) The long-term shift from service-producing to goods-producing employment is expected to continue. E) Today, we operate in an economy that seldom focuses on intangible offerings. Answer: C Explanation: Changing U.S. demographics represent a major driver for why the service sector is thriving. For example, as baby boomers begin to retire and spend their discretionary income on travel and entertainment, firms in those industries will prosper. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

26) Many firms are reluctant to invest in great service, largely because ________. A) it is difficult to change employees' actions B) consumers usually are not aware that they are receiving great service C) a service's quality can only be as good as that of the provider himself or herself D) it takes time and patience before a return on the investment is noticeable E) of the inseparability and perish ability of services Answer: D Explanation: Many firms are reluctant to invest in great service, largely because it takes time and patience before a return on the investment may be noticeable. Although the payback might take time, once a firm is able to deliver great service as a core differentiator it is much more likely to provide a sustainable competitive advantage than are most other sources of differentiation. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 27) Which axiom of service-dominant logic applies to this statement? Customers don't buy a car (product)—they buy the company's ability to add value through a defined set of benefits. A) Service is the fundamental basis of exchange. B) Value is co-created by multiple parties, including the company and the customer. C) A unique experience is created when the customer interacts with the company's marketing efforts and product. D) Value is defined by the customer. E) A customer-centric approach has been supplanted by a newer service-dominant approach. Answer: A Explanation: This demonstrates the axiom that service is the fundamental basis of exchange. Put simply, customers don't buy a car (product)—they buy the company's ability to add value through a defined set of benefits. For example, a customer who may be concerned about safety will evaluate the company in terms of how well it builds safety into its cars. The more a company knows about safety and is able to build it into the customer's car experience, the more favorable that customer will evaluate the company. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

28) Which of the following is NOT a distinct characteristic of services that is different from physical goods? A) variability B) perishability C) reliability D) intangibility E) inseparability Answer: C Explanation: Services possess several distinct characteristics different from physical goods. These are intangibility, inseparability, variability, and perish ability. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 29) Services are produced and consumed at the same time and cannot be detached from their provider. This characteristic of service is called ________. A) intangibility B) perishability C) variability D) inseparability E) reliability Answer: D Explanation: Even with the best efforts at enhancing a service's tangibility, a customer still can't really experience it until it is actually consumed. This characteristic represents the inseparability of a service—it is produced and consumed at the same time and cannot be separated from its provider. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

30) A service cannot be experienced through the physical senses. This property represents the ________ of services. A) inseparability B) variability C) intangibility D) perishability E) reliability Answer: C Explanation: A service cannot be experienced through the physical senses. It cannot be seen, heard, tasted, felt, or smelled by a customer. This property represents the intangibility of services versus goods; goods can easily be experienced through the senses. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 31) The ________ of performance and consumption of services heightens the role of human service providers in a customer's experience. A) inseparability B) intangibility C) variability D) perishability E) tangibility Answer: A Explanation: The inseparability of performance and consumption of services heightens the role of the human service providers in a customer's experience. It also leads to opportunities for considerable customization in delivering a service. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

32) Which of the following is one of the characteristics of services? A) separability B) variability C) tangibility D) reparability E) durability Answer: B Explanation: Services possess several distinct characteristics different from physical goods. They are intangibility, inseparability, variability, and perish ability. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 33) As a characteristic of services, intangibility refers to the fact that a service ________. A) cannot be seen, heard, tasted, or felt by a customer B) is produced and consumed at the same time C) can be experienced through the physical senses D) can be experienced by a customer before utilization E) quality can only be as good as that of the provider himself or herself Answer: A Explanation: A service cannot be experienced through the physical senses. It cannot be seen, heard, tasted, felt, or smelled by a customer. This property represents the intangibility of services versus goods; goods can easily be experienced through the senses. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

34) ________ of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider. A) Separability B) Intangibility C) Variability D) Perishability E) Tangibility Answer: C Explanation: An offshoot of the inseparability issue, variability of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider himself or herself. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 35) To enable customers to draw conclusions about a brand's service, service companies face the challenge of making their intangible services seem ________. A) more tangible B) more imperceptible C) less inseparable D) less reliable E) less perishable Answer: A Explanation: When it comes to making purchase decisions about services, customers draw conclusions from what tangibles they can experience—things like the company's people, website, marketing communications, office ambience, and pricing. In a service setting, the importance and impact of marketing is heightened considerably because in many cases there's little else tangible for customers to experience before purchase. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

36) One way to make a service more tangible is to have customers ________. A) read about it on a website B) experience the service through a trial C) receive a brochure that highlights the advantages and disadvantages of the service D) Google the service and see who provides the services in their area E) use the service at a regular basis Answer: B Explanation: Sometimes it is possible to enhance tangibility of a service through a bit of customer trial. For example, MBA programs often encourage prospective students to come to open houses or visit classes to gain a sense of how the school they are considering approaches teaching and learning. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) A service is described as being inseparable because ________. A) it can be easily separated from its provider B) it can be experienced by a customer before utilization C) it cannot be seen, heard, tasted, or felt by a customer D) it is produced and consumed at the same time E) its quality is only as good as that of the provider himself or herself Answer: D Explanation: Even with the best efforts at enhancing a service's tangibility, a customer still can't really experience it until it is actually consumed. This characteristic represents the inseparability of a service—it is produced and consumed at the same time and cannot be separated from its provider. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

38) It may be more accurate to think of a service as being ________ rather than produced. A) designed B) modified C) performed D) created E) developed Answer: C Explanation: With physical goods, the familiar process is production, storage, sale, and then consumption. But with services, first a service is sold and then it is produced and consumed at the same time. Perhaps it is more accurate to think of a service as being performed rather than produced. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 39) The four characteristics of services are that they are ________. A) inseparable, perishable, intangible, and variable B) tangible, quantifiable, reliable, and durable C) variable, dependable, repairable, and customized D) customized, standardized, formalized, and categorized E) specialized, tangible, standardized, and perishable Answer: A Explanation: Services possess several distinct characteristics different from physical goods. They are intangibility, inseparability, variability, and perishability. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

40) The enhanced role of human service providers in a customer service experience enables service providers to ________. A) allow for new products to be promoted B) stimulate the formation of the same experience for all people C) offer considerable customization in delivering a service D) create profit pockets by encouraging the ordering of more expensive options E) help customers experience a service before utilization Answer: C Explanation: The inseparability of performance and consumption of services heightens the role of the human service providers in a customer's experience. It also leads to opportunities for considerable customization in delivering a service. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 41) With services, continual investment in training, retraining, and good management of people is required if ________. A) variability is to be consistently low B) tangibility is to be consistently low C) inseparability is to be consistently high D) intangibility is to be consistently high E) perishability is to be consistently high Answer: A Explanation: Variability of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider himself or herself. With services, continual investment in training, retraining, and good management of people is required if variability is to be consistently low. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

42) Once a firm has invested in continuous process improvement and quality control in operations, goods, in general, tend to be much more ________ than services. A) perishable B) standardized C) distinguished D) intangible E) customized Answer: B Explanation: Goods, in general, tend to be much more standardized than services because, once a firm has invested in continuous process improvement and quality control in its manufacturing operations, products flow off the line with very little variation. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 43) Fluctuating demand is related to ________ of services. A) durability B) variability C) perishability D) flexibility E) tangibility Answer: C Explanation: Perishability is the fact that a service can't be stored or saved up for future use. Fluctuating demand is related to perishability of services. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

44) Perishability of a service means that ________. A) a service's quality can only be as good as that of the provider himself or herself B) a service cannot be stored or saved up for future use C) a service is produced and consumed at the same time D) a service must be handled and stored with care E) a service cannot be separated from its provider Answer: B Explanation: If you schedule an appointment for a routine physical with your physician and then simply don't show up, the doctor loses the revenue from that time slot. That's perishability— the fact that a service can't be stored or saved up for future use. Difficulty: 1 Easy Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive ________. A) production and distribution B) customer loyalty, revenue growth, and higher profits C) brand awareness and economies of scope D) marketing and sales E) customer satisfaction, promotion, and higher demand Answer: B Explanation: The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) Treating employees as customers and developing systems and benefits that satisfy their needs is called ________. A) marketing for profit B) employee induction C) market orientation D) internal marketing E) green marketing Answer: D Explanation: Considerable evidence exists that internal marketing, treating employees as customers and developing systems and benefits that satisfy their needs, is an essential element of internal service quality. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 47) If a firm is considered customer-centric, it implies that the company ________. A) does marketing research on all market segments and creates ads that focus on individual market segments B) develops products and services that sell well in both large and small markets including some international markets C) gives more importance to customers in everything that takes place both inside and outside the firm D) places employees and customers at the top of the organizational chart E) treats employees as customers and develops systems and benefits that satisfy their needs Answer: C Explanation: Firms practicing internal service quality are customer-centric—they place customers at the center of everything that takes place both inside and outside the firm. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) Firms that are customer-centric exhibit a high degree of customer orientation, which means that they ________. A) instill an organization-wide focus on understanding customers' requirements B) generate an understanding of the marketplace and keep that information confidential C) align system capability externally so that an organization can respond with competitively similar goods and services D) develop mass-produced goods and services that sell well in both large and small markets E) treat employees as customers and develop systems and benefits that satisfy their needs Answer: A Explanation: Firms that are customer-centric exhibit a high degree of customer orientation, which means they do the following: 1. Instill an organization-wide focus on understanding customers' requirements. 2. Generate an understanding of the marketplace and disseminate that knowledge to everyone in the firm. 3. Align system capabilities internally so that the organization can respond effectively with innovative, competitively differentiated, satisfaction-generating goods and services. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

49) When a company follows a customer-centric philosophy with a high degree of customer orientation, it is likely to ________. A) keep everyone up-to-date on the progress of relevant legislation B) generate an understanding of the marketplace and disseminate that knowledge to everyone in the firm C) produce products solely for the loyal customers from higher socio-economic status D) place customers at the top of the organizational chart E) align system capability externally so that the organization can respond with competitively similar goods and services Answer: B Explanation: Firms that are customer-centric exhibit a high degree of customer orientation, which means they do the following: 1. Instill an organization-wide focus on understanding customers' requirements. 2. Generate an understanding of the marketplace and disseminate that knowledge to everyone in the firm. 3. Align system capabilities internally so that the organization can respond effectively with innovative, competitively differentiated, satisfaction-generating goods and services. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) An organization's focus on internal service quality implies that employees ________. A) are less likely to be satisfied B) lack job security C) are highly reward-oriented D) hold a customer mind-set E) need motivation to change Answer: D Explanation: An organization's focus on internal service quality implies that employees hold a customer mind-set, meaning that employees believe that understanding and satisfying customers, whether internal or external to the firm, is central to doing their job well. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

51) In the service-profit chain, customer satisfaction leads to customer loyalty, and results in ________. A) revenue growth and profitability B) changes in the organizational structure C) competitive intelligence for future growth D) competitive retaliation based on service strategy E) external service value Answer: A Explanation: In the service-profit chain, customer satisfaction leads to customer loyalty, which directly results in revenue growth and profitability. The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 52) José, an employee of a company that has worked hard to have a customer mind-set, understands that ________. A) whether internal or external to the firm, satisfying customers is central to doing his job well B) all members of the firm must get to work on time and start their computers by 8:30 a.m. C) it is essential to generate an understanding of the marketplace and keep that information confidential D) products must be produced solely for loyal customers from higher socio-economic status E) system capability must be aligned externally so that the organization can respond with competitively similar goods and services Answer: A Explanation: An organization's focus on internal service quality implies that employees hold a customer mind-set, meaning that employees believe that understanding and satisfying customers, whether internal or external to the firm, is central to doing their job well. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

53) One of the central concepts of the service-profit chain is to ________. A) enable a firm's customers to participate and contribute in strategic decision making B) create an environment in which all employees can be successful C) implement market penetration strategies in order to increase sales and profitability D) create elements of change within people to do things above their capabilities E) encourage employees to engage in groupthink and to resist any change to existing systems Answer: B Explanation: Great service doesn't happen without great people. A big part of making the service-profit chain work is creating an environment in which all employees can be successful. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 54) As noted in the text, Caesars Entertainment points with pride to the fact that everyone in the firm understands and can articulate its branding and values. This would be an indication that Caesars is devoted to ________. A) creating self-actualization for management B) providing work-focused training for valued employees C) internal marketing to achieve the goals in the service-profit chain D) external marketing to achieve the goals of stress-relief ergonomics E) producing products that are similar to that of its competitors Answer: C Explanation: Employees must have a deep understanding of the brand and must be able to consistently articulate a clear, concise message to customers that reflects the firm's service strategy and branding. At Caesars, Loveman points with pride to the fact that everyone in the firm understands and can articulate its branding and values. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) When a company underpromises but overdelivers with respect to its services, it is said to be practicing ________ management. A) inferior service B) change C) customer salience D) customer expectations E) total quality Answer: D Explanation: A fundamental rule in marketing is to not set customer expectations so high that they cannot be effectively met on a consistent basis. This is because it is always better to under promise and over deliver than the reverse scenario. This concept is often called customer expectations management. Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 56) In the service-profit chain, external service value leads to all of the following EXCEPT ________. A) customer satisfaction B) employee turnover C) customer loyalty D) revenue growth E) profitability Answer: B Explanation: In the service-profit chain, external service value leads to customer satisfaction and loyalty, which in turn results in revenue growth and profitability. The service-profit chain is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) A frequent Caesars guest who serves as a strong advocate for the Caesars experience to friends and acquaintances is referred to as a(n) ________. A) whistleblower B) pacifier C) apostle D) champion E) polemicist Answer: C Explanation: The ultimate Caesars customer is the "apostle"—highly satisfied, fiercely loyal, a frequent Caesars guest who serves as a strong advocate for the Caesars experience to friends and acquaintances. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 58) As discussed in the text, Caesars Entertainment has found that customers who fall into the zone of ________ spend considerably more money and provide a substantially greater return on customer investment than others. A) defection B) affection C) indifference D) competition E) retention Answer: B Explanation: It's not that Caesars is disinterested in or doesn't want the money of other customers, but it has learned from its research that customers in the zone of affection spend considerably more money and provide a substantially greater return on customer investment than others. Difficulty: 1 Easy Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

59) The zone of defection describes the area of ________. A) slightly satisfied customers B) extremely dissatisfied customers C) loyal customers D) apostles E) very satisfied customers Answer: B Explanation: The zone of defection describes the area where extremely dissatisfied customers reside. These customers are referred to as "terrorists." Difficulty: 2 Medium Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 60) One of the difficulties associated with search qualities for consumers when evaluating different service offerings is ________. A) services are not offered in a store B) customers do not truly know how a service performs until after the sale C) it is difficult to compare services online D) a service may be inseparable from its price E) customers find it difficult to analyze services since they have too many search attributes Answer: B Explanation: Services are low in search qualities because it is difficult to evaluate many aspects of them before purchase. Usually customers do not truly know how a service performs until after the sale—that's the inseparability aspect of services. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) Compared to products, services are ________. A) low in credence qualities B) separable in nature C) easy to evaluate D) low in search qualities E) tangible in nature Answer: D Explanation: Services are low in search qualities because it is difficult to evaluate many aspects of them before purchase. Usually customers do not truly know how a service performs until after the sale—that's the inseparability aspect of services. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 62) Sometimes, customers can tell if they received good service. For example, vacations, haircuts, and restaurants all have ________ attributes that allow customers to decide whether they will repeat the purchase another time. A) purchasable B) tangible C) focused D) experience E) search Answer: D Explanation: Experience attributes are aspects of an offering that can be evaluated only during or after consumption. Many services fit this category, including restaurants, vacations, haircuts, and child care. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

63) When a customer cannot make a reasonable evaluation of the quality of a service even after use because they lack expertise, this relates to a service's ________ attributes. A) secondary B) credence C) search D) focused E) observable Answer: B Explanation: In many cases, a customer cannot make a reasonable evaluation of the quality of a service even after use. Services such as television repair, legal services, dentistry, auto repair, and medical services require specialized training to deliver. A customer may know only the desired end state—a car that runs or a pretty new crown molar. To assess these credence attributes would require customers to have expertise not generally shared by the public. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 64) The assessment of which of the following attributes would require customers to have expertise not generally shared by the public? A) search B) credence C) experience D) observable E) tangible Answer: B Explanation: In many cases, a customer cannot make a reasonable evaluation of the quality of a service even after use. To assess these credence attributes would require customers to have expertise not generally shared by the public. These services have industry or trade groups that self-regulate the quality of their services and serve as a clearinghouse for information and referrals. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

65) Which of the following services is MOST likely to be high in credence attributes? A) restaurants B) hair cuts C) tax preparation D) child care facilities E) vacations Answer: C Explanation: One interesting professional service for consideration is higher education. College business courses are high in credence attributes because of the difficulty in evaluating their real impact until much later, often after a student is able to apply knowledge and skills gained to a particular job situation. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 66) Some business schools take the approach that the primary customers for their business are ________. A) professional health care service providers B) graduate schools C) parents and relatives of students D) companies that hire their students E) professors and lecturers Answer: D Explanation: The perennial question in business education is, "Who is the customer?" One approach frames the companies that hire a business school's students as the primary customer, which would seem to imply the students are a product of the business school rather than its customer. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

67) Once a customer begins to have a positive experience with a service provider and builds a relationship with the firm, customer loyalty ________. A) tends to be lesser for services than for goods B) tends to be greater for services than for goods C) is the same for services and goods D) develops, but only for a temporary period in all cases E) develops and increases regardless of future service experiences Answer: B Explanation: Because of the higher risk involved in purchasing a service versus a good, once a customer begins to have a positive experience with a service provider and builds a relationship with the firm, customer loyalty to services tends to be greater than loyalty to goods. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) ________ represents a formalization of the measurement of customer expectations of a service compared to perceptions of actual service performance. A) Customer delight B) Service encounter C) Service quality D) Service excellence E) Moment of truth Answer: C Explanation: In many respects, service quality represents a formalization of the measurement of customer expectations of a service compared to perceptions of actual service performance. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-04 Describe the continuum from pure goods to pure services. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) Exceeding customer expectations is often referred to as customer ________. A) excellence B) loyalty C) essence D) delight E) satisfaction Answer: D Explanation: Exceeding customer expectations is often referred to as customer delight, which has been shown to correlate highly with loyalty and high return on customer investment. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 70) ________ is the period during which a customer interacts in any way with a service provider. A) Service encounter B) Moment of truth C) Service period D) Service quality E) Time of service Answer: A Explanation: The playing field for service quality is the service encounter, which is the period during which a customer interacts in any way with a service provider. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) The face-to-face time between customer and service provider is often called the ________ because that is when customer judgments take place A) goal line stand B) moment of truth C) moment of momentum D) service ROI E) service encounter Answer: B Explanation: The face-to-face time between customer and service provider is often called the moment of truth. Most customer judgments take place at that moment. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) The basis of the Gap model of Service Quality is the ________. A) examination of the differences between the objectives of management and employees B) elimination of gap between an organization's and its employees' perceptions of the customer experience C) recognition of suitable techniques for resource management to achieve better service quality D) identification and measurement of differences in five key areas of the service delivery process E) improvisation of the face-to-face time between customer and service provider, often called the moment of truth Answer: D Explanation: The basis of the gap model is the identification and measurement of differences in five key areas of the service delivery process. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) In which of the following gaps of the Gap Model of Service Quality can a lack of the right customer data wreak havoc on service delivery? A) Gap 1: management's perceptions of customer service expectations versus actual customer expectations of service B) Gap 2: management's perceptions of customer service expectations versus the actual service quality specifications developed C) Gap 3: actual service quality specifications versus actual service delivery D) Gap 4: actual service delivery versus what the firm communicates it delivers E) Gap 5: perceived service by customers versus actual customer expectations of service Answer: A Explanation: Gap 1 is where a lack of the right customer data can wreak havoc on service delivery. Unfortunately, firms all too often make unfounded assumptions about customers' wants and needs and translate them into product offerings. Then management is surprised when new products fail or customers begin to switch to other providers. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) In the Gap Model of Service Quality, which gap asks whether a service is provided in the manner intended? A) Gap 1: management's perceptions of customer service expectations versus actual customer expectations of service B) Gap 2: management's perceptions of customer service expectations versus the actual service quality specifications developed C) Gap 3: actual service quality specifications versus actual service delivery D) Gap 4: actual service delivery versus what the firm communicates it delivers E) Gap 5: perceived service by customers versus actual customer expectations of service Answer: C Explanation: Gap 3 strictly asks whether a service is provided in the manner intended. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) The basis of the gap model is the identification and measurement of differences in ________ key areas of the service delivery process. A) six B) two C) three D) four E) five Answer: E Explanation: The basis of the gap model is the identification and measurement of differences in five key areas of the service delivery process. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) A negative gap between ________ nearly always points to management and employees simply not getting the job done. This could be due to vague performance standards, poor training, or ineffective monitoring by management. A) actual service quality specifications and actual service delivery B) management's perception of customer service expectations and actual service quality specifications developed C) management's perceptions of customer service expectations and actual customer expectations of service D) actual service delivery and what the firm communicates it delivers E) perceived service by customers and actual customer expectations of service Answer: A Explanation: Gap 3 strictly asks whether a service is provided in the manner intended. As such, when there is a negative gap at Gap 3, it nearly always points to management and employees simply not getting the job done. This could be due to vague performance standards, poor training, or ineffective monitoring by management. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) Firms that employ service as a marketing strategy must plan ahead for service ________ and train employees to properly execute service recovery. A) differentiation B) specification C) failure D) orientation E) encounter Answer: C Explanation: Much research in services marketing has shown that service failure, when properly handled through service recovery, does not necessarily impact customer satisfaction, loyalty, or retention unless service failures become habitual. All firms employing service as a marketing strategy must plan ahead for the eventuality of service failures and train employees to properly execute service recovery. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 78) Which gap in the Gap Model of Service Quality fundamentally represents customer expectations management through marketing communications? A) Gap 1: management's perceptions of customer service expectations versus actual customer expectations of service B) Gap 2: management's perceptions of customer service expectations versus the actual service quality specifications developed C) Gap 3: actual service quality specifications versus actual service delivery D) Gap 4: actual service delivery versus what the firm promises it delivers E) Gap 5: perceived service by customers versus actual customer expectations of service Answer: D Explanation: Gap 4 represents customer expectations management through marketing communications. The messages a marketing manager puts out through various communication vehicles are in large measure what sets the expectations for customers. Thus, deceptive advertising, overly zealous sales pitches, and coupon promotions backed by too little stock to handle demand all create a negative gap at Gap 4. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) Gap 5 in the Gap Model of Service Quality is unique in that it is the only gap that occurs ________. A) between management's and customers' expectations B) between consumers' expectations and the perception of the service they receive C) actual service quality specifications and actual service delivery D) in small businesses but not in larger ones E) actual service delivery and what a firm promises to deliver Answer: B Explanation: Gap 5 represents the core issue of expectations versus perceptions and is the only gap that occurs exclusively in a customer's space. This is the gap between the service a customer expects to receive and the customer's perceptions of the level of service actually received. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) Among the dimensions of service quality, tangibles refer to ________. A) the elements of communication that differentiate one service from another B) the personality characteristics of service providers C) the combination of price and quality of a service D) the physical evidence of a service or the observable aspects E) the knowledge and courtesy of employees Answer: D Explanation: Tangibles are the physical evidence of a service or the observable aspects that help customers form advance opinions about a service despite its general intangibility. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

81) As a dimension of service quality, reliability means that ________. A) a service is performed right the first time and every time B) a service is variable and has different outcomes due to employee variation C) a customer is repeatedly asked about his or her perception of the service quality D) service providers think from customers' point of view E) service providers are more willing and capable of providing prompt service Answer: A Explanation: Reliability is the ability to provide service dependably and accurately and thus to deliver what was promised. Reliability means performing a service right the first time and every time. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) Jonathon works in a hair salon. When a customer approaches him about a problem with a service she had purchased, he made excuses for the service provider and did not offer to help fix the problem. Jonathon demonstrated poor ________. A) reliability B) tangibility C) responsiveness D) assurance E) empathy Answer: C Explanation: Responsiveness is the willingness and ability to provide prompt service and to respond quickly to customer requests. Customers often complain about a lack of responsiveness on the part of service providers. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

83) Mariette was highly regarded by her customers in the bakery because she was knowledgeable about the product and was always courteous to customers. Her customers' faith in her demonstrated ________. A) reliability B) tangibility C) responsiveness D) assurance E) empathy Answer: D Explanation: Assurance is the knowledge and courtesy of employees, and the ability to convey trust and build a customer's confidence in the quality of the service. Service providers often provide assurance primarily through their own competence in the job. Difficulty: 2 Medium Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) Of the five dimensions of service quality, the ability to convey trust and build a customer's confidence in the quality of a service refers to ________. A) tangibles B) assurance C) reliability D) responsiveness E) empathy Answer: B Explanation: Assurance is the knowledge and courtesy of employees, and the ability to convey trust and build a customer's confidence in the quality of a service. Service providers often provide assurance primarily through their own competence in the job. Difficulty: 1 Easy Topic: Measuring Service Quality Learning Objective: 10-06 Measure service quality through use of SERVQUAL. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) In a service blueprint, activities are divided between those above and those below the line of ________ to a customer. A) motivation B) demarcation C) visibility D) distinction E) threshold Answer: C Explanation: In a service blueprint, activities are divided between those above the line of visibility (or those activities directly involving a customer that the customer sees) and those below the line of visibility to a customer. The moments of truth—face-to-face time between customer and service provider—occur above the line of visibility. Difficulty: 1 Easy Topic: Service Blueprinting Learning Objective: 10-07 Understand service blueprinting and how it aids marketing managers. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) A service blueprint borrows concepts from manufacturing and operations management to allow a service firm to ________. A) map out a complete design and flow of all the activities related to customer service B) map out the route that service people follow when they leave in the mornings (i.e., truck delivery service) C) analyze feedback received from customers after the sale of a service to improve service quality D) measure customers' expectations of service E) assess the quality of services provided by an employee Answer: A Explanation: A service blueprint is a complete pictorial design and flow chart of all of a service's activities from the first customer contact to the actual delivery of the service. Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 10-07 Understand service blueprinting and how it aids marketing managers. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

87) Particularly in a teamwork environment, such as a restaurant, the advantage of a service blueprint is that it ________. A) provides managers with a way to integrate service topics into the performance evaluation process B) provides employees with a way to rate the performance of the other team members C) shows employees how their individual roles fit into the entire system D) focuses on the company organization as the foundation of work efforts E) provides incentives to employees for their contributions Answer: C Explanation: Especially in a teamwork environment such as Outback Steakhouse where servers, cooks, and bartenders are so dependent on each other's performance to maximize the customer's positive experience overall, familiarizing each person involved in service delivery with exactly how his or her role fits into the entire system helps everyone take on a customer mind-set—even employees who ordinarily don't directly interface with the external customers such as the cooks. Difficulty: 2 Medium Topic: Service Blueprinting Learning Objective: 10-07 Understand service blueprinting and how it aids marketing managers. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) Explain the three basic axioms that support the concept of service-dominant logic. Answer: 1. Service is the fundamental basis of exchange. Remember that historically, goods or products were the basis of exchange. In the new logic, service (defined as unique skills and competencies offered by the company) is the basis of exchange. 2. Value is cocreated by multiple parties, including the company and the customer. The customer is an integral, even essential, part of creating value in the experience. 3. Value is defined by the customer. Customers receive value from their experience, not from the company. The "bundle" of benefits that create value are different for each customer, making it important to understand the unique buying trends of specific customers in addition to broad customer behavior trends. Difficulty: 2 Medium Topic: Understanding Services Learning Objective: 10-01 Understand why service is a key source of potential differentiation. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) Define and give examples of the four characteristics of services: intangibility, inseparability, variability, and perishability. Answer: A service cannot be experienced through the physical senses. It cannot be seen, heard, tasted, felt, or smelled by a customer. This property represents the intangibility of services versus goods; goods can easily be experienced through the senses. Even with the best efforts at enhancing a service's tangibility, a customer still can't really experience it until it is actually consumed. This characteristic represents the inseparability of a service—it is produced and consumed at the same time and cannot be separated from its provider. With physical goods, the familiar process is production, storage, sale, and then consumption. But with services, first the service is sold and then it is produced and consumed at the same time. An offshoot of the inseparability issue, variability of a service means that because it can't be separated from the provider, a service's quality can only be as good as that of the provider him/herself. Goods, in general, tend to be much more standardized than services because, once a firm has invested in continuous process improvement and quality control in its manufacturing operations, products flow off the line with very little variation. With services, continual investment in training, retraining, and good management of people is required if variability is to be consistently low. If you schedule an appointment for a routine physical with your physician and then simply don't show up, the doctor loses the revenue from that time slot. That's perishability—the fact that a service can't be stored or saved up for future use. Difficulty: 3 Hard Topic: Understanding Services Learning Objective: 10-02 Explain the characteristics that set services apart from physical goods. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

90) What is a service-profit chain? Explain how external service quality affects the chain. Answer: In a Harvard Business Review article and follow-up book, James Heskett and his colleagues proposed a formalization of linkages between employee and customer aspects of service delivery called the service-profit chain. Because of the inseparability and variability of services, employees play a critical role in their level of success. The service-profit chain, which is portrayed in Exhibit 10.2, is designed to help managers better understand the key linkages in a service delivery system that drive customer loyalty, revenue growth, and higher profits. Internal service quality includes elements of workplace design, job design, employee selection and development processes, employee rewards and recognition approaches, and availability of effective tools for use by employees in serving customers. It is assumed that a firm's culture, business philosophy, strategy, structure, and processes will be aligned in order to create, communicate, and deliver value to customers. Difficulty: 3 Hard Topic: The Service-Profit Chain Learning Objective: 10-03 Explain the service-profit chain and how it guides marketing management decisions about service. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) What is the Gap Model of Service Quality? Describe the five gaps and give examples of each. Answer: The basis of the gap model is the identification and measurement of differences in five key areas of the service delivery process. The model is divided by a horizontal line, with the area below the line representing the provider side of the service encounter and the area above the line representing the customer side. The gaps are: Gap 1: Management's Perceptions of Customer Service Expectations versus Actual Customer Expectations of Service Gap 2: Management's Perceptions of Customer Service Expectations versus the Actual Service Quality Specifications Developed Gap 3: Actual Service Quality Specifications versus Actual Service Delivery Gap 4: Actual Service Delivery versus What the Firm Communicates It Delivers Gap 5: Perceived Service by Customers versus Actual Customer Expectations of Service Examples will vary. Difficulty: 3 Hard Topic: Measuring Service Quality Learning Objective: 10-05 Discuss the elements of service quality and gap analysis. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 11 Manage Pricing Decisions 1) Regardless of whether the setting is B2C or B2B, most costs are associated with the purchase price. 2) For the marketing manager, pricing is merely an economic break-even point or a cost-plus accounting calculation. 3) Since a product's price tends to be invisible, customers rarely have trouble moving past price to consider other critical benefits the product affords. 4) Price objectives are the desired or expected result associated with a pricing strategy and must be consistent with other marketing-related objectives, such as positioning or branding. 5) A competitor's price is one of the most visible elements of its marketing strategy; analyzing historical and current pricing patterns may allow firms to determine the competitor's pricing objective. 6) Effectively communicating a product's differential advantages is at the heart of positioning strategy, and exposure to these elements spurs the customer to develop perceptions of value and a subsequent understanding of the value proposition. 7) Firms that have an objective of utilizing pricing to communicate positioning use a stability pricing strategy. 8) Firms and brands that continually attempt to operate in the high-price/low-benefits environment do not survive over the long run as customer trust is damaged. 9) Firms frequently rely on combinations of pricing tactics in the marketplace rather than putting all their eggs in one basket. 10) In product line pricing, the escalation of product prices up the product line does not depend on prices competitors are charging for similar products. 11) Captive pricing entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate. 12) With prestige pricing, some of the traditional price/demand curves cannot properly predict sales or market response because it violates the common assumption that increasing price decreases volume. 13) Odd pricing can backfire if misapplied, especially with respect to service industries. 14) A variable pricing strategy makes planning and forecasting much easier than a one-price strategy. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

15) Due to its use of an everyday low pricing tactic, Walmart has historically needed to make heavy investment in promotional activities. 16) To set an exact price for goods or service, marketing managers should consider more than one method of calculation to arrive at the optimal price. 17) Average-cost pricing is a method for determining the price of an offering by adding a standardized markup on top of the costs for the offering. 18) A promotional allowance offers retailers the opportunity to receive some compensation from product marketers for the costs of successful product promotions. 19) Zone, uniform delivered, and free on board are examples of geographically-driven pricing options that can be implemented within a distribution channel. 20) Among the marketing mix variables, price is the easiest and quickest to alter, so sometimes firms overuse price changes to stimulate additional sales or gain market share. 21) The just noticeable difference in a price is the amount of price increase that can be taken without affecting customer demand. 22) When formulating a response to a competitor's price reduction, firms should consider their offering from the perspective of its overall value proposition to customers. 23) Deceptive pricing refers to the collusion among companies to set mutually beneficial high prices and limit competition. 24) The Robinson-Patman Act addressed price discrimination by prohibiting a seller's ability to offer different prices to different customers without a substantive basis. 25) The internal processes at Southwest Airlines are highly efficient, giving it a competitive advantage over other airlines. Southwest has a very efficient maintenance process and also has a very simple process of booking passengers. Because of these efficiencies, the company is able to offer customers an appealing mileage-driven pricing structure while also increasing the airline's profit margin. In this scenario, Southwest's competitive advantage is based on ________. A) price perception B) cost leadership C) value ratio D) service E) quality

26) Michael Porter has consistently advocated that firms that are able to compete based on some extraordinary efficiency in one or more internal processes bring to the market a competitive advantage based on ________. A) price perception B) cost leadership C) value ratio D) service E) quality 27) A company's core cost advantages translate directly to an edge over its competitors based on much more flexibility in its ________ as well as its ability to translate some of the cost savings to the bottom line. A) pricing strategies B) cost leadership C) value ratio D) service E) quality 28) ________ is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings. A) Price B) Cost C) ROI D) Markup E) Skimming 29) In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a ________ strategy can create a powerful barrier to market entry for other firms. A) penetration pricing B) target ROI C) price skimming D) competitor-based pricing E) value pricing 30) When a firm's objective is to gain as much market share as possible, a likely pricing strategy is ________, sometimes also referred to as pricing for maximum marketing share. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing

31) Firms should be careful with a ________ strategy, as price is a cue for developing customer perceptions of product quality. The value proposition may be reduced if a low price belies the product's actual quality attributes. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 32) Amelia is the marketing manager at a cafe in Charleston, and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Amelia, but she increased its price slowly over a period of 6 months. In this scenario, Amelia utilized a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 33) A strategy of ________ addresses the objective of entering a market at a relatively high price point. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 34) In proposing a ________ strategy, the marketing manager usually is convinced that a strong price-quality relationship exists for the product. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 35) Jean Claude has just completed a new line of designer handbags. He wants the price to communicate to the customer that the handbags are high quality and exclusive, so he sets the price high. He knows that after this season, the price may need to decrease as the market evolves. Jean Claude is using a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing

36) Pricing objectives very frequently are designed to maximize profit, which necessitates a ________ pricing strategy. A) penetration B) price skimming C) target return on investment (ROI) D) price war E) value 37) Hector is opening an appliance store. He has estimated a monthly profit goal based on his anticipated expenses and earning goals and uses it to set product prices. Hector is implementing a ________ pricing strategy. A) penetration B) price skimming C) target return on investment (ROI) D) competitor-based E) value 38) ________ could lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives. A) Penetration pricing B) Price skimming C) Target ROI D) Competitor-based pricing E) Value pricing 39) Mark owns a driving range in New York City. He has taken notice of the three competitors who are located very close to his business. Mark decides to look at his competitors' pricing and then determine his best pricing strategy based on all of the information. In this scenario, Mark is utilizing ________. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 40) ________ can occur when a company purposefully makes pricing decisions to undercut one or more competitors and gain sales and net market share. A) Cost leadership B) A price war C) Price skimming D) Price discrimination E) Price elasticity of demand

41) A firm attempts to find a neutral set point for price that is neither low enough to raise the ire of competition nor high enough to put the value proposition at risk with customers. The firm is adopting a(n) ________ pricing strategy. A) stability B) target ROI C) value D) average-cost E) product line 42) Firms that have an objective of utilizing pricing to communicate positioning use a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 43) Marco wants to buy a new car that is of good quality and available at an affordable price. After exploring the available options, Marco decides to purchase a car made by a popular car manufacturer, which has a high retail price but offers very low operating and maintenance costs. In this scenario, the pricing strategy employed by the car manufacturer is ________. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing 44) In markets where customers typically witness rapidly changing prices, ________ can provide a source of competitive advantage. A) price elasticity of demand B) stability pricing C) price bundling D) auction pricing E) variable pricing 45) For most products, as long as the customer perceives the ratio of price and benefit to be at least equal, perceptions of ________ will likely be favorable. A) market share B) quality C) value D) cost E) brand image

46) Firms and brands that continually attempt to operate in the ________ quadrant do not survive over the long run as customer trust is damaged. Some firms use price skimming strategies, especially on product introductions, even when all the bugs have yet to be worked out of the product. A) high price, high benefits B) high price, low benefits C) low price, high benefits D) low price, low benefits E) low price, no benefits 47) ________ affords the marketing manager an opportunity to develop a rational pricing strategy across a complete line of related items. A) Product line pricing B) Captive pricing C) Price bundling D) Reference pricing E) Prestige pricing 48) Yoko is trying to explain to one of her ticket counter associates the differences in price associated with concert tickets. She explains that the lowest-priced tickets are for the least desirable seats and the highest-priced tickets are for the most desirable seats, with the rest of the ticket prices falling somewhere in between. Yoko is describing ________ pricing. A) product line B) captive C) odd/even D) reference E) prestige 49) Marriott has branded its entire family of accommodations based on different value propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such Courtyard and Residence Inn. This is an example where ________ can occur at a level much broader in scope than individual products. A) captive pricing B) auction pricing C) price lining D) reference pricing E) variable pricing 50) HP sells an inexpensive printer for an entry-level user, but the printer cartridges that need continual replacement are fairly expensive. This demonstrates the concept of ________. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 7 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

51) Krista goes to a store to buy a new liquid soap dispenser. When she purchases a new dispenser from the store she gets two liquid soap refill packets for free, as part of a promotional offer, but she will need to purchase refills later. In this scenario, the pricing strategy used for the soap dispenser is ________ pricing. A) product line B) captive C) variable D) reference E) prestige 52) When Claire purchased her new cell phone, she was offered an opportunity to purchase a car charger and a cover together at a reduced price. The cell phone provider was using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 53) Bright House wants Madhukar to buy the full gamut of entertainment products, and the more he buys—digital television, premium channels, downloadable movies, local and long-distance phone service, cellular service, high-speed Internet—the better the deal becomes compared to the total of the individual prices of each product. Bright House is using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 54) It can be useful for customers to have some type of comparative price when considering a product purchase. Such a comparison is referred to as ________ pricing, which in the case of price bundling is the total price of the components of the bundle if purchased separately versus the bundled price. A) product line B) captive C) odd/even D) reference E) prestige

55) Bella is a discount furniture store. Most of the items in the store are overstock and hence tend to be more inexpensive than other furniture. Recently Bella started to display the manufacturers' suggested retail price next to the price it charges to show the savings. Bella is using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 56) One rationale for establishing a price skimming objective is that ________ lends status to a product or brand by virtue of a price relatively higher than the competition. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 57) Edvard works at a ski shop. He has just gotten a shipment of new snowboards and realizes that the company has priced its snowboards higher than the rest of the boards in his shop. Since Edvard took a marketing class in college, he knows that the company is most likely using ________. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing 58) Creating a perception about price merely from the image the numbers provide the customer demonstrates ________ pricing. A) psychological B) stability C) variable D) everyday low E) high/low 59) Dag runs a hardware store. He learned that customers process the price of $9.99 as significantly lower than the price of $10.00 because of the reduced digit count in the price point. Accordingly, he follows this rule to set up the prices for all products. Dag uses a ________ strategy. A) psychological pricing B) one-price strategy C) variable pricing D) everyday low pricing (EDLP) E) high/low pricing

60) With ________ pricing, customers are allowed—even encouraged—to haggle about prices. A) psychological B) captive C) variable D) odd/even E) high/low 61) The fundamental philosophy behind ________ is to reduce investment in promotion and transfer part of the savings to lower price. A) price bundling B) target return on investment pricing C) variable pricing D) everyday low pricing E) reverse auctions 62) The rise of Walmart as one of the world's largest corporations has brought the concept of ________ to the forefront of global consumer consciousness. A) reverse auctions B) target return on investment pricing C) price points D) everyday low pricing E) high/low pricing 63) ________ is used by firms that rely on periodic heavy promotional pricing, primarily communicated through advertising and sales promotion, to build traffic and sales volume. A) Psychological pricing B) One-price strategy C) Variable pricing D) Everyday low pricing (EDLP) E) High/low pricing 64) Dyani runs Cute Cakes, a gourmet cupcake bakery. To set prices for her cupcakes, Dyani looks at the cost of making each cupcake and then adds an additional amount on top of that to arrive at her price. Dyani is using ________. A) cost-plus pricing B) high/low pricing C) markup on sales price D) average-cost pricing E) target return pricing 65) The Internet created a rise in ________ as more and more people decided to meet online to sell products to the highest bidder. A) price elasticity of demand B) stability pricing C) prestige pricing D) auction pricing E) trade discounts 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

66) Besides the standard auction approach where buyers bid for a seller's offering, it is now very common for sellers to utilize ________ to bid prices to capture a buyer's business. A) price elasticity of demand B) stability pricing C) online promotion D) channel discounts E) reverse auctions 67) Priceline.com is a firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. It is an example of a firm that uses a(n) ________ strategy. A) cost-plus pricing B) price war C) reverse auction D) average-cost pricing E) target return pricing 68) You should be careful when using ________ pricing, as it is always possible that the quantity demanded will not match the marketing manager's forecast. A) cost-plus B) psychological C) value D) average-cost E) prestige 69) James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using a ________ approach. A) markup on cost B) value price C) average-cost pricing D) markup on sales price E) cost-plus 70) To better take into account the differential impact of fixed and variable costs, marketing managers can use ________ pricing. A) cost-plus B) psychological C) odd/even D) average-cost E) target return

71) As with average-cost pricing, the effectiveness of ________ pricing is highly dependent on the accuracy of the forecast. A) cost-plus B) psychological C) reference D) average-cost E) target return 72) ________ costs are incurred over time, regardless of volume, whereas ________ costs fluctuate with volume. A) Fixed; variable B) Variable; fixed C) Total; variable D) Variable; total E) Marginal; total 73) ________ costs are the sum of the fixed and variable costs. A) Marginal B) Total C) Average D) Minimum E) Reduced 74) To use target return pricing, one must first calculate total ________ costs. A) fixed B) variable C) marginal D) minimum E) average 75) ________ are direct, immediate reductions in price provided to purchasers. A) Allotments B) Rebates C) Offers D) Discounts E) Allowances 76) ________ remit monies to purchasers after the fact. A) Allotments B) Coupons C) Offers D) Discounts E) Allowances

77) Solid Surface, a countertop store, will give customers a 10 percent discount if they pay their bills in full in 20 days; however, after 20 days they do not receive a discount. This is an example of a ________. A) cash discount B) trade discount C) quantity discount D) seasonal discount E) promotional allowance 78) ________ provide an incentive to a channel member for performing some function in the channel that benefits the seller, such as stocking a product or performing a product service. A) Cash discounts B) Quantity discounts C) Trade discounts D) Seasonal discounts E) Promotional allowances 79) ________ are typically expressed as greatly extended invoice due dates. A) Cash discounts B) Trade discounts C) Quantity discounts D) Seasonal discounts E) Promotional allowances 80) Veggie Vitality will send retailers a check if the retailer successfully includes its vegetablebased smoothies in promotional efforts. Veggie Vitality uses ________ to incentivize retailers. A) cash discounts B) trade discounts C) quantity discounts D) seasonal discounts E) promotional allowances 81) Which of the following free on board (FOB) pricings indicates that until the goods arrive at the purchaser's location, title doesn't change hands and freight charges are the responsibility of the seller? A) FOB-destination B) FOB-origin C) FOB-factory D) FOB-zone E) FOB-market

82) Giovanni's Gems is a high-quality Italian leather goods store in Manhattan. Giovanni also runs an Internet site where people can buy his products and he will charge the same delivery fee to any location within the 48 contiguous states. Giovanni utilizes ________ pricing. A) free on board (FOB) B) uniform delivered C) zone D) psychological E) product line 83) When shipping prices are dependent on geographic areas based on the distance from the shipping location, it is considered ________ pricing. A) free on board (FOB) B) uniform delivered C) zone D) target return E) psychological 84) ________ is the amount of price increase that can be taken without affecting customer demand. A) Just noticeable difference (JND) B) Price skimming C) Return on investment (ROI) D) Reference pricing E) Free on board (FOB) 85) ________ could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits. A) Price-fixing B) Price discrimination C) Deceptive pricing D) Reference pricing E) Predatory pricing 86) Jameson purchased an alarm system for his car during a promotion. He considered the price after the promotion to be very attractive. However, he later learned that the firm set an artificially high reference price for the alarm system just before the promotion to make the advertised sale price more attractive. Jameson just experienced ________. A) price fixing B) price discrimination C) deceptive pricing D) bait and switch E) predatory pricing

87) When a seller advertises an item at an unbelievably low price to lure customers into a store, and then refuses to sell the advertised item and instead pushes a similar item with a much higher price and higher margin, the seller is participating in the illegal practice of ________. A) price fixing B) price discrimination C) psychological pricing D) bait and switch E) predatory pricing 88) Companies that collude to set prices at a mutually beneficial high level are engaged in ________. A) price discrimination B) deceptive pricing C) predatory pricing D) price-fixing E) bait and switch 89) A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs, is called ________. A) price-fixing B) price discrimination C) deceptive pricing D) bait and switch E) predatory pricing 90) In the past, ________ allowed manufacturers to establish artificially high prices by limiting the ability of wholesalers and retailers to offer reduced or discounted prices. A) fair trade laws B) minimum markup laws C) the Robinson-Patman Act D) the Consumer Goods Pricing Act E) price discrimination 91) ________ require that a certain percentage markup be applied to all products. A) Fair trade laws B) Minimum markup laws C) Partnership laws D) State fair trade laws E) Criminal laws 92) ________ refers to products sold at prices below cost to attract shoppers to a store. A) Free on board (FOB) B) Bait and switch C) Price bundling D) Loss leader E) Prestige 15 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

93) Define the concept of cost leadership. Explain how a company might achieve cost leadership and the primary benefits to be gained. 94) Define and discuss the pros and cons of three of the following pricing strategies: penetration pricing, price skimming, target return on investment (ROI) pricing, competitor-based pricing, and value pricing. 95) Explain the tactic of product line pricing and provide three examples of this strategy in the marketplace today. 96) Explain step-by-step how average-cost pricing would be used to set the exact price of a product. What is the primary risk associated with average-cost pricing? Step 1: Calculate the total costs expected to produce the product. Step 2: Forecast the number of units expected to be sold. Step 3: Divide the total cost by the number of units to determine the average cost per unit. Step 4: Add the desired profit margin to the average cost per unit to determine the average price per unit. 97) Define the four types of channel discounts and provide an example of each. 98) You are a marketing manager and have determined that to meet your company's financial objectives, you will need to increase the bottom line contribution of your product. What are three creative approaches you might take beyond just considering a price increase? 99) Define price-fixing and differentiate horizontal price-fixing from vertical price-fixing. Give an example of how price-fixing might manifest in the market.

Marketing Management, 3e (Marshall) Chapter 11 Manage Pricing Decisions 1) Regardless of whether the setting is B2C or B2B, most costs are associated with the purchase price. Answer: TRUE Explanation: For most purchasers, regardless of whether the setting is B2C or B2B, the vast majority of costs are associated with the purchase price. As such, price—or more specifically the customer's perception of the offering's pricing—is a key determinant of perceived value. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) For the marketing manager, pricing is merely an economic break-even point or a cost-plus accounting calculation. Answer: FALSE Explanation: For the marketing manager, pricing is much more than an economic break-even point or a cost-plus accounting calculation. It is a critical component that plays into a customer's assessment of value. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) Since a product's price tends to be invisible, customers rarely have trouble moving past price to consider other critical benefits the product affords. Answer: FALSE Explanation: Pricing objectives are but one component leading to an overall value proposition. However, a product's price tends to be so visible and definitive that customers often have trouble moving past price to consider other critical benefits the product affords. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) Price objectives are the desired or expected result associated with a pricing strategy and must be consistent with other marketing-related objectives, such as positioning or branding. Answer: TRUE Explanation: Pricing objectives are the desired or expected result associated with a pricing strategy. Pricing objectives must be consistent with other marketing-related objectives (positioning, branding, etc.) as well as with the firm's overall objectives (including financial objectives) for doing business. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) A competitor's price is one of the most visible elements of its marketing strategy; analyzing historical and current pricing patterns may allow firms to determine the competitor's pricing objective. Answer: TRUE Explanation: A competitor's price is one of the most visible elements of its marketing strategy, and firms can often infer the pricing objective by carefully analyzing historical and current pricing patterns. Based on such analysis, a firm may develop competitor-based pricing strategies. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Effectively communicating a product's differential advantages is at the heart of positioning strategy, and exposure to these elements spurs the customer to develop perceptions of value and a subsequent understanding of the value proposition. Answer: TRUE Explanation: Because value is in the eyes of the beholder, affected by his or her perceptions of the offering coupled with the operative needs and wants, pricing decisions are strongly driven by the sources of differential advantage a product can realistically deliver. Effectively communicating a product's differential advantages is at the heart of positioning strategy, and exposure to these elements spurs the customer to develop perceptions of value and a subsequent understanding of the value proposition. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

7) Firms that have an objective of utilizing pricing to communicate positioning use a stability pricing strategy. Answer: FALSE Explanation: Firms that have an objective of utilizing pricing to communicate positioning use a value pricing strategy. Value pricing overtly attempts to consider the role of price as it reflects the bundle of benefits sought by the customer. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) Firms and brands that continually attempt to operate in the high-price/low-benefits environment do not survive over the long run as customer trust is damaged. Answer: TRUE Explanation: Firms and brands that continually attempt to operate in the high-price/low-benefits quadrant do not survive over the long run as customer trust is damaged. Unfortunately, some highly unscrupulous companies perpetuate their operations in this quadrant by constantly changing company name, location, and brand names. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Firms frequently rely on combinations of pricing tactics in the marketplace rather than putting all their eggs in one basket. Answer: TRUE Explanation: As with establishing pricing strategies, for a variety of reasons firms frequently rely on combinations of pricing tactics in the marketplace rather than just going with one strategy. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) In product line pricing, the escalation of product prices up the product line does not depend on prices competitors are charging for similar products. Answer: FALSE Explanation: In product line pricing, the escalation of product prices up the product line has to consider factors such as real cost differences among the various features offered, customer assessments of the value added by the increasing level of benefits, and prices competitors are charging for similar products. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Captive pricing entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate. Answer: TRUE Explanation: Captive pricing, sometimes called complementary pricing, entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) With prestige pricing, some of the traditional price/demand curves cannot properly predict sales or market response because it violates the common assumption that increasing price decreases volume. Answer: TRUE Explanation: One rationale for establishing a price skimming objective is prestige pricing— lending prestige to a product or brand by virtue of a price relatively higher than the competition. With prestige pricing, some of the traditional price/demand curves cannot properly predict sales or market response because it violates the common assumption that increasing price decreases volume. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) Odd pricing can backfire if misapplied, especially with respect to service industries. Answer: TRUE Explanation: Studies indicate that at certain important price breaks—$9.99 versus $10.00, $99.95 versus $100.00, and so on—customers mentally process the price as significantly lower because of the reduced digit count in the price point. However, odd pricing can backfire if misapplied. For example, it seems acceptable for a bottle of Voss to be prestige priced at $12.95 instead of $13.00, but a physician, management consultant, or CPA wouldn't want to charge a client $195 instead of simply $200 for services rendered. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) A variable pricing strategy makes planning and forecasting much easier than a one-price strategy. Answer: FALSE Explanation: A one-price strategy makes planning and forecasting infinitely easier than the alternative approach, variable pricing, which is found in many other countries and cultures but is relatively rare in the United States. With variable pricing, customers are allowed—even encouraged—to haggle about prices. Ultimately, the price is whatever the buyer and seller agree to—a marked price is nothing more than a starting point for negotiation. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Due to its use of an everyday low pricing tactic, Walmart has historically needed to make heavy investment in promotional activities. Answer: FALSE Explanation: Walmart did bring the concept of everyday low pricing (EDLP) to the forefront, however this tactic actually reduces the investment in promotion and transfers that savings into lower prices. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) To set an exact price for goods or service, marketing managers should consider more than one method of calculation to arrive at the optimal price. Answer: TRUE Explanation: To set an exact price for an offering, be it goods or service, marketing managers should consider several calculations to arrive at the optimal price. Four methods that are frequently used include cost-plus pricing/markup on cost, markup on sales price, average-cost pricing, and target return pricing. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Average-cost pricing is a method for determining the price of an offering by adding a standardized markup on top of the costs for the offering. Answer: FALSE Explanation: The pricing method that adds a standardized markup on top of the costs for an offering is known as cost-plus pricing or markup on cost. Average-cost pricing rather identifies total costs associated with an offering and determines an average cost based on a desired profit margin and a prediction of demand for the offering. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) A promotional allowance offers retailers the opportunity to receive some compensation from product marketers for the costs of successful product promotions. Answer: TRUE Explanation: A promotional allowance is used by product marketers to incentivize retailers to promote specific products and, if successful, be compensated for some of the promotional costs. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) Zone, uniform delivered, and free on board are examples of geographically-driven pricing options that can be implemented within a distribution channel. Answer: TRUE Explanation: The three pricing options that take into account geographic location when determining pricing associated with product delivery are zone, uniform delivered, and free on board. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) Among the marketing mix variables, price is the easiest and quickest to alter, so sometimes firms overuse price changes to stimulate additional sales or gain market share. Answer: TRUE Explanation: Over time, price changes are inevitable. A marketing manager may want to raise or lower a price for competitive or other reasons, or competitors may make price changes that require a considered pricing response from your own firm. Among the marketing mix variables, price is the easiest and quickest to alter, so sometimes firms over rely on price changes to stimulate additional sales or gain market share. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) The just noticeable difference in a price is the amount of price increase that can be taken without affecting customer demand. Answer: TRUE Explanation: Both qualitative research approaches, such as focus groups, and quantitative approaches, such as surveys and experiments, can be designed to determine the degree to which an anticipated price change might influence customer response. Ideally, price changes upward will reflect the just noticeable difference (JND) in a price, which is the amount of price increase that can be taken without affecting customer demand. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) When formulating a response to a competitor's price reduction, firms should consider their offering from the perspective of its overall value proposition to customers. Answer: TRUE Explanation: When formulating a response to a competitor's price reduction, firms should remember to consider their offering from the perspective of its overall value proposition to customers and not be too quick to react in kind with a price decrease. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) Deceptive pricing refers to the collusion among companies to set mutually beneficial high prices and limit competition. Answer: FALSE Explanation: Collusion among companies to agree on mutually beneficial high prices is called price-fixing. Deceptive pricing is knowingly stating prices in a way that gives customers a false impression. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) The Robinson-Patman Act addressed price discrimination by prohibiting a seller's ability to offer different prices to different customers without a substantive basis. Answer: TRUE Explanation: The Robinson-Patman Act only allows a seller to offer different prices to different customers under specific conditions where proof exists that the difference is justified. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

25) The internal processes at Southwest Airlines are highly efficient, giving it a competitive advantage over other airlines. Southwest has a very efficient maintenance process and also has a very simple process of booking passengers. Because of these efficiencies, the company is able to offer customers an appealing mileage-driven pricing structure while also increasing the airline's profit margin. In this scenario, Southwest's competitive advantage is based on ________. A) price perception B) cost leadership C) value ratio D) service E) quality Answer: B Explanation: From a marketing planning and strategy perspective, Michael Porter has consistently advocated that firms that are able to compete based on some extraordinary efficiency in one or more internal processes bring to the market a competitive advantage based on cost leadership. Difficulty: 2 Medium Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) Michael Porter has consistently advocated that firms that are able to compete based on some extraordinary efficiency in one or more internal processes bring to the market a competitive advantage based on ________. A) price perception B) cost leadership C) value ratio D) service E) quality Answer: B Explanation: From a marketing planning and strategy perspective, Michael Porter has consistently advocated that firms that are able to compete based on some extraordinary efficiency in one or more internal processes bring to the market a competitive advantage based on cost leadership. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

27) A company's core cost advantages translate directly to an edge over its competitors based on much more flexibility in its ________ as well as its ability to translate some of the cost savings to the bottom line. A) pricing strategies B) cost leadership C) value ratio D) service E) quality Answer: A Explanation: Although firms competing on cost leadership will likely also engage in one of Michael Porter's other competitive strategies (differentiation or focus/niche), their core cost advantages translate directly to an edge over their competitors based on much more flexibility in their pricing strategies as well as their ability to translate some of the cost savings to the bottom line. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) ________ is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings. A) Price B) Cost C) ROI D) Markup E) Skimming Answer: A Explanation: Price is a critical component that plays into a customer's assessment of the value afforded by a firm and its offerings. As such, managerial decisions about pricing should be undertaken methodically and always with a focus on how price impacts the all-important costversus-bundle-of-benefits assessment that equates to customer perceived value. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

29) In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a ________ strategy can create a powerful barrier to market entry for other firms. A) penetration pricing B) target ROI C) price skimming D) competitor-based pricing E) value pricing Answer: A Explanation: In markets where customers are sensitive to price and where internal efficiencies lead to cost advantages allowing for acceptable margins even with aggressive pricing, a penetration pricing objective can create a powerful barrier to market entry for other firms, thus protecting market share. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) When a firm's objective is to gain as much market share as possible, a likely pricing strategy is ________, sometimes also referred to as pricing for maximum marketing share. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: A Explanation: Market share is the percentage of total category sales accounted for by a firm. When a firm's objective is to gain as much market share as possible, a likely pricing strategy is penetration pricing, sometimes also referred to as pricing for maximum marketing share. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

31) Firms should be careful with a ________ strategy, as price is a cue for developing customer perceptions of product quality. The value proposition may be reduced if a low price belies the product's actual quality attributes. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: A Explanation: Firms should be careful with a penetration pricing strategy as price is a cue for developing customer perceptions of product quality, the value proposition may be reduced if a low price belies the product's actual quality attributes. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 32) Amelia is the marketing manager at a cafe in Charleston, and is responsible for deciding the price of dishes included on the cafe's menu. The chef of the cafe introduced a new dish, which was initially priced at $20 by Amelia, but she increased its price slowly over a period of 6 months. In this scenario, Amelia utilized a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: A Explanation: Sometimes penetration pricing is used as part of a new-product introduction. In both the B2C and B2B markets, it is common for prices to be set low initially to ward off competition and then for prices to creep up over time. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

33) A strategy of ________ addresses the objective of entering a market at a relatively high price point. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: B Explanation: A strategy of price skimming addresses the objective of entering a market at a relatively high price point. In proposing price skimming, the marketing manager usually is convinced that a strong price-quality relationship exists for the product. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) In proposing a ________ strategy, the marketing manager usually is convinced that a strong price-quality relationship exists for the product. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: B Explanation: A strategy of price skimming addresses the objective of entering a market at a relatively high price point. In proposing price skimming, the marketing manager usually is convinced that a strong price-quality relationship exists for the product. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

35) Jean Claude has just completed a new line of designer handbags. He wants the price to communicate to the customer that the handbags are high quality and exclusive, so he sets the price high. He knows that after this season, the price may need to decrease as the market evolves. Jean Claude is using a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: B Explanation: Price skimming is sometimes used in a new-product introduction by a firm with a first-mover advantage to skim early sales while the product has a high level of panache and exclusivity in the marketplace. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) Pricing objectives very frequently are designed to maximize profit, which necessitates a ________ pricing strategy. A) penetration B) price skimming C) target return on investment (ROI) D) price war E) value Answer: C Explanation: Pricing objectives very frequently are designed for profit maximization, which necessitates a target return on investment pricing strategy. Here, a bottom-line profit is established first and then pricing is set to achieve the target. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

37) Hector is opening an appliance store. He has estimated a monthly profit goal based on his anticipated expenses and earning goals and uses it to set product prices. Hector is implementing a ________ pricing strategy. A) penetration B) price skimming C) target return on investment (ROI) D) competitor-based E) value Answer: C Explanation: Pricing objectives geared toward achieving maximum or target profit necessitate a target return on investment pricing strategy. Here, a bottom-line profit is established first and then pricing is set to achieve the target. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 38) ________ could lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives. A) Penetration pricing B) Price skimming C) Target ROI D) Competitor-based pricing E) Value pricing Answer: D Explanation: Competitor-based pricing strategies might lead the marketing manager to decide to price at some market average price, or perhaps above or below it in the context of penetration or skimming objectives. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

39) Mark owns a driving range in New York City. He has taken notice of the three competitors who are located very close to his business. Mark decides to look at his competitors' pricing and then determine his best pricing strategy based on all of the information. In this scenario, Mark is utilizing ________. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: D Explanation: Gaining a thorough understanding of competitors' marketing practices is a key element of successful marketing planning and execution. A competitor's price is one of the most visible elements of its marketing strategy, and you can often infer the pricing objective by carefully analyzing historical and current pricing patterns. Based on such analysis, a firm may develop competitor-based pricing strategies. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 40) ________ can occur when a company purposefully makes pricing decisions to undercut one or more competitors and gain sales and net market share. A) Cost leadership B) A price war C) Price skimming D) Price discrimination E) Price elasticity of demand Answer: B Explanation: A price war occurs when a company purposefully makes pricing decisions to undercut one or more competitors and gain sales and net market share. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

41) A firm attempts to find a neutral set point for price that is neither low enough to raise the ire of competition nor high enough to put the value proposition at risk with customers. The firm is adopting a(n) ________ pricing strategy. A) stability B) target ROI C) value D) average-cost E) product line Answer: A Explanation: A potentially more productive strategy related to competitor-based pricing is stability pricing, in which a firm attempts to find a neutral set point for price that is neither low enough to raise the ire of competition nor high enough to put the value proposition at risk with customers. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42) Firms that have an objective of utilizing pricing to communicate positioning use a ________ strategy. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: E Explanation: Firms that have an objective of utilizing pricing to communicate positioning use a value pricing strategy. Value pricing overtly attempts to consider the role of price as it reflects the bundle of benefits sought by the customer. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

43) Marco wants to buy a new car that is of good quality and available at an affordable price. After exploring the available options, Marco decides to purchase a car made by a popular car manufacturer, which has a high retail price but offers very low operating and maintenance costs. In this scenario, the pricing strategy employed by the car manufacturer is ________. A) penetration pricing B) price skimming C) target ROI D) competitor-based pricing E) value pricing Answer: E Explanation: Value pricing considers the whole deliverable and its possible sources of differential advantage—image, service, product quality, personnel, innovation, and many others—the whole gamut of elements that create customer benefit. For instance, Toyotas and Hondas cost more to purchase initially than other comparable vehicles, but they last longer, require fewer repairs, are more fuel-efficient, and hold their resale value much better; overall, they have a lower lifetime cost of ownership. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 44) In markets where customers typically witness rapidly changing prices, ________ can provide a source of competitive advantage. A) price elasticity of demand B) stability pricing C) price bundling D) auction pricing E) variable pricing Answer: B Explanation: Many factors go into selecting a specific product's stability price point. In markets where customers typically witness rapidly changing prices, stability pricing can provide a source of competitive advantage. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

45) For most products, as long as the customer perceives the ratio of price and benefit to be at least equal, perceptions of ________ will likely be favorable. A) market share B) quality C) value D) cost E) brand image Answer: C Explanation: A diagonal range of feasible positioning options exists based on matching price to the benefits achieved. For most products, as long as the customer perceives the ratio of price and benefit to be at least at equilibrium, perceptions of value will likely be favorable. Thus, a poorerquality product offset by a super-low price can be perceived as a good value just as a higherquality product at a high price can be. Difficulty: 1 Easy Topic: The Concept of Customer Value Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 46) Firms and brands that continually attempt to operate in the ________ quadrant do not survive over the long run as customer trust is damaged. Some firms use price skimming strategies, especially on product introductions, even when all the bugs have yet to be worked out of the product. A) high price, high benefits B) high price, low benefits C) low price, high benefits D) low price, low benefits E) low price, no benefits Answer: B Explanation: Firms and brands that continually attempt to operate in the high-price/low-benefits quadrant do not survive over the long run as customer trust is damaged. Unfortunately, some highly unscrupulous companies perpetuate their operations in this quadrant by constantly changing company name, location, and brand names. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

47) ________ affords the marketing manager an opportunity to develop a rational pricing strategy across a complete line of related items. A) Product line pricing B) Captive pricing C) Price bundling D) Reference pricing E) Prestige pricing Answer: A Explanation: Product line pricing (or price lining) affords the marketing manager an opportunity to develop a rational pricing strategy across a complete line of related items. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 48) Yoko is trying to explain to one of her ticket counter associates the differences in price associated with concert tickets. She explains that the lowest-priced tickets are for the least desirable seats and the highest-priced tickets are for the most desirable seats, with the rest of the ticket prices falling somewhere in between. Yoko is describing ________ pricing. A) product line B) captive C) odd/even D) reference E) prestige Answer: A Explanation: Product line pricing (or price lining) affords the marketing manager an opportunity to develop a rational pricing strategy across a complete line of related items. As a customer is evaluating the choices available within a firm's product line, the price points established for the various items in the line need to make sense and reflect the differences in benefits offered as the customer moves up and down the product line. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

49) Marriott has branded its entire family of accommodations based on different value propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such Courtyard and Residence Inn. This is an example where ________ can occur at a level much broader in scope than individual products. A) captive pricing B) auction pricing C) price lining D) reference pricing E) variable pricing Answer: C Explanation: Price lining can occur at a level much broader in scope than individual products. For example, Marriott has branded its entire family of accommodations based on different value propositions, supported by clearly delineated pricing strategies. Its offerings include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such as Courtyard, Residence Inn, Spring Hill Suites, Fairfield Inn, and Town Place Suites. Marriott clearly communicates the differences and value in each of these brands, partly by how each is priced in relation to the others. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 50) HP sells an inexpensive printer for an entry-level user, but the printer cartridges that need continual replacement are fairly expensive. This demonstrates the concept of ________. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: B Explanation: Captive pricing, sometimes called complementary pricing, entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 21 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

51) Krista goes to a store to buy a new liquid soap dispenser. When she purchases a new dispenser from the store she gets two liquid soap refill packets for free, as part of a promotional offer, but she will need to purchase refills later. In this scenario, the pricing strategy used for the soap dispenser is ________ pricing. A) product line B) captive C) variable D) reference E) prestige Answer: B Explanation: Captive pricing, sometimes called complementary pricing, entails gaining a commitment from a customer to a basic product or system that requires continual purchase of peripherals to operate. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 52) When Claire purchased her new cell phone, she was offered an opportunity to purchase a car charger and a cover together at a reduced price. The cell phone provider was using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: C Explanation: When customers are given the opportunity to purchase a package deal at a reduced price compared to what the individual components of the package would cost separately, the firm is using a price bundling strategy. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

53) Bright House wants Madhukar to buy the full gamut of entertainment products, and the more he buys—digital television, premium channels, downloadable movies, local and long-distance phone service, cellular service, high-speed Internet—the better the deal becomes compared to the total of the individual prices of each product. Bright House is using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: C Explanation: When customers are given the opportunity to purchase a package deal at a reduced price compared to what the individual components of the package would cost separately, the firm is using a price bundling strategy. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 54) It can be useful for customers to have some type of comparative price when considering a product purchase. Such a comparison is referred to as ________ pricing, which in the case of price bundling is the total price of the components of the bundle if purchased separately versus the bundled price. A) product line B) captive C) odd/even D) reference E) prestige Answer: D Explanation: As in price bundling, it can be useful for customers to have some type of comparative price when considering a product purchase. Such a comparison is referred to as reference pricing and, in the case of price bundling, the reference price is the total price of the components of the bundle if purchased separately versus the bundled price. The savings would be expected to stimulate purchase of the bundle so long as the perceived value realized is sufficient. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) Bella is a discount furniture store. Most of the items in the store are overstock and hence tend to be more inexpensive than other furniture. Recently Bella started to display the manufacturers' suggested retail price next to the price it charges to show the savings. Bella is using a ________ strategy. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: D Explanation: Reference pricing is implemented in a number of ways. Sometimes a store might show a manufacturer's suggested list price next to the actual price the product is offered for in other stores. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 56) One rationale for establishing a price skimming objective is that ________ lends status to a product or brand by virtue of a price relatively higher than the competition. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: E Explanation: One rationale for establishing a price skimming objective is prestige pricing— lending prestige to a product or brand by virtue of a price relatively higher than the competition. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) Edvard works at a ski shop. He has just gotten a shipment of new snowboards and realizes that the company has priced its snowboards higher than the rest of the boards in his shop. Since Edvard took a marketing class in college, he knows that the company is most likely using ________. A) product line pricing B) captive pricing C) price bundling D) reference pricing E) prestige pricing Answer: E Explanation: One rationale for establishing a price skimming objective is prestige pricing— lending prestige to a product or brand by virtue of a price relatively higher than the competition. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 58) Creating a perception about price merely from the image the numbers provide the customer demonstrates ________ pricing. A) psychological B) stability C) variable D) everyday low E) high/low Answer: A Explanation: The rationale for odd pricing is very different and it is often regarded as a key element of psychological pricing, or creating a perception about price merely from the image the numbers provide the customer. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

59) Dag runs a hardware store. He learned that customers process the price of $9.99 as significantly lower than the price of $10.00 because of the reduced digit count in the price point. Accordingly, he follows this rule to set up the prices for all products. Dag uses a ________ strategy. A) psychological pricing B) one-price strategy C) variable pricing D) everyday low pricing (EDLP) E) high/low pricing Answer: A Explanation: The rationale for odd pricing is very different and it is often regarded as a key element of psychological pricing, or creating a perception about price merely from the image the numbers provide the customer. Studies indicate that at certain important price breaks—$9.99 versus $10.00, $99.95 versus $100.00, and so on—customers mentally process the price as significantly lower because of the reduced digit count in the price point. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 60) With ________ pricing, customers are allowed—even encouraged—to haggle about prices. A) psychological B) captive C) variable D) odd/even E) high/low Answer: C Explanation: Variable pricing is found in many other countries and cultures but is relatively rare in the United States. With variable pricing, customers are allowed—even encouraged—to haggle about prices. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) The fundamental philosophy behind ________ is to reduce investment in promotion and transfer part of the savings to lower price. A) price bundling B) target return on investment pricing C) variable pricing D) everyday low pricing E) reverse auctions Answer: D Explanation: The rise of Walmart as one of the world's largest corporations has brought the concept of everyday low pricing (EDLP) to the forefront of global consumer consciousness. EDLP is not an option just for retailers; it's an important strategic choice for nearly any firm. The fundamental philosophy behind EDLP is to reduce investment in promotion and transfer part of the savings to lower price. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 62) The rise of Walmart as one of the world's largest corporations has brought the concept of ________ to the forefront of global consumer consciousness. A) reverse auctions B) target return on investment pricing C) price points D) everyday low pricing E) high/low pricing Answer: D Explanation: The rise of Walmart as one of the world's largest corporations has brought the concept of everyday low pricing (EDLP) to the forefront of global consumer consciousness. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

63) ________ is used by firms that rely on periodic heavy promotional pricing, primarily communicated through advertising and sales promotion, to build traffic and sales volume. A) Psychological pricing B) One-price strategy C) Variable pricing D) Everyday low pricing (EDLP) E) High/low pricing Answer: E Explanation: A high/low pricing strategy is one in which firms rely on periodic heavy promotional pricing, primarily communicated through advertising and sales promotion, to build traffic and sales volume. The promotional investment is offset by somewhat higher everyday prices. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 64) Dyani runs Cute Cakes, a gourmet cupcake bakery. To set prices for her cupcakes, Dyani looks at the cost of making each cupcake and then adds an additional amount on top of that to arrive at her price. Dyani is using ________. A) cost-plus pricing B) high/low pricing C) markup on sales price D) average-cost pricing E) target return pricing Answer: A Explanation: Cost-plus pricing is really just a general heuristic that builds a price by adding a standardized markup on top of costs for an offering, hence the term markup on cost. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

65) The Internet created a rise in ________ as more and more people decided to meet online to sell products to the highest bidder. A) price elasticity of demand B) stability pricing C) prestige pricing D) auction pricing E) trade discounts Answer: D Explanation: As a strategy, auction pricing has gained in prominence as Internet commerce has come of age. The most famous example of auction pricing is eBay. Whereas in the past prices at auction were wholly dependent on the level of demand represented by a fairly small number of people either physically gathered at the auction location or connected through traditional telecommunication, today the Internet provides a vast electronic playing field for customers to participate in the auction on a real-time basis. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 66) Besides the standard auction approach where buyers bid for a seller's offering, it is now very common for sellers to utilize ________ to bid prices to capture a buyer's business. A) price elasticity of demand B) stability pricing C) online promotion D) channel discounts E) reverse auctions Answer: E Explanation: Besides standard auction approaches, online reverse auctions are when sellers bid prices to capture a buyer's business. Priceline.com is a prominent example of a reverse auction firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

67) Priceline.com is a firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. It is an example of a firm that uses a(n) ________ strategy. A) cost-plus pricing B) price war C) reverse auction D) average-cost pricing E) target return pricing Answer: C Explanation: Besides standard auction approaches (buyers bid for a seller's offering), online reverse auctions are now very common in which sellers bid prices to capture a buyer's business. Priceline.com is a prominent example of a reverse auction firm that serves as a clearinghouse for extra capacity from airlines, hotels, and cruise lines. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) You should be careful when using ________ pricing, as it is always possible that the quantity demanded will not match the marketing manager's forecast. A) cost-plus B) psychological C) value D) average-cost E) prestige Answer: D Explanation: Caution is warranted in employing average-cost pricing, because the quantity demanded may not match the marketing manager's forecast. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) James is trying to determine the best price for his new fishing poles and thus uses the sales price as a basis of calculating the markup percentage. He is using a ________ approach. A) markup on cost B) value price C) average-cost pricing D) markup on sales price E) cost-plus Answer: D Explanation: In most applications, when a marketing manager simply refers to "markup," he or she is referring to markup on sales price, which uses the sales price as a basis of calculating the markup percentage. This is because most important items on financial reports (gross sales, revenue, etc.) are sales, not cost, figures. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 70) To better take into account the differential impact of fixed and variable costs, marketing managers can use ________ pricing. A) cost-plus B) psychological C) odd/even D) average-cost E) target return Answer: E Explanation: To better take into account the differential impact of fixed and variable costs, marketing managers can use target return pricing. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) As with average-cost pricing, the effectiveness of ________ pricing is highly dependent on the accuracy of the forecast. A) cost-plus B) psychological C) reference D) average-cost E) target return Answer: E Explanation: As with average-cost pricing, the effectiveness of target return pricing is highly dependent on the accuracy of the forecast. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) ________ costs are incurred over time, regardless of volume, whereas ________ costs fluctuate with volume. A) Fixed; variable B) Variable; fixed C) Total; variable D) Variable; total E) Marginal; total Answer: A Explanation: Fixed costs are incurred over time, regardless of volume. Variable costs fluctuate with volume. And total costs are simply a sum of the fixed and variable costs. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) ________ costs are the sum of the fixed and variable costs. A) Marginal B) Total C) Average D) Minimum E) Reduced Answer: B Explanation: Fixed costs are incurred over time, regardless of volume. Variable costs fluctuate with volume. And total costs are simply a sum of the fixed and variable costs. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) To use target return pricing, one must first calculate total ________ costs. A) fixed B) variable C) marginal D) minimum E) average Answer: A Explanation: To use target return pricing, one must first calculate total fixed costs. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) ________ are direct, immediate reductions in price provided to purchasers. A) Allotments B) Rebates C) Offers D) Discounts E) Allowances Answer: D Explanation: Discounts are direct, immediate reductions in price provided to purchasers. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) ________ remit monies to purchasers after the fact. A) Allotments B) Coupons C) Offers D) Discounts E) Allowances Answer: E Explanation: Allowances remit monies to purchasers after the fact. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) Solid Surface, a countertop store, will give customers a 10 percent discount if they pay their bills in full in 20 days; however, after 20 days they do not receive a discount. This is an example of a ________. A) cash discount B) trade discount C) quantity discount D) seasonal discount E) promotional allowance Answer: A Explanation: Sellers offer cash discounts to elicit quicker payment of invoices. The rational purchaser weighs the discount offered for early payment versus the value of keeping the money until it is due. Ideally the cash discount results in financial advantage for both parties. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 78) ________ provide an incentive to a channel member for performing some function in the channel that benefits the seller, such as stocking a product or performing a product service. A) Cash discounts B) Quantity discounts C) Trade discounts D) Seasonal discounts E) Promotional allowances Answer: C Explanation: Trade discounts, also sometimes called functional discounts, provide an incentive to a channel member for performing some function in the channel that benefits the seller. Examples include stocking a seller's product or performing a service related to that product, such as installation or repair, within the channel. Trade discounts are normally expressed as a percentage of the invoice price. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) ________ are typically expressed as greatly extended invoice due dates. A) Cash discounts B) Trade discounts C) Quantity discounts D) Seasonal discounts E) Promotional allowances Answer: D Explanation: To accommodate lengthy sales processes, firms offer seasonal discounts, which reward the purchaser for shifting part of the inventory storage function away from the manufacturer. Seasonal discounts are often expressed as greatly extended invoice due dates. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) Veggie Vitality will send retailers a check if the retailer successfully includes its vegetablebased smoothies in promotional efforts. Veggie Vitality uses ________ to incentivize retailers. A) cash discounts B) trade discounts C) quantity discounts D) seasonal discounts E) promotional allowances Answer: E Explanation: With promotional allowances provided by the manufacturer, ordinarily, upon proof of performance of the promotion, the retailer will receive a check back from the manufacturer to compensate for part of the promotional costs. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

81) Which of the following free on board (FOB) pricings indicates that until the goods arrive at the purchaser's location, title doesn't change hands and freight charges are the responsibility of the seller? A) FOB-destination B) FOB-origin C) FOB-factory D) FOB-zone E) FOB-market Answer: A Explanation: FOB-destination indicates that until the goods arrive at the purchaser's location, title doesn't change hands and freight charges are the responsibility of the seller. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) Giovanni's Gems is a high-quality Italian leather goods store in Manhattan. Giovanni also runs an Internet site where people can buy his products and he will charge the same delivery fee to any location within the 48 contiguous states. Giovanni utilizes ________ pricing. A) free on board (FOB) B) uniform delivered C) zone D) psychological E) product line Answer: B Explanation: Many direct-to-consumer marketers such as Amazon, and Lands' End practice uniform delivered pricing, in which the same delivery fee is charged to customers regardless of geographic location within the 48 contiguous states. Pricing rates are quoted for other locations, and expedited delivery is generally available for a higher fee. Difficulty: 2 Medium Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

83) When shipping prices are dependent on geographic areas based on the distance from the shipping location, it is considered ________ pricing. A) free on board (FOB) B) uniform delivered C) zone D) target return E) psychological Answer: C Explanation: In a zone pricing approach, shippers set up geographic pricing zones based on the distance from the shipping location. The parcel post system of the U.S. Postal Service is set up this way. Rates are calculated for the various combinations of sending and receiving zones. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) ________ is the amount of price increase that can be taken without affecting customer demand. A) Just noticeable difference (JND) B) Price skimming C) Return on investment (ROI) D) Reference pricing E) Free on board (FOB) Answer: A Explanation: Ideally, price changes upward will reflect the just noticeable difference (JND) in a price, which is the amount of price increase that can be taken without affecting customer demand. Difficulty: 1 Easy Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) ________ could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits. A) Price-fixing B) Price discrimination C) Deceptive pricing D) Reference pricing E) Predatory pricing Answer: A Explanation: Companies that collude to set prices at a mutually beneficial high level are engaged in price fixing. When competitors are involved in the collusion, horizontal price fixing occurs. The Sherman Act forbids horizontal price fixing, which could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Jameson purchased an alarm system for his car during a promotion. He considered the price after the promotion to be very attractive. However, he later learned that the firm set an artificially high reference price for the alarm system just before the promotion to make the advertised sale price more attractive. Jameson just experienced ________. A) price fixing B) price discrimination C) deceptive pricing D) bait and switch E) predatory pricing Answer: C Explanation: Knowingly stating prices in a manner that gives a false impression to customers is deceptive pricing. Deceptive pricing practices are monitored and enforced by the FTC. Deceptive pricing may take several forms. Sometimes, firms will set artificially high reference prices for merchandise just before a promotion so that an advertised sale price will look much more attractive to customers. Difficulty: 2 Medium Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

87) When a seller advertises an item at an unbelievably low price to lure customers into a store, and then refuses to sell the advertised item and instead pushes a similar item with a much higher price and higher margin, the seller is participating in the illegal practice of ________. A) price fixing B) price discrimination C) psychological pricing D) bait and switch E) predatory pricing Answer: D Explanation: A seller may advertise an item at an unbelievably low price to lure customers into a store, and once the customer arrives refuse to sell the advertised item and instead push a similar item with a much higher price and higher margin. When this occurs and it can be demonstrated that a seller had no true intent to actually make the lower-priced item available for sale, the practice is called bait and switch and is illegal. Difficulty: 2 Medium Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) Companies that collude to set prices at a mutually beneficial high level are engaged in ________. A) price discrimination B) deceptive pricing C) predatory pricing D) price-fixing E) bait and switch Answer: D Explanation: Companies that collude to set prices at a mutually beneficial high level are engaged in price fixing. When competitors are involved in the collusion, horizontal price fixing occurs. The Sherman Act forbids horizontal price fixing, which could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs, is called ________. A) price-fixing B) price discrimination C) deceptive pricing D) bait and switch E) predatory pricing Answer: E Explanation: A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs, is called predatory pricing. Predatory pricing is illegal but prosecuting it can be very tricky because intent must be proved. Other plausible explanations exist for drastic price reductions including inventory overstocks, so proving that predatory pricing has occurred is difficult. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) In the past, ________ allowed manufacturers to establish artificially high prices by limiting the ability of wholesalers and retailers to offer reduced or discounted prices. A) fair trade laws B) minimum markup laws C) the Robinson-Patman Act D) the Consumer Goods Pricing Act E) price discrimination Answer: A Explanation: Fair trade laws were popular in the past because they allowed manufacturers to establish artificially high prices by limiting the ability of wholesalers and retailers to offer reduced or discounted prices. Fair trade laws varied greatly from state to state, depending largely on how strong the independent retailer and wholesaler lobby was in a particular locale. These laws protected mom-and-pop operators from the price discounting by chain stores. Difficulty: 2 Medium Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) ________ require that a certain percentage markup be applied to all products. A) Fair trade laws B) Minimum markup laws C) Partnership laws D) State fair trade laws E) Criminal laws Answer: B Explanation: Closely associated with fair trade laws are minimum markup laws, which require that a certain percentage markup be applied to products. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 92) ________ refers to products sold at prices below cost to attract shoppers to a store. A) Free on board (FOB) B) Bait and switch C) Price bundling D) Loss leader E) Prestige Answer: D Explanation: Target Corporation was at one point sued by the State of Oklahoma for violating minimum markup laws by offering loss leader products. Target eventually prevailed by using an ad campaign to highlight higher prices being charged in Oklahoma compared to the rest of the country due to the state law. The law was eventually repealed as part of the Consumer Goods Pricing Act. Difficulty: 1 Easy Topic: Legal Considerations in Pricing Learning Objective: 11-07 Examine legal considerations in pricing. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

93) Define the concept of cost leadership. Explain how a company might achieve cost leadership and the primary benefits to be gained. Answer: Cost leadership refers to a competitive advantage gained by a company when it achieves extraordinary efficiency in internal processes. For example, a company may choose to limit its product line to minimize inventory and service costs. It may also design products to use common components to take advantage of simplified sourcing and quantity discounts. By optimizing internal efficiency and costs, the company has larger margins to work with and thus has more flexibility when considering pricing strategies. In addition to pricing flexibility, the cost savings can also be directed to the bottom line or reinvested to support growth objectives. Difficulty: 3 Hard Topic: The Concept of Customer Value Learning Objective: 11-01 Understand the integral role of price as a core component of value. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

94) Define and discuss the pros and cons of three of the following pricing strategies: penetration pricing, price skimming, target return on investment (ROI) pricing, competitor-based pricing, and value pricing. Answer: Penetration pricing utilizes a cost leadership advantage to compete aggressively on price. It can both draw customers from competitors and prevent new competitors from entering a market (e.g., as part of a new product introduction) making it an ideal strategy to achieve market share objectives. The downside of penetration pricing is that customers often associate price with quality and may be left with the wrong impression of a product or companies benefits. Price skimming attempts to leverage the high quality or exclusivity of a product to enter a market at a high price point. Price skimming maximizes initial profits while lending prestige to a product to capture market share. A challenge of this strategy is to manage multi-year marketing plans to accommodate a decrease in demand and increase in competition which will drive pricing down. Target return on investment (ROI) pricing first establishes a bottom-line profit requirement and then prices in order to achieve the target. With proper consideration of other market considerations such as price elasticity of demand (i.e., price sensitivity), marketing managers can effectively drive pricing to reach a firm's profit objectives. Target ROI pricing can be challenging due to the difficulty in determining price sensitivity. Another downside of a target ROI pricing strategy, if focused too heavily on profit maximization alone, is the potential for unethical pricing if a firm decides to greatly overprice products in short supply in the market just to maximize profits. Competitor-based pricing requires thorough research of competitors' offerings and pricing in an attempt to discern competitors' pricing strategies. Based on the research, a marketing manager can make informed decisions to price below the competitors to gain market share or perhaps to enter the market with the goal of pricing that creates a neutral set point relative to competitors (also called stability pricing). Attempts to price too high or low based solely on competitive information can backfire and lead to customer value concerns or price wars. Value pricing strives to use pricing in relationship to the overall bundle of benefits sought by the customer. By promoting the differential advantage of the totality of a product (e.g., image, service, quality, etc.), the marketing manager can set pricing to create an acceptance of the product's value proposition. Value pricing can not only attract customers but often leads to product loyalty. Value pricing is complex and marketing managers must be careful not to overpromise and underdeliver which creates poor value perceptions and can alienate customers. Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-02 Explore different pricing objectives and related strategies. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

95) Explain the tactic of product line pricing and provide three examples of this strategy in the marketplace today. Answer: Product Line Pricing is an approach where a marketing manager develops a pricing strategy not for a single product but for a series of products within a product line. The price point established for each item reflects the difference in benefits offers as the customer moves through the product line. Examples will vary (concert ticket levels, hotel chain accommodations, car models etc.). Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-03 Identify pricing tactics. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 96) Explain step-by-step how average-cost pricing would be used to set the exact price of a product. What is the primary risk associated with average-cost pricing? Step 1: Calculate the total costs expected to produce the product. Step 2: Forecast the number of units expected to be sold. Step 3: Divide the total cost by the number of units to determine the average cost per unit. Step 4: Add the desired profit margin to the average cost per unit to determine the average price per unit. Answer: A risk in average-cost pricing involves the reliance on a forecast estimate. If sales fall short of forecast, it is likely that some coats may also reduce but total cost would not drop proportionately due to fixed costs. This risk supports the general wisdom regarding taking a holistic approach to setting price and not focusing solely on cost alone. Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-04 Describe approaches to setting the exact price. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

97) Define the four types of channel discounts and provide an example of each. Answer: Sellers offer cash discounts to elicit quicker payment of invoices. The rational purchaser weighs the discount offered for early payment versus the value of keeping the money until it is due. Ideally the cash discount results in financial advantage for both parties. Cash discounts are stated in a typical format such as 2 percent/10, Net/40, which translates to the buyer receiving 2 percent off the total bill if payment is received within 10 days of the invoice date, but after that point there is no discount and the whole invoice is due within 40 days of the invoice date. Trade discounts, also sometimes called functional discounts, provide an incentive to a channel member for performing some function in the channel that benefits the seller. Examples include stocking a seller's product or performing a service related to that product, such as installation or repair, within the channel. Trade discounts are normally expressed as a percentage off the invoice price. Quantity discounts are taken off an invoice price based on different levels of product purchased. Quantity discounts may be offered on an order-by-order basis, in which case they are noncumulative, or they may be offered on a cumulative basis over time as an incentive to promote customer loyalty. From a legal standpoint, it is essential that quantity discounts are offered to all customers on an equally proportionate basis so that small buyers as well as large buyers follow the same rules for qualification. The later section on legal considerations in pricing extends the discussion about fairness in pricing practices. Firms often purchase seasonal products many months before the season begins. For example, a retailer might purchase a winter apparel line at a trade show a year before its season, accept delivery in August, begin displaying it in September, yet cold weather may not hit until November or December. To accommodate such lengthy sales processes, firms offer seasonal discounts, which reward the purchaser for shifting part of the inventory storage function away from the manufacturer. Seasonal discounts are often expressed as greatly extended invoice due dates. In the winter clothes line example, terms of 2 percent/120, Net 145 would not be unusual. Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-05 Determine discounts and allowances to offer to channel members. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

98) You are a marketing manager and have determined that to meet your company's financial objectives, you will need to increase the bottom line contribution of your product. What are three creative approaches you might take beyond just considering a price increase? Answer: Approaches will vary, such as: Consider internal process improvements to increase efficiency and reduce costs. Adjust product designs to reduce use of high cost materials. Offer discounts or allowances to channel members to increase sales. Reduce product quality with caution regarding impact to customers. Alter product bundles to streamline functionality. Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-06 Understand how to execute price changes. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 99) Define price-fixing and differentiate horizontal price-fixing from vertical price-fixing. Give an example of how price-fixing might manifest in the market. Answer: Price-fixing occurs when companies collude to set mutually beneficial high prices. Price-fixing is illegal and monitored/enforced by the Federal Trade Commission. When competitors are involved in the collusion, horizontal price-fixing occurs. The Sherman Act forbids horizontal price-fixing, which could result in overall higher prices for consumers since various competitors are all pricing the same to maximize their profits. When independent members of a channel (for example, manufacturers, distributors, and retailers) collude to establish a minimum retail price, referred to as retail price maintenance, vertical price-fixing occurs. Vertical price-fixing is illegal under the Consumer Goods Pricing Act, and for good reason. Vertical price-fixing ensures everybody in the channel is satisfied with their "cut" of the profits, but the profit boost is achieved by increased prices to consumers. Difficulty: 3 Hard Topic: Pricing Tactics and Strategies Learning Objective: 11-07 Understand how to execute price changes. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 12 Manage Marketing Channels, Logistics, and Supply Chain 1) The value chain portrays a mixture of primary and support activities utilized by an organization to design, produce, market, deliver, and support its products. 2) Customers, both end users and those within a channel, are often considered by organizations as unimportant members of the value network. 3) A channel is a system of interdependent relationships among a set of organizations that facilitates the exchange process. 4) Cutting out intermediaries will always guarantee that consumers will save money. 5) A wide variety of types of intermediaries exist, and they usually fall within two principal categories: merchant intermediaries and agent intermediaries. 6) Logistics is a function of channel intermediaries. 7) Facilitating functions performed by intermediaries include a variety of activities, including financing and market research. 8) The performance of transaction and communication functions is a category of intermediary contribution within a channel. 9) Disintermediation is common in the machining channel. 10) Many firms are using outsourcing or third-party logistics to better focus on their core business. 11) A vertical marketing system is comprised of independent entities. 12) The lead player in an administered VMS is called the channel captain. 13) Unresolved channel conflict will never result in an uncooperative and inefficient channel; however, it may impact end-user consumers through inferior products, spotty inventory, and higher prices. 14) Expert power is when channel members adopt an approach of utilizing their unique competencies to influence others in the channel. 15) When marketing planning, a good channel decision can be one of the most important within the entire planning process and can lead to market advantage over competitors. 16) With a push strategy, much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) The degree of push versus pull used is fundamental in framing the channel structure and relationships that are likely to optimize a product's success. 18) Physical distribution, or logistics, is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution. 19) Receiving and properly processing customer orders takes place before the product moves into the supply chain. 20) In an ideal supply chain, materials of all kinds are handled as many times as possible. 21) Exclusive dealing may be legal if the parties show exclusivity is essential for strategic reasons, such as to maintain product image. 22) A producer can always grant an intermediary an exclusive territory for sales purposes. 23) E-commerce is not generally a central part of most firms' marketing strategies. 24) Electronic retailing is the communication and sale of products or services to consumers over the Internet. 25) Although the Internet has reshaped the way businesses and consumers interact, it has not been successful in B2B customer interfaces. 26) In evaluating a website, one of the key measures is its "stickiness," which refers to the amount of time visitors remain and explore a site. 27) A(n) ________ is thought of as an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space. A) value network B) virtual organization C) business conglomerate D) organic organization E) tall organization 28) A value network perspective is a macro-level strategic approach that is being adopted by many firms in part because of the intense competition to cut ________ and maximize ________ every step of the way to market. A) costs; process efficiencies B) rewards; stock inventory C) employee benefits; cost control D) time inefficiencies; profits E) labor hours; performance incentives

29) A virtual organization is otherwise known as a ________ organization. A) flat B) boundaryless C) bureaucratic D) tall E) network 30) A ________ eliminates many in-house business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value. A) value network B) mechanistic distribution system C) virtual organization D) physical distribution system E) tall organization 31) Jenn, a production manager at a company, has decided to take a value network approach to create a competitive advantage over the company's competitors. In the context of network organizations, this approach will make the company's operations more ________. A) rigid B) costly C) consistent D) static E) nimble 32) A(n) ________ represents all organizations involved in providing a firm, the members of its channels of distribution, and its end-user consumers and business users. A) value chain B) supply chain C) virtual channel D) direct channel E) indirect channel 33) Keisha is in charge of overseeing the flow of activities among several entities for Walmart. Her main objective is to coordinate these value-adding activities in a way that maximizes value and profit. She is in charge of ________. A) physical distribution B) assortment creation C) supply chain management D) partner relationship management E) transaction reduction 34) A channel of distribution consists of interdependent entities that ________. A) transfer possession of a product from producer to consumer B) fix the price of a product to create monopoly C) experience inefficiencies in business processes D) develop new products E) include members of the same market segment 3 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

35) In the context of the distribution channel, which of the following takes title to a product? A) product promoters B) merchant intermediaries C) agent intermediaries D) brokers E) commission dealers 36) ________ intermediaries perform a variety of physical distribution, transaction and communication, and facilitating functions that make exchange possible. They do not take title to the product. A) Wholesalers B) Retailer C) Agent D) Distributor E) Supplier 37) Which of the following has no intermediaries and operates strictly from producer to end-user consumer or business user? A) exclusive distribution B) physical distribution C) virtual network D) direct channel E) indirect channel 38) Channel members add their value by bridging gaps in form, time, place, and ownership that naturally exist between ________. A) consumers and transporters B) facilitating agents and transporters C) producers and consumers D) producers and retailers E) distributors and agents 39) A(n) ________ contains one or more intermediary levels. A) channel community B) network organization C) virtual organization D) direct channel E) indirect channel 40) ________ enhance utilities by providing a wide array of specific functions including physical distribution functions, transaction and communication functions, and facilitating functions. A) Direct channels B) Value networks C) Indirect channels D) Pull strategies E) Channel intermediaries 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

41) Good Egg Co. buys eggs from local farmers, sorts them into different grades, and then packages them to sell to larger grocers. Good Egg Co. is performing the distribution function of ________. A) physical distribution B) product processing C) determining variety D) breaking bulk E) accumulating bulk 42) Intermediaries engage in ________ when they accumulate products from several sources and then make those products available down the channel as a convenience for consumers. A) creating assortments B) reducing transactions C) transportation and storage functions D) facilitating functions E) disintermediation 43) Introducing an intermediary into a channel may contribute to ________ that are necessary to complete an exchange. A) creating assortments B) reducing transactions C) transportation and storage functions D) facilitating functions E) disintermediations 44) An intermediary works with large consumer product manufacturers as well as small local retailers. The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers to better match quantities needed for space constraints and inventory turnover requirements. The intermediary is performing the distribution function of ________. A) disintermediation B) assortment creation C) reverse logistics D) breaking bulk E) accumulating bulk 45) ________ is one of the most commonly provided channel intermediary activities. A) Showrooming B) Franchising C) Storage D) Outsourcing E) Disintermediation

46) Financing, market research, risk-taking, and other services are considered to be ________ functions. A) physical distribution B) transaction and communication C) transportation and storage D) facilitating E) e-commerce 47) Big Market purchases different fruits from local farmers and then sells them to local restaurants and retailers. If the fruits rot before Big Market sells them, the store takes the loss. As an intermediary, Big Market is performing the function of ________. A) financing B) market research C) channeling D) risk-taking E) sorting 48) ________ means the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, which is common in the electronic channel. A) Creating assortments B) Reducing transactions C) Channel integration D) Outsourcing E) Disintermediation 49) ________ refers to companies handing over most or all of their supply chain activities to third-party organizations that are experts in those areas. A) Creating assortments B) Outsourcing C) Channel integration D) Disintermediation E) Breaking bulk 50) Nadia works for a major soda distributor. The company decides to buy a transportation company to move its product from its own manufacturing facility to the consumer. This is an example of a(n) ________ vertical marketing system. A) private B) intermediated C) corporate D) contractual E) administered

51) Local Farmers of Tampa Bay sell their produce in the market every day. They band together to gain cost and operating economies of scale in the market for selling their produce. This is an example of a ________. A) retailer cooperative B) disintermediation C) pull strategy D) vertical integration E) customer community 52) A vertical ________ system consists of vertically aligned networks behaving and performing as a unified system. A) insourcing B) marketing C) assortment D) allowance E) inventory 53) In a(n) ________ vertical marketing system, a channel member invests in backward or forward vertical integration by buying a controlling interest in other intermediaries. A) private B) distributive C) corporate D) contractual E) administered 54) A(n) ________ vertical marketing system creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity. A) distributive B) disintermediated C) corporate D) contractual E) administered 55) An example of a contractual vertical marketing system is ________. A) e-tailing B) stocking C) wholesaling D) franchising E) retailing

56) It is possible that a(n) ________ vertical marketing system can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation. An example of this is the relationship between Walmart and Procter & Gamble. A) distributive B) private C) corporate D) contractual E) administered 57) A ________ is the highest-potential start-up and growth mechanism for small-business owners, and it is an effective way to expand a distribution channel quickly and efficiently. A) franchise operation B) retailer cooperative C) wholesaler cooperative D) channel captain E) partner relationship management (PRM) strategy 58) Core Inc., a dealer of electronic items, enjoys economies of scale due to its large buying and selling operations and controls many aspects of the channel's operations. As a consequence of this, the company enjoys tremendous power in the market. In the context of administered vertical marketing systems, Core Inc. is a(n) ________. A) franchise organization B) retailer cooperative C) channel captain D) wholesaler cooperative E) agent intermediary 59) In an administered vertical marketing system, the sheer size and power of one of the intermediaries places it in a position of control. The lead player in such situations may be referred to as the ________. A) virtual organization B) retailer cooperative C) wholesaler cooperative D) channel captain E) network organization 60) The goal of ________ is to share resources, especially knowledge-based resources, to effect optimally profitable relationships between two channel members. A) pull strategies B) push strategies C) materials requirement planning (MRP) D) enterprise resource planning (ERP) E) partner relationship management (PRM) strategies

61) ________ is the degree to which any member of a marketing channel can exercise influence over the other members of the channel. A) Channel power B) Distribution intensity C) Disintermediation D) Assortment E) Exclusive power 62) ________ occurs when channel members experience disagreements and their relationship becomes strained. A) Disintermediation B) Channel conflict C) Stock-out D) Vertical integration E) Outsourcing 63) Unresolved channel conflict can result not only in an uncooperative and inefficient channel, but it can also ultimately impact end-user consumers through ________. A) intensive distribution B) selective distribution C) increased supply D) increased demand E) higher prices 64) ________ power involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it does not comply with the leader's request or expectations. A) Coercive B) Reward C) Expert D) Referent E) Legitimate 65) ________ power is NOT a source of channel power. A) Reward B) Referent C) Legitimate D) Consumer E) Expert 66) The motivating force for suppliers to work with large chain stores is that the stores can offer huge ________ power in the form of writing big orders. A) coercive B) reward C) expert D) referent E) legitimate 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

67) ________ power can take the form of sharing important product knowledge. A) Coercive B) Reward C) Expert D) Referent E) Legitimate 68) When a channel member is respected, admired, or revered based on one or more attributes, that member enjoys ________ power within the channel. A) coercive B) reward C) expert D) referent E) legitimate 69) ________ power results from contracts such as franchise agreements or other formal agreements. A) Coercive B) Reward C) Expert D) Referent E) Legitimate 70) When the objective is to obtain maximum product exposure throughout the channel, a(n) ________ strategy is designed to saturate every possible intermediary. A) selective distribution B) intensive distribution C) exclusive distribution D) partnership relationship management E) materials requirement planning 71) In a(n) ________ vertical marketing system, one channel member may be placed in a position of channel control. A) referent B) organic C) corporate D) contractual E) administered 72) Intensive distribution is typically associated with low-cost ________. A) industrial goods B) heavy equipment C) convenience goods D) machine tools E) manufacturing tools 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

73) ________ goods are appropriate for intensive distribution, as their sales rely on the consumer seeing the product, feeling an immediate want, and being able to purchase now. A) High-technology B) Durable C) Convenience D) Impulse E) Shopping 74) Consumers engage in limited search for items like midrange fashion apparel, home furnishings, and appliances. These are examples of ________ goods, which are candidates for selection distribution. A) technology B) durable C) convenience D) impulse E) shopping 75) ________ distribution is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing. A) Selective B) Exclusive C) Widespread D) Convenience E) Intensive 76) ________ strategies can be intensive, selective, or exclusive. A) Assortment B) Disintermediation C) Virtual D) Referent E) Distribution 77) In deciding on the right balance between control and flexibility in a channel, marketing managers must consider ________. A) utilizing software applications B) the type of channel power to be used C) the right pull strategy D) employing enterprise resource planning systems E) the type of products involved 78) Grape Inc. sells high-end wines to liquor, wine, and spirits wholesalers who have built relationships among select restaurants and hotels. Grape Inc. employs a(n) ________ strategy. A) selective distribution B) exclusive distribution C) push D) pull E) intensive distribution 11 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

79) ________ implies that many of the promotional activities take place from the manufacturer downward through the channel of distribution. A) A selective distribution B) An exclusive distribution C) A push strategy D) A pull strategy E) An intensive distribution 80) An example of a push strategy is ________. A) organizing couponing campaigns B) utilizing newspaper advertising C) using television advertising D) employing direct marketing E) paying a shelf fee 81) A manufacturer employing a(n) ________ strategy focuses much of its promotional investment on the end-user consumer. A) selective distribution B) exclusive distribution C) push D) pull E) limited distribution 82) A manufacturer employing a pull strategy would engage in ________. A) offering discounts to wholesalers B) Investing in intermediaries C) paying slotting allowances D) offering shelf fee to intermediaries E) advertising in mass media 83) ________ logistics is the process that starts with production and ends with the delivery of a final product. A) Outbound B) Inbound C) Reverse D) Third-party E) Bulk 84) ________ refers to sourcing materials and knowledge inputs from external suppliers to the point at which production begins. A) Outbound logistics B) Inbound logistics C) Reverse logistics D) Third-party logistics E) Breaking bulk 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

85) Venus Office Supplies offers customers a $0.50 coupon for turning in their empty printer cartridges. Venus collects the cartridges and then returns them to the producer for recycling. This is an example of ________. A) outbound logistics B) inbound logistics C) reverse logistics D) order processing E) reducing transactions 86) Logistics and other processes are managed using sophisticated and integrated ________. A) partner relationships management strategies B) total quality management strategies C) enterprise resource planning systems D) vertical marketing systems E) integrated contractual systems 87) When an item is not in stock, it is called ________. In this case, inbound replenishment processes are triggered. A) a slotting allowance B) an empty shelf C) disintermediation D) a stock-out E) a supply chain disruption 88) A part of ERP, ________, guides overall management of the inbound materials from suppliers to facilitate minimal production delays. A) materials requirement planning B) distributed marketing C) vertical marketing D) virtual network E) just-in-time inventory control 89) To ensure that inventories of both raw materials and finished goods are sufficient to meet customer demand without undue delay, firms utilize sophisticated ________. A) just-in-time (JIT) inventory control systems B) materials requirement planning (MRP) systems C) exclusive dealings D) exclusive territorities E) multiverse inventories 90) When a supplier creates a restrictive agreement that prohibits intermediaries that handle its product from selling competing firms' products, ________ has occurred. A) just-in-time (JIT) inventory control B) materials requirement planning (MRP) C) exclusive dealing D) exclusive territory E) tying contract 13 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

91) NextGen Electronix Inc. is a wholesaler of electronic goods in the city of Erbia. The company sells goods manufactured by CellDer Inc. The wholesaler enjoys monopoly because it is the only intermediary selling those products in the city. This is an example of a(n) ________. A) just-in-time (JIT) inventory control B) materials requirement planning (MRP) C) exclusive dealing D) exclusive territory E) tying contract 92) If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, it results in ________. A) channel disintermediation B) vertical integration C) exclusive dealing D) exclusive territory E) a tying contract 93) A stationary store offers a 5 percent discount on pens and pencils to students if they agree to purchase all the books needed for the academic year from the store. This is an example of a(n) ________. A) tying contract B) exclusive territory C) exclusive dealing D) intermediary contract E) pull strategy 94) ________ is the point of contact in the supply chain with the consumer of the product. A) Retailing B) Wholesaling C) Stocking D) Promotion E) Feedback 95) ________ is any business activity that creates value in the delivery of goods and services to consumers for their personal, nonbusiness consumption. A) Distribution B) Retailing C) Stocking D) Merchandising E) Wholesaling

96) ________ is the fastest-growing retail format. A) Electronic retailing B) Wholesaling C) Customer Communities D) Promotion E) Franchising 97) Websites where customers come to engage with other customers, the sponsoring firm, and others in the ecosystem to share ideas and collaborate on topics of mutual interest are called ________. A) e-commerce sites B) product communities C) omnichannel retailing sites D) customer communities E) tying contracts 98) Explain the important aspects of a value network. 99) Explain the difference between merchant and agent intermediaries. 100) Channel intermediaries enhance utilities by providing a wide array of specific functions. Their contributions can be classified into physical distribution functions, transaction and communication functions, and facilitating functions. Give an example of an activity under each of these functions and explain its importance in the value chain. 101) Define disintermediation, and explain why it's common in the electronic channel. 102) A vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. Explain the three different ways they can be set up. 103) Define channel power and explain how it can lead to channel conflict. How does it affect vertical marketing systems? 104) Explain the difference between a push and pull strategy. 105) Name the three different types of logistics and explain why they are important for businesses. 106) Describe three of the legal issues in supply chain management.

107) Describe two advantages of e-tailing and two disadvantages. Advantages 1. Extensive Selection: No other channel offers the breadth and depth of selection. From information search to purchase, the Internet gives consumers greater access to more choices and different product options. 2. Considerable Information Available for Product Research and Evaluation: The Internet dramatically expands consumers' knowledge, offering an almost unlimited number of websites that research, evaluate, and recommend products and services. From retailers (Best Buy in electronics) to independent testing organizations (CNet in technology), consumers can find information on anything. 3. Build Product Communities: The Internet brings together groups of individuals with a shared interest to create virtual communities. These communities share information, ideas, and product information. 4. Individualized Customer Experience: The Internet allows a great deal of personalization for both the consumer and the company. Consumers can get one-on-one interaction from a customer service representative and create their own web content based on personal preferences. At the same time, companies can tailor messages and web content by analyzing consumer web history. The end result is a more customized, personal experience for the consumer. Disadvantages 1. Easier for Customers to Walk Away: The customer is in total control of the web experience and has the opportunity to walk away at any time. In sharp contrast to a personal-selling situation or even a retail store, the customer can simply click to another site. This puts additional pressure on the website to attract and then hold on to visitors. 2. Reduced Ability to Sell Features and Benefits: Websites incorporate sophisticated tools to display and highlight critical features and benefits. However, unless the customer initiates additional contact via web live chat, phone, or e-mail, it can prove challenging to engage the customer to answer questions or deal with objections. 3. Security of Personal Data: Over the past several years, numerous highly publicized data security breaches have occurred involving e-retailers (as well as retail stores). While companies work hard to make their websites secure and keep personal data such as credit card numbers private, many consumers still have concerns about the security of their data. These concerns lead some consumers to limit their electronic purchases.

Marketing Management, 3e (Marshall) Chapter 12 Manage Marketing Channels, Logistics, and Supply Chain 1) The value chain portrays a mixture of primary and support activities utilized by an organization to design, produce, market, deliver, and support its products. Answer: TRUE Explanation: This is correct, the value chain's activities are utilized by a firm to design, produce, market, deliver, and support its products. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) Customers, both end users and those within a channel, are often considered by organizations as unimportant members of the value network. Answer: FALSE Explanation: Many organizations are beginning to consider their customers—both end users and within a channel—as important members of a value network. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) A channel is a system of interdependent relationships among a set of organizations that facilitates the exchange process. Answer: TRUE Explanation: A channel of distribution consists of interdependent entities that are aligned for the purpose of transferring possession of a product from producer to consumer or business user. Put another way, a channel is a system of interdependent relationships among a set of organizations that facilitates the exchange process. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) Cutting out intermediaries will always guarantee that consumers will save money. Answer: FALSE Explanation: Cutting out intermediaries is not a guarantee of saving consumers money. In the long run, channel intermediaries tend to continue to participate in a channel only as long as their value added to the channel supports their inclusion. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) A wide variety of types of intermediaries exist, and they usually fall within two principal categories: merchant intermediaries and agent intermediaries. Answer: TRUE Explanation: A wide variety of types of intermediaries exist, and they usually fall within two principal categories: merchant intermediaries, who take title to the product, and agent intermediaries, who do not take title to the product. Difficulty: 1 Easy Topic: Types of Intermediaries Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) Logistics is a function of channel intermediaries. Answer: TRUE Explanation: One function of channel intermediaries is physical distribution, or logistics, which is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

7) Facilitating functions performed by intermediaries include a variety of activities, including financing and market research. Answer: TRUE Explanation: Facilitating functions performed by intermediaries include a variety of activities that help fulfill completed transactions and also maintain the viability of the channel relationships. They include financing, market research, risk-taking, and other services. Difficulty: 2 Medium Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) The performance of transaction and communication functions is a category of intermediary contribution within a channel. Answer: TRUE Explanation: A category of intermediary contribution within a channel is the performance of transaction and communication functions. These functions include selling, buying, and marketing communications. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) Disintermediation is common in the machining channel. Answer: FALSE Explanation: Driven largely by the advent of electronic commerce and online marketing, disintermediation, or the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, is common in the electronic channel. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Many firms are using outsourcing or third-party logistics to better focus on their core business. Answer: TRUE Explanation: Recently, many e-commerce (and other) firms are finding that handing over one or more of their core internal functions, such as most or all of their supply chain activities, to other (third-party) companies that are experts in those areas allows the firm to better focus on its core business. This approach, which is referred to as outsourcing or third-party logistics (3PL), is attractive for many firms whose own core competencies do not include these elements. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) A vertical marketing system is comprised of independent entities. Answer: FALSE Explanation: Whereas standard marketing channels are comprised of independent entities, a vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) The lead player in an administered VMS is called the channel captain. Answer: TRUE Explanation: In an administered VMS, the sheer size and power of one of the channel members place it in a position of channel control. The lead player in such situations may be referred to as the channel captain or channel leader, signifying its ability to control many aspects of that channel's operations. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) Unresolved channel conflict will never result in an uncooperative and inefficient channel; however, it may impact end-user consumers through inferior products, spotty inventory, and higher prices. Answer: FALSE Explanation: Channel conflict can occur in which channel members experience disagreements and their relationship can become strained or fall apart. Unresolved channel conflict not only can result in an uncooperative and inefficient channel, but it also can ultimately impact end-user consumers through inferior products, spotty inventory, and higher prices. Difficulty: 2 Medium Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Expert power is when channel members adopt an approach of utilizing their unique competencies to influence others in the channel. Answer: TRUE Explanation: Often, channel members adopt an approach of utilizing their unique competencies to influence others in the channel. This is using expert power. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) When marketing planning, a good channel decision can be one of the most important within the entire planning process and can lead to market advantage over competitors. Answer: TRUE Explanation: Given the plethora of choices of channel intermediaries and channel structures, marketing managers have a lot to consider when designing or selecting the channel approach that will best meet their needs. When marketing planning, a good channel decision can be one of the most important within the entire planning process and can lead to market advantage over competitors. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) With a push strategy, much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution. Answer: TRUE Explanation: A push strategy means that much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution. Think of this approach as an investment by the manufacturer in intermediaries so that they will have a maximal incentive to stock, promote, sell, and ship the firm's products. Push strategies usually are supported by heavy allowance payments to intermediaries for helping accomplish the manufacturer's goals. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) The degree of push versus pull used is fundamental in framing the channel structure and relationships that are likely to optimize a product's success. Answer: TRUE Explanation: A number of important marketing management decisions about channel structure and types of intermediaries to best utilize are influenced by the degree to which the channel intermediaries are relied on to help create and support demand. The degree of push versus pull used is fundamental in framing the channel structure and relationships that are likely to optimize a product's success. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) Physical distribution, or logistics, is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution. Answer: TRUE Explanation: Physical distribution, or logistics, is the integrated process of moving input materials to the producer, in-process inventory through the firm, and finished goods out of the firm through the channel of distribution. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

19) Receiving and properly processing customer orders takes place before the product moves into the supply chain. Answer: FALSE Explanation: Receiving and properly processing customer orders is a critical step in getting product moving through the supply chain. It is also a point at which mistakes can easily occur, and when a mistake occurs in the order it usually carries through the whole fulfillment system. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) In an ideal supply chain, materials of all kinds are handled as many times as possible. Answer: FALSE Explanation: In an ideal supply chain, materials of all kinds are handled as few times as possible. Any warehouse needs to be designed so that after goods are received and checked in, they move directly to their designated storage locations. Efficient, orderly, clean, and wellmarked warehouses enhance the flow of goods. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) Exclusive dealing may be legal if the parties show exclusivity is essential for strategic reasons, such as to maintain product image. Answer: TRUE Explanation: Exclusive dealing may be legal if the parties show exclusivity is essential for strategic reasons, such as to maintain product image. High-fashion brands often engage in exclusive dealing with retailers so that their image is not sullied by being merchandised in the store next to step-down labels. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) A producer can always grant an intermediary an exclusive territory for sales purposes. Answer: FALSE Explanation: An exclusive territory protects an intermediary from having to compete with others selling a producer's goods. Can a producer always grant an intermediary an exclusive territory for sales purposes? Not necessarily. For this practice to be legal, it would have to be demonstrated that the exclusivity doesn't violate any statutes on restriction of competition. Difficulty: 2 Medium Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) E-commerce is not generally a central part of most firms' marketing strategies. Answer: FALSE Explanation: Electronic commerce has created new business opportunities and enabled existing business models to be more efficient. Less than a decade ago, for many retailers e-commerce was basically just a secondary channel to their traditional store operations. Today, that's changed and an effective e-commerce strategy is central to most firms' marketing strategy. Difficulty: 1 Easy Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) Electronic retailing is the communication and sale of products or services to consumers over the Internet. Answer: TRUE Explanation: Electronic retailing (e-retailing or e-tailing) is the communication and sale of products or services to consumers over the Internet. E-retailing is by far the fastest-growing retail format, with growth of upward of 10 percent per year. Difficulty: 1 Easy Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

25) Although the Internet has reshaped the way businesses and consumers interact, it has not been successful in B2B customer interfaces. Answer: FALSE Explanation: The Internet has reshaped the way businesses and consumers interact, and it also plays a significant role in B2B customer interface. Difficulty: 1 Easy Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) In evaluating a website, one of the key measures is its "stickiness," which refers to the amount of time visitors remain and explore a site. Answer: TRUE Explanation: In evaluating a website, one of the key measures is its "stickiness," which refers to the amount of time visitors remain at the site. A good website not only attracts a lot of visitors, but it also gets them to remain and explore the site. Difficulty: 2 Medium Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

27) A(n) ________ is thought of as an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space. A) value network B) virtual organization C) business conglomerate D) organic organization E) tall organization Answer: A Explanation: At the broadest level, a firm might view itself as an integral part of a value network, which may be thought of as an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) A value network perspective is a macro-level strategic approach that is being adopted by many firms in part because of the intense competition to cut ________ and maximize ________ every step of the way to market. A) costs; process efficiencies B) rewards; stock inventory C) employee benefits; cost control D) time inefficiencies; profits E) labor hours; performance incentives Answer: A Explanation: A value network perspective is a macro-level strategic approach that is being adopted by many firms in part because of the intense competition to cut costs and maximize process efficiencies every step of the way to market. The approach suggests opportunities for breaking outside of traditional thinking that marketing is encapsulated within an organization, and instead suggests looking for such opportunities as alliances, strategic partnerships, nontraditional channel approaches, episodic collaborations, and outsourcing opportunities to provide unique sources of competitive edge. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 10 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

29) A virtual organization is otherwise known as a ________ organization. A) flat B) boundaryless C) bureaucratic D) tall E) network Answer: E Explanation: Based on the concept of value networks, a whole new breed of organization is arising called a network organization, or virtual organization, because it eliminates many inhouse business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) A ________ eliminates many in-house business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value. A) value network B) mechanistic distribution system C) virtual organization D) physical distribution system E) tall organization Answer: C Explanation: Based on the concept of value networks, a whole new breed of organization is arising called a network organization, or virtual organization, because it eliminates many inhouse business functions and activities in favor of focusing only on those aspects for which it is best equipped to add value. Difficulty: 1 Easy Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

31) Jenn, a production manager at a company, has decided to take a value network approach to create a competitive advantage over the company's competitors. In the context of network organizations, this approach will make the company's operations more ________. A) rigid B) costly C) consistent D) static E) nimble Answer: E Explanation: Taking a value network approach frees up internal resources so a firm can be more nimble in addressing external uncontrollable opportunities and threats, thus yielding a potential competitive advantage over firms that have high costs associated with performing many of the value chain functions themselves. Difficulty: 2 Medium Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 32) A(n) ________ represents all organizations involved in providing a firm, the members of its channels of distribution, and its end-user consumers and business users. A) value chain B) supply chain C) virtual channel D) direct channel E) indirect channel Answer: B Explanation: A supply chain represents all organizations involved in supplying a firm, the members of its channels of distribution, and its end-user consumers and business users. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

33) Keisha is in charge of overseeing the flow of activities among several entities for Walmart. Her main objective is to coordinate these value-adding activities in a way that maximizes value and profit. She is in charge of ________. A) physical distribution B) assortment creation C) supply chain management D) partner relationship management E) transaction reduction Answer: C Explanation: Supply chain management is the process of managing the aspects of the supply chain. The goal is coordination of these value-adding flows among the entities in a way that maximizes overall value delivered and profit realized. Difficulty: 2 Medium Topic: Logistics of Supply Chain Management Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 34) A channel of distribution consists of interdependent entities that ________. A) transfer possession of a product from producer to consumer B) fix the price of a product to create monopoly C) experience inefficiencies in business processes D) develop new products E) include members of the same market segment Answer: A Explanation: A channel of distribution consists of interdependent entities that are aligned for the purpose of transferring possession of a product from producer to consumer or business user. Put another way, a channel is a system of interdependent relationships among a set of organizations that facilitates the exchange process. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

35) In the context of the distribution channel, which of the following takes title to a product? A) product promoters B) merchant intermediaries C) agent intermediaries D) brokers E) commission dealers Answer: B Explanation: Most channels are not direct from producer to consumer. Instead, they contain a variety of intermediaries, formerly called middlemen that play a role in the exchange process between producer and consumer. A wide variety of types of intermediaries exists, and they usually fall within two principal categories: merchant intermediaries, who take title to the product, and agent intermediaries, who do not take title to the product. Difficulty: 1 Easy Topic: Types of Intermediaries Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) ________ intermediaries perform a variety of physical distribution, transaction and communication, and facilitating functions that make exchange possible. They do not take title to the product. A) Wholesalers B) Retailer C) Agent D) Distributor E) Supplier Answer: C Explanation: Agent intermediaries perform a variety of physical distribution, transaction and communication, and facilitating functions that make exchange possible. Difficulty: 1 Easy Topic: Types of Intermediaries Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

37) Which of the following has no intermediaries and operates strictly from producer to end-user consumer or business user? A) exclusive distribution B) physical distribution C) virtual network D) direct channel E) indirect channel Answer: D Explanation: A direct channel has no intermediaries and operates strictly from producer to enduser consumer or business user. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 38) Channel members add their value by bridging gaps in form, time, place, and ownership that naturally exist between ________. A) consumers and transporters B) facilitating agents and transporters C) producers and consumers D) producers and retailers E) distributors and agents Answer: C Explanation: If an intermediary doesn't carry its weight, the channel structure eventually will change accordingly to maximize efficiencies across the utilities. Thus, channel members add their value by bridging gaps in form, time, place, and ownership that naturally exist between producers and consumers. Difficulty: 1 Easy Topic: Types of Intermediaries Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

39) A(n) ________ contains one or more intermediary levels. A) channel community B) network organization C) virtual organization D) direct channel E) indirect channel Answer: E Explanation: An indirect channel contains one or more intermediary levels. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40) ________ enhance utilities by providing a wide array of specific functions including physical distribution functions, transaction and communication functions, and facilitating functions. A) Direct channels B) Value networks C) Indirect channels D) Pull strategies E) Channel intermediaries Answer: E Explanation: Channel intermediaries enhance utilities by providing a wide array of specific functions. Their contributions can be classified into physical distribution functions, transaction and communication functions, and facilitating functions. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

41) Good Egg Co. buys eggs from local farmers, sorts them into different grades, and then packages them to sell to larger grocers. Good Egg Co. is performing the distribution function of ________. A) physical distribution B) product processing C) determining variety D) breaking bulk E) accumulating bulk Answer: E Explanation: In some industries, intermediaries perform a process of accumulating bulk—that is, they take in product from multiple sources and transform it, often through sorting it into different classifications for sales through the channel. Eggs, for example, might come into a processing house from individual farm operators for sorting by grade and size, then to be packaged and sent on their way to retailers. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 42) Intermediaries engage in ________ when they accumulate products from several sources and then make those products available down the channel as a convenience for consumers. A) creating assortments B) reducing transactions C) transportation and storage functions D) facilitating functions E) disintermediation Answer: A Explanation: Intermediaries engage in creating assortments when they accumulate products from several sources and then make those products available down the channel as a convenient assortment for consumers. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

43) Introducing an intermediary into a channel may contribute to ________ that are necessary to complete an exchange. A) creating assortments B) reducing transactions C) transportation and storage functions D) facilitating functions E) disintermediations Answer: B Explanation: Introduction of even one intermediary into a distribution channel can contribute to greatly reducing transactions necessary to complete an exchange. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 44) An intermediary works with large consumer product manufacturers as well as small local retailers. The company buys large quantities of products from the manufacturers and sells them in smaller quantities to retailers to better match quantities needed for space constraints and inventory turnover requirements. The intermediary is performing the distribution function of ________. A) disintermediation B) assortment creation C) reverse logistics D) breaking bulk E) accumulating bulk Answer: D Explanation: The function of breaking bulk occurs within a channel to better match quantities needed to space constraints and inventory turnover requirements. Importantly, like most channel functions, breaking bulk could be performed by different types of intermediaries. Difficulty: 2 Medium Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

45) ________ is one of the most commonly provided channel intermediary activities. A) Showrooming B) Franchising C) Storage D) Outsourcing E) Disintermediation Answer: C Explanation: Relatively few producers operate their own transportation networks or provide warehousing facilities. Producers make money by pushing finished goods out the door and into the channel of distribution. As such, transportation and storage functions are among the most commonly provided channel intermediary activities. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 46) Financing, market research, risk-taking, and other services are considered to be ________ functions. A) physical distribution B) transaction and communication C) transportation and storage D) facilitating E) e-commerce Answer: D Explanation: In a channel, facilitating functions performed by intermediaries include a variety of activities that help fulfill completed transactions and also maintain the viability of the channel relationships. The activities may include financing, market research, risk-taking, and other services. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

47) Big Market purchases different fruits from local farmers and then sells them to local restaurants and retailers. If the fruits rot before Big Market sells them, the store takes the loss. As an intermediary, Big Market is performing the function of ________. A) financing B) market research C) channeling D) risk-taking E) sorting Answer: D Explanation: A big part of how an intermediary can add value is by reducing the risk of others in the channel. Any of the major physical distribution functions that are assumed by a channel member comes with potential risks and liabilities. For example, accumulating bulk in perishable goods comes with a risk of spoilage if customer demand estimates are inaccurately high. Difficulty: 2 Medium Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 48) ________ means the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, which is common in the electronic channel. A) Creating assortments B) Reducing transactions C) Channel integration D) Outsourcing E) Disintermediation Answer: E Explanation: Driven largely by the advent of electronic commerce and online marketing, disintermediation, or the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries, is common in the electronic channel. Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

49) ________ refers to companies handing over most or all of their supply chain activities to third-party organizations that are experts in those areas. A) Creating assortments B) Outsourcing C) Channel integration D) Disintermediation E) Breaking bulk Answer: B Explanation: Recently, many e-commerce (and other) firms are finding that handing over one or more of their core internal functions, such as most or all of their supply chain activities, to other (third-party) companies that are experts in those areas allows the firm to better focus on its core business. This approach is referred to as outsourcing or third-party logistics (3PL). Difficulty: 1 Easy Topic: Roles and Functions of Intermediaries Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) Nadia works for a major soda distributor. The company decides to buy a transportation company to move its product from its own manufacturing facility to the consumer. This is an example of a(n) ________ vertical marketing system. A) private B) intermediated C) corporate D) contractual E) administered Answer: C Explanation: In corporate vertical marketing system, a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries. Difficulty: 2 Medium Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

51) Local Farmers of Tampa Bay sell their produce in the market every day. They band together to gain cost and operating economies of scale in the market for selling their produce. This is an example of a ________. A) retailer cooperative B) disintermediation C) pull strategy D) vertical integration E) customer community Answer: A Explanation: A common contractual VMS is the retailer cooperative, or co-op. Independent retailers across a variety of product categories have banded together to gain cost and operating economies of scale in the channel. Difficulty: 2 Medium Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 52) A vertical ________ system consists of vertically aligned networks behaving and performing as a unified system. A) insourcing B) marketing C) assortment D) allowance E) inventory Answer: B Explanation: Whereas standard marketing channels are comprised of independent entities, a vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

53) In a(n) ________ vertical marketing system, a channel member invests in backward or forward vertical integration by buying a controlling interest in other intermediaries. A) private B) distributive C) corporate D) contractual E) administered Answer: C Explanation: In corporate vertical marketing system, a channel member has invested in backward or forward vertical integration by buying a controlling interest in other intermediaries. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 54) A(n) ________ vertical marketing system creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity. A) distributive B) disintermediated C) corporate D) contractual E) administered Answer: C Explanation: An owned, or corporate, vertical marketing system creates a powerful competitive advantage in the marketplace due to cost and process efficiencies realized when a channel is strictly controlled by one entity. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) An example of a contractual vertical marketing system is ________. A) e-tailing B) stocking C) wholesaling D) franchising E) retailing Answer: D Explanation: A contractual VMS consists of otherwise independent entities that are bound together legally through contractual agreement. An example of this arrangement is a franchise organization. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 56) It is possible that a(n) ________ vertical marketing system can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation. An example of this is the relationship between Walmart and Procter & Gamble. A) distributive B) private C) corporate D) contractual E) administered Answer: E Explanation: It is possible that an administered VMS can be more formally structured through strategic alliances and partnership agreements among channel members that agree to work in mutual cooperation. P&G and Walmart have a longstanding strategic alliance that includes connectivity of inventory, billing systems, and market research. The result is improved inventory management, more efficient invoice processing, and product development that better serves the consumer marketplace. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) A ________ is the highest-potential start-up and growth mechanism for small-business owners, and it is an effective way to expand a distribution channel quickly and efficiently. A) franchise operation B) retailer cooperative C) wholesaler cooperative D) channel captain E) partner relationship management (PRM) strategy Answer: A Explanation: Entrepreneur magazine reports that franchising remains the highest-potential start-up and growth mechanism for small-business owners, and it's an effective way to expand a distribution channel quickly and efficiently. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 58) Core Inc., a dealer of electronic items, enjoys economies of scale due to its large buying and selling operations and controls many aspects of the channel's operations. As a consequence of this, the company enjoys tremendous power in the market. In the context of administered vertical marketing systems, Core Inc. is a(n) ________. A) franchise organization B) retailer cooperative C) channel captain D) wholesaler cooperative E) agent intermediary Answer: C Explanation: In an administered VMS, the sheer size and power of one of the channel members place it in a position of channel control. The lead player in such situations may be referred to as the channel captain or channel leader, signifying its ability to control many aspects of that channel's operations. Difficulty: 2 Medium Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

59) In an administered vertical marketing system, the sheer size and power of one of the intermediaries places it in a position of control. The lead player in such situations may be referred to as the ________. A) virtual organization B) retailer cooperative C) wholesaler cooperative D) channel captain E) network organization Answer: D Explanation: In an administered vertical marketing system, the sheer size and power of one of the channel members place it in a position of channel control. The lead player in such situations may be referred to as the channel captain or channel leader, signifying its ability to control many aspects of that channel's operations. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 60) The goal of ________ is to share resources, especially knowledge-based resources, to effect optimally profitable relationships between two channel members. A) pull strategies B) push strategies C) materials requirement planning (MRP) D) enterprise resource planning (ERP) E) partner relationship management (PRM) strategies Answer: E Explanation: Partner relationship management (PRM) strategies consist of a strategic alliance that includes connectivity of inventory, billing systems, and market research among marketing channel members. The goal of PRM is to share resources, especially knowledge-based resources, to effect optimally profitable relationships between two channel members. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) ________ is the degree to which any member of a marketing channel can exercise influence over the other members of the channel. A) Channel power B) Distribution intensity C) Disintermediation D) Assortment E) Exclusive power Answer: A Explanation: The very nature of channels, especially traditional channels composed of independent entities, fosters differences in channel power among members. Channel power is the degree to which any member of a marketing channel can exercise influence over the other members of the channel. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 62) ________ occurs when channel members experience disagreements and their relationship becomes strained. A) Disintermediation B) Channel conflict C) Stock-out D) Vertical integration E) Outsourcing Answer: B Explanation: Power can directly influence the relationships within the channel. Ultimately, channel conflict can occur in which channel members experience disagreements and their relationship can become strained or fall apart. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

63) Unresolved channel conflict can result not only in an uncooperative and inefficient channel, but it can also ultimately impact end-user consumers through ________. A) intensive distribution B) selective distribution C) increased supply D) increased demand E) higher prices Answer: E Explanation: Unresolved channel conflict can result not only in an uncooperative and inefficient channel, but it can also ultimately impact end-user consumers through inferior products, spotty inventory, and higher prices. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 64) ________ power involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it does not comply with the leader's request or expectations. A) Coercive B) Reward C) Expert D) Referent E) Legitimate Answer: A Explanation: Coercive power involves an explicit or implicit threat that a channel captain will invoke negative consequences on a channel member if it does not comply with the leader's request or expectations. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

65) ________ power is NOT a source of channel power. A) Reward B) Referent C) Legitimate D) Consumer E) Expert Answer: D Explanation: Channel power includes reward power, referent power, expert power, and legitimate power. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 66) The motivating force for suppliers to work with large chain stores is that the stores can offer huge ________ power in the form of writing big orders. A) coercive B) reward C) expert D) referent E) legitimate Answer: B Explanation: The motivating force to work with a large chain store, such as Walmart, is due to its huge reward power in the form of writing big orders. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

67) ________ power can take the form of sharing important product knowledge. A) Coercive B) Reward C) Expert D) Referent E) Legitimate Answer: C Explanation: Expert power might take the form of sharing important product knowledge, such as a representative from Clinique setting up a demonstration for cosmetic consultants in a Nordstrom store to stimulate sales expertise. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) When a channel member is respected, admired, or revered based on one or more attributes, that member enjoys ________ power within the channel. A) coercive B) reward C) expert D) referent E) legitimate Answer: D Explanation: When a channel member is respected, admired, or revered based on one or more attributes, that member enjoys referent power within the channel. Only the best of the best brands can rely on this power source. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) ________ power results from contracts such as franchise agreements or other formal agreements. A) Coercive B) Reward C) Expert D) Referent E) Legitimate Answer: E Explanation: Legitimate power results from contracts such as franchise agreements or other formal agreements. When McDonald's requires franchisees that want to participate in the latest iteration of their famous Monopoly scratch-off game to sign an agreement as to how the game will be promoted and administered in the store, it is exercising legitimate power to control misuse of the promotional activity. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 70) When the objective is to obtain maximum product exposure throughout the channel, a(n) ________ strategy is designed to saturate every possible intermediary. A) selective distribution B) intensive distribution C) exclusive distribution D) partnership relationship management E) materials requirement planning Answer: B Explanation: When the objective is to obtain maximum product exposure throughout the channel, an intensive distribution strategy is designed to saturate every possible intermediary and especially retailers. Intensive distribution is typically associated with low-cost convenience goods. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) In a(n) ________ vertical marketing system, one channel member may be placed in a position of channel control. A) referent B) organic C) corporate D) contractual E) administered Answer: E Explanation: In an administered vertical marketing system (VMS), the sheer size and power of one of the channel members place it in a position of channel control. Difficulty: 1 Easy Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) Intensive distribution is typically associated with low-cost ________. A) industrial goods B) heavy equipment C) convenience goods D) machine tools E) manufacturing tools Answer: C Explanation: When the objective is to obtain maximum product exposure throughout the channel, an intensive distribution strategy is designed to saturate every possible intermediary and especially retailers. Intensive distribution is typically associated with low-cost convenience goods. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) ________ goods are appropriate for intensive distribution, as their sales rely on the consumer seeing the product, feeling an immediate want, and being able to purchase now. A) High-technology B) Durable C) Convenience D) Impulse E) Shopping Answer: D Explanation: Impulse goods are appropriate for intensive distribution, as their sales rely on the consumer seeing the product, feeling an immediate want, and being able to purchase now. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) Consumers engage in limited search for items like midrange fashion apparel, home furnishings, and appliances. These are examples of ________ goods, which are candidates for selection distribution. A) technology B) durable C) convenience D) impulse E) shopping Answer: E Explanation: Shopping goods, goods for which a consumer may engage in a limited search, are candidates for selective distribution. Examples of goods that fit this approach include most appliances, midrange fashion apparel, and home furnishings. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) ________ distribution is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing. A) Selective B) Exclusive C) Widespread D) Convenience E) Intensive Answer: B Explanation: When a manufacturer opts for exclusive distribution in a channel, it is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) ________ strategies can be intensive, selective, or exclusive. A) Assortment B) Disintermediation C) Virtual D) Referent E) Distribution Answer: E Explanation: Distribution strategies can be intensive, selective, or exclusive. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) In deciding on the right balance between control and flexibility in a channel, marketing managers must consider ________. A) utilizing software applications B) the type of channel power to be used C) the right pull strategy D) employing enterprise resource planning systems E) the type of products involved Answer: E Explanation: In deciding on the right balance between control and flexibility in a channel, marketing managers must consider the type of products involved, cost issues among the various options, strength of belief in the accuracy of the sales forecast, and likelihood that major changes will occur in the customer or competitive marketplace that would necessitate restructuring the channel. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 78) Grape Inc. sells high-end wines to liquor, wine, and spirits wholesalers who have built relationships among select restaurants and hotels. Grape Inc. employs a(n) ________ strategy. A) selective distribution B) exclusive distribution C) push D) pull E) intensive distribution Answer: B Explanation: When a manufacturer opts for exclusive distribution in a channel, it is often part of an overall positioning strategy built on prestige, scarcity, and premium pricing. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

79) ________ implies that many of the promotional activities take place from the manufacturer downward through the channel of distribution. A) A selective distribution B) An exclusive distribution C) A push strategy D) A pull strategy E) An intensive distribution Answer: C Explanation: A push strategy means that much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution. Think of this approach as an investment by the manufacturer in intermediaries so that they will have a maximal incentive to stock, promote, sell, and ship the firm's products. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) An example of a push strategy is ________. A) organizing couponing campaigns B) utilizing newspaper advertising C) using television advertising D) employing direct marketing E) paying a shelf fee Answer: E Explanation: Push strategies usually are supported by heavy allowance payments to intermediaries for helping accomplish the manufacturer's goals. Examples include funding an extra incentive to a wholesale drug salesperson for pushing a particular medication to an independent pharmacy, or paying a slotting allowance or shelf fee to secure distribution in an intermediary's inventory listing and warehouse or onto a retail shelf. Difficulty: 2 Medium Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

81) A manufacturer employing a(n) ________ strategy focuses much of its promotional investment on the end-user consumer. A) selective distribution B) exclusive distribution C) push D) pull E) limited distribution Answer: D Explanation: A manufacturer employing a pull strategy focuses much of its promotional investment on the end-user consumer. Difficulty: 1 Easy Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) A manufacturer employing a pull strategy would engage in ________. A) offering discounts to wholesalers B) Investing in intermediaries C) paying slotting allowances D) offering shelf fee to intermediaries E) advertising in mass media Answer: E Explanation: A manufacturer employing a pull strategy focuses much of its promotional investment on the end-user consumer. Heavy advertising in mass media, direct marketing, couponing, and other direct-to-consumer promotion are expected to create demand from intermediaries from the bottom of the channel upward. Difficulty: 2 Medium Topic: Roles and Functions of Intermediaries Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation

83) ________ logistics is the process that starts with production and ends with the delivery of a final product. A) Outbound B) Inbound C) Reverse D) Third-party E) Bulk Answer: A Explanation: Traditionally, logistics was thought of as an internal flow going one direction— outbound logistics. That is, it was thought that logistics started with production and ended with receipt of finished good by the end-user consumer or business user. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) ________ refers to sourcing materials and knowledge inputs from external suppliers to the point at which production begins. A) Outbound logistics B) Inbound logistics C) Reverse logistics D) Third-party logistics E) Breaking bulk Answer: B Explanation: Along with outbound logistics, it is important to consider inbound logistics— sourcing materials and knowledge inputs from external suppliers to the point at which production begins. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) Venus Office Supplies offers customers a $0.50 coupon for turning in their empty printer cartridges. Venus collects the cartridges and then returns them to the producer for recycling. This is an example of ________. A) outbound logistics B) inbound logistics C) reverse logistics D) order processing E) reducing transactions Answer: C Explanation: Reverse logistics deals with how to get goods back to a manufacturer or intermediary after purchase. Product returns result for many reasons including spoilage and breakage, excess inventory, customer dissatisfaction, and overstocks. Difficulty: 2 Medium Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 86) Logistics and other processes are managed using sophisticated and integrated ________. A) partner relationships management strategies B) total quality management strategies C) enterprise resource planning systems D) vertical marketing systems E) integrated contractual systems Answer: C Explanation: Sophisticated and integrated enterprise resource planning (ERP) systems now manage much of the logistics and other processes for many firms. ERP is a software application designed to integrate information related to logistics processes throughout the organization. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

87) When an item is not in stock, it is called ________. In this case, inbound replenishment processes are triggered. A) a slotting allowance B) an empty shelf C) disintermediation D) a stock-out E) a supply chain disruption Answer: D Explanation: If the item ordered is in stock, outbound processing from inventory occurs. If the item is not in stock, referred to as a stock-out, then inbound replenishment processes are triggered. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) A part of ERP, ________, guides overall management of the inbound materials from suppliers to facilitate minimal production delays. A) materials requirement planning B) distributed marketing C) vertical marketing D) virtual network E) just-in-time inventory control Answer: A Explanation: One component of ERP systems is usually materials requirement planning (MRP). MRP guides overall management of the inbound materials from suppliers to facilitate minimal production delays. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) To ensure that inventories of both raw materials and finished goods are sufficient to meet customer demand without undue delay, firms utilize sophisticated ________. A) just-in-time (JIT) inventory control systems B) materials requirement planning (MRP) systems C) exclusive dealings D) exclusive territorities E) multiverse inventories Answer: A Explanation: To ensure that inventories of both raw materials and finished goods are sufficient to meet customer demand without undue delay, firms utilize sophisticated just-in-time (JIT) inventory control systems. A JIT system's goal is to balance the double-edge sword of potentially having too many goods on hand and creating unnecessary warehousing costs, with the chance of having so little inventory in stock that stock-outs occur requiring expensive rush production and express delivery situations. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) When a supplier creates a restrictive agreement that prohibits intermediaries that handle its product from selling competing firms' products, ________ has occurred. A) just-in-time (JIT) inventory control B) materials requirement planning (MRP) C) exclusive dealing D) exclusive territory E) tying contract Answer: C Explanation: Exclusive dealing occurs when a supplier creates a restrictive agreement that prohibits intermediaries that handle its product from selling competing firms' products. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) NextGen Electronix Inc. is a wholesaler of electronic goods in the city of Erbia. The company sells goods manufactured by CellDer Inc. The wholesaler enjoys monopoly because it is the only intermediary selling those products in the city. This is an example of a(n) ________. A) just-in-time (JIT) inventory control B) materials requirement planning (MRP) C) exclusive dealing D) exclusive territory E) tying contract Answer: D Explanation: An exclusive territory protects an intermediary from having to compete with others selling a producer's goods. A producer cannot always grant an intermediary an exclusive territory for sales purposes. For this practice to be legal, it would have to be demonstrated that the exclusivity doesn't violate any statutes on restriction of competition. Difficulty: 2 Medium Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 92) If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, it results in ________. A) channel disintermediation B) vertical integration C) exclusive dealing D) exclusive territory E) a tying contract Answer: E Explanation: If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, a tying contract is in place. Example: "You can buy my printer, but to do so you must sign a contract to by my ink"—thus, the products are "tied together" as terms of sale. Difficulty: 1 Easy Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

93) A stationary store offers a 5 percent discount on pens and pencils to students if they agree to purchase all the books needed for the academic year from the store. This is an example of a(n) ________. A) tying contract B) exclusive territory C) exclusive dealing D) intermediary contract E) pull strategy Answer: A Explanation: If a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy, a tying contract is in place. Difficulty: 2 Medium Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 94) ________ is the point of contact in the supply chain with the consumer of the product. A) Retailing B) Wholesaling C) Stocking D) Promotion E) Feedback Answer: A Explanation: Retailing, in whatever form, is the point of contact in the supply chain with the consumer of the product. Put another way, retailing in its various forms represents a very important point of customer interface. Difficulty: 1 Easy Topic: The Role of Retailing Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

95) ________ is any business activity that creates value in the delivery of goods and services to consumers for their personal, nonbusiness consumption. A) Distribution B) Retailing C) Stocking D) Merchandising E) Wholesaling Answer: B Explanation: Retailing is any business activity that creates value in the delivery of goods and services to consumers for their personal, nonbusiness consumption and is an essential component of the supply chain. Difficulty: 1 Easy Topic: The Role of Retailing Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 96) ________ is the fastest-growing retail format. A) Electronic retailing B) Wholesaling C) Customer Communities D) Promotion E) Franchising Answer: A Explanation: E-retailing is by far the fastest-growing retail format, with growth of upward of 10 percent per year. Difficulty: 1 Easy Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

97) Websites where customers come to engage with other customers, the sponsoring firm, and others in the ecosystem to share ideas and collaborate on topics of mutual interest are called ________. A) e-commerce sites B) product communities C) omnichannel retailing sites D) customer communities E) tying contracts Answer: D Explanation: Retailing, in whatever form, is the point of contact in the supply chain with the consumer of the product. Put another way, retailing in its various forms represents a very important point of customer interface. Difficulty: 1 Easy Topic: E-Commerce and M-Commerce Learning Objective: 12-07 Understand the role of retailing and e-commerce in delivering the value offering to the customer. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 98) Explain the important aspects of a value network. Answer: 1. The overarching process focus is on value co-creation. 2. A shared vision exists within the network with a common aim of fostering value co-creation. 3. Value co-creation is viewed as emanating from the expertise and competencies of all parties within the network. 4. Network and team relationships are key elements in the co-creation of the value. 5. This value is viewed as network value. 6. Relationship conflicts are viewed as potential barriers to the creation of network value and a process for conflict co-management is essential. Difficulty: 3 Hard Topic: Define a Value Network Learning Objective: 12-01 Define a value network and how organizations operate within this approach. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

99) Explain the difference between merchant and agent intermediaries. Answer: Merchant intermediaries buy goods outright and take title to the product. Agent intermediaries, on the other hand, negotiate purchases, sales, or both but do not take title to the goods involved. They perform a variety of physical distribution, transaction and communication, and facilitating functions that make exchange possible. Difficulty: 3 Hard Topic: Types of Intermediaries Learning Objective: 12-02 Identify various types of intermediaries and distribution channels. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 100) Channel intermediaries enhance utilities by providing a wide array of specific functions. Their contributions can be classified into physical distribution functions, transaction and communication functions, and facilitating functions. Give an example of an activity under each of these functions and explain its importance in the value chain. Answer: 1. Physical distribution functions can include breaking bulk, accumulating bulk and sorting, creating assortments, reducing transactions, or transportation and storage. 2. Transaction and communication functions can include selling, buying, or marketing communications, 3. Facilitating functions can include financing, market research, and risk-taking. Examples will vary. Difficulty: 3 Hard Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

101) Define disintermediation, and explain why it's common in the electronic channel. Answer: Disintermediation is the shortening or collapsing of marketing channels due to the elimination of one or more intermediaries. In the early days of e-commerce, many entrepreneurs rushed to market with a website to sell their favorite products. This dot-com boom quickly turned to a bust, however, in part because many of these new-age marketers didn't understand the basics of distribution channels. Simply opening a website that features a product is one thing, but it's another thing entirely to invest in the infrastructure and capabilities needed to consistently fulfill orders in a timely and accurate manner. Most postmortems on the cause of the dot-com bust point to poor channel and supply chain practices as the primary reason so many of those initial emarketers failed. That is, customer expectations were peaked by the novelty and convenience of buying online only to be dashed by delays and errors in product fulfillment after the sale. Difficulty: 3 Hard Topic: Channel Design Learning Objective: 12-03 Understand the impact of intermediary contributions via physical distribution functions, transaction and communication functions, and facilitating functions. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 102) A vertical marketing system (VMS) consists of vertically aligned networks behaving and performing as a unified system. Explain the three different ways they can be set up. Answer: 1. In corporate VMS, a channel member owns the others by investing in backward or forward vertical integration by buying a controlling interest in other intermediaries. 2. A contractual VMS consists of otherwise independent entities that are bound together legally through contractual agreement. 3. An administered VMS simply forces cooperation through sheer clout within the channel. Difficulty: 3 Hard Topic: Vertical Marketing Systems Learning Objective: 12-04 Explain the different types of vertical marketing systems. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

103) Define channel power and explain how it can lead to channel conflict. How does it affect vertical marketing systems? Answer: Channel power is the degree to which any member of a marketing channel can exercise influence over the other members of the channel. As we saw with the administered VMS, power can directly influence the relationships within the channel. Ultimately, channel conflict can occur in which channel members experience disagreements and their relationship can become strained or fall apart. Unresolved channel conflict not only can result in an uncooperative and inefficient channel, but it also can ultimately impact end-user consumers through inferior products, spotty inventory, and higher prices. Difficulty: 3 Hard Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 104) Explain the difference between a push and pull strategy. Answer: A push strategy means that much of the intensive promotional activities take place from the manufacturer downward through the channel of distribution. Think of this approach as an investment by the manufacturer in intermediaries so that they will have a maximal incentive to stock, promote, sell, and ship the firm's products. Push strategies usually are supported by heavy allowance payments to intermediaries for helping accomplish the manufacturer's goals. In contrast, a manufacturer employing a pull strategy focuses much of its promotional investment on the end-user consumer. In this case, heavy advertising in mass media, direct marketing, couponing, and other direct-to-consumer promotion are expected to create demand from intermediaries from the bottom of the channel upward. A pull strategy doesn't mean a manufacturer wouldn't engage in any channel incentives, but rather that the incentives would likely be greatly reduced versus a push strategy. Difficulty: 3 Hard Topic: Channel Design Learning Objective: 12-05 Utilize suitable criteria to select appropriate channel approaches. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

105) Name the three different types of logistics and explain why they are important for businesses. Answer: 1. Outbound logistics: An internal flow going one direction—that is, logistics starts with production and ends with the receipt of the finished good by the end-user consumer or business user. This is the flow of products from one business to the user in the most basic form. 2. Inbound logistics: This refers to sourcing materials and knowledge inputs from external suppliers. This ensures the company has the correct supplies to produce the products. This can include the transportation, storage, and delivery of goods for production. 3. Reverse logistics: This deals with how to get goods back to a manufacturer or intermediary after purchase. This is especially important regarding product returns, because they can result for many reasons including spoilage and breakage, excess inventory, customer dissatisfaction, and overstocks. Difficulty: 3 Hard Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation

106) Describe three of the legal issues in supply chain management. Answer: 1. Exclusive dealing is when a supplier creates a restrictive agreement that prohibits intermediaries that handle its product from selling competing firms' products. Whether a particular arrangement is legal depends on whether it interferes with the intermediary's right to act independently or the rights of competitors to succeed—that is, is competition lessened by the arrangement? Exclusive dealing lessens competition if it (1) accounts for substantial market share, (2) involves a substantial dollar amount, and (3) involves a big supplier and smaller intermediary, which sets up a case for coercion. 2. An exclusive territory protects an intermediary from having to compete with others selling a producer's goods. Can a producer always grant an intermediary an exclusive territory for sales purposes? Not necessarily. For this practice to be legal, it would have to be demonstrated that the exclusivity doesn't violate any statutes on restriction of competition. This issue often manifests itself in the context of suppliers limiting the number of retail outlets within a certain geographic area. One possible defense of exclusive territories might be that the costs of a new store (restaurant, retailer, dealer, etc.) entering the market are so great that the nature of the market and risks involved demand an opportunity for exclusivity. 3. A tying contract is when a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product the intermediary wishes to buy. Example: "You can buy my printer, but to do so you must sign a contract to buy my ink"—thus, the products are "tied together" as terms of sale. Tying contracts are illegal, but historically it has often been difficult to prove in a court of law whether an agreement is or isn't a tying contract. Difficulty: 3 Hard Topic: Logistics of Supply Chain Management Learning Objective: 12-06 Identify the logistics aspects of supply chain management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 13 Promotion Essentials: Digital and Social Media Marketing 1) The development of promotion mix strategies involves decisions about which combination of elements in the promotion mix is likely to best convey the company's offering to a marketplace. 2) Public relations uses publicity, such as news stories and mentions at public events, as a method for influencing the attitudes, opinions, and behaviors of customers. 3) The effectiveness and efficiency of promotional strategies for a particular product or product line are often tracked on the basis of price fluctuations. 4) The marketing manager doesn't need to understand the basics of promotion since sales is separate from marketing. 5) Push and pull promotional strategies are seldom used independently of one another. 6) Internal marketing is defined as the way in which internal activities affect external marketing results. 7) The AIDA acronym stands for attitude, interest, desire, and activity. 8) The order of the steps in the AIDA model is not important as long as the effort has the desired outcome. 9) In the action stage of the AIDA model, salespeople and customized direct and interactive marketing first enter the promotion mix. 10) Consumers make a purchase during the action stage of the AIDA model. 11) Younger consumers are much more likely to want to be "sold to," and therefore place a high value on objective information sources for decision making. 12) Digital technologies have not fundamentally changed the way organizations connect and communicate with their customers. 13) Customer website interfaces have many dimensions, one of which is correctness. 14) When Sony came out with PlayStation®4, it created a website specifically for the new product. This is an example of a microsite. 15) It makes little difference where a company is displayed in a list of search results on the Internet, as long as the message is clear. 16) Any website feature that can be used on a computer can also be used on a smartphone with the same results. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) Geolocation marketing is the use of geographic data to drive messaging and other marketing decisions. 18) Banu downloaded a program from his insurance agency that allowed him to check on a claim from his phone. The first time he used it, a pop-up informed him of a new product and provided a button to click for more information. This is called an in-app ad. 19) Viral marketing is a trend that encourages customers to share a marketing message with other potential customers. 20) Companies spend too much time ensuring they have current and frequent postings on social media sites; they aren't that important. 21) One of the biggest challenges marketing managers face in social media marketing is measuring their social media campaign's value. 22) Twitter is currently the largest social networking platform in the world. 23) Which of the following is NOT a part of the promotion mix? A) advertising B) sales promotion C) public relations D) pricing E) personal selling 24) Which form of promotion is based on unpaid communication? A) personal selling B) advertising C) sales promotion D) digital marketing E) public relations 25) ________ is a technology-driven relationship between companies and customers. A) Interactive marketing B) Personal selling C) Public relations D) Advertising E) Sales promotion 26) ________ involves one-to-one personal communication with a customer. A) Advertising B) Sales promotion C) Personal selling D) Public relations E) Social media marketing

27) The development of promotional strategies most likely involves decisions about ________. A) elements in the promotion mix B) acceptable ROI for the customer C) price promotions D) product development E) customer service response 28) ________ provides an incentive, such as a coupon, for a customer to buy a product or for a salesperson to sell it. A) Buzz marketing B) Promotional campaign C) Sales promotion D) Media buying E) Advertising 29) In the context of the promotion mix elements, which of the following represents a strength specific to social media marketing? A) great creative flexibility B) ability to stimulate purchase directly through incentive to buy C) unpaid communication seen as more credible than paid forms D) message customization without high costs of personal selling E) many provider choices 30) In a push strategy, the focus is on ________. A) end users B) members of the channel who are targeted for promotion C) members who typically rely on advertising D) end users who drive the distribution of the new product E) stimulating demand for an offering directly from the end user 31) ________ is the application of marketing concepts and strategies inside an organization. A) Direct marketing B) Personal selling C) Internal marketing D) Prosocial marketing E) Publicity 32) The first step a manager should take in the promotion strategy process is to ________. A) identify targets for promotion B) select a promotion mix C) develop a message D) prepare a budget E) establish measures of results

33) Which capability of promotion is used to let customers know about new products or brands offered by a firm? A) to take action B) to sell C) to persuade D) to inform E) to remind 34) Questions such as "Why should a construction project lease Caterpillar equipment instead of Kamatsu?" and "What are the advantages of the Toyota Camry over the Honda Accord, and vice versa?" are related to which of the following capabilities of promotion? A) to take action B) to remind C) to persuade D) to inform E) to sell 35) Coca-Cola intends to invest further in promotion to help maintain brand loyalty from its existing customers. Which of the following capabilities of promotion is Coca-Cola demonstrating? A) to inform B) to persuade C) to remind D) to sell E) to take action 36) What is the final element the marketing manager should implement in promotional strategy? A) identify targets for promotion B) prepare promotion budget C) develop the message D) establish measures of results E) select the promotion mix 37) In a push strategy, the focus is on ________. A) the quality of an offering B) the price of distribution C) stimulating demand for an offering directly from the end users D) the channel of distribution E) making an offering more attractive than what is offered by the competitors 38) A push strategy usually relies on a combination of sales promotion and ________ directed toward channel members. A) virtual marketing B) social media promotion C) public relations D) personal selling E) indirect marketing 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

39) Brianna is a marketing manager who wants to have a strong two-way communication of ideas with customers and she considers it very important to directly ease customer confusion and persuade them to purchase. She does not care much about whether the cost per customer contact will be expensive. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) advertising B) sales promotion C) viral marketing D) personal selling E) direct marketing 40) A marketing manager wants to build a strong relationship with the customers and to customize messages without high costs. He understands that relationship building and message customization would require constant updating of the database due to the reliance on CRM and he plans to hire staff to make sure the database stays up to date. Based on the manager's consideration, ________ will be the most appropriate promotion mix element. A) personal selling B) digital and social media marketing C) sales promotion D) advertising E) public relations and covert advertising 41) A marketing manager believes that unpaid communication is seen as more credible than paid forms. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) public relations B) personal selling C) direct marketing and interactive marketing D) advertising E) sales promotion 42) A marketing manager wants to stimulate purchase directly through an incentive to buy, but wants something that will work alongside other forms of promotion. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) public relations B) advertising C) personal selling D) sales promotion E) direct marketing and interactive marketing

43) A marketing manager wants to efficiently reach large numbers of customers in a creative way and she is not concerned about the production costs of the medium. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) sales promotion B) public relations C) personal selling D) advertising E) direct marketing and interactive marketing 44) What is NOT included in the AIDA acronym? A) interest B) attitude C) desire D) attention E) action 45) At the ________ stage of the AIDA model, marketing managers mostly use promotions to gain awareness of the offering with the market's innovators and early adopters. A) attention B) interest C) desire D) attitude E) action 46) During the ________ stage of the AIDA model, promotional messages are altered so that a customer feels they simply must have the product and can't live without it. A) attention B) interest C) desire D) action E) attitude 47) To encourage the ultimate purchase, marketers often rely on ________ to close the sale. A) emails B) salespeople C) cold calls D) print ads E) social media

48) When Sonja bought her new Samsung phone, she couldn't wait to show her co-workers its new features, all of which were widely-advertised by the company. The next day, three of them went out and bought the same phone. Which stage of the AIDA model was created through Sonja's actions? A) attitude B) awareness C) interest D) desire E) purchase 49) Which of the following is NOT part of the AIDA model? A) attention B) interest C) desire D) action E) attitude 50) Gaining a potential customer's attention requires investment in mass appeal forms of promotion, most notably advertising and ________. A) social media marketing B) sales promotion C) public relations D) direct and interactive marketing E) personal selling 51) The cognitive step of the AIDA model is ________. A) attention B) interest C) desire D) remembering action E) advertising 52) The affective steps of AIDA are ________. A) aspiration and action B) decision and action C) desire and attention D) attention and interest E) interest and desire 53) The behavioral step of AIDA is ________. A) attention B) desire C) action D) aspiration E) interest

59) ________, one of the seven design elements of the customer interface in a website, is a site's ability to tailor itself to different users or allow users to personalize the site. A) Communication B) Customization C) Community D) Connections E) Commerce 60) ________, one of the seven dimensions used by researchers to define a website interface, is a site's ability to enable transactions. A) Connections B) Community C) Commerce D) Communication E) Content 61) ________ refers to the various ways a site enables user-to-user communications. A) Community B) Customization C) Content D) Commerce E) Context 62) ________ is the interactive channel that allows companies to interact with customers in three key ways. A) Communication B) Community C) Customization D) Context E) Connections 63) In addition to the company's primary website, many companies create smaller, more focused sites that deal with specific topics such as new product introductions or targeted products within a large product portfolio known as ________. A) blogs B) microsites C) social networking sites D) profiles E) micro blog sites 64) Yahoo allows users to create their own Yahoo experience defining the look and content of their Yahoo web page. Which element of the customer interface does this illustrate? A) customization B) context C) content D) communication E) connections 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

65) In the context of online advertising decisions, ________ are visually appealing, full-page ads that are delivered before the viewer is directed to the intended web page. A) banner ads B) interstitials C) microsites D) search ads E) search engines 66) M-commerce refers to purchases made ________. A) as the result of direct marketing efforts B) for business and not consumer use C) with a mobile device D) at a local market E) following a public relations event 67) Organizations should engage in ________ social networking platforms. A) one or two B) the four most popular C) only the most relevant D) all E) at least five or six 68) A modern interpretation of a(n) ________ is a group of people connected through technology. A) online database B) marketing mix C) social network D) blog E) wiki 69) One drawback that is particularly relevant to ________ is the user expectation of very quick and timely response to questions or comments. A) Twitter B) blogs C) Facebook D) e-mail E) Snapchat 70) A unique feature of Snapchat is that shared information is ________. A) temporary B) networked C) not brand related D) unique E) popular with older consumers

71) A plan for initiating a viral marketing campaign to specific customers is called a(n) ________. A) seeding strategy B) dark web C) viral marketing strategy D) diffusion process E) PR campaign 72) ________ enables the spread of a marketing campaign to potentially large audiences through acts of individual users as marketing communication channels. A) A promotion strategy B) Customization C) Viral marketing D) The diffusion process E) Segmentation 73) In the context of social networks, ________ is targeted at working professionals and offers some distinct advantages in terms of content relevant to a professional audience. A) Facebook B) Twitter C) Google Plus D) LinkedIn E) Reddit.com 74) ________ is a social media site where users provide short and immediate insights on how they feel or what they are thinking. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Reddit.com 75) ________ is the process of creating a video clip, image, message, e-book, or some other content in an effort to have the media passed on by individuals in a social network or by wordof-mouth. A) Geolocation marketing B) Covert marketing C) Cross selling D) Personal selling E) Viral marketing

76) The immediacy and personalization of social networks and, more broadly, the web itself set up the environment for ________. A) newspaper advertising B) viral marketing C) green marketing D) prosocial marketing E) predatory pricing 77) A recent study found that about 70 percent of Americans consult either a user review site or an independent review site before ________. A) posting product information on social media B) making a purchase C) beginning the shopping process D) believing advertising E) using a product 78) CNET, Urbanspoon, and Consumersearch are examples of ________. A) online brand communities B) product and service review sites C) social marketing D) prosocial marketing E) consumer blogs 79) P&G solicits meaningful interaction from customers on its website rather than at independent sites. P&G recognizes the value of ________. A) online brand communities B) viral marketing C) social marketing D) prosocial marketing E) digital reliance 80) When a company pays customers for their positive ratings on product user review sites, it may cross a(n) ________ line. A) ethical B) financial C) social responsibility D) customer relationship E) channel interface 81) Cho was in need of a new job after being laid off. Her friend suggested she put her resume on ________, a social media site geared toward working professionals and companies who use it for recruiting. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Reddit.com 12 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

82) ________ was originally started as a site for college students to connect with each other. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Snapchat 83) What are the five key elements that make up the promotional mix? Describe each one. 84) What are the three capabilities, or goals of promotion? Give at least one example for each of how promotion achieves this goal. 85) Name the seven major elements of the marketing manager's role in managing promotion. 86) Describe the AIDA model of promotion. Include a description of each step. 87) What is digital marketing and how has it changed the way companies and individuals communicate? 88) What are paid media, owned media, and earned media? Give an example of each. 89) Compare and contrast display ads, banner ads, interstitials, search ads, and native ads. 90) Describe the seven Cs that define the customer website interface. 91) Describe social networks. How do they benefit marketers, and what are the drawbacks?

Marketing Management, 3e (Marshall) Chapter 13 Promotion Essentials: Digital and Social Media Marketing 1) The development of promotion mix strategies involves decisions about which combination of elements in the promotion mix is likely to best convey the company's offering to a marketplace. Answer: TRUE Explanation: The promotion mix is vital to marketing planning. The development of promotion mix strategies, or simply promotional strategies, involves decisions about which combination of elements in the promotion mix is likely to best communicate the offering to the marketplace. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 2) Public relations uses publicity, such as news stories and mentions at public events, as a method for influencing the attitudes, opinions, and behaviors of customers. Answer: TRUE Explanation: Public relations (PR) is a systematic approach to influencing attitudes, opinions, and behaviors of customers and others. It is often executed through publicity. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) The effectiveness and efficiency of promotional strategies for a particular product or product line are often tracked on the basis of price fluctuations. Answer: FALSE Explanation: A promotional campaign for a particular product or product line tracks the effectiveness and efficiency of promotional strategies as it allocates expenditures to a specific creative execution over a given time period. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

4) The marketing manager doesn't need to understand the basics of promotion since sales is separate from marketing. Answer: FALSE Explanation: The proliferation of outsourcing of marketing communications and separation of sales from marketing do not absolve the marketing manager from the need to understand the basics of promotion so that the agency's contributions, as well as those of the sales force, can be properly integrated into the marketing planning process. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Push and pull promotional strategies are seldom used independently of one another. Answer: TRUE Explanation: In practice, push and pull strategies are rarely used mutually exclusively. Rather, a promotional strategy is developed that strikes the best balance of investment of promotional funds in both push and pull strategies that make sense for a product and market involved. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 6) Internal marketing is defined as the way in which internal activities affect external marketing results. Answer: FALSE Explanation: Internal marketing is the application of marketing concepts and strategies inside an organization. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

7) The AIDA acronym stands for attitude, interest, desire, and activity. Answer: FALSE Explanation: The AIDA acronym stands for Attention (or Awareness), Interest, Desire, and Action. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) The order of the steps in the AIDA model is not important as long as the effort has the desired outcome. Answer: FALSE Explanation: The AIDA model is so named because the effects (or steps) build in this order: attention (or awareness), interest, desire, and action. The attention stage correlates to the cognitive step of buyer decision making, the interest and desire stages to the affective step, and the action stage to the behavioral step; hence, the order of the steps is important. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 9) In the action stage of the AIDA model, salespeople and customized direct and interactive marketing first enter the promotion mix. Answer: FALSE Explanation: Salespeople and customized direct and interactive marketing enter the promotion mix during the desire stage. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Consumers make a purchase during the action stage of the AIDA model. Answer: TRUE Explanation: The action stage is the purchase itself. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) Younger consumers are much more likely to want to be "sold to," and therefore place a high value on objective information sources for decision making. Answer: FALSE Explanation: The response of younger generations to different promotional approaches is not the same as that of previous generations. They are much less likely to want to be "sold to," are generally disinterested in mass advertising, and tend to place high value on objective information for decision making, likely from sources outside of traditional promotion. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Digital technologies have not fundamentally changed the way organizations connect and communicate with their customers. Answer: FALSE Explanation: Digital technologies have enabled individuals to access vast amounts of information almost instantaneously and have revolutionized the way organizations connect and communicate with their customers. Difficulty: 1 Easy Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

13) Customer website interfaces have many dimensions, one of which is correctness. Answer: FALSE Explanation: Customer website interface is often defined by 7 Cs: context, content, community, customization, communication, commerce, and connections. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 14) When Sony came out with PlayStation®4, it created a website specifically for the new product. This is an example of a microsite. Answer: TRUE Explanation: In addition to an organization's primary website, it may also create smaller, more focused sites that deal with specific topics such as new product introductions or targeted products. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 15) It makes little difference where a company is displayed in a list of search results on the Internet, as long as the message is clear. Answer: FALSE Explanation: For many organizations, being able to be displayed near the top of organic search results (searches that are not paid for) is of high value because it increases the likelihood of being found by potential customers and further strengthening relationships with existing customers. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

16) Any website feature that can be used on a computer can also be used on a smartphone with the same results. Answer: FALSE Explanation: Differences in how information is displayed and interacted with on mobile devices create both opportunities and challenges for how marketing managers communicate with customers. For example, a smartphone's relatively smaller screen size and touch-based interface means that certain aspects of websites or ads designed may be viewed and interacted with differently than they would be on other media. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 17) Geolocation marketing is the use of geographic data to drive messaging and other marketing decisions. Answer: TRUE Explanation: Geolocation marketing is the use of geographic data to drive marketing messaging and other marketing management decisions. Difficulty: 1 Easy Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 18) Banu downloaded a program from his insurance agency that allowed him to check on a claim from his phone. The first time he used it, a pop-up informed him of a new product and provided a button to click for more information. This is called an in-app ad. Answer: TRUE Explanation: A variety of mobile apps (for example, mobile game apps, social media apps, and nonbranded productivity apps) offer opportunities for marketing managers to communicate with customers through ads that feature a mix of text, image, and video elements. Ads displayed within such mobile apps are called in-app ads. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 6 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

19) Viral marketing is a trend that encourages customers to share a marketing message with other potential customers. Answer: TRUE Explanation: Viral marketing is a marketing phenomenon that facilitates and encourages people to pass along a marketing message. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 20) Companies spend too much time ensuring they have current and frequent postings on social media sites; they aren't that important. Answer: FALSE Explanation: One of the challenges for organizations is the never-ending need for currency and immediacy of postings on social network sites. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 21) One of the biggest challenges marketing managers face in social media marketing is measuring their social media campaign's value. Answer: TRUE Explanation: Assessing the value of social media marketing efforts can be a real challenge for marketing managers, especially in terms that other organizational stakeholders are willing to accept as important to performance. This is especially the case when social media efforts do not drive easily tractable types of customer behaviors that are clearly and directly linked to a specific product purchase. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

22) Twitter is currently the largest social networking platform in the world. Answer: FALSE Explanation: Facebook is currently the largest social networking platform in the world, at over 1.5 billion users. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 23) Which of the following is NOT a part of the promotion mix? A) advertising B) sales promotion C) public relations D) pricing E) personal selling Answer: D Explanation: Five key promotional elements make up the promotion mix used by marketing managers: digital and social media marketing, advertising, sales promotion, public relations (PR), and personal selling. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

24) Which form of promotion is based on unpaid communication? A) personal selling B) advertising C) sales promotion D) digital marketing E) public relations Answer: E Explanation: Public relations is based on unpaid communication. For instance, the mention of an athletic company's name during a news story about the value of exercise would not be something the company paid for. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 25) ________ is a technology-driven relationship between companies and customers. A) Interactive marketing B) Personal selling C) Public relations D) Advertising E) Sales promotion Answer: A Explanation: Interactive marketing is another name for digital marketing, which is promotion through the use of digital technologies such as desktops, laptops, tablets, and smartphones that does not involve a salesperson. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

26) ________ involves one-to-one personal communication with a customer. A) Advertising B) Sales promotion C) Personal selling D) Public relations E) Social media marketing Answer: C Explanation: Personal selling is one-to-one personal communication with a customer by a salesperson, either in person or through other means. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 27) The development of promotional strategies most likely involves decisions about ________. A) elements in the promotion mix B) acceptable ROI for the customer C) price promotions D) product development E) customer service response Answer: A Explanation: The promotion mix is vital to marketing planning. The development of promotion mix strategies, or simply promotional strategies, involves decisions about which combination of elements in the promotion mix is likely to best communicate the offering to the marketplace. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

28) ________ provides an incentive, such as a coupon, for a customer to buy a product or for a salesperson to sell it. A) Buzz marketing B) Promotional campaign C) Sales promotion D) Media buying E) Advertising Answer: C Explanation: Sales promotion provides an inducement for an end-user consumer to buy your product or for a salesperson or someone else in the channel to sell it. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 29) In the context of the promotion mix elements, which of the following represents a strength specific to social media marketing? A) great creative flexibility B) ability to stimulate purchase directly through incentive to buy C) unpaid communication seen as more credible than paid forms D) message customization without high costs of personal selling E) many provider choices Answer: D Explanation: Digital and social media marketing has an advantage of message customization without high costs of personal selling. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

30) In a push strategy, the focus is on ________. A) end users B) members of the channel who are targeted for promotion C) members who typically rely on advertising D) end users who drive the distribution of the new product E) stimulating demand for an offering directly from the end user Answer: B Explanation: In a push strategy, the focus is on the channel of distribution, and in getting the offering into the channel. Members of the channel are targeted for promotion and are depended on to then push the offering into the hands of end users. A push strategy typically relies on a combination of personal selling and sales promotion directed toward channel members. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 31) ________ is the application of marketing concepts and strategies inside an organization. A) Direct marketing B) Personal selling C) Internal marketing D) Prosocial marketing E) Publicity Answer: C Explanation: A critical aspect of promotion is internal marketing, which is the application of marketing concepts and strategies inside an organization. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

32) The first step a manager should take in the promotion strategy process is to ________. A) identify targets for promotion B) select a promotion mix C) develop a message D) prepare a budget E) establish measures of results Answer: A Explanation: The seven major elements of the marketing manager's role in managing promotion are identified as follows: identify targets for promotion, establish goals for promotion, select the promotion mix, develop the message, select media for use in promotion, prepare the promotion budget, and establish measures of results. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 33) Which capability of promotion is used to let customers know about new products or brands offered by a firm? A) to take action B) to sell C) to persuade D) to inform E) to remind Answer: D Explanation: Informing indicates features when introducing new products or making product modifications. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

34) Questions such as "Why should a construction project lease Caterpillar equipment instead of Kamatsu?" and "What are the advantages of the Toyota Camry over the Honda Accord, and vice versa?" are related to which of the following capabilities of promotion? A) to take action B) to remind C) to persuade D) to inform E) to sell Answer: C Explanation: Persuasion involves impacting customer perceptions of a product, especially in comparison to competitors' products. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 35) Coca-Cola intends to invest further in promotion to help maintain brand loyalty from its existing customers. Which of the following capabilities of promotion is Coca-Cola demonstrating? A) to inform B) to persuade C) to remind D) to sell E) to take action Answer: C Explanation: Reminding includes maintaining a customer relationship with a brand. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation

36) What is the final element the marketing manager should implement in promotional strategy? A) identify targets for promotion B) prepare promotion budget C) develop the message D) establish measures of results E) select the promotion mix Answer: D Explanation: The elements are identify targets for promotion, establish goals for promotion, select the promotion mix, develop the message, select media for use in promotion, prepare promotion budget, and establish measures of results. Difficulty: 1 Easy Topic: The Marketing Managers Role in Promotional Strategy Learning Objective: 13-01 Describe in detail the marketing managers role in promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 37) In a push strategy, the focus is on ________. A) the quality of an offering B) the price of distribution C) stimulating demand for an offering directly from the end users D) the channel of distribution E) making an offering more attractive than what is offered by the competitors Answer: D Explanation: In a push strategy, the focus is on the channel of distribution, and in getting the offering into the channel. Members of the channel are targeted for promotion and are depended on to then push the offering into the hands of end users. A push strategy typically relies on a combination of personal selling and sales promotion directed toward channel members. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

38) A push strategy usually relies on a combination of sales promotion and ________ directed toward channel members. A) virtual marketing B) social media promotion C) public relations D) personal selling E) indirect marketing Answer: D Explanation: A push strategy typically relies on a combination of personal selling and sales promotion directed toward channel members. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 39) Brianna is a marketing manager who wants to have a strong two-way communication of ideas with customers and she considers it very important to directly ease customer confusion and persuade them to purchase. She does not care much about whether the cost per customer contact will be expensive. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) advertising B) sales promotion C) viral marketing D) personal selling E) direct marketing Answer: D Explanation: The advantages of personal selling include strong two-way communication of ideas. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation

40) A marketing manager wants to build a strong relationship with the customers and to customize messages without high costs. He understands that relationship building and message customization would require constant updating of the database due to the reliance on CRM and he plans to hire staff to make sure the database stays up to date. Based on the manager's consideration, ________ will be the most appropriate promotion mix element. A) personal selling B) digital and social media marketing C) sales promotion D) advertising E) public relations and covert advertising Answer: B Explanation: The advantages of direct marketing and interactive marketing include message customization without high costs of personal selling, and strong relationship building, especially when customer can control the interaction. Difficulty: 3 Hard Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Apply AACSB: Reflective Thinking Accessibility: Keyboard Navigation 41) A marketing manager believes that unpaid communication is seen as more credible than paid forms. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) public relations B) personal selling C) direct marketing and interactive marketing D) advertising E) sales promotion Answer: A Explanation: An advantage of public relations is that unpaid communication is seen as more credible than paid forms. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

42) A marketing manager wants to stimulate purchase directly through an incentive to buy, but wants something that will work alongside other forms of promotion. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) public relations B) advertising C) personal selling D) sales promotion E) direct marketing and interactive marketing Answer: D Explanation: Sales promotion stimulates purchase directly through incentive to buy, and serves as an effective accompaniment to other promotion forms. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 43) A marketing manager wants to efficiently reach large numbers of customers in a creative way and she is not concerned about the production costs of the medium. Based on the manager's consideration, ________ will be the most appropriate promotional form. A) sales promotion B) public relations C) personal selling D) advertising E) direct marketing and interactive marketing Answer: D Explanation: Advertising efficiently reaches large numbers of customers and offers great creative flexibility. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

44) What is NOT included in the AIDA acronym? A) interest B) attitude C) desire D) attention E) action Answer: B Explanation: The AIDA model includes the steps in this order: attention (or awareness), interest, desire, and action. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 45) At the ________ stage of the AIDA model, marketing managers mostly use promotions to gain awareness of the offering with the market's innovators and early adopters. A) attention B) interest C) desire D) attitude E) action Answer: A Explanation: At the attention stage of the AIDA model, marketing managers hope to use promotions to gain awareness of their offering with the innovators and early adopters. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

46) During the ________ stage of the AIDA model, promotional messages are altered so that a customer feels they simply must have the product and can't live without it. A) attention B) interest C) desire D) action E) attitude Answer: C Explanation: Altering the promotional message so that a customer feels they must have the product occurs during the desire stage of the AIDA model. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 47) To encourage the ultimate purchase, marketers often rely on ________ to close the sale. A) emails B) salespeople C) cold calls D) print ads E) social media Answer: B Explanation: To stimulate ultimate purchase, marketers often rely on salespeople, accompanied by some form of sales promotion, to close the sale. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

48) When Sonja bought her new Samsung phone, she couldn't wait to show her co-workers its new features, all of which were widely-advertised by the company. The next day, three of them went out and bought the same phone. Which stage of the AIDA model was created through Sonja's actions? A) attitude B) awareness C) interest D) desire E) purchase Answer: D Explanation: Many people undoubtedly let their friends and co-workers see and touch their prized possession—sharing the experience of its functionality and form. This creates desire for the product by others. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 49) Which of the following is NOT part of the AIDA model? A) attention B) interest C) desire D) action E) attitude Answer: E Explanation: The AIDA model includes attention (or awareness), interest, desire, and action. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

50) Gaining a potential customer's attention requires investment in mass appeal forms of promotion, most notably advertising and ________. A) social media marketing B) sales promotion C) public relations D) direct and interactive marketing E) personal selling Answer: C Explanation: In many cases, gaining attention requires investment in mass appeal forms of promotion, especially advertising and PR. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 51) The cognitive step of the AIDA model is ________. A) attention B) interest C) desire D) remembering action E) advertising Answer: A Explanation: The attention stage correlates to the cognitive step of buyer decision making, the interest and desire stages to the affective step, and the action stage to the behavioral step. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

52) The affective steps of AIDA are ________. A) aspiration and action B) decision and action C) desire and attention D) attention and interest E) interest and desire Answer: E Explanation: The AIDA model includes the following steps: attention (or awareness), interest, desire, and action. The attention stage correlates to the cognitive step of buyer decision making, the interest and desire stages to the affective step, and the action stage to the behavioral step. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 53) The behavioral step of AIDA is ________. A) attention B) desire C) action D) aspiration E) interest Answer: C Explanation: The AIDA model includes the following steps: attention (or awareness), interest, desire, and action. The attention stage correlates to the cognitive step of buyer decision making, the interest and desire stages to the affective step, and the action stage to the behavioral step. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

54) In the initial introduction of the Prius, Toyota put much effort into building awareness of the emerging need for hybrid cars and also educating potential customers about what a hybrid car actually is. This is an example of the ________ stage in the AIDA model. A) attention B) interest C) desire D) decision E) action Answer: A Explanation: Depending on the situation, this may involve developing the customer's awareness for a whole new set of customer needs and wants as well as revealing that your product exists to address those needs and wants. In the initial introduction of the Prius, Toyota put much effort into building awareness of the emerging need for hybrid cars and also into educating potential customers about what a hybrid car actually is. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 55) ________ media refers to a customer or commercial entity choosing to act as a marketing communication channel for the organization at no cost. A) Owned B) Earned C) Paid D) Social E) Free Answer: B Explanation: Earned media refers to the case where either a customer or a commercial entity (such as a news media organization) chooses to act as a marketing communication channel for the dissemination of information associated with the marketer's organization at no cost. Difficulty: 1 Easy Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

56) Carrie maintains a cooking blog, and she often mentions products by name if she feels they are especially nutritional and easy to obtain. This is an example of ________ media. A) owned B) earned C) paid D) display E) free Answer: B Explanation: Posting about a product on social media is earned media. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 57) Digital ads designed to blend in with the format and style of the content that a website delivers are called ________ ads. A) inline B) display C) social network D) featured E) native Answer: E Explanation: Digital ads that are designed to fit the format and style of content that is offered through the website on which the ad is being displayed are called native ads. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

58) ________, one of the seven dimensions used by researchers to define a website interface, refers to the overall layout, design, and aesthetic appeal of a site. A) Community B) Content C) Commerce D) Context E) Customization Answer: D Explanation: Context refers to the overall layout, design, and aesthetic appeal of a site. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 59) ________, one of the seven design elements of the customer interface in a website, is a site's ability to tailor itself to different users or allow users to personalize the site. A) Communication B) Customization C) Community D) Connections E) Commerce Answer: B Explanation: Customization is ability to create a unique individual experience with a company website adds great value to the customer interface. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

60) ________, one of the seven dimensions used by researchers to define a website interface, is a site's ability to enable transactions. A) Connections B) Community C) Commerce D) Communication E) Content Answer: C Explanation: The number of products purchased online has grown dramatically in both B2C and B2B markets. Web designers know that creating a simple, easy-to-understand, and secure purchase experience is essential for success in online commerce. This relates to commerce. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 61) ________ refers to the various ways a site enables user-to-user communications. A) Community B) Customization C) Content D) Commerce E) Context Answer: A Explanation: A key advantage of web-based communication is the opportunity to create a community of users or visitors to the site. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

62) ________ is the interactive channel that allows companies to interact with customers in three key ways. A) Communication B) Community C) Customization D) Context E) Connections Answer: A Explanation: Communication is interactive channel that allows companies to communicate with customers in three ways: the contact feature or email, customer service requests, and instant messaging. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 63) In addition to the company's primary website, many companies create smaller, more focused sites that deal with specific topics such as new product introductions or targeted products within a large product portfolio known as ________. A) blogs B) microsites C) social networking sites D) profiles E) micro blog sites Answer: B Explanation: In addition to the company's primary site, many companies create smaller, more focused sites that deal with specific topics such as new product introductions or targeted products within a large product portfolio known as micro sites. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

64) Yahoo allows users to create their own Yahoo experience defining the look and content of their Yahoo web page. Which element of the customer interface does this illustrate? A) customization B) context C) content D) communication E) connections Answer: A Explanation: More customized sites enable customers to choose content and context. Yahoo, for example, allows users to create their own Yahoo experience defining the look and content of their Yahoo web page. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Apply AACSB: Communication Accessibility: Keyboard Navigation 65) In the context of online advertising decisions, ________ are visually appealing, full-page ads that are delivered before the viewer is directed to the intended web page. A) banner ads B) interstitials C) microsites D) search ads E) search engines Answer: B Explanation: Interstitials are visually appealing, full-page ads that are delivered before the viewer is directed to the intended web page. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

66) M-commerce refers to purchases made ________. A) as the result of direct marketing efforts B) for business and not consumer use C) with a mobile device D) at a local market E) following a public relations event Answer: C Explanation: M-commerce refers to purchases made with a mobile device. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 67) Organizations should engage in ________ social networking platforms. A) one or two B) the four most popular C) only the most relevant D) all E) at least five or six Answer: C Explanation: Given the sheer number of social networking platforms available to customers, it is generally not feasible (or desirable) for even the largest organizations to maintain an effective digital presence across them all. Thus, identifying the particular social networks that an organization's customers tend to interact with most helps determine where a marketing manager can best invest promotional budget. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

68) A modern interpretation of a(n) ________ is a group of people connected through technology. A) online database B) marketing mix C) social network D) blog E) wiki Answer: C Explanation: The modern interpretation of a social network is a group of people connected through technology. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 69) One drawback that is particularly relevant to ________ is the user expectation of very quick and timely response to questions or comments. A) Twitter B) blogs C) Facebook D) e-mail E) Snapchat Answer: A Explanation: Twitter clearly presents an opportunity to engage in discussions with customers and disseminate or respond to news related to the brand. Note, though, that a hallmark of Twitter is the user expectation of very quick and timely response to questions or comments. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

70) A unique feature of Snapchat is that shared information is ________. A) temporary B) networked C) not brand related D) unique E) popular with older consumers Answer: A Explanation: The temporary nature of the content on Snapchat provides a certain level of appeal to users that arguably resonates most with a younger demographic. While many social networks may have user-age distributions that skew toward the younger side, Snapchat boasts that about 60 percent of its users are between the ages of 13 and 24. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 71) A plan for initiating a viral marketing campaign to specific customers is called a(n) ________. A) seeding strategy B) dark web C) viral marketing strategy D) diffusion process E) PR campaign Answer: A Explanation: A seeding strategy entails initiating a viral marketing approach to specific customers or groups of customers who then further stimulate the internal dynamics of the target market, thus resulting in the diffusion process (spread of the virus). Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

72) ________ enables the spread of a marketing campaign to potentially large audiences through acts of individual users as marketing communication channels. A) A promotion strategy B) Customization C) Viral marketing D) The diffusion process E) Segmentation Answer: C Explanation: Think of viral marketing as one of the most potent types of earned media, in that it enables the spread of a marketing communication to potentially large audiences through the activation of individual users as marketing communication channels. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 73) In the context of social networks, ________ is targeted at working professionals and offers some distinct advantages in terms of content relevant to a professional audience. A) Facebook B) Twitter C) Google Plus D) LinkedIn E) Reddit.com Answer: D Explanation: LinkedIn is targeted at working professionals, has a membership of over 120 million users, and offers some distinct advantages in terms of a professional calling card. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

74) ________ is a social media site where users provide short and immediate insights on how they feel or what they are thinking. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Reddit.com Answer: A Explanation: Twitter is a microblogging site with close to 600 million users. It is a different experience than Facebook; shorter and more immediate. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 75) ________ is the process of creating a video clip, image, message, e-book, or some other content in an effort to have the media passed on by individuals in a social network or by wordof-mouth. A) Geolocation marketing B) Covert marketing C) Cross selling D) Personal selling E) Viral marketing Answer: E Explanation: Viral marketing (or buzz marketing) is the process of creating a video clip, image, message, e-book, or some other content in an effort to have the media passed on by individuals in a social network or by word-of-mouth. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

76) The immediacy and personalization of social networks and, more broadly, the web itself set up the environment for ________. A) newspaper advertising B) viral marketing C) green marketing D) prosocial marketing E) predatory pricing Answer: B Explanation: The immediacy and personalization of social networks and, more broadly, the web itself set up the environment for viral marketing. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation 77) A recent study found that about 70 percent of Americans consult either a user review site or an independent review site before ________. A) posting product information on social media B) making a purchase C) beginning the shopping process D) believing advertising E) using a product Answer: B Explanation: A recent study found that about 70 percent of Americans consult either a user review site or an independent review site (with equal likelihood) before making a purchase. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

78) CNET, Urbanspoon, and Consumersearch are examples of ________. A) online brand communities B) product and service review sites C) social marketing D) prosocial marketing E) consumer blogs Answer: B Explanation: Product and service review sites offer the opportunity for customers to provide feedback on their experience with the organization and its offering, and also provide an information repository for customers to search of information before purchase. These three are some of the most popular. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation 79) P&G solicits meaningful interaction from customers on its website rather than at independent sites. P&G recognizes the value of ________. A) online brand communities B) viral marketing C) social marketing D) prosocial marketing E) digital reliance Answer: A Explanation: In recent years marketing managers have led their organizations to understand the potential of creating their own online brand communities, where customers can engage in meaningful interaction right on the organization's own website rather than at independent sites. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

80) When a company pays customers for their positive ratings on product user review sites, it may cross a(n) ________ line. A) ethical B) financial C) social responsibility D) customer relationship E) channel interface Answer: A Explanation: Post-purchase, marketers can run into potential reputational and ethical issues if they go too far in trying to influence ratings and reviews on these websites. It's not unusual for marketers to offer financial incentives or other customer benefits in exchange for users posting ratings and reviews on various sites after purchase. The implicit assumption is that incentivized participants will be more inclined to provide positive ratings and reviews. These types of influence approaches must be undertaken with extreme care, lest the customer feel manipulated by the organization. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation 81) Cho was in need of a new job after being laid off. Her friend suggested she put her resume on ________, a social media site geared toward working professionals and companies who use it for recruiting. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Reddit.com Answer: B Explanation: Organizations are making extensive use of LinkedIn for recruiting. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

82) ________ was originally started as a site for college students to connect with each other. A) Twitter B) LinkedIn C) Facebook D) Google Plus E) Snapchat Answer: C Explanation: Facebook was originally started as a site for college students to connect with each other, but now it has a broad base of users. Difficulty: 1 Easy Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

83) What are the five key elements that make up the promotional mix? Describe each one. Answer: Five key promotional elements make up the promotion mix used by marketing managers: digital and social media marketing, advertising, sales promotion, public relations (PR), and personal selling. Digital and Social Media Marketing—Promotion through the use of digital technologies such as desktops, laptops, tablets, and smartphones that does not involve a salesperson. Often called interactive marketing, this approach enables customers to connect with a company directly in a two-way exchange. Advertising—Paid form of relatively less personal marketing communications, often through a mass medium to one or more target markets. Example media include television, radio, magazines, newspapers, and outdoors. Sales Promotion—Provides an inducement for an end-user consumer to buy your product or for a salesperson or someone else in the channel to sell it. Designed to augment other forms of promotion; rarely used alone. Example sales promotion tools for customers are coupons, rebates, and sweepstakes. Inducements for salespeople or channel members often involve special monies or prizes for pushing a particular offering. Public Relations (PR)—Systematic approach to influencing attitudes, opinions, and behaviors of customers and others. Often executed through publicity, which is an unpaid and relatively less personal form of promotion, usually through news stories and mentions at public events. Personal Selling—One-to-one personal communication with a customer by a salesperson, either in person or through other means. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation

84) What are the three capabilities, or goals of promotion? Give at least one example for each of how promotion achieves this goal. Answer: Goal One: To Inform Indicate features when introducing new products or making product modifications Provide explanation of product functionality Articulate what a company and its brands stand for in order to develop a clear image Discuss various uses and applications for the product Goal Two: To Persuade Impact customer perceptions of a product, especially in comparison to competitor's products Get customers to try a product, hopefully resulting in a more permanent switch from a competitor Influence customers to purchase right now due to some strong benefit or need Drive customers to seek more information online or through a salesperson Goal Three: To Remind Maintain a customer relationship with a brand Provide impetus for purchase based on some impending event Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 85) Name the seven major elements of the marketing manager's role in managing promotion. Answer: Identify targets for promotion; establish goals for promotion; select the promotion mix; develop the message; select media for use in promotion; prepare promotion budget; establish measures of results. Difficulty: 1 Easy Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-01 Understand promotion and identify the elements of the promotion mix. Bloom's: Remember AACSB: Communication Accessibility: Keyboard Navigation

86) Describe the AIDA model of promotion. Include a description of each step. Answer: The AIDA model is so named because the effects (or steps) build in this order: Attention (or Awareness), Interest, Desire, and Action. The attention stage correlates to the cognitive step of buyer decision making, the interest and desire stages to the affective step, and the action stage to the behavioral step. In the attention step, target customers are essentially unaware of an offering. Marketers must gain attention and build awareness. The interest step requires persuasive communication. Marketers must inform customers more specifically about what a product can do for them—how it fulfills wants and needs. Moving from interest to desire means that a customer has to move past a need and begin to really want that specific product. Promotion feeds desire through strong persuasive communication. At this stage, salespeople and customized direct and interactive marketing enter the promotion mix. Finally, the action step is the purchase itself. Difficulty: 2 Medium Topic: The Promotion Mix and Promotional Strategies Learning Objective: 13-02 Explain the hierarchy of effects (AIDA) model and its usefulness to promotional strategy. Bloom's: Understand AACSB: Communication Accessibility: Keyboard Navigation 87) What is digital marketing and how has it changed the way companies and individuals communicate? Answer: Digital marketing refers to the marketing of value offerings through the use of digital technologies (for example, desktops, laptops, tablets, and smartphones). Digital technologies have enabled individuals to access vast amounts of information almost instantaneously and have revolutionized the way organizations connect and communicate with their customers. Details will vary. Difficulty: 1 Easy Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Remember AACSB: Technology Accessibility: Keyboard Navigation

88) What are paid media, owned media, and earned media? Give an example of each. Answer: Paid media refers to marketing communication channels requiring that the marketer pay someone else for customer access. In digital marketing, access to paid media can generally be purchased on a per-unit basis. Examples are display ads, search ads, native ads, and social network ads. Owned media refers to marketing communication channels that the marketer's organization has complete control over. The content created on an organization's website is an example of owned media. Earned media refers to the case where either a customer or a commercial entity (such as a news media organization) chooses to act as a marketing communication channel for the dissemination of information associated with the marketer's organization at no cost. Examples are social media shares and user reviews of products. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

89) Compare and contrast display ads, banner ads, interstitials, search ads, and native ads. Answer: Digital ads that are displayed on a given page within a website that clearly demarcates the ad from the webpage's primary content (what the customer navigated to that page for) are called display ads. Display ads can take on multiple forms, including banner ads and interstitials. Banner ads are boxes embedded into a website that can contain graphics, text, or video elements as well as an embedded hyperlink to take the viewer to a webpage intended to facilitate subsequent interactions between the viewer and the advertiser. Interstitials are full-page ads that are delivered before the viewer is directed to the intended webpage visit. Interstitials tend to be very visually appealing, with graphical elements that capitalize on the substantial real estate they inherently hold. Search ads are displayed with the results produced by search engines, typically at the top of or along a column to the side of the search results on a webpage. Digital ads that are designed to fit the format and style of content that is offered through the website on which the ad is being displayed are called native ads. In the case of online publications, native ads tend to be articles or posts that cover a topic of interest to the readership. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

90) Describe the seven Cs that define the customer website interface. Answer: Context refers to the overall layout, design, and aesthetic appeal of the site. Content is the information on the site. In the past, organizations put their existing print materials (catalogs, for example) on the website, and there was little in the way of original web content. Today, organizations' websites incorporate a great deal of web-specific content. A key advantage of web-based communication is the opportunity to create a community of users or visitors to the site. Blogs and organizational bulletin boards encourage a sense of community that enhances customers' experiences with the product and selling firm. The ability to create a unique individual experience with an organization website adds great value to the customer interface, because nowadays online customers appreciate and expect customization of their website experiences. Websites allow organizations to communicate with customers in three key ways. First, organizations communicate to customers and visitors to the website one on one through the Contact feature or e-mail. Second, customers and interested visitors communicate directly with the organization through customer service requests. Finally, organizations use instant messaging for customer service requests and sales inquiries. Connection refers to communication among many sources, such as marketers and customers. And finally, The number of products purchased online has grown dramatically in both B2C and B2B markets. Web designers know that creating a simple, easy-to-understand, and secure purchase experience is essential for success in online commerce. Difficulty: 2 Medium Topic: The Role of Marketing Communications Learning Objective: 13-03 Discuss the role and key types of digital marketing in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

91) Describe social networks. How do they benefit marketers, and what are the drawbacks? Answer: Social networks are about connecting people through friendships, mutual interest, or some other characteristics. There are hundreds of social networks that vary widely in the interests catered to and the ways that users communicate and interact within the network. Given the sheer number of social networking platforms available to customers, it is generally not feasible (or desirable) for even the largest organizations to maintain an effective digital presence across them all. Thus, identifying the particular social networks that an organization's customers tend to interact with most helps determine where a marketing manager can best invest promotional budget. The varying ways of media sharing across networks give marketers a chance to spread their creative wings and have some fun reflecting brand personalities through different approaches such as making a funny comment about a specific current event as it is happening on one platform, while sharing an amusing meme on another. A well-orchestrated mix of actions on social media has positive benefits for brand image and reinforces customer relationship quality with the brand. A potential downside is that marketers must stay on top of postings and be quick to respond. And content needs to be regularly updated. Difficulty: 2 Medium Topic: Marketing Trends Learning Objective: 13-04 Identify the key types of social media and their benefits to marketers in communicating value to customers. Bloom's: Understand AACSB: Technology Accessibility: Keyboard Navigation

Marketing Management, 3e (Marshall) Chapter 14 Promotion Essentials: Legacy Approaches 1) Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising wearout. 2) There are two major types of advertising: product advertising and service advertising. 3) The goal of institutional advertising is to increase the purchase of a specific offering. 4) Institutional advertising is a particularly smart strategy during the early phases of the product life cycle and AIDA model in that it can enhance feelings of trust in potential customers. 5) Pioneering advertising tends to be used during the introductory and early growth stages of the product life cycle. 6) JK motors is the leader in the automobile industry, and so it should use comparative advertising to reach its audience. 7) Many people believe that advertising is synonymous with marketing. 8) The lower the reach and frequency, the higher the cost of an advertising campaign will be. 9) The way an advertisement communicates the information and image is called advertising results. 10) Sales promotion can be aimed directly at end-user consumers, or it can be targeted to members of a channel on which a firm relies to sell products. 11) A trade show is an industry- or company-sponsored event in which booths are set up for the dissemination of information about offerings to members of a channel. 12) Sales promotion is a promotion mix element that provides an inducement for an end-user consumer to buy a product or for a salesperson or someone else in the channel to sell it. 13) In a trade show, a manufacturer provides special incentive money to channel members for certain performances such as running advertisements for one of the manufacturer's brands or doing product demonstrations with potential customers. 14) Bonus payments, prizes, trips, and other incentives to induce a salesperson to push one product over another are forms of consumer sales promotion. 15) Public relations is a systematic approach to influencing attitudes, opinions, and behaviors of customers and others. 16) Public relations is a specialized field. 1 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

17) Salespeople and the personal selling function are the most effective approach for establishing and enhancing the personal relationship between company and customer. 18) Trade servicers take orders from customers directly and persuade customers to buy their firm's products from distributors or other suppliers. 19) Inbound telemarketing involves calling potential customers at their home or office. 20) The goal of sales presentation is not simply to make the sale but to create a strong value proposition that will lead to a mutually beneficial long-term relationship. 21) To communicate the message in a sales presentation, the first step is to set goals and objectives. 22) Salespeople consistently report that price is the most common customer apprehension. 23) One of the most critical aspects to the selling process is not what happens before the purchase decision but what happens after, the follow-up. 24) The primary advantage of a market organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. 25) A commission is a fixed sum of money paid at regular intervals. 26) Murphy Bros took out an ad in several local papers focusing on how the company was started and how it benefits the community. This is an example of ________ advertising. A) product B) pioneering C) competitive D) institutional E) comparative 27) ________ advertising is one of the three principal types of product advertising. A) Covert B) Competitive C) Institutional D) Direct E) Viral

28) A problem with advertising is that beyond a certain ad spending level, diminishing returns tend to set in. That is, market share stops growing—or even begins to decline—despite continued spending. This is known as ________. A) the advertising market concept B) the advertising response function C) advertising wear out D) advertising reach E) advertising execution 29) What is an example of measured media? A) newspaper B) social media C) direct marketing D) promotion E) e-mail marketing 30) Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising ________. A) response function B) tracking C) wearout D) persuading E) illusion 31) The goal of ________ advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. A) product B) pioneering C) competitive D) comparative E) institutional 32) California Milk Advisory Board has been running a national advertising campaign on television. The ad features "happy cows" and carries the tagline "Great cheese comes from happy cows. Happy cows come from California." The board developed a logo that is prominently displayed in the ads, and presumably the expectation is that a consumer would look for that logo on a wedge of cheese in the dairy case, selecting it over cheese from elsewhere. This is an example of ________ advertising. A) institutional B) product C) comparative D) competitive E) pioneering

33) From an AIDA model perspective, ________ advertising seeks to gain awareness and initial interest and is used mostly in the early growth stages of a product. A) institutional B) competitive C) covert D) pioneering E) comparative 34) ________ advertising is heavily used during the growth and early maturity stages of the product life cycle. A) Competitive B) Comparative C) Pioneering D) Covert E) Institutional 35) Marketing managers employ ________ advertising to build sales of a specific brand. A) institutional B) comparative C) pioneering D) covert E) competitive 36) ________ advertising is common during the maturity stage of the product life cycle, but you should avoid this if your brand is the leader. A) Pioneering B) Comparative C) Competitive D) Institutional E) Covert 37) Apple ran a series of humorous television ads in which two guys stood side by side while slinging barbs back and forth about features of the Mac versus the PC. This is an example of ________ advertising. A) pioneering B) competitive C) institutional D) comparative E) covert 38) When two or more brands are reviewed against each other on certain attributes, it is considered ________ advertising. A) pioneering B) competitive C) institutional D) comparative E) covert 4 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

39) The vast majority of advertising is ________ advertising. A) institutional B) product C) virtual D) nonprofit E) research-based 40) Comparative advertising works well when a brand ________. A) has a higher than average advertising budget B) is not competing with a top brand C) is not the leader in its product category D) has higher sales than all of its competitors E) has an inexperienced marketing team 41) Starbucks ran a new ad during the Super Bowl. It wanted to know the percentage of people who watched the ad during the event. Starbucks was measuring the ________ of the ad. A) reach B) frequency C) relevancy D) impact E) noise 42) ________ measures the average number of times a person in a target market is exposed to the message. A) Reach B) Frequency C) Relevancy D) Impact E) Noise 43) P&G often shows ads of people using its products, such as a family using a Swiffer to pick up dog hair. This approach to advertising execution is called ________. A) mood/affect B) humor C) slice of life D) demonstration E) lifestyle 44) When actress Jennifer Aniston appears in an advertisement using and promoting a particular brand of body lotion, it is an example of the ________ approach to advertising execution. A) demonstration B) research-based C) lifestyle D) endorser E) slice-of-life 5 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

45) A commercial that shows Dodge Ram pickup trucks navigating through the back roads of America is an example of the ________ approach to advertising execution. A) lifestyle B) fantasy creation C) musical D) slice-of-life E) humor 46) ________, an approach to advertising execution, offers an imaginative look at how it might be if a customer purchases a product. A) Fantasy creation B) Endorser C) Humor D) Musical E) Slice of life 47) An advertisement showing tiny aliens blasting cavities in a person's mouth is an example of the ________ approach to advertising execution. A) fantasy creation B) endorser C) humor D) slice-of-life E) musical 48) Which of the following is one of the benefits of using television as an advertising medium? A) It has a long shelf life. B) It appeals to multiple senses. C) It creates the feel of one-to-one marketing. D) It offers lasting impressions. E) It involves low cost. 49) Which advertising media offers the advantage of high audience selectivity? A) online and social media B) radio C) direct mail D) newspaper E) television 50) Which advertising media offers the advantage of interactive capabilities? A) online and social media B) radio C) direct mail D) newspaper E) television

51) Chen wants to opt for an advertising medium that is flexible and can create the feel of oneto-one marketing. Which of the following advertising media is she likely to choose? A) direct mail B) newspapers C) outdoor D) magazines E) radio 52) Newspapers are effective as an advertising medium because they ________. A) are a highly credible medium B) appeal to a younger audience C) have a very personal message D) appeal to multiple senses E) have a long shelf life 53) Marcia was describing a humorous ad to her friend, who asked her what product it was for. She said she didn't know because there were so many ads on TV that she got them all mixed up. This demonstrates the problem advertisers have with ________. A) clutter B) reach C) frequency D) impact E) volume 54) ________ are a form of sales promotion to channel members. A) Product samples B) Multiple-purchase offers C) Product placements D) Trade shows E) Loyalty programs 55) Which customer sales promotion refers to an instant price reduction at the point of sale, available in print media, online, or in-store, that encourages customers to "buy now?" A) loyalty program B) rebate C) contest or sweepstake D) premium E) coupon 56) ________ refer to a price reduction for purchase of a specific product during a specific time period. A) Loyalty programs B) Rebates C) Contests and sweepstakes D) Premiums E) Coupons 7 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

57) A car dealership receives a bonus from the manufacturer if it sells more hybrid cars than it did the previous year. This is called ________. A) a rebate B) an allowance C) a contest D) a point-of-purchase payment E) a commission 58) Gillette sends out a free razor to induce switching from an older model. This is an example of using ________ as the sales promotion approach. A) coupons B) premiums C) product sampling D) comparative parity method E) product placements 59) Apple products appeared in many films in 2016 and 2017. This demonstrates how Apple is using ________ as a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers 60) Centrum Vitamin's offer to buy a bottle of 100 and get an extra mini-bottle of 20 free is an example of using ________ a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers 61) McDonald's provides a free toy in every Happy Meal. This is an example of using ________ as a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers 62) McDonald's famous Monopoly game—the more you eat, the more you play (and vice versa!)—is an example of using ________ as a sales promotion approach. A) product placements B) contests and sweepstakes C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers 8 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

63) When targeted to members of a channel on which a firm relies to sell a product, ________ is an important element of a push strategy. A) consumer advertising B) public relations C) personal selling D) sales promotion E) institutional advertising 64) Coca-Cola bottles placed on the desks of judges of the show American Idol is an example of the sales promotion approach of ________. A) rebates B) product placements C) product sampling D) loyalty programs E) premiums 65) "Buy 1, get 1 half price" is an example of the sales promotion approach of ________. A) rebates B) product placements C) multiple-purchase offers D) loyalty programs E) premiums 66) When General Hospital was informed that a pile up on Highway 101 resulted in multiple injuries, the staff was informed to expect new patients arriving by ambulance and they followed standard procedure to prepare. This demonstrates ________. A) direct marketing B) advertising C) interactive marketing D) public relations E) crisis management 67) What is one of the three core functions of public relations that are most closely aligned with the role of a marketing manager? A) developing new products for new market segments B) serving as organizational spokesperson C) handling investor relations D) attaining funds for marketing campaigns E) gaining product publicity and buzz 68) Which of the following is a distinct advantage of personal selling over the other marketing communication methods? A) ability to tailor the message B) highly flexible C) strategic relationship between company and customer D) less time-consuming E) highly cost effective 9 Copyright 2019 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

69) ________ is a distinct advantage that personal selling offers over other marketing communications methods. A) Low transactional costs B) Strategic flexibility C) Geographic flexibility D) Personal knowledge management E) Personal relationship with a customer 70) Which of the following activities best describes a salesperson's job? A) manage production of goods B) devise marketing strategies C) set prices D) manage information E) research on product development 71) ________ is a two-way communication process with the goal of securing, building, and maintaining long-term relationships with profitable customers. A) Sales promotion B) Direct marketing C) Personal selling D) Publicity E) Advertising 72) ________ is one of the three distinct advantages of personal selling. A) Large variety of media B) Immediate feedback C) Low cost per exposure D) Consistent message E) Elimination of noise 73) ________ is an example of a nontechnology communication selling activity. A) Enhancing language and overall communication skills B) Identifying and targeting key customer accounts C) Creating useful company web page content D) Developing database management skills E) Leaving voice-mail messages 74) Which of the following best reflects a technology-oriented communication selling activity? A) developing effective presentation skills B) following up after customer contact C) developing time management skills D) listening effectively E) leaving voice-mail messages

75) The main difference between B2C and B2B markets is ________. A) good interpersonal and communication skills are more important for B2C than for B2B. B) B2B requires more supervision and performance evaluation than B2C. C) services sold by B2B salespeople are more expensive and technically complex than those in B2C. D) B2B requires more knowledge of the products being sold than B2C. E) B2C requires the ability to discover customer needs and solve their problems more than B2B. 76) ________ are those who are responsible for managing large accounts and are skilled in developing complex solutions to a particular customer problem. A) Technical sellers B) Key account salespeople C) Missionary salespeople D) Trade servicers E) Telemarketers 77) The sales engineer from General Electric who calls on Boeing to sell the GE90 jet engine to be used in Boeing aircraft is an example of a ________. A) technical seller B) solutions servicer C) missionary salesperson D) trade servicer E) telemarketer 78) ________ is the last stage of the personal selling process. A) Prospecting for customers B) Handling customer objections C) Following up with customers D) Qualifying prospects E) Opening the relationships 79) Prospective customers call a toll-free number for more information. This is used to identify and qualify prospects and is considered ________. A) outbound telemarketing B) database management C) closing of the sale D) follow-up E) inbound telemarketing 80) The delivery of information relevant to meet the customer's needs is called a ________. A) customer needs summary B) value proposition C) customer touch point D) sales presentation E) transactional analysis

81) One of five principal goals for a sales presentation is to ________. A) fulfill the customer's need for affiliation B) enable evaluation of product alternatives C) build impersonal relationships with customers D) build product interest E) agree on a price 82) ________ is one of the four characteristics of a great sales presentation. A) Explaining the value proposition B) Maximizing change conflict C) Developing competitive pricing D) Focusing on technology E) Emphasizing features over benefits 83) ________ is obtaining commitment from the customer to make the purchase. A) Following up after the sale B) Closing the sale C) Handling objections D) Qualifying the prospect E) Opening the relationship 84) Which of the following questions are addressed by an effective sales presentation? A) What is the shareholding pattern of the board of directors of the organization? B) What is the estimated growth in sales of a product in the next quarter? C) What is the sales turnover ratio of the organization? D) What are the marketing strategies adopted by the company to ensure its sales? E) What is the value-added of the product? 85) The decision to use independent agents or a company sales is determined based on ________. A) psychographic segmentation B) database mining C) organizational learning D) institutional cost E) strategic flexibility 86) Using independent sales agents is referred to as ________. A) inbounding the sales force B) out bounding the sales force C) using the company sales force D) transferring sales agents E) outsourcing the sales force

87) ________ is one of the critical mistakes made in closing a sale. A) Adopting a flippant approach B) Excessive marketing C) Standardized presentation D) Too much talking E) Geographic segmentation 88) ________ is one of the four factors used when deciding whether to use independent sales people. A) Legal resources B) Risk tolerance C) Geographic flexibility D) Transaction cost E) Psychographic segmentation 89) The simplest method of sales force organization is ________. A) geographic orientation B) product organization C) customer type D) market organization E) workload method 90) ________ takes advantage of a salesperson's technical knowledge. A) Geographic orientation B) Product organization C) Customer type D) Market organization E) Workload method 91) The disadvantage of geographic sales orientation is ________. A) it does not support specialization of labor B) it tends to have the highest cost C) its large territories involve maximized travel time D) its complicated structure maximizes customer confusion E) it requires additional managerial levels for coordination 92) ________ is one of the three organizational factors that influence a salesperson's performance. A) Job experience B) Career stage C) Sales aptitude D) Company marketing budget E) Education

93) The individual's learned proficiency at performing necessary sales tasks is called ________. A) sales aptitude B) motivation C) reward D) sales skill level E) satisfaction 94) Bart was awarded sales person of the year and was given a cruise for two by his company. This is an example of a(n) ________ reward. A) intrinsic B) bonus C) contest D) extrinsic E) subjective 95) Feelings of accomplishment, personal growth, and self-worth are examples of ________ rewards. A) intrinsic B) transactional C) objective D) extrinsic E) subjective 96) Carlo receives a paycheck every other Friday for the same amount. Carlos receives ________. A) a salary B) a stipend C) an intrinsic reward D) an output measure E) incentive pay 97) Which of the following is an intrinsic reward? A) pay B) security C) personal growth D) promotion E) recognition 98) Compare and contrast the two major types of advertising and give an example of each. 99) Choose four of the consumer sales promotion options and provide a description and an example of each. 100) Explain the three core functions of public relations that are most closely aligned with the role of the marketing manager.

101) Name the three advantages that personal selling has over other forms of marketing communications, and explain why they are advantages. 102) What are the six stages of the personal selling process? 103) Explain three types of financial compensation and rewards given to salespeople. Give one example of a nonfinancial reward.

Marketing Management, 3e (Marshall) Chapter 14 Promotion Essentials: Legacy Approaches 1) Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising wearout. Answer: TRUE Explanation: There is a danger in overrelying on advertising to the exclusion of other promotional choices. Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising wearout. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 2) There are two major types of advertising: product advertising and service advertising. Answer: FALSE Explanation: There are two major types of advertising: institutional advertising and product advertising. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 3) The goal of institutional advertising is to increase the purchase of a specific offering. Answer: FALSE Explanation: The goal of institutional advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

4) Institutional advertising is a particularly smart strategy during the early phases of the product life cycle and AIDA model in that it can enhance feelings of trust in potential customers. Answer: TRUE Explanation: Institutional advertising is a particularly smart strategy during the early phases of the product life cycle (PLC) and AIDA model in that it can enhance feelings of trust in potential customers with a message that is broader than just "buy me." Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 5) Pioneering advertising tends to be used during the introductory and early growth stages of the product life cycle. Answer: TRUE Explanation: Pioneering advertising stimulates primary demand. Hence, it tends to be used during the introductory and early growth stages of the product life cycle when it is important to gain purchase by innovators and early adopters. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 6) JK motors is the leader in the automobile industry, and so it should use comparative advertising to reach its audience. Answer: FALSE Explanation: Comparative advertising works especially well when a brand is not No. 1 in a product category because it can put the market leader on the defensive. Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

7) Many people believe that advertising is synonymous with marketing. Answer: TRUE Explanation: Much of the general public thinks of advertising as synonymous with marketing because advertising is a very visible side of marketing—not surprising, since advertising is one of the dominant forms of marketing communication. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 8) The lower the reach and frequency, the higher the cost of an advertising campaign will be. Answer: FALSE Explanation: Frequency measures the average number of times a person in a target market is exposed to the message. Obviously, the greater the reach and higher the frequency, the more expensive the overall advertising campaign will be. Difficulty: 2 Medium Topic: Target Markets Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 9) The way an advertisement communicates the information and image is called advertising results. Answer: FALSE Explanation: Advertising execution is the way an advertisement communicates the information and image. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

10) Sales promotion can be aimed directly at end-user consumers, or it can be targeted to members of a channel on which a firm relies to sell products. Answer: TRUE Explanation: Sales promotion can be aimed directly at end-user consumers, or it can be targeted to members of a channel on which a firm relies to sell products. In the latter case, sales promotion is an important element of a push strategy. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 11) A trade show is an industry- or company-sponsored event in which booths are set up for the dissemination of information about offerings to members of a channel. Answer: TRUE Explanation: A trade show is an industry- or company-sponsored event in which booths are set up for the dissemination of information about offerings to members of a channel. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 12) Sales promotion is a promotion mix element that provides an inducement for an end-user consumer to buy a product or for a salesperson or someone else in the channel to sell it. Answer: TRUE Explanation: Sales promotion is defined as a promotion mix element that provides an inducement for an end-user consumer to buy a product or for a salesperson or someone else in the channel to sell it. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-01 Identify various approaches to sales promotion and how each might be used Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

13) In a trade show, a manufacturer provides special incentive money to channel members for certain performances such as running advertisements for one of the manufacturer's brands or doing product demonstrations with potential customers. Answer: FALSE Explanation: A form of sales promotion to a channel is cooperative advertising and promotion. In cooperative advertising, a manufacturer provides special incentive money to channel members for certain performances such as running advertisements for one of the manufacturer's brands or doing product demonstrations with potential customers. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 14) Bonus payments, prizes, trips, and other incentives to induce a salesperson to push one product over another are forms of consumer sales promotion. Answer: FALSE Explanation: Bonus payments, prizes, trips, and other incentives to induce a salesperson to push one product over another are forms of internal sales promotion. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 15) Public relations is a systematic approach to influencing attitudes, opinions, and behaviors of customers and others. Answer: TRUE Explanation: Public relations (PR) is defined as a systematic approach to influencing attitudes, opinions, and behaviors of customers and others. Difficulty: 1 Easy Topic: Public Relations Learning Objective: 14-03 Describe the activities and aims of public relations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

16) Public relations is a specialized field. Answer: TRUE Explanation: PR is a specialized field. Usually, undergraduate and graduate marketing programs do not include training in PR. Many PR professionals receive specialized training in communication, and outstanding PR people are highly sought after. Difficulty: 1 Easy Topic: Public Relations Learning Objective: 14-03 Describe the activities and aims of public relations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 17) Salespeople and the personal selling function are the most effective approach for establishing and enhancing the personal relationship between company and customer. Answer: TRUE Explanation: Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. In particular, business-to-business (B2B) customers appreciate the efficiency of the Internet and other communication tools but expect a personal relationship with their suppliers. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 18) Trade servicers take orders from customers directly and persuade customers to buy their firm's products from distributors or other suppliers. Answer: FALSE Explanation: This describes missionary salespeople, who often do not take orders from customers directly but persuade customers to buy their firm's product from distributors or other suppliers. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

19) Inbound telemarketing involves calling potential customers at their home or office. Answer: FALSE Explanation: Outbound telemarketing involves calling potential customers at their home or office, either to make a sales call via telephone or to set up an appointment for a field salesperson. Inbound telemarketing, where prospective customers call a toll-free number for more information, is also used to identify and qualify prospects. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 20) The goal of sales presentation is not simply to make the sale but to create a strong value proposition that will lead to a mutually beneficial long-term relationship. Answer: TRUE Explanation: The sales presentation is the delivery of information relevant to meet the customer's needs and is the heart of the selling process. The goal is not simply to make the sale but to create a strong value proposition that will lead to a mutually beneficial long-term relationship. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 21) To communicate the message in a sales presentation, the first step is to set goals and objectives. Answer: TRUE Explanation: Setting goals and objectives is the first step in communicating. Ultimately, the goal of the presentation is to secure a purchase commitment from the customer. However, the salesperson does not just walk in asking for the purchase order. Successful salespeople understand that the purchase order does not come until customers believe the company's products offer the best solution to their needs. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

22) Salespeople consistently report that price is the most common customer apprehension. Answer: TRUE Explanation: Salespeople consistently report that price is the most common customer apprehension. In many cases, the customer has legitimate objections about the price of a product. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 23) One of the most critical aspects to the selling process is not what happens before the purchase decision but what happens after, the follow-up. Answer: TRUE Explanation: One of the most critical aspects to the selling process is not what happens before the purchase decision but what happens after, the follow-up. Salespeople often rely on support people inside the company to help in post-sales service. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 24) The primary advantage of a market organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. Answer: FALSE Explanation: Some companies have a separate sales force for each product or product category. The primary advantage of a product organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

25) A commission is a fixed sum of money paid at regular intervals. Answer: FALSE Explanation: A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 26) Murphy Bros took out an ad in several local papers focusing on how the company was started and how it benefits the community. This is an example of ________ advertising. A) product B) pioneering C) competitive D) institutional E) comparative Answer: D Explanation: The goal of institutional advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

27) ________ advertising is one of the three principal types of product advertising. A) Covert B) Competitive C) Institutional D) Direct E) Viral Answer: B Explanation: Three principal types of product advertising are pioneering advertising, competitive advertising, and comparative advertising. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 28) A problem with advertising is that beyond a certain ad spending level, diminishing returns tend to set in. That is, market share stops growing—or even begins to decline—despite continued spending. This is known as ________. A) the advertising market concept B) the advertising response function C) advertising wear out D) advertising reach E) advertising execution Answer: B Explanation: A problem with advertising is that beyond a certain ad spending level, diminishing returns tend to set in. That is, market share stops growing—or even begins to decline—despite continued spending. This effect is known as the advertising response function. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

29) What is an example of measured media? A) newspaper B) social media C) direct marketing D) promotion E) e-mail marketing Answer: A Explanation: Traditional forms of advertising are considered measured media—magazine, newspaper, TV, radio, outdoor, and display advertising on the Internet. Difficulty: 1 Easy Topic: Market Indicators and Market Factors Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 30) Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising ________. A) response function B) tracking C) wearout D) persuading E) illusion Answer: C Explanation: There is a danger in over relying on advertising to the exclusion of other promotional choices. Customers can quickly and easily become bored with any given advertising campaign, a concept referred to as advertising wearout. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

31) The goal of ________ advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. A) product B) pioneering C) competitive D) comparative E) institutional Answer: E Explanation: The goal of institutional advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. Institutional advertising is often used to inform or remind, but to a lesser degree to persuade. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 32) California Milk Advisory Board has been running a national advertising campaign on television. The ad features "happy cows" and carries the tagline "Great cheese comes from happy cows. Happy cows come from California." The board developed a logo that is prominently displayed in the ads, and presumably the expectation is that a consumer would look for that logo on a wedge of cheese in the dairy case, selecting it over cheese from elsewhere. This is an example of ________ advertising. A) institutional B) product C) comparative D) competitive E) pioneering Answer: A Explanation: Sometimes entire industries will run institutional advertising. For example, the California Milk Advisory Board runs a major national television campaign featuring "happy cows." Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

33) From an AIDA model perspective, ________ advertising seeks to gain awareness and initial interest and is used mostly in the early growth stages of a product. A) institutional B) competitive C) covert D) pioneering E) comparative Answer: D Explanation: Pioneering advertising stimulates primary demand. Hence, it tends to be used during the introductory and early growth stages of the PLC when it is important to gain purchase by innovators and early adopters. From an AIDA model perspective, pioneering advertising seeks to gain awareness and initial interest. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 34) ________ advertising is heavily used during the growth and early maturity stages of the product life cycle. A) Competitive B) Comparative C) Pioneering D) Covert E) Institutional Answer: A Explanation: Building a positive customer attitude toward a brand is a key component of competitive advertising, and this approach is heavily used during the growth and early maturity stages of the product life cycle (PLC). Triggering the desire and action stages of the AIDA model is a focus of the message. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

35) Marketing managers employ ________ advertising to build sales of a specific brand. A) institutional B) comparative C) pioneering D) covert E) competitive Answer: E Explanation: Marketing managers employ competitive advertising to build sales of a specific brand. Here, the appeal often shifts to more emotion and the goal is persuasion as well as providing information. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 36) ________ advertising is common during the maturity stage of the product life cycle, but you should avoid this if your brand is the leader. A) Pioneering B) Comparative C) Competitive D) Institutional E) Covert Answer: B Explanation: Comparative advertising is common during the maturity stage of the product life cycle (PLC), as attempts at shaking out weaker competitors are generally part of a marketing strategy. Most experts recommend avoiding comparative advertising if your brand is the leader. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

37) Apple ran a series of humorous television ads in which two guys stood side by side while slinging barbs back and forth about features of the Mac versus the PC. This is an example of ________ advertising. A) pioneering B) competitive C) institutional D) comparative E) covert Answer: D Explanation: In comparative advertising, two or more brands are directly compared against each other on certain attributes. Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 38) When two or more brands are reviewed against each other on certain attributes, it is considered ________ advertising. A) pioneering B) competitive C) institutional D) comparative E) covert Answer: D Explanation: In comparative advertising, two or more brands are directly compared against each other on certain attributes. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

39) The vast majority of advertising is ________ advertising. A) institutional B) product C) virtual D) nonprofit E) research-based Answer: B Explanation: The vast majority of advertising is product advertising, designed to increase purchase of a specific offering (good or service). Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 40) Comparative advertising works well when a brand ________. A) has a higher than average advertising budget B) is not competing with a top brand C) is not the leader in its product category D) has higher sales than all of its competitors E) has an inexperienced marketing team Answer: C Explanation: Comparative advertising works especially well when a brand is not number one in a product category because the market leader can be put on the defensive. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

41) Starbucks ran a new ad during the Super Bowl. It wanted to know the percentage of people who watched the ad during the event. Starbucks was measuring the ________ of the ad. A) reach B) frequency C) relevancy D) impact E) noise Answer: A Explanation: Reach measures the percentage of individuals in a defined target market who are exposed to an ad during a specified time period. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 42) ________ measures the average number of times a person in a target market is exposed to the message. A) Reach B) Frequency C) Relevancy D) Impact E) Noise Answer: B Explanation: This is the definition of frequency, which measures the average number of times a person in a target market is exposed to the message. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

43) P&G often shows ads of people using its products, such as a family using a Swiffer to pick up dog hair. This approach to advertising execution is called ________. A) mood/affect B) humor C) slice of life D) demonstration E) lifestyle Answer: C Explanation: Common approaches to advertising execution include slice of life, which portrays regular people in everyday settings. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 44) When actress Jennifer Aniston appears in an advertisement using and promoting a particular brand of body lotion, it is an example of the ________ approach to advertising execution. A) demonstration B) research-based C) lifestyle D) endorser E) slice-of-life Answer: D Explanation: The endorser approach to advertising execution connects a celebrity or an actor posing as an authority figure (with appropriate disclaimer), a company officer, or an everyday consumer with a product to sanction and support its use. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

45) A commercial that shows Dodge Ram pickup trucks navigating through the back roads of America is an example of the ________ approach to advertising execution. A) lifestyle B) fantasy creation C) musical D) slice-of-life E) humor Answer: A Explanation: A commercial which shows Dodge Ram pickup trucks navigating through the back roads of America is an example of lifestyle approach to advertising execution. It portrays ways a product will connect with a target customer's lifestyle. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 46) ________, an approach to advertising execution, offers an imaginative look at how it might be if a customer purchases a product. A) Fantasy creation B) Endorser C) Humor D) Musical E) Slice of life Answer: A Explanation: Fantasy creation offers an imaginative look at how it might be if a customer purchases a product. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

47) An advertisement showing tiny aliens blasting cavities in a person's mouth is an example of the ________ approach to advertising execution. A) fantasy creation B) endorser C) humor D) slice-of-life E) musical Answer: A Explanation: An advertisement showing tiny aliens blasting cavities in a person's mouth is an example of the fantasy creation approach to advertising execution. It offers a fantasy look at how it might be if a customer purchases the product. Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 48) Which of the following is one of the benefits of using television as an advertising medium? A) It has a long shelf life. B) It appeals to multiple senses. C) It creates the feel of one-to-one marketing. D) It offers lasting impressions. E) It involves low cost. Answer: B Explanation: Television appeals to multiple senses and combines multimedia. But its impressions are fleeting and it has a high cost. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

49) Which advertising media offers the advantage of high audience selectivity? A) online and social media B) radio C) direct mail D) newspaper E) television Answer: C Explanation: Direct mail offers the advantage of high audience selectivity. It creates the feel of one-to-one marketing. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 50) Which advertising media offers the advantage of interactive capabilities? A) online and social media B) radio C) direct mail D) newspaper E) television Answer: A Explanation: Online and social media offers the advantage of interactive capabilities. It is flexible and timely and involves low cost per exposure. Difficulty: 1 Easy Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

51) Chen wants to opt for an advertising medium that is flexible and can create the feel of oneto-one marketing. Which of the following advertising media is she likely to choose? A) direct mail B) newspapers C) outdoor D) magazines E) radio Answer: A Explanation: Direct mail is flexible, and it can create the feel of one-to-one marketing. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 52) Newspapers are effective as an advertising medium because they ________. A) are a highly credible medium B) appeal to a younger audience C) have a very personal message D) appeal to multiple senses E) have a long shelf life Answer: A Explanation: Newspapers are a highly credible advertising medium. They are flexible and timely. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

53) Marcia was describing a humorous ad to her friend, who asked her what product it was for. She said she didn't know because there were so many ads on TV that she got them all mixed up. This demonstrates the problem advertisers have with ________. A) clutter B) reach C) frequency D) impact E) volume Answer: A Explanation: One issue inherent to most media forms is some degree of clutter—the level of competing messages on that medium. Difficulty: 2 Medium Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 54) ________ are a form of sales promotion to channel members. A) Product samples B) Multiple-purchase offers C) Product placements D) Trade shows E) Loyalty programs Answer: D Explanation: Trade shows can be a very fruitful form of sales promotion. A trade show is an industry- or company-sponsored event in which booths are set up for the dissemination of information about offerings to members of a channel. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

55) Which customer sales promotion refers to an instant price reduction at the point of sale, available in print media, online, or in-store, that encourages customers to "buy now?" A) loyalty program B) rebate C) contest or sweepstake D) premium E) coupon Answer: E Explanation: Coupons refer to an instant price reduction at point of sale, available in print media, online, or in-store. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 56) ________ refer to a price reduction for purchase of a specific product during a specific time period. A) Loyalty programs B) Rebates C) Contests and sweepstakes D) Premiums E) Coupons Answer: B Explanation: Rebates refer to a price reduction for purchase of a specific product during a specific time period. Difficulty: 1 Easy Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

57) A car dealership receives a bonus from the manufacturer if it sells more hybrid cars than it did the previous year. This is called ________. A) a rebate B) an allowance C) a contest D) a point-of-purchase payment E) a commission Answer: B Explanation: Sometimes money is made available for a channel member in the form of a special payment for selling certain products, making a large order, or other specific performance. This form of channel-focused sales promotion is called an allowance. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Understand AACSB: Knowledge Application Accessibility: Keyboard Navigation 58) Gillette sends out a free razor to induce switching from an older model. This is an example of using ________ as the sales promotion approach. A) coupons B) premiums C) product sampling D) comparative parity method E) product placements Answer: C Explanation: Gillette sending out a free razor to induce switching from an older model is an example of product sampling approach of consumer sales promotion. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

59) Apple products appeared in many films in 2016 and 2017. This demonstrates how Apple is using ________ as a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers Answer: A Explanation: Apple products often appear in popular movies and TV shows. This is an example of using product placement as the sales promotion approach. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 60) Centrum Vitamin's offer to buy a bottle of 100 and get an extra mini-bottle of 20 free is an example of using ________ a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers Answer: E Explanation: This is an incentive to buy more of the same brand at a special price, which demonstrates using multiple-purchase offers as the sales promotion approach. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

61) McDonald's provides a free toy in every Happy Meal. This is an example of using ________ as a sales promotion approach. A) product placements B) premiums C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers Answer: B Explanation: Free toys are premiums received because the consumer purchased the Happy Meal. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation 62) McDonald's famous Monopoly game—the more you eat, the more you play (and vice versa!)—is an example of using ________ as a sales promotion approach. A) product placements B) contests and sweepstakes C) loyalty programs D) point-of-purchase materials E) multiple-purchase offers Answer: B Explanation: McDonald's famous Monopoly game—the more you eat, the more you play (and vice versa!)—is an example of using contests and sweepstakes as the sales promotion approach. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

63) When targeted to members of a channel on which a firm relies to sell a product, ________ is an important element of a push strategy. A) consumer advertising B) public relations C) personal selling D) sales promotion E) institutional advertising Answer: D Explanation: Sales promotion can be aimed directly at end-user consumers, or it can be targeted to members of a channel on which a firm relies to sell a product. In the latter case, sales promotion is an important element of a push strategy. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 64) Coca-Cola bottles placed on the desks of judges of the show American Idol is an example of the sales promotion approach of ________. A) rebates B) product placements C) product sampling D) loyalty programs E) premiums Answer: B Explanation: Coca-Cola bottles placed on the desks of judges of the show American Idol is an example of the sales promotion approach of product placements, which involve having product images appear in movies, on television, or in photographs in print media. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

65) "Buy 1, get 1 half price" is an example of the sales promotion approach of ________. A) rebates B) product placements C) multiple-purchase offers D) loyalty programs E) premiums Answer: C Explanation: "Buy 1, get 1 half price" is an example of the sales promotion approach of multiple-purchase offers, which provide the customers with an incentive to buy more of a brand at a special price. Difficulty: 2 Medium Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 66) When General Hospital was informed that a pile up on Highway 101 resulted in multiple injuries, the staff was informed to expect new patients arriving by ambulance and they followed standard procedure to prepare. This demonstrates ________. A) direct marketing B) advertising C) interactive marketing D) public relations E) crisis management Answer: E Explanation: Crisis management is a planned, coordinated approach for disseminating information during times of emergency and for handling the effects of unfavorable publicity. Difficulty: 2 Medium Topic: Public Relations Learning Objective: 14-03 Describe the activities and aims of public relations. Bloom's: Apply AACSB: Knowledge Application Accessibility: Keyboard Navigation

67) What is one of the three core functions of public relations that are most closely aligned with the role of a marketing manager? A) developing new products for new market segments B) serving as organizational spokesperson C) handling investor relations D) attaining funds for marketing campaigns E) gaining product publicity and buzz Answer: E Explanation: The three core functions of PR that are most closely aligned with the role of a marketing manager are gaining product publicity and buzz, securing event sponsorships, and crisis management. Difficulty: 1 Easy Topic: Public Relations Learning Objective: 14-03 Describe the activities and aims of public relations. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 68) Which of the following is a distinct advantage of personal selling over the other marketing communication methods? A) ability to tailor the message B) highly flexible C) strategic relationship between company and customer D) less time-consuming E) highly cost effective Answer: A Explanation: No other marketing communication method does a better job of creating personal, unique customer messages in real time than personal selling's ability to tailor the message. Salespeople generate distinctive sales messages that directly address customer problems and concerns. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

69) ________ is a distinct advantage that personal selling offers over other marketing communications methods. A) Low transactional costs B) Strategic flexibility C) Geographic flexibility D) Personal knowledge management E) Personal relationship with a customer Answer: E Explanation: Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 70) Which of the following activities best describes a salesperson's job? A) manage production of goods B) devise marketing strategies C) set prices D) manage information E) research on product development Answer: D Explanation: Salespeople today must be excellent information managers, collecting information from a variety of sources (their own company, customers, competitors, and independent information sources), determining what is relevant, and then presenting it to the customer. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

71) ________ is a two-way communication process with the goal of securing, building, and maintaining long-term relationships with profitable customers. A) Sales promotion B) Direct marketing C) Personal selling D) Publicity E) Advertising Answer: C Explanation: Personal selling is a two-way communication process between salesperson and buyer with the goal of securing, building, and maintaining long-term relationships with profitable customers. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 72) ________ is one of the three distinct advantages of personal selling. A) Large variety of media B) Immediate feedback C) Low cost per exposure D) Consistent message E) Elimination of noise Answer: B Explanation: Personal selling offers three distinct advantages over other marketing communications methods: Immediate feedback to the customer. Customers don't want to wait for information. They demand accurate information quickly, putting pressure on companies for immediate, personal communication with a salesperson or customer service representative. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

73) ________ is an example of a nontechnology communication selling activity. A) Enhancing language and overall communication skills B) Identifying and targeting key customer accounts C) Creating useful company web page content D) Developing database management skills E) Leaving voice-mail messages Answer: A Explanation: Enhancing language and overall communication skills is an example of a nontechnology communication selling activity. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 74) Which of the following best reflects a technology-oriented communication selling activity? A) developing effective presentation skills B) following up after customer contact C) developing time management skills D) listening effectively E) leaving voice-mail messages Answer: E Explanation: Making telephone calls/leaving voice-mail messages involves the use of technology and best reflects a technology-oriented communication selling activity. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

75) The main difference between B2C and B2B markets is ________. A) good interpersonal and communication skills are more important for B2C than for B2B. B) B2B requires more supervision and performance evaluation than B2C. C) services sold by B2B salespeople are more expensive and technically complex than those in B2C. D) B2B requires more knowledge of the products being sold than B2C. E) B2C requires the ability to discover customer needs and solve their problems more than B2B. Answer: C Explanation: B2C and B2B selling differ in some important ways. Many of the goods and services sold by B2B salespeople are more expensive and technically complex than those in B2C. In addition, B2B customers tend to be larger and engage in extensive decision-making processes involving many people. Difficulty: 2 Medium Topic: How B2B and B2C Markets Differ Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 76) ________ are those who are responsible for managing large accounts and are skilled in developing complex solutions to a particular customer problem. A) Technical sellers B) Key account salespeople C) Missionary salespeople D) Trade servicers E) Telemarketers Answer: B Explanation: Key account salespeople, those responsible for managing large accounts, are skilled in developing complex solutions to a particular customer problem. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

77) The sales engineer from General Electric who calls on Boeing to sell the GE90 jet engine to be used in Boeing aircraft is an example of a ________. A) technical seller B) solutions servicer C) missionary salesperson D) trade servicer E) telemarketer Answer: A Explanation: An example of technical selling is the sales engineer from General Electric who calls on Boeing to sell the GE90 jet engine to be used in Boeing aircraft. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 78) ________ is the last stage of the personal selling process. A) Prospecting for customers B) Handling customer objections C) Following up with customers D) Qualifying prospects E) Opening the relationships Answer: C Explanation: One of the most critical aspects to the selling process is not what happens before the purchase decision but what happens after, the follow-up. Salespeople often rely on support people inside the company to help in post-sales service. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

79) Prospective customers call a toll-free number for more information. This is used to identify and qualify prospects and is considered ________. A) outbound telemarketing B) database management C) closing of the sale D) follow-up E) inbound telemarketing Answer: E Explanation: Inbound telemarketing, where prospective customers call a toll-free number for more information, is used to identify and qualify prospects. When prospects call for more information, a telemarketing representative determines the extent of interest and assesses the prospect qualifications, then passes the contact information on to the appropriate salesperson. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 80) The delivery of information relevant to meet the customer's needs is called a ________. A) customer needs summary B) value proposition C) customer touch point D) sales presentation E) transactional analysis Answer: D Explanation: The sales presentation is the delivery of information relevant to meet the customer's needs and is the heart of the selling process. It is the process salespeople use to transition customers from interest in the product to purchase of the product. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

81) One of five principal goals for a sales presentation is to ________. A) fulfill the customer's need for affiliation B) enable evaluation of product alternatives C) build impersonal relationships with customers D) build product interest E) agree on a price Answer: D Explanation: Salespeople identify at least one of five principal goals for the presentation: Educate the customer by providing enough knowledge about the company's products. Get the customer's attention. Build interest for the company's products. Nurture the customer's desire and conviction to purchase. Obtain a customer commitment to action (purchase). Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 82) ________ is one of the four characteristics of a great sales presentation. A) Explaining the value proposition B) Maximizing change conflict C) Developing competitive pricing D) Focusing on technology E) Emphasizing features over benefits Answer: A Explanation: Explaining the value proposition is a characteristic of a great sales presentation. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

83) ________ is obtaining commitment from the customer to make the purchase. A) Following up after the sale B) Closing the sale C) Handling objections D) Qualifying the prospect E) Opening the relationship Answer: B Explanation: Closing the sale is obtaining commitment from the customer to make the purchase. The close is not a discrete event but rather a nonlinear process that begins with the approach to the customer. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 84) Which of the following questions are addressed by an effective sales presentation? A) What is the shareholding pattern of the board of directors of the organization? B) What is the estimated growth in sales of a product in the next quarter? C) What is the sales turnover ratio of the organization? D) What are the marketing strategies adopted by the company to ensure its sales? E) What is the value-added of the product? Answer: E Explanation: The characteristics of a great sales presentation answer the questions: What is the value-added of the product? What are the advantages and benefits of the product? What are the key points I should know about this company, product, and services? What should I remember about this presentation? Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

85) The decision to use independent agents or a company sales is determined based on ________. A) psychographic segmentation B) database mining C) organizational learning D) institutional cost E) strategic flexibility Answer: E Explanation: The decision to use independent agents or a company sales force involves four factors: economic, control, transaction cost, and strategic flexibility. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 86) Using independent sales agents is referred to as ________. A) inbounding the sales force B) out bounding the sales force C) using the company sales force D) transferring sales agents E) outsourcing the sales force Answer: E Explanation: Maintaining a sales force is expensive, and companies are constantly assessing the most practical method to reach customers. Using independent sales agents is referred to as outsourcing the sales force. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

87) ________ is one of the critical mistakes made in closing a sale. A) Adopting a flippant approach B) Excessive marketing C) Standardized presentation D) Too much talking E) Geographic segmentation Answer: D Explanation: Research suggests salespeople make four critical mistakes in closing: a negative attitude about the customer or situation, the failure to conduct an effective pre-approach, too much talking and not enough listening, and using a "one size fits all" approach. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 88) ________ is one of the four factors used when deciding whether to use independent sales people. A) Legal resources B) Risk tolerance C) Geographic flexibility D) Transaction cost E) Psychographic segmentation Answer: D Explanation: The decision to use independent agents or a company sales force involves four factors: economic, control, transaction cost, and strategic flexibility. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

89) The simplest method of sales force organization is ________. A) geographic orientation B) product organization C) customer type D) market organization E) workload method Answer: A Explanation: The simplest and most common method of organizing a company sales force is geographic orientation. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 90) ________ takes advantage of a salesperson's technical knowledge. A) Geographic orientation B) Product organization C) Customer type D) Market organization E) Workload method Answer: B Explanation: Some companies have a separate sales force for each product or product. The primary advantage of a product organization is that individual salespeople can develop familiarity with the technical attributes, applications, and most effective selling methods associated with a single product. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

91) The disadvantage of geographic sales orientation is ________. A) it does not support specialization of labor B) it tends to have the highest cost C) its large territories involve maximized travel time D) its complicated structure maximizes customer confusion E) it requires additional managerial levels for coordination Answer: A Explanation: The major disadvantage of geographic sales orientation is that it does not encourage or support any division or specialization of labor. Each salesperson is expected to be good at many things (various customer needs, product applications, and specifications). Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 92) ________ is one of the three organizational factors that influence a salesperson's performance. A) Job experience B) Career stage C) Sales aptitude D) Company marketing budget E) Education Answer: D Explanation: Organizational factors that influence a salesperson's performance include company marketing budget, current market share for the company's products, and the degree of sales management supervision. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

93) The individual's learned proficiency at performing necessary sales tasks is called ________. A) sales aptitude B) motivation C) reward D) sales skill level E) satisfaction Answer: D Explanation: Sales skill levels are the individual's learned proficiency at performing necessary sales tasks. They include such learned abilities as interpersonal skills, leadership, technical knowledge, and presentation skills. Difficulty: 1 Easy Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation 94) Bart was awarded sales person of the year and was given a cruise for two by his company. This is an example of a(n) ________ reward. A) intrinsic B) bonus C) contest D) extrinsic E) subjective Answer: D Explanation: Extrinsic rewards are those controlled and given by people other than the salesperson, such as managers and customers. They include pay, financial incentives, security, recognition, and promotion. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

95) Feelings of accomplishment, personal growth, and self-worth are examples of ________ rewards. A) intrinsic B) transactional C) objective D) extrinsic E) subjective Answer: A Explanation: Intrinsic rewards are those that salespeople primarily attain for themselves and include feelings of accomplishment, personal growth, and self-worth. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 96) Carlo receives a paycheck every other Friday for the same amount. Carlos receives ________. A) a salary B) a stipend C) an intrinsic reward D) an output measure E) incentive pay Answer: A Explanation: A salary is a fixed sum of money paid at regular intervals. Most firms that pay a salary also offer incentives or incentive pay to encourage better performance. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation

97) Which of the following is an intrinsic reward? A) pay B) security C) personal growth D) promotion E) recognition Answer: C Explanation: Intrinsic rewards are those salespeople primarily attain for themselves and include feelings of accomplishment, personal growth, and self-worth. Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation 98) Compare and contrast the two major types of advertising and give an example of each. Answer: The goal of institutional advertising is to promote an industry, company, family of brands, or some other issues broader than a specific product. Institutional advertising is often used to inform or remind, but to a lesser degree to persuade. The vast majority of advertising is product advertising, designed to increase purchase of a specific offering (good or service). Three principal types of product advertising are available: pioneering advertising, competitive advertising, and comparative advertising. Examples will vary. Difficulty: 3 Hard Topic: Advertising Learning Objective: 14-01 Understand the key types of advertising and the role of the creative agency. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

99) Choose four of the consumer sales promotion options and provide a description and an example of each. Answer: The consumer sales promotions options are product sampling, in which a physical sample of the product is given to consumers; coupons, which are an instant price reduction at point of sale; rebates, a price reduction for purchase of a specific product during a specific period; contests and sweepstakes, which may suggest a purchase but legally must be offered without a purchase requirement; premiums, offered for free for purchasing the brand targeted in the promotion; multiple-purchase offers, incentives to buy more of the brand at a special price; product placements, having product images appear in movies, on television, or in photographs in print media; and loyalty programs, in which the consumer accumulates points for doing business with the company. Examples will vary. Difficulty: 3 Hard Topic: Sales Promotion Learning Objective: 14-02 Identify various approaches to sales promotion and how each might be used. Bloom's: Apply AACSB: Analytical Thinking Accessibility: Keyboard Navigation 100) Explain the three core functions of public relations that are most closely aligned with the role of the marketing manager. Answer: The three core functions of PR that are most closely aligned with the role of the marketing manager are gaining product publicity and buzz, securing event sponsorships, and crisis management. Difficulty: 2 Medium Topic: Public Relations Learning Objective: 14-03 Describe the activities and aims of public relations. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation

101) Name the three advantages that personal selling has over other forms of marketing communications, and explain why they are advantages. Answer: 1. Immediate feedback to the customer. Customers don't want to wait for information. They demand accurate information quickly, putting pressure on companies for immediate, personal communication with a salesperson or customer service representative. 2. Ability to tailor the message to the customer. No other marketing communication method does a better job of creating personal, unique customer messages in real time. Salespeople generate distinctive sales messages that directly address customer problems and concerns. 3. Enhance the personal relationship between company and customer. Salespeople and the personal selling function are the single most effective approach for establishing and enhancing the personal relationship between company and customer. In particular, business-to-business (B2B) customers appreciate the efficiency of the Internet and other communication tools but expect a personal relationship with their suppliers. There is no substitute for a salesperson working with the customer one-on-one to solve problems. Difficulty: 3 Hard Topic: Personal Selling and ic Learning Objective: 14-04 Understand the role of personal selling in marketing communications Bloom's: Analyze AACSB: Analytical Thinking Accessibility: Keyboard Navigation 102) What are the six stages of the personal selling process? Answer: 1. Prospecting for customers 2. Opening the relationship 3. Qualifying the prospect 4. Making the sales presentation 5. Handling customer objections 6. Follow-up with customers Difficulty: 2 Medium Topic: Personal Selling and ic Learning Objective: 14-05 Learn the process of relationship selling. Bloom's: Remember AACSB: Analytical Thinking Accessibility: Keyboard Navigation

103) Explain three types of financial compensation and rewards given to salespeople. Give one example of a nonfinancial reward. Answer: A salary is a fixed sum of money paid at regular intervals. Most firms that pay a salary also offer incentives or incentive pay to encourage better performance. Incentives are generally commissions tied to sales volume or profitability, or bonuses for meeting or exceeding specific performance targets (for example, meeting quotas for a particular product). Such incentives direct salespeople's efforts toward specific strategic objectives during the year, as well as offer additional rewards for top performers. A commission is payment based on short-term results, usually a salesperson's dollar or unit sales volume. Since there is a direct link between sales volume and the amount of commission received, commission payments are useful for increasing salespeople's sales efforts. Exhibit 14.14 summarizes the components and objectives of financial compensation plans. In addition to financial compensation, sales management (and management across the company) incorporates a range of nonfinancial incentives. Most sales managers consider promotional opportunities second only to financial incentives as effective sales force motivators. Difficulty: 3 Hard Topic: Personal Selling and ic Learning Objective: 14-06 Understand the major job responsibilities of sales management. Bloom's: Understand AACSB: Analytical Thinking Accessibility: Keyboard Navigation